Latin America Post-Chavez:

Quo Vadis?

(Panel Discussion on Political, Social, Economic,

and Strategic Implications)

March 22, 2013

Please contact the Inter-University Center for Terrorism Studies at the Potomac Institute for Policy Studies,

901 North Stuart Street Suite 200 Arlington, VA 22203

Tel. 703-562-4513, 703-525-0770 ext. 237 Fax 703-562-1000

yalexander@potomacinstitute.org www.potomacinstitute.org 2

Latin America Post-Chavez:

Quo Vadis?

(Panel Discussion on Political, Social, Economic, and Strategic Implications) Date: Friday, March 22nd 2013

12:00PM to 2:00PM

Co-Sponsors: Inter-University

Center for Terrorism

Studies

International Center for

Terrorism Studies, at the

Potomac Institute for

Policy Studies

Inter-University Center

for Legal Studies, at the

International Law Institute

Moderator: Professor Yonah Alexander

Director, Inter-University Center for Terrorism Studies, and Senior Fellow, Potomac

Institute for Policy Studies

Speakers: Ambassador (ret.) Roger Noriega

Former U.S. Asst. Sec. of State for Western Hemisphere, and

Former Ambassador to Organization of American States

Professor Monica Arruda De Almeida

Professor at Center for Latin American Studies, Georgetown University

Brig. Gen. (ret.) Boris Saavedra

Asst. Prof. of National Security, Affairs Center for Hemispheric Defense Studies, NDU

Dr. Fernando Jimenez

Director of TecnoLegal Consult LLC, and Former Legal Advisor for

Inter-American Development Bank and Inter-American Investment Council

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this report.

Copyright © 2013 by the Inter-University Center for Terrorism Studies Directed by Professor Yonah Alexander.

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of the copyright holder.

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Ambassador (ret.) Roger Noriega

Thank you very much. Good afternoon everyone, I appreciate the introduction.

Everybody knows of course that Hugo Chavez died last week - I think it was March 4th, and

even that’s a matter for debate. In this post-Chavez era, there is a struggle underway right now

on whether a regime that is really a narco-state and the best friend of Hezbollah and Iran in this

hemisphere might be replaced by a friendly democratic neighbor, the likes of which Venezuela

was before Hugo Chavez. It is likely that in these April 14th elections the Chavista regime will

hold on to power in my view, but that succession is not stable in the short run and not sustainable

in the long run, and I will talk about why. A lot of this has to do with the fundamentals being

shaken, the foundations being shaken in Venezuela under that ruling Chavista regime. There is

an impending socio-economic meltdown, rampant street crime, a faltering oil sector, bitter

infighting within the Chavista movement, complicity with drug trafficking and terrorism that

really casts serious doubt on the legitimacy of any such regime and the inept performance of

Nicolas Maduro the designated successor as well as a growing rejection of Cuba’s really heavy-

handed role in the succession and the corrupt institutions and rigged electoral process that will

help the Chavistas hold on to power. Beset by all these challenges and with Chavez no longer at

the top of the ballot, they are going to have to pull out all the stops to hold on to power and

engineer a victory on April 14th which I expect they will.

A little bit about these economic challenges in greater detail, there was a currency

devaluation in February which was really too little too late to break the fall of the Venezuelan

economy that has been decimated for 14 years by gross mismanagement, staggering corruption

and polices that were really consciously meant to strangle the private sector. The Chavista

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economic team is scrambling now to stabilize that economy in advance of the April 14 elections

but their incompetence - really their ideological disorientation - is evident as they ratchet up

restrictions that will stifle production and commerce. I had thought maybe that they would have

adopt in a post-Chavez period some sort of tactical moderation both politically and economically

but that does not seem to be the case; there does not seem to be any sort of subtle pivoting either

with the economic policies or political trajectory or the rhetoric of the regime. You see inflation,

food shortages, power outages and crumbling infrastructure which is taking a terrible toll, more

and more on all Venezuelans across the board. We suspect that this devaluation will hit the

working class, the lower class, the more impoverished sector of that economy just about the time

these elections are taking place.

