Country Research | Venezuela’s Shocking, Impending Collapse


A chronicle of the sad dissolution of a formerly democratic country: Venezuela. Previously, the stuff of former Soviet states, a Latin American economic powerhouse has been bankrupted in every sense of the word.

How does this cut against a common conclusion of political science research, namely that democracies rarely collapse into authoritarianism? Thank chavismo, mismanagement, institutional destruction, bad policy, and corruption, according to Moises Naim and Francisco Toro.

And in the NYT’s Interpreter, Max Fischer offers this:

Distrust of institutions often leads populists, who see themselves as the people’s true champion, to consolidate power. But institutions sometimes resist, leading to tit-for-tat conflicts that can weaken both sides.

“Even before the economic crisis, you have two things that political scientists all agree are the least sustainable bases for power, personalism and petroleum,” Mr. Levitsky said, referring to the style of government that consolidates power under a single leader. …

Because populism describes a world divided between the righteous people and the corrupt elite, each round of confrontation, by drawing hard lines between legitimate and illegitimate points of view, can polarize society.

Bernard Aronson, Diplomat and Negotiator for the Americas

The notion of someone of an opposition party serving in the other administration once was common, says Bernard Aronson, who worked for Mondale, Carter, Reagan, and Bush Sr. “Bipartisanship wasn’t just some airy idea,” he added. “It was an effective policy that turned these divisive issues into win-wins.”

His latest contribution are coming on behalf of President Obama as he works to ensure progress in negotiations between the Colombian government and FARC rebels on the world’s “longest ongoing guerrilla war“. He used humor, fairness, and respect for the rebels.

“Bernie Aronson has an unparalleled understanding of how to be firm when you need to be, and at the same time how to develop the empathy that builds trust,” Sergio Jaramillo, one of Colombia’s lead negotiators, said in an email.As a Democrat who served as assistant secretary of state for inter-American affairs under the first President George Bush, Mr. Aronson has made both peace and war.He was involved in carrying out Mr. Bush’s invasion of Panama in 1989, and he was a strong supporter of the contras in Nicaragua in their fight against that country’s leftist Sandinista government. While never holding a position in the Reagan administration, he did help write an important speech for Ronald Reagan praising the contras as freedom fighters in a worldwide battle against Soviet expansion.But Mr. Aronson also helped bring about the demobilization of the contras after the Sandinistas lost elections in 1990. And he played an important role in negotiating the 1992 peace accord that ended the civil war in El Salvador.

Source: A Democratic Diplomat, at Ease With Both Guerrillas and the G.O.P. – The New York Times

The Weekly Wonk Weighs in on Brazil

Is Brazil ready for the world stage–particularly with regard to governance issues.  Anne-Marie Slaughter convenes a discussion with Jorge Castañeda, former ambassador Rengaraj Viswanathan, and Oliver Stuenkel to explore such issues as the economic, development, and internal issues facing Brazil–a country that holds an “enviable position” in global affairs:

Oliver Stuenkel, assistant professor of international relations at Fundacao Gertulio Vargas in Sao Paulo:  Brazil is prepared to play a relatively constructive role on the world stage – in fact, it is already doing so. It’s misguided to characterize our country as an “irresponsible stakeholder.” As I have recently written in the Americas Quarterly magazine, Brazil has turned into a strong supporter of democracy in the region, largely by creating treaty clauses punishing countries that do not uphold democratic standards. Brazil has supported the concept of an international “responsibility to protect” in the vast majority of cases when it was on the Security Council. Brazil abstained from resolution 1973 on Libya not because it was against an intervention per se, but because it feared that a broadly authorized military intervention with unclear terms of enforcement would become a slippery slope towards regime change. While Brazil’s foreign policy is far from perfect, it is certainly no less constructive than that of established powers, which can also fail to consistently promote good principles such as democracy or international criminal justice.

via The Weekly Wonk | SOTU Remix & Super Bowlcott » The Weekly Wonk.

The Fix on Brazil

We hear a lot about China and even India.  But Brazil is a country that warrants attention as noted in this CFR Independent Task Force Report:

Domestically, Brazil’s “inclusive growth has translated into a significant reduction of inequality, an expansion of the middle class, and a vibrant economy, all framed within a democratic context.” Consequently, Brazil has been able to use its economic bona fides to leverage a stronger position in the international, commercial, and diplomatic arenas.

Brazil is on the rise.  Brazil is no longer the country of the future.  But Brazil needs some reform–and we are not just talking about the preparation for the Olympics and World Cup.

People living in cities like São Paulo pay more for food, housing and other basic goods than people in other comparable countries. A big reason for the high prices is that the government has not built enough roads, railways, ports and other infrastructure to keep up with the economy’s growth. Brazil also imposes high import duties and taxes that inflate the price of many goods and services.

The country also needs to reform its education system, which does a poor job preparing young people for skilled jobs in the manufacturing and the service sector. In an international test of the reading, math and science skills of 15-year-olds, Brazilian students scored lower than their counterparts in other Latin American countries like Uruguay, Mexico and Colombia.

Brazil has such chronic shortages of skilled professionals that the government is planning to import doctors from other countries. That might be a fine temporary solution, but the government needs to build more universities and improve teaching in primary and secondary schools to make sure more students can pursue higher education.

via Brazil’s Next Steps –

Rival Factions in Strike Underscore the Fissures in Post-Chávez Venezuela –

Chavez is gone and his successor struggles to maintain the same control that was once exerted:

The strikers’ main demand is that the government-owned company, the Orinoco Steelworks, also known as Sidor, pay millions of dollars in bonuses and other benefits they say were wrongly calculated.

And despite the charges of outside meddling, the scene here on Friday was quintessential Venezuela — unruly and loud, with lots of shouting and little or no listening. Yet it might never have occurred under Mr. Maduro’s predecessor and mentor, the charismatic socialist Hugo Chávez, who led the country for 14 years until his death in March.

via Rival Factions in Strike Underscore the Fissures in Post-Chávez Venezuela –

As Brazil Snubs the U.S., Who Loses? – Room for Debate –

As Brazil Snubs the U.S., Who Loses? A discussion among Oliver Stuenkiel, Julia Sweig, Mauicio Snatoro, Eric Farnsworth, and Joao Augusto de Castro Neves on what may have been no big deal–but could also portend something more.

via As Brazil Snubs the U.S., Who Loses? – Room for Debate –


Brazil Banking on a New Opportunity

Business grows when opportunities for lower-performing or less viable opportunities open up.  In the case of investment banking, Latin America is ripe for Brazil–even as its economy is only slowly recovering from what calls a potential “lost decade.”

Roberto Sallouti, chief operating officer of BTG Pactual, said the current trend was similar to what happened during the 2008-9 financial crisis, when many global banks pulled back from Latin America and left space for local firms to grow.

“The other guys are still there,” Mr. Sallouti said, “but we are eating into their market share.”

While the Latin American economies are not as robust as they once were, the region generated over $1.6 billion in investment banking fees last year, according to Freeman Consulting Services, an investment banking advisory firm based in New York.

via In Latin America, Brazilian Banks Fill Void Left by Global Giants –