Special Report: Inside Venezuela

a nation in default an economy in ruins a desperate struggle for millions here there are so many people hungry miserable without jobs now after four years of crippling u.s sanctions venezuelan president nicolas maduro senses an opportunity hopefully we can find paths of closeness of respect paths of mutual benefit donald trump is out joe biden is in he wants to negotiate a deal paths that allow us to normalize relations between the united states and venezuela but venezuela isn't a free country the political opposition has been crushed media are censored or controlled by the state if maduro wants to end the sanctions much has to change no wonder there's so much skepticism the socio-economic situation of venezuela is like a very thin threat that could break this is venezuela a country that has suffered one of the greatest economic and humanitarian crises in modern history today it appears nicolas maduro and his government are prepared to negotiate an agreement that might end u.s sanctions and pave the way for free and fair elections is he really ready to deal or just setting the stage for another disappointment i'm eric shatzger and i came here to talk to the power brokers who will decide this country's future join me as we go inside venezuela less than a decade ago venezuela was the richest country in latin america a global oil powerhouse flushed with petrodollars today it's one of the poorest and life for millions is a struggle for survival the economy has been flat on its back for 22 years dragging more and more each day every day hyperinflation abuses us it doesn't allow us to eat it doesn't allow us to get medicine venezuela's decline is a story of destructive domestic politics and failed foreign intervention it started with hugo chavez the self-styled revolutionary and it continues today with his chosen successor president nicolas maduro venezuela used to be the biggest oil exporter to the united states bigger than saudi arabia but since 2019 u.s sanctions have kept the country from selling most of its crude and forced it into default imposing economic sanctions on the knowledge that this is going to hurt the population as a whole it is essentially targeting civilians or at least doing something that you know you're aware generates significant collateral damage among non-combatants according to government figures the economic embargo has wiped out some 50 billion dollars a year of export revenue if venezuela can produce oil and sell it it can produce and sell its gold can produce and sell its bauxite can't produce iron etc etc and can't earn a revenue in the international market how is it supposed to pay the holders of venezuelan bonds even maduro whose authoritarian regime has withstood u.s efforts to oust him is desperate for a deal this world has to change this situation has to change maduro appears on state television multiple times a week blasting the u.s government and his political opponents for venezuela's troubles but the economy was already in shambles by the time he took office in 2013. chavez wanted to build a socialist utopia when travis came into power there were four steps you had to take to export a container of chocolate that's jorge redmond ceo of chocolates el rey he makes some of venezuela's finest chocolate and sells it all over the world today there's 90 steps and with and there are 19 ministries involved in this process of permissions and documents and whatever so if we if we could go back to four or five steps that would be a big big big help for for our business and that's just an example of everything else that goes on the u.s sanctions go back to the presidency of george w bush and continued under barack obama they intensified during the trump administration especially after venezuela's 2018 election maduro won but international observers said his victory was a sham the main reason why maduro is still there is not a lack of unity we've had almost perfect unity in the last 12 years in venezuela through primaries consensus demonstrations and institutional legitimacy in the case of the president of the parliament the main reason is because modulo is a dictator the leader of venezuela's legislature is whom the u.s recognizes as president not maduro today there is more pressure on maduro in his regime what they pretended was social control degenerate into a total lack of control because today they can't even ensure a supply of gasoline the country with the world's largest proven oil reserves does not have gasoline so farmers can transport their food from the countryside to the city across the country drivers line up for hours sometimes days to fill up with gas venezuela's once mighty oil industry has been crippled production that peaked at almost three and a half million barrels a day shrank to just three hundred and ten thousand not enough to meet domestic demand two days more or less approximately to line up for tomorrow if we're lucky tomorrow they'll fill up with gasoline from today until tomorrow i have to spend the whole night here until tomorrow it's a disaster a total disaster losing a day a whole day of work an entire day in june of 2021 oil minister tarek al-aisami predicted the lineups would be gone in weeks but they're still here across the country infrastructure is crumbling poverty is everywhere slums blanket the hillsides as far as the eye can see and without access to vaccines covet 19 is ravaging the population my god we have to get out of this lord please enough waiting already mr president please make it so these people are vaccinated help there have never them so many poor people in venezuela public services were never this bad the income of the venezuelan family has never been as low as today none of the people you see here have been vaccinated even though there is a pandemic enrique capriles is a former state governor and presidential candidate i think that the socio-economic situation of venezuela is like a very thin threat that could break it has not broken but he could break maduro knows things can't go on like this already he started to unwind many of chavez's policies if the restrictions the sanctions the persecution of the bank accounts of the finances of the economy of the oil production that were forced on venezuela if they were forced on another country of the world what would happen what would they do that's what we should ask ourselves look at the globe point to another country and see what would happen how that would affect their reality well venezuela has had to declare a war economy we are acting on a war economy price controls are mostly gone gasoline subsidies have been reduced public spending