There will be no windfall of oil revenues because production is greatly diminished and

really over-subscribed, actual production in Venezuelan oil, contrary to what their official

numbers are, is about 2.4 billion barrels a day. That’s far below the peak of 3.3 billion barrels a

day before Chavez, and sweetheart deals with China, Russia and Iran, and giveaways to Cuba

and other client states in the Caribbean and Central America are bleeding Venezuela dry. There

simply is no more oil to sell at this point. There will also be no China bailout - what do I mean

by that? In the 18 months leading up to the elections where Chavez won a term which he never

actually began, the Chinese loaned about $28 billion to Chavez, which was used in campaign and

election year spending right before those elections, but Beijing has closed the check book, a

couple of months ago they summoned Elias Jaua, one of Chavez’s inner circle people to Beijing,

he thought he could cajole them into giving them more money leading into this election and they

said no, I’m afraid not because there is no production, and they have some serious doubts about

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the legitimacy of the regime and whether they would ever be paid back by a successor

government. Frankly, Chavez came into office politicizing PDVSA, the state-run petroleum

company and he used its revenue as his petty cash fund, and now the company is ruined and the

till has run dry and is filled with IOUs.

[Now I’ll] talk a little bit about the political infighting that is shaking the base of

Chavismo and reflect on the fact that as I describe this and reflect on the state of Chavismo, that

we are talking about infighting that pits a wing that is loyal to Havana and the failed government

of Cuba against a wing that is loyal to the narco-military. So the failed foreign ideological hard

left loyal to Havana and those who see government as an opportunity to make money and be

complicit in drug trafficking. Maduro, as I mentioned, the acting president, de facto president,

and Elias Jaua, who is now foreign minister, are those who carry the Cuban flag in this whole

process and the Cubans seem to be winning and we see this sort of overdone rhetoric and

radicalization being employed by Maduro now that really has Cuba’s fingerprints all over it.

[It’s] very anti-American, very rabid, very radical. Diosdado Cabello is the president of the

National Assembly, he sort of leads the other wing. He is mostly interested in maintaining the

impunity that is required to be a narco-state and he has doubts whether Maduro can hold on to

power in the long run and he doesn’t want to put his life, and his fortune - tens of billions of

dollars - in the hands of these ideologues from Cuba, and there is a measure of nationalism

mixed in here within the Venezuelan military that rejects this interference of the Cubans. So far

Cabello seems to be closing ranks with Maduro; he could have challenged Maduro’s legitimacy

under article 233 of the Venezuelan constitution that, as president of the national assembly, he

should have assumed the presidency.

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But Maduro moved more quickly and brazenly and he claimed that job, Cabello is going

along with him, in the short run and he’s closed ranks for now. But if the election begins to look

shaky, it is a possibility that the military, which has a big role in running these elections may

decide it doesn’t want to steal that election for Havana’s people and for people that they have

doubts about. On these elections, certainly Chavismo has a distinct institutional advantage, they

have of course some residual popularity because Chavez was a popular figure, to a considerable

extent, particularly among the very poor, and they have this great institutional unfair advantage

and access of media. Virtually most of the independent media is silenced by president with his

access to the so-called cadenas where he can insist that every network in the country carry his

speeches, which could go on for long periods of time and the opposition which has much, much

fewer resources to mine the kind of advertising and access to the media that they would need to

get their message out. The question is will the state have the resources to motivate and mobilize

the voters. To motivate them, that is to say with give-away programs, a lot of cash on the street,

and mobilizing them, literally getting them to the polls and a very sophisticated mechanism, that

very few people know about, that they… When you enter a voting place they put your thumb

print down, that thumb print registers your name and the Chavista Electoral Command knows

immediately that you voted, so consequently around mid-day they know who has not voted and

they have the cell numbers and the addresses of everybody that has not voted whose vote they

count on, and they literally go down and pick them up one at a time. So you have satellite

imagery of every street and they have the routes that trucks and busses will drive to get their vote

out. Frankly the DNC and the RNC would love to have that system. But only one side has that

system, and that’s not fair. So as long as that continues, that’s their important advantage.

