What’s Happening in Venezuela?: A Quick Pragmatic Guide

Venezuelan opposition coalition has surprised Maduro and the world with a new and very well coordinated political strategy that has shaken Maduro’s regime. Here is a very short pragmatic guide on what is happening:

  1. Transition is a Constitutional and lawful procedure designed by the National Assembly. Last year, the opposition to Maduro and Maduro were negotiating in Dominican Republic with the support of different Foreign Affairs Ministers including Mexico, Nicaragua, Paraguay, Chile, among others. The opposition to Maduro claimed free elections and that was the center of the negotiation. But Maduro refused to sign the final version of the negotiation and decided to call for elections unilaterally, disabled candidates and outlawed political parties. As a result, the opposition did not participate and the International Community (including Canada, USA, EU, and members of the Grupo de Lima) announced they did not recognize Maduro as legitimate President as of January 10th of 2019, which was the day of the inauguration of the new presidential term. The opposition-controlled National Assembly declared that Maduro is usurping power and that the National Assembly has to assume the responsibilities of the executive power while the usurpation ends and new free elections are called. 
  2. Venezuelans need international support. Despite the political strategy has been designed by members of the opposition coalition, they have claimed international support including Grupo de Lima, USA and the EU, because Maduro has control of the military and oil industry, which produces 80% of the Venezuela income. International pressures are designed to cut Maduro’s funds and military loyalty.
  3. Opposition key steps to coming to power. Coming to power is not as easy as Juan Guaidó declares himself as President of Venezuela. As explained above, his interim presidency is backed by a Constitutional strategy and the National Assembly (democratically elected), but there have been a couple of key steps: 1) Guaidó government is taking control of the foreign assets of the Venezuelan state, including USA based oil company CITGO and the payments from oil exports to the United States. 2) «Pay to play»: offering amnesty to militaries and officials that contribute to restore democracy. In addition, Guaidó has been appointing representatives of his government to the USA, Grupo de Lima and other countries in Latin America and Canada.
  4. What are the odds that Maduro will remain in power? Despite having the control of the high military command, it is not clear that Maduro could remain in power without international recognition, but mostly without control of the flow of revenue. The reaction of Maduro is unpredictable. He can turns violent or he can negotiate his exit. IIn prediction markets (PredictIt) the odds that Maduro will remain in power were 80% three weeks ago and now are below 35%.

If you are interested in what is happening in Venezuela, I can provide you a very in-depth tailored research on political and economic outlook, economic forecast and business opportunities in Venezuela.