Monthly Archives: December 2012

OpEd on Venezuela by ANCLAS Senior Associate

ANCLAS Senior Associate Sean Burges has an OpEd in The Australian today on what the return of Chavez’s illness might mean for Venezuela.

For those wanting to follow the Maduro/Chavez saga, Americas Quarterly has a good piece on Maduro by Javier Corrales. Quick summary — Corales is definitely a fellow Chavista traveller, but he has a ways to go before he can must the almost automatic widespread support Hugo Chavez enjoys.

If you don’t have a subscription, an earlier version of the text is below.

Venezuela’s looming crisis

Sean W Burges

Senior Associate

Australian National Centre for Latin American Studies

at the Australian National University


Throughout the 2012 presidential campaign that ended with Venezuelan president Hugo Chávez’s re-election on October 7th, the mercurial Chávez exhibited his trademark ebullience and rhetorical extravagance. Even though he cut back on his public appearances, for the faithful it was easy to believe that his cancer had been completely cured. Now it is starting to look like the naysayers were right and that the cancer Chávez has been fighting since 2011 is terminal. A December 9th special session of Congress was convened to authorize Chávez’s travel to Cuba for emergency surgery this week, which will be his fourth major cancer intervention.


The problem for Venezuelans is that Chávez’s potential health decline and death could throw their country into a very messy political crisis and bitter internecine power struggle within the president’s Bolivarian movement. Worse, this could lead to mass violence in the streets as contending factions battle for power.


Article 232 of the Venezuelan constitution addresses two scenarios directly relevant to Chávez’s illness. First, should an elected president become unable to take the oath of office to start their term, the constitution calls for a new presidential election. Second, new presidential elections must be held if a president dies, resigns or is fired from the presidency within the first four years of their term.


Chávez appears to be planning for the enactment of Article 232. He made a pre-surgery whistle stop return to Caracas last weekend to unambiguously name Nicolas Maduro as his vice president and heir, calling on Venezuelans to support his candidacy should a new presidential election be required. In effect Chávez is trying to exercise a practice that Mexicans under the 71-year authoritarian rule of the Institutional Revolutionary Party knew as the “dedazo”, or the touch of the president’s finger to anoint the chosen successor. The question in Venezuela is whether Chávez’s finger will be strong enough to reach out from his grave.


The extent to which Chávez dominates Venezuela makes little sense in a political context such as Australia’s. Everything in Venezuela is about the president. Whether loved or hated, he is talked about all the time and in relation to almost any subject. Within government and public policy circles no decision is made without the almost direct approval of Chávez. In the public and private sphere his influence is all-pervasive and unrelenting. Its dominating nature is particularly notable during elections. Although the actual act of voting is laudably free and fair in Venezuela, the extent to which Chávez’s popularly created cult of personality imbues everything means that conditions for the electoral campaign are massively tilted against his opponents.


It is also the strength of Chávez’s personality that keeps internecine bickering within the Bolivarian movement under wraps. Although Chávez is explicitly naming Maduro, a former bus driver and grass roots general for the Bolivarian movement, as his successor and protector of the revolution, there is no wider consensus or actual agreement that the vice president should assume the reins of power. In particular, National Assembly president Diosdado Cabello harbors his own presidential ambitions. Cabello also brings his own revolutionary credibility, which stretches back to active participation in Chávez’s 1992 failed coup attempt and successive ministerial posts over the last decade.


For Chávez the worst case scenario is that his two lieutenants will engage in a bitter struggle for power that will split the leftist vote and leave the way open for victory by Henrique Capriles, who garnered 46% of the vote in last October’s presidential ballot. With the dominating force of Chávez’s personality interred this is also a very likely scenario.


The implications for Venezuelans are deeply worrying. A complex system of corruption and patronage has arisen in the shadows of Chávez’s hyper-centralized rule, some of it with very deep links into the military and parts drifting into the shady world of narcotrafficking. A new presidential election thus becomes about more than who holds the country’s highest office. It suddenly becomes about who control of the real levers of economic power in the country by preventing close scrutiny of activities in the shadows. This makes the election a winner takes all game that no side can afford to lose.


Sadly this explosive cocktail of conflicting vested interests may prove to be Chávez’s lasting legacy, not the many laudable social programs he launched and the efforts he devoted to making Venezuela’s poor majority realize they have rights and can have a voice in the political system. Chávez’s death, when it comes, will put a severe strain on the Venezuelan political system and force complex and painful negotiations to reformulate how the country operates. There is a very real, but still avoidable possibility that these negotiations will take the form of violent street protests and gangland-style score settling, making Venezuela an even more violent place. The saving grace here is that an authoritarian retrogression is not a real possibility due to severe regional pressure to keep the Americas democratic, which is ironically due to concerns with the type of democracy that Chávez sought to build in Venezuela.





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Satirical take on Latin American preisdents

If you Spanish is up to it and you’ve been following Latin American politics this video is a very amusing over-the-top satirical take on presidential diplomacy in the region. Absolutely not to be taken seriously, but fun.