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But there are disadvantages too. First, Maduro is not Chavez and Maduro is Maduro,

that’s another disadvantage. You can Google roguish charm and you’ll find hits [for Chavez]. So

Chavez is a charming rogue, Maduro is not. He may be a rogue, but he is not particularly

charming. So there’s the charisma deficit. Chavez was able to modulate because he was a strong

figure in his own right, while Maduro is not. He seems to be following this Cuban script which is

very radical, very polarizing and very shrill. It comes off, nevertheless as a clumsy, pale

imitation of Chavez. And then also these unpopular economic policies are going to begin to bite,

and they won’t have the resources to mobilize their voters.

Capriles on the other hand is being much more aggressive than he was against Chavez,

because again Maduro is not Chavez. He also has nothing to lose, he has invigorated his base

with tougher rhetoric and also those ni-nis - the neither this person nor that person, roughly two

and a half million voters who have sat out every election in the last decade - may see this as their

last chance and they may be even further mobilized or motivated by Maduro’s shrill rhetoric.

Also I can assure you, none of these people have been sitting around for ten years waiting for an

opportunity to vote for Nicolas Maduro. They never came out to vote for Chavez or his opponent

but it is very likely that they won’t come out, although those that do come out now will be

Capriles or opposition voters. So if there’s obvious fraud committed to hold onto power, that will

delegitimize that regime if there’s somebody around to talk about it. But the United States’

official position in this election, remember how I described it, between the possibility of electing

a government that would lead back to the friendly, positive, constructive relationships of a

prosperous country with the United States or an enemy of the United States, the best friend of

Iran and Hezbollah and narco-terrorists. The official position of the United States State

8

Department is neutrality. Neutrality. Which suggests they are either insulting our intelligence or

revealing their own lack of it. What should be on the table with a successful regime, democracy

and human rights?

Obviously the State Department does not care about that and neither will the Chavista

successor. But drugs and the fact that you have a narco-state in Venezuela today and will if

Chavez’s designated successor wins the election; what I mean by that is that Diosdado Cabello,

the president of the National Assembly, the former head of the army, the former Minister of

Defense, the current vice-minister of the interior, have all been implicated in narco-trafficking in

the last seven years, acquiring tens of billions of dollars from that trade which they don’t want to

give up. We need to have that on the table as well as the fact that today Venezuela is one of

Iran’s best friends in the world serving as way to get around international sanctions and

providing safe haven to Hezbollah in their territory and really a partnership with Hezbollah. The,

and I’ll stop on this dramatic note, the number two person in the Venezuelan Embassy in

Damascus today is a man named Ghazi Atef Nassereddine Abu Ali. It’s not a very common

Venezuelan last name, well there is a reason for that - he was born in Lebanon, and he is

essentially Hezbollah’s envoy to the Venezuelan government and he’s [close] with Nicolas

Maduro, the new president of Venezuela. He is on the U.S. Treasury’s list of persons providing

logistical and material support to Hezbollah and that’s the kind of regime that we are talking

about, and those are the stakes that are playing today in Venezuela.

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Professor Monica Arruda de Almeida:

Good afternoon everybody. It is a pleasure to be here. I would like to thank Professor

Yonah Alexander for the invitation; it is an honor to be able to participate in this debate. My take

on the legacy of Chavez is going to be a bit different from the one presented by the Ambassador.

I am going to speak as somebody who works on issues of economic development and who

happens to be a Brazilian and also a student of Latin America, although sometimes Brazilians

don’t think of themselves as being Latin Americans.

But I would say that pundits in Brazil have a much more forgiving view of Chavez. It’s a

more forgiving, more understanding, but also a view of missed opportunities. Chavez really

didn’t come out of the blue. In other words, there was real demand for leaders who would place

more focus on issues of social justice and really deal with centuries-long problem that the region

has in terms of income inequality. The economic reforms that took place in the mid-1980s and

1990s were a departure from state controlled economic policies. The success of pro-market

economic reforms was fundamental because the reforms dealt with the question of stabilization.

As many of you may remember, we were dealing with hyperinflation; talk of three, four,

and even five-digit inflation a year in Latin America. My whole experience of being a Latin

American was one of living with hyperinflation. And in the year I left Brazil to live in the US, in

1994, the government finally dealt with inflation there. Latin America is a very unjust region.

