Gustavo Coronel
My six minute presentation at the Oslo Freedom Forum
Monday, May 25, 2015
The
magnitude of the financial disaster of Venezuela during the last 15
years can be summarized by the formula: C+ I = $1.5 trillion, where C is
Corruption and I bureaucratic ineptitude. This immense amount of money
has essentially been wasted, illegally transferred to ideologically
similar foreign leaders from Cuba to Belarus or simply stolen by the
members of the regime and their cronies.
How was this possible, in such a small country of only 30 million people?
Venezuela
is a petro state. Oil represents 96% of its foreign exchange income.
This money goes to the state, not to the nation as a whole. In Venezuela
the state is really the government and the government is a political
oligarchy with an autocratic leader. The petro state has become a
Tyrannosaurus Rex while the nation has remained the size of a chicken
Where
has this money gone? About one third has been transferred to the
Venezuelan poor under a policy of cash handouts designed to gain their
political loyalty, creating an illusion of prosperity. As the money
dwindles the poor have remained poor. About 20% has gone into financing
friendly political regimes around the world. 10% has been utilized in
the acquisition of unnecessary weapons and equipment such as artificial
satellites ($400million each). 25% has been stolen and can today be
found in Andorra, Switzerland, Panama. Perhaps only 25% has been
effectively invested.
Corruption
in Venezuela has multiple faces. I can only give you a few examples:
The state oil company rents a drilling barge for $700,000 a day from a
small company incorporated in Singapore for that purpose and this small
company pays the real owner of the barge only $350,000 per day and
pockets the rest, to be shared with their “friends”. Venezuela has
given the Castro brothers about $4 billion per year in practically free
oil. Dozens of paper companies have been created by friends of the
regime to import goods that are never imported, while the preferential
dollars received are deposited abroad. Dollars are sold to friends at
the rate of six bolivars per dollar, which are then sold in the open
market for over 400 bolivars per dollar, millions made in a matter of
days.
As
expenditures grow out of control and the price of oil weakens the
regime has looked for other sources of income and has gone into drug
trafficking. Some 350 tons of cocaine per year go from Venezuela to the
U.S. and Europe, an operation essentially run by the Venezuelan
military. There are two or three drug cartels in Venezuela, one said to
be run by the number two man in government, the president of the
National Assembly. Not only is Venezuela a petro state, it is also a
narco state.
Today
the Venezuelan society is in an anomic state, with no rule of law, no
separation of powers, in fact a military dictatorship.
____________________
During
the brief period of questions I mentioned that the future Venezuelan
transition from dictatorship to democracy will run the risk of not
punishing the corrupt. This lack of transitional justice has been
evident in other cases where similar transitions have taken place, such
as Poland, Chile, Spain, even South Africa. If no real punishment comes
to the corrupt we will be promoting another dictatorship in the medium
term. We will need a Venezuelan Nuremberg.
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