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Mundo #24 - Raúl Gallegos on what Putin's regime teaches us about Venezuela

Updated: Dec 8, 2020

Greetings from Bogotá, Colombia, and welcome to edition 24 of Mundo! This week I interview Raúl Gallegos, one of the world's leading political analysts covering Venezuela. We continue our theme from Mundo #23, analysing Nicolás Maduro and his regime's tragic resiliency in Venezuela. But first, I briefly recap the U.S. election, and why Trump will remain a political force out of office.

Are you in Bogotá? Let me know if you're around for a socially-distanced cup of Colombian coffee.

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Approximate reading time: 5 minutes.

Trump lost, but will remain a force

Last week the world fixated on the U.S. election, as vote tallies saw Joe Biden gradually draw ahead to secure victory over Donald Trump as the next president. When several media outlets called the election for Joe Biden last Saturday, the mood where I was in New York City's Manhattan, was one of euphoric release.

Photo taken November 7 at Columbus Circle as people celebrated Biden's victory.

No doubt you've had your fill of election analysis, so I'll only make a few short points following on from the election scenarios of social and political instability I outlined in Mundo #22.

  • What unfolded was essentially a calmer version of Scenario 3, with Biden winning a narrow victory that is disputed by Trump, without any legitimate basis. Accordingly, only his most loyal supporters protested the results, and demonstrations were predominately peaceful.

  • I flagged the logistical success of mail-in voting, in-person voting, and the perception of foreign interference as factors that could trigger greater political and social instability. Local, state, and federal government officials and agencies have not found any voting irregularities beyond normal glitches that occur in any election, nor any evidence of foreign interference in the election process.

  • Trump still refuses to concede, and his campaign has launched a number of legal challenges. However the particularities of the US electoral college system, generally a winner-takes-all accumulation of electoral college votes by state, sees Biden winning a comfortable electoral college victory, despite some extremely close results at the state level. Biden's margin of victory diminishes the likelihood of state-level legal challenges impacting the overall result, even if these legal challenges had legitimate grounds (they don't).

  • The U.S. remains deeply polarised, and Biden's victory doesn't lessen this. The electoral college gives a false sense of the magnitude of Biden's victory, when by popular vote, Trump still garnered approximately 72.6 million votes, or roughly 47% of the total vote.

  • Trump will continue driving this polarisation, who will remain a political force even out of office. He has already set up a leadership Political Action Committee ("PAC") called "Save America", which allows him to receive donations and use these proceeds to push political causes while out of office. I speculated in Mundo #22 that he could run for president again in 2024, and in recent days he has signalled his openness to doing so. Even the prospect of this will suppress challengers, and prolong his hold over the Republican Party. Thus far, senior Republicans have also declined to denounce Trump's refusal to concede, showing continued deference to Trump, and his control of their party's political future.

An interview with political analyst Raúl Gallegos - What Putin's regime teaches us about Venezuela

Raúl Gallegos is one of the world's leading political risk analysts covering Venezuela, and heads Control Risks' Global Risk Analysis for the Andean region. I recommended his book Crude Nation in Mundo #6. I reached out to him recently for his views on Nicolás Maduro's regime in Venezuela, and whether its longevity can be understood in a similar way to my analysis of Vladimir Putin's Russia, from Mundo #23.

In Edition 23 of Mundo, I argued that "selective change", an opaque international financial network, a tightly woven (and vulnerable) political power network, and an ability to manipulate crises explains much of the surprising longevity of Vladimir Putin's Russia.  What do you think explains the Chávez/Maduro regime's longevity in Venezuela? Does the Maduro regime share similar characteristics to Russia?


There are some similarities, like Chávez and Maduro taking advantage of crises to advance their agenda. But in the case of Chavismo you have an impressive level of discipline that has allowed the various factions that make up Chavismo to come together when threatened (either by the opposition or the U.S.). Maduro has also learned the following from the Cuban regime (it's main advisor): 1) The use of lethal force, jail and intimidation (.i.e. terror) to keep the opposition in line and, especially its own people from turning their backs on Chavismo, 2) The use of a very effective intelligence apparatus that likewise keeps an eye on the opposition, and especially on any sign of internal dissent so it can address it. 3) The use of corruption and criminalization as a glue that keeps the regime together. By allowing regime insiders to benefit from drug trafficking, illegal mining, and other forms of corruption, the regime (as a matter of policy) allows insiders to get their own private rewards, and it also criminalizes them, meaning they can no longer have a normal life outside the regime. The regime uses these crimes against its own people to keep them obedient. This forces them to remain committed to the regime because outside it they would face jail, destitution or worse. 

Mundo readers would be fascinated if you're able to sketch out a general overview of Venezuela's international financial network.  Is it purely used for financial necessity to avoid sanctions, or does it also serve as a fund to further their international political interests?

The international financial network is very obscure. But the regime relies on little known financial institutions in tax havens and countries where US sanctions are not effective, say Turkey, China, Russia, and countries in the Middle East. These financial contacts, as well as obscure traders and other intermediaries, allow the regime to maintain commercial relationships and conduct basic payments for goods and services. It also helps regime insiders to hide ill-gotten fortunes.

Catherine Belton's book details "Putin's People", and how they established and continue to maintain political power in Russia. It seems that they're equally people who Putin controls, and people who control Putin.  How would you characterise Maduro's political power structure? Is it similarly circular, or does he wield absolute authority and vulnerability to downfall?

Maduro and various power groups work like a crime syndicate, they support each other and respect each other's turfs. But the Maduro inner circle rules over the others with the advice and support of Cuba. Russia and China are influential, but they do not call the shots or have influence like Cuba does.   

Is a political transition viable in Venezuela at present? If not, what factors are you looking for to shift before it becomes viable? Can this be orderly, or is it necessarily chaotic?

Because the opposition is so weak and non-threatening to Chavismo, the only likely transition right now is one within the Chavista movement. But this is likely to happen only if and when the regime feels its survival is no longer threatened. The most likely situation then is that Maduro cedes power to another Chavista. The opposition is highly unlikely to gain access to power unless it becomes just as dangerous and threatening to the regime as the Chavista regime is to the opposition. And this is unlikely with the current opposition leadership. 

How do you think international firms should position themselves for when a political transition in Venezuela occurs? 

Companies with ample patience, financial muscle and appetite for risk are present in the country and plan on staying, even if they do so with a smaller footprint. Many of those are hoping for a time when the opposition runs things, but others are eager to take advantage of opportunities if there is some form of economic recovery, even under a Chavista government.


Who else would you like to see interviewed for Mundo?

Thanks to everyone who has emailed me with their thoughts and ideas. Keep them coming! Forward this along to others who might find this an interesting read. Stay calm, think of others, stay healthy. Mitch

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