Opportunities for economic upgrade are still limited. So, there was a real claim for government

policies that would address the issues of inequality and social injustice. I would argue that the

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pro-market reforms did a great deal in addressing those issues just by dealing with

hyperinflation, which is a major source of poverty and inequality. But after so many decades,

and even centuries of the legacy of inequality, there was a claim for greater state intervention

because pro-market reforms alone were not being successful in addressing those problems. So

there you have the so-called left turn in Latin America when left-leaning governments replaced

leaders who were successful in implementing economic stabilization reforms. The question

people were asking was: okay, we are doing well with macroeconomic stability, but so what?

We still have a terrible educational system, poor access to healthcare, and very few opportunities

for social mobility. So there was a real claim, a need to have people in power that would address

those issues. And Hugo Chavez was the first of leftist leaders who came to power in the region

that had the goal of dealing with big social issues.

One cannot help but compare the Brazilian experience - especially during the Lula

administration, with the Venezuelan experience under Chavez. I look at the Chavez case as one,

as I said in the beginning, of missed opportunities. Although Chavez and his government really

attempted to address demands for social justice, unfortunately this effort was pursued in ways

that were much politicized. One case that I want to address is the so-called conditional cash

transfers. I think it is good establish a comparison between the social policies that were

developed in Brazil to those that were developed in Venezuela. For those of you who are not

familiar with this policy program in Brazil, the cash transfers started during the Fernando

Henrique Cardoso administration, which is the administration right before Lula, and it

demonstrated some success. By the time Lula came to power, he really needed to strengthen the

country’s macroeconomic standing by diminishing its reliance on foreign debt. During its whole

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first term, the Lula administration spent doing the homework in macroeconomics to diminish the

exposure of Brazil to foreign markets. Once he was able to put Brazil in stronger economic and

financial situation, the second term was really when Lula put greater focus on his cash transfer

program. One thing you learn about the Brazilian program was that was inspired by efficiency.

Those of us that studied political science know historically ministries that have the mandate of

dealing with social spending are really a target for a lot of clientelism, for a lot of embezzlement,

and apparently that wasn’t the case with the ministry that was created by the Lula administration

to deal with cash transfer programs. Talking with people that worked for that administration,

they said there was a real concern by Lula himself to insulate the ministry responsible for the

program from political use and just hire the best people available to implement the program.

That’s why the program has been claimed as being a model that could be reproduced in many

places, including in Africa. The program has been very successful; it reduces the intermediation

in cash transfers because people that are benefitted by this program can get their payments

directly from an ATM machine, with no interference by a mayor or state governor. It doesn’t

mean that Lula himself didn’t get the benefit from the implementation of the program. There are

scholarly papers that have demonstrated that he really benefited politically from the program in

terms of electoral results. But you can interpret this as a politician actually doing what he had

promised his constituency beforehand. There is some debate whether it was used for purely

electoral uses but this is a debate that still goes on in classrooms today. I tend not to be so cynical

about it, you know, he just did what was promised, and he was able to gain politically from it.

If you look at what happened in the Venezuelan case, Chavez openly said that the

misiones, his cash transfer program, were used to help the poor but also had an immediate

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electoral goal of keeping him and his government in power. And that’s what I see this as a

missed opportunity because it’s a program that really can play a major role in alleviating poverty

and social injustice in the region and, in the case of Venezuela, it was very politicized. Why the

program was politicized? There’s a lot of room for debate here as well. Some would argue that

he didn’t have the political environment to make it more of an institutional program the way that

the Lula administration did; some say the Venezuelan political environment was much more

polarized, that there was much more rejection - especially from people from the central bank to

use funds from the PDVSA for social transfers. Whatever the reason was, the fact is that his

government controlled a lot of the resources of PDVSA to invest in social programs and the use

of these resources was very opaque; it lacked transparency. If you talk about the legacy of

Chavez now that he is dead, one wonders how the misiones are going to survive now that he is

not around anymore. Lula left government and the Bolsa Família, which is the conditional cash

transfer program in Brazil, is still strong and no matter who comes to power, the institutions are

there and they can survive without Lula. If the opposition later comes to power and decides to

diminish the program, reduce the program, that is another thing but the institutions are very well

set.