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Two OpEds on Brazil-China with Australian implications

ANCLAS Senior Associate Dr Sean Burges has had two OpEds published this week dealing with Brazil-China relations and ideas for balancing the relationship through cooperation with Australia and Canada. The English-language version, structured around some of the challenges that could arise from Australia’s focus on Asia was published on December 5th in The Australian. A separate piece addressing how Brazil might get past its current challenges with China was published in the major Brazilian daily O Estado de São Paulothe English language text is appended below.


A new approach needed for China
Sean W Burges
Senior Associate, Australian National Centre for Latin American Studies at the Australian National University
Like many other countries, Brazil is struggling with the relentless onslaught of Chinese exports. The Brazil-China Business Council convened its fourth annual conference in São Paulo to try and address this challenge. Some interesting stories were told, but not much new thinking was displayed. More worryingly, there appeared to be little recognition of the subtle warnings that China is maneuvering Brazil into position as a subordinate, vassal state.

China’s ambassador to Brazil, Li Jinzhang, used a mix of oblique messaging and ancient imperial strategies to quietly underline relative power positions and the limits on Brazilian aspirations for the bilateral relationship. Jinzhang deliberately spoke in Mandarin, not the Portuguese that we might expect from an ambassador to an important global player such as Brazil. To be generous, it is possible that his Portuguese, a language reportedly difficult for the Chinese, was not up to a major public address. But if this was so, why not use a common second language such as English, the international language of business and diplomacy? His message was clear: you must come to us and adapt to our ways and priorities.

Quiet reminders that China dominates the bilateral relationship were accompanied by a subtle warning to Brazilian industrialists complaining about Chinese imports and calling on Brasília to engage in further protectionist measures. Jinzhang told the story of a small Chinese village that, like Brazil, was a predominantly agrarian community. Through hard work and innovation this village transformed itself into an industrial powerhouse and now contributes just over two percent of China’s exports from a tiny geographical footprint. While gently delivered, the lesson for the gathered Brazilian business leaders was very simple: we are not going to slow the pace of exports and it is up to you to innovate and compete with us. More chillingly for Brazil’s leading agro-industrial business sector, Jinzhang also noted that a central policy goal of the new administration in Beijing is food security with an ultimate aim of self-sufficiency.

An implicit aspect of CEBC President Ambassador Sergio Amaral’s closing address was a riposte to China’s challenge. Unfortunately, Amaral’s idea of reinvigorating Latin American integration ventures to create a larger internal market and a common set of high tariffs to exclude Chinese products is an old idea that has failed. Moreover, the idea is delusional, completely ignoring that Chile, Peru, Colombia and Mexico have banded together to form the Pacific Alliance precisely with the idea of looking West to China’s Asia and not East to Brazil.

Interestingly, Jinzhang’s story about a Chinese agrarian town transformed by innovation points to a path forward for Brazil, one that would involve a very different direction for Brazilian foreign policy and major, but ultimately productive shifts in thinking by Brazilian business. There are two concrete avenues for action.

First, Brazil must increase its rate of innovation. The Ciência Sem Fronteiras program will help, but it is not enough on its own. Lessons from the Chinese experience should be added to the mix. Industrialization in China was built upon successive waves of FDI, which brought new technology and processes – Chinese firms engaged in an extensive process of international collaboration to drive innovation. Thanks to Ciência Sem Fronteiras Brazilian universities are already beginning to experience this through active engagement by universities in the US, UK, Canada, Europe and even my own home institution, the Australian National University. Business should follow and actively seek dynamic partners with whom new markets, products and processes can be explored and developed. The Brazilian Government could actively assist with creative programming at institutions such as the BNDES or new financing lines through the Banco do Brasil or Caixa Economica.

Second, Brazil needs a new approach to managing China. One option that will not work is the middle power route Australia and Canada have long-used to manage bilateral relations with the US. The commonality of interests is simply not in place to make this viable with BRIC-member China. Instead, attention should be given to a sophisticated ‘balancing’ strategy involving a partnership with Australia and Canada. Why these two countries? Both are relatively small and actively courting Brazil, which makes them manageable. More importantly for the impact on Chinese perceptions, they are the two other major mineral and food exporters to China.

With Australia, Brazil and Canada – a new ABC group of countries – engaging China independently Beijing is able to engage in a divide and conquer strategy. The end result is that Chinese tariffs let in raw materials cheaply, but price value-added products out of the market. This leaves the ABC countries as breadbaskets for Chinese consumers. Collective action might be an avenue for reversing this process and forcing concessions from Beijing.
China is undoubtedly going to one of Brazil’s main economic partners for the rest of this century. The danger is that relying on tired integration models and an excessively autonomist approach to engaging Beijing will quickly shunt Brazil back into a peripheral position as little more than China’s pantry.

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Filed under Brazil, Foreign investment, Foreign Policy / Diplomacy, Trade