Unfortunately that is not the case with Venezuela. It was really used very politically,

personalistically, and that’s really a missed opportunity. We even can think of Chavez, as the

Ambassador has said, as a terrible administrator. In a way it fits in with the big picture of how

poorly he managed the country. He was a political figure who addressed the needs of the

population at the time and he didn’t come out of a vacuum. That’s the history of Latin America:

you may expect left-leaning governments in power if there is the perception that whoever is in

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power is not really addressing the major problems of the region. It is still a very unjust region

with a lot of social inequality. That’s pretty much how Brazilians would see the Chavez

movement. People talk a lot about Chavismo and whether it’s going to become a movement like

the Peronismo in Argentina that has survived Peron, or whether it’s going to be a one shot event,

that Chavismo is not going to be able to survive afterwards. So there is some suspense there.

Where there is no real suspense is that the misiones have failed when it comes to being a medium

of social service and cash transfers that could help society, especially the poor who really

supported Chavez the most. Well, that is the perspective I bring to this debate.

Brig. Gen. (ret.) Boris Saavedra

I’d like to begin by giving thanks to Professor Yonah Alexander and the Potomac

Institute for Policy Studies for this opportunity to share with you my thoughts about the current

situation in Venezuela. Mr. Chavez is the product of a political system that collapsed. He didn’t

win the election in 1998 because he was the candidate with the best proposal; he was an outsider

with military background that was known in the country for his participation in the coup attempt

in 1992. If we look at that in the context of Venezuelan political culture and situation, he

represented a valid option for change. Therefore, it was because the political system collapsed.

And the other options were more or less the same traditional political parties that governed

Venezuela for forty years. Also, I’d like to tell you some anecdote about myself related to

Venezuela, to give you some ideas that you will not find in books. I come from a poor family,

with seven brothers and sisters. We lived in a system that provided us opportunities. My father

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was a shoe-maker; he didn’t have a lot of money. But he provided us with the best that he could

and the state with its educational public system gave us the opportunity to become university

professionals. I went to the air force academy for my higher education. It gave me the

opportunity, without looking at my family background, to come through the rank to the top in the

military institution, and I did it. That political system gave me the opportunity to prepare myself,

to study here in the United States, and in Europe to be better prepared for my professional duties.

Everything that Ambassador Noriega said about the armed forces today is true. This is very, sad

for me as a Venezuelan, to admit that this is the real situation today in the armed forces. I know

in Latin America there is a lot of inequality. Do we have inequality in Venezuela? Of course we

have it. But in the case of Venezuela there were also opportunities to succeed and the difference

with today’s political system is that to be beneficiary of these opportunities require a political

identification with the Chavez government ideology.

With this Power Points presentation, I will be able to provide you with a lot of

information, and I will make just few comments about each of them. It is my objective to give

you the context, in order to look at Venezuela in the 21st century, to give you my perspective at

medium and long term. With this agenda, I will try to describe what Chavismo is, the Bolivarian

Revolution, the domestic environment, what is the current situation, and scenarios that I see in

the near future and the foreign policy in Venezuela based on its impact in the region for several

reasons mentioned by Ambassador Noriega and other additional reasons that I can see, then

Cuba and Venezuela relationship to come to some conclusions. Chavismo is an authoritarian

regimes characterized by a concentration of power in the ruler’s hands and a political system due

more to loyalty to the ruler than to an identifiable ideology. It’s a highly polarized political arena

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that blocks most institutional solutions to the presidential crisis. Revolutionary passion is the

third component to Chavismo. Both the political project and financial justification; the method of

revolutionary confrontation is to deny the other side any legitimate opposition to the regime. And

to consider [the opposition] as illegitimate and thereby make them an enemy to be eliminated.

The Bolivarian Revolution is composed by three major elements: the democratic model,

popular model, a participatory and protagonist democracy. It’s participatory when you agree with

the leader - if you disagree, then you become the enemy. Therefore, there is no democracy,

because democracy is disagreement, democracy is confrontation, but this is not the case in

Venezuela. The state economy, with the government control of all means of production,

centralization of power, creation of the missions in order to replace the constitutional political

institution and a political environment characterized by a vacuum of power; it is a Vacuum of

power for these three major reasons: Uncertainty - this is the way the government controls the

political agenda and maintains a polarized society. President Chavez has governed, from the

radical left, in any society when the leader governs from the left or right, it automatically

polarizes society. A falsehood: Venezuelan government buried the truth before burying Chavez.

That’s the reality. Ambassador Noriega said Chavez died on the fifth of March, I don’t believe so

I don’t want to come here to speculate, because the way this Chavez health situation has been

handled, for the lack of management capacity of the government, that has been characterized

after many years by a lack of sound management in its government affairs.

Radicalization of Venezuelan society increased since Chavez death, it is why I call it the

perfect storm today. In other words lack of efficiency and efficacy in government affairs. There

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is a perfect storm with an economic, political and social crisis all together. In the economic

context, you will see on the internet, the oil price in 1998 was eight dollars, and today in the

Chavez’s era the oil price increased to more than $100. Oil production in 1992 was 3.2 million

and today it is 2.7million, according with some sources it is 2.3 million. Nobody knows exactly

because there is no transparency in government. National debt was $20 billion and today it’s

more than $150 billion. The Oil exports [account for] 96% of every dollar that comes to

Venezuela; fiscal expenditures have expanded in all branches of government, compared with

what it was before Chavez came to power. It’s not just to the poor, it’s also to the entire nation

because armaments that Venezuela bought from Russia cost a lot of money, and I’m not so sure

that Venezuela needs that armament. I’m coming from the military sector, but I do have doubt

about the kind and amount of armament bought to Russia. There was an increase of 27% of

expenditure in just last year, about $5.8 billion in a long political campaign. What are the

consequences? It is a fiscal deficit of about 1.2%, high inflation, contraction of the economy is

expected to be 3.6%. Two currency devaluations, within 100 days of Mr. Maduro’s tenure in

office because he is not just running a political campaign, he is in charge of the presidency

already for more than 100 days and [there have been] two devaluations - The last one was

yesterday! It is a currency exchange control for more than 10 years. An economy wholly

addicted to imported goods and services. In politics, Venezuela has very weak democratic

institutions because you had a leader that controlled everything. It has been the way President

Chavez controlled everything in government, throughout the so called missions; creating parallel

institutions. Why? Because it is the way he is able to avoid important instruments in democracy:

accountability, balance of power, and control and oversight. They don’t exist in Venezuela. And

Venezuela has used almost one trillion dollars in the past 10 years. It’s a lot of money for a

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country with 26 million. Maduro plots accusations against Capriles. It’s easy to understand

because it is the policy used by President Chavez for many years [creates] those kind false

accusations. Why? Because in Marxist-Leninist thought, in order to achieve the end, it doesn’t

matter what means you will use, any mean is valid just to achieve the goal in maintaining

political power. It is important to keep in the mind of Venezuelans that the major threat to their

country is the United States of America.

At this very crucial time, I would like to give you couple of scenarios; my first scenario is

that Mr Maduro is likely to be the next president. I hope not, but according to some polls it is a

tendency based on the Chavez image in his followers. But the real issue here is the next day after

the election: political instability, increasing government mismanagement; Mr. Maduro is going

to have the same cabinet as Chavez, which is very incapable of handling the government, Cuban

influence, structural economic crisis, and foreign policy focused on confronting the US and

continuing the financial support for ALBA countries in the middle of a deep domestic economic

crisis, and an aggressive and confrontational speech against the United States. International

investment with China and Russia based on oil and business. However, relationship with Iran

will be in an uncertainty based on the result of the coming elections in Iran this summer. Mr.

Maduro needs to convince the new Chinese leadership of his leadership capability to unite his

political party and a polarized society in order to gain credibility at international level. I do have

my doubts that Maduro will be able to do that because his ideology, lack of knowledge, and

experience in government affairs will limit himself of doing too much to demonstrate leadership

and courage to overcome all these major challenges. Also take into consideration that China is

investing money in ALBA and CELAC institutions based on Chavez’s leadership and

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Venezuelan guaranties. Russians have major concerns also, because they believe that without

Chavez they are risking about $ 30 billion dollars given to President Chavez since 2010 to 2012

The second scenario I see is Mr. Capriles winning the presidency; it will be a policy of

reunification of Venezuelan society with new plural cabinet. Mr. Capriles is not alone. He has

about 400 professionals in Venezuela working together in a transition plan in order to build up a

government program, legitimacy at an international level, international solidarity, money market

economy, regularization of U.S.-Venezuela relations, and a policy toward private and foreign

direct investment, that’s an important issue in order to recover the Venezuelan economy. With

respect to China and Russia’s contracts, they believe that it is needed to review those agreements

in the context of the Venezuelan Constitution. Additionally, Mr. Capriles will cut the Foro of Sao

Pablo illegal financial support for leftist ideology penetration in most countries in the region. Mr

Capriles will review and assess the ALBA and CELAC financial support that will complicate the

future of these two major regional organizations

The anti-system strategy developed by Chavez and Ahmadinejad with two regional blocs,

one in Latin America and one in the Middle East to create an anti-Americanism sentiment all

over the world with Maduro and expectation for the new government in Iran will change. I

doubt that strategy will continue for the increase deterioration of Venezuela’s internal situation

with Maduro in power and Iran’s international situation. This strategy to move to a multipolar

world, with the use of oil by both countries with an anti-U.S. rhetoric, becomes more

problematic to continue even under an eventual presidency of Maduro. In my opinion, that

strategy is not working anymore because Chavez is gone and Ahmadinejad is leaving power: We

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need to see how the international and regional situation evolve in the Middle East (Syria) and

Venezuela without Chavez.

On the other hand, Cuba-Venezuelan relationship is based on billions of dollars a year for

the transfer of 100,000 barrels of oil a day with an amount of $ 10,000 billion a year. Havana

provides “health professionals.” However, I doubt this, as well as their 8,000 political security

advisers. This relationship is founded on a common ideology, and Cuban economic interest. I

think the most important point that I want to make here is that Cuba is using Venezuelan

resources as the major instrument to blackmail countries in the region using Venezuelan oil

resources.

Here are my conclusions: Maduro is not Chavez, he doesn’t have the same charisma,

money resources, and regional leadership support that Chavez had to project his foreign policy. It

is a major challenge for Mr. Maduro in foreign policy. There is another aspect, and that is the

strong resentment against Chavez in the armed forces, because of the Cuban military presence in

the Venezuelan armed forces. I agree, Chavismo [is going to remain] after Chavez in the political

arena. But in the armed forces, I doubt it. A military intervention is likely if the Supreme

Court’s constitutional decisions are not respected. Cuban intervention in the armed forces is

more difficult with Maduro because Maduro needs to consolidate his leadership inside the armed

forces. The strong man in the armed forces is not the Minister of Defense, it is the Armed Forces

Strategic Commander who has under his command all Armed Forces components: Army, Navy,

Air Force, Militia, and Military Regions; let see how Maduro will consolidate his leadership with

this army generals. The third conclusion is that the new president needs to put together the best

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professional team of experts in the economy, government planning and programs with very clear

policies to overcome this crisis. I don’t think that Mr. Maduro has the leadership and his

ideology prevents him from doing that. The best minds in Venezuela are not in the government,

they are in the other side of the political equation. Consider that we in the U.S are concerned

with the sequestration act – the crisis in Venezuela that I call “Perfect Storm” requires a real

sequestration with the economic, political, and social changes that will demand the will of all

Venezuelans in the next few years. Let’s see how Mr. Maduro or Mr. Capriles will handle it for

the best of the country and the region. I’m going to stop here for any question or comment that

you may have.

Thank you.

Dr. Fernando Jimenez:

Thank you Yonah, and thanks to the Potomac Institute for giving me the honor of being

part of this discussion.

The future of Venezuela without Chávez is an uncertain one. And it is uncertain because,

despite the exaltation regarding the regime's political continuity through Maduro and the mass

movement he fosters, there is obvious internal political tension.

We still do not know:

1. If Chávez died in Cuba or in Venezuela.

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2. If the Venezuelan Army, which supposedly must maintain public security and political

neutrality, agrees to overtly accept anti-constitutional actions, both now as well as in the future.

We see as a real concern the recent statements made by the minister of defense appointed by de

death president. He asked the people to go to the polls and to vote democratically, but, of course,

“provided that they are going to vote for Chavez’s successor” (real democracy). We know that

this statement doesn’t reflect the opinion of all military body. Chavez knew how to deal with his

colleagues in the army. He kept unified the military in the political field, in the economic welfare

and, of course, in the barracks discipline. We assume that Maduro has not the same capability.

3. If its policy of generosity towards Cuba and smaller Caribbean sovereign countries will

continue along the same terms of a lack of budgetary control and political colonialism as it has

done up to now.

4. If it is true what Jerry Brewer, Director of Criminal Justice International Associates, has stated

by saying that Hugo Chávez's fortune is worth $2 billion and that groups of Bolivian criminals,

linked to Chávez's Government, had depleted around $100 billion.

The upcoming elections, which Nicolás Maduro, the theoretical heir to Chávez, has

already practically won, will reflect the votes of a mass of population which was elevated from

living in misery to a lower-middle class status, and which represents his best political customer

base. It is a fact that when Chávez rose to power, he found 75% of Venezuelans living on the

threshold of poverty. It is also true that we must admit, whether we like it or not, that, as Chávez

would say, he was not the root of the cause rather that his government had to face its

consequences. Chávez won the successive elections and Chávez also won, fair and square, the

referendum to modify the Constitution.

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However, these realities, which would enable us to recognize the figure of a charismatic

and democratic leader, capable of facing great domestic and foreign challenges defending his

people, have regrettably been overshadowed by the most typical flaws and foibles of historical

despots.

He attempted to foster integration but absolutely failed to reach any kind of unity in the

hemisphere.

He tried to distribute income but left the country and its economy in very bad shape, and

not because the price of an oil barrel is low, rather because Venezuela is not competitive at all.

He lost the trust of society and serious countries in the international community.

On a domestic level, currently, in Venezuela, you are either a friend or a foe of the

regime. This, in politics, cannot be accepted with a serious mind.

Sometimes, when we see the full picture, we are highly concerned about the Venezuela-

Iran relations, the Venezuela-China relations, Russian influences or how the Cubans play their

game in the country. It goes without saying that this is geopolitically important.

I believe that what is truly important is to be able to explain to the world that a regime is

not a democratic one just because of the votes it attains rather it is so if it is capable of ruling in a

democratic fashion. It is unconceivable that we accept a government which shuts down any

media outlet which is hostile to it, which coerces journalists and monitors people's lives and

homes, following a pattern based on Maoist or Marxist-Leninist principles.

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We should expect Maduro to continue to please his South American fellow colleagues, to

continue to use two different languages in his relations with the United States, to subtly review

and restate the 'generous donations' to Cuba (US$5 billion in oil, cash and services) and the

Caribbean basin countries, and he will move along lines of friendship and cooperation with Iran

while avoiding friction with the United States caused by these actions.

I understand that the international community, in regard to this new scenario, must:

1. Carefully observe the electoral process.

2. Convey messages of collaboration and understanding to the government which will be legally

constituted.

3. Warn this government about the consequences of erratic policies in approaching countries

which derange international security. This is not about meddling in domestic affairs rather

demanding that normal relations must be based on a reciprocal understanding regarding the

international order established by U.N. mandates.

4. Standardize criteria so that, if despite efforts made, both Venezuela or any other country

pretending to derange the aforementioned international legal order, both regarding foreign

investment as well as financing against terrorism, drug trafficking and money laundering, will

have an immediate and united response by respectful countries against this deranged legal order.

I am referring to fact that, should it be required, the European Union as well as the United States,

in addition to friendly and allied nations, should impose sanctions against those who conduct

arbitrary and illegitimate actions affecting their interests.

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Spain and United States have common interests in protecting our relations, our trade and

our investments in Venezuela. The broad picture is that we are important players in this part of

the world that is why although we don’t know the results of the April 14th

election, we must see

carefully the legitimacy of these results and the immediate consequences that without doubt will

open a political transition in the country. We are going to confront problems, challenges and

provocations but, I am optimistic that the future and the path towards a real democracy are closer

now than when Chavez was alive.

5. Another question could be, are we going to promote reconciliation?