was slashed maduro had little choice the economy was in a free fall inflation became a national obsession [Music] in venezuela there have already been two devaluations and the third is coming one in 2008 and another devaluation in 2018. in 2008 they removed three zeros from the currency and in 2018 they removed five zeros and they are planning to remove six zeros from the currency it means that inflation in venezuela exceeds ten zeros this is hyperinflation the currency is useless this is the worst i mean it's i don't mean to mean to be so negative but in minnesota we've never seen something like this we have heard and and read about uh inflation's in argentina and in chile in brazil and we've always thought well that's that's their problem but now we find that it's very much our problem venezuela's official currency the bolivar is almost worthless even the most basic goods cost millions nowadays prices for just about everything are in dollars the government is letting them circulate freely starting in november we started using only dollars and to write down people's names we use dollars because the bolivar is useless i was selling something to people for 20 million bolivars and soon after i couldn't buy anything with those 20 million dollarization has improved life for many store shelves that sat empty only a few years ago are full again zell the app that draws on dollars in u.s bank accounts is hugely popular lowering inflation rates is not capitalist it's preserving and defending the purchasing power of workers generating more food production is not capitalist it's guaranteeing the food security of the venezuelan people delci rodriguez maduro's vice president is the architect of all these reforms today the venezuelan private sector is becoming less dependent on oil income it's becoming a sector that invests produces and it's finding space in venezuela to develop its potential [Music] potential jorge redmond is still waiting for a rebound i i'd like to believe in it and i think in in the end i think the government has come to the conclusion that they need to do that because nothing works our economy had already collapsed so maduro was forced to acknowledge under the circumstances the dollarization maduro it's a tricky balancing act one minute he's almost begging for negotiations to end the us sanctions the next he's denouncing yankee imperialism i would say to president joe biden stop from the white house from the state department stop the demonization of venezuela the demonization of the bolivarian revolution the demonization of president nicolas maduro hopefully we can find paths of closeness of respect paths of mutual benefits and paths that allow us to normalize relations between the united states and venezuela interest in venezuela just how far is maduro willing to go or is he stalling for time that's next on inside venezuela [Music] venezuelan president nicolas maduro says he wants a deal to ease the u.s sanctions that crippled his country's economy to establish a real objective credible verifiable foundation and a negotiation process to normalize relations between the two countries in win-win terms which has been our goal for a long time for the first time in years there's some reason for optimism the u.s remains deeply concerned about the ongoing crisis in venezuela and the biden administration has set conditions for meaningful progress starting with electoral conditions that abide by international standards for democracy the optimist in me you know makes me say that the sort of magnetic pull between the united states and venezuela will overcome everything else what hasn't changed is the assessment of maduro himself here's how president trump summed it up during his last state of the union the united states is leading a 59 nation diplomatic coalition against the socialist dictator of venezuela nicholas maduro is an illegitimate ruler a tyrant who brutalizes his people but maduro's grip on tyranny will be smashed and broken here this evening he's a very brave man who carries with him the hopes dreams and aspirations of all venezuelans joining us in the gallery is the true and legitimate president of venezuela juan guido mr president please take this message back to you maduro not only outlasted trump he insists the former president was ready to negotiate we always had contact with donald trump i was about to meet with donald trump personally in september of 2018 when i went to the united nations general assembly in new york we received the call from the white house but we know about the pressures john bolton and other officials around donald trump were applying to prevent what he wanted which was a meeting with me had we met his story might be different you were going to go we were going to meet in new york we made all the arrangements by phone to meet in new york but in the end the pressure was too much for him for donald trump and contact was canceled lately maduro has been giving ground he moved six political detainees from prison to house arrest gave the opposition seats on an elections council and allowed the world food program into venezuela there is a new administration in washington that administration believes that positions need to be aligned with europe believes that the international community needs to be aligned in the search for the recovery of democracy in venezuela they are ready to accompany and support the negotiation process there are also people in maduro's side who have noticed that the existential conflict is not good in the position they are in because there is no way to recover the country economically i imagine the government is under heavy internal pressure a new round of talks between the government and the opposition is underway mediated by norway the reality is that negotiations in venezuela have consistently and systematically failed so this is not the first attempt at negotiations nor the second nor the third but dialogue is a constructive step after the uprisings and insurgencies that failed to topple maduro in 2017 and 2019. inside the opposition divisions are sharp one side favors a step-by-step approach the gradual easing of sanctions in exchange for concessions the other side led by guido wants to keep the sanctions in force and only recently agreed to negotiate what everyone can agree on is that conflict and confusion only help maduro these authoritarian regimes want to win by wearing out by getting the world tired of fighting by getting venezuelans tired of demanding that is what happened in cuba at the time i'm going to be very clear we're not going to get tired of fighting or demanding our rights because that is something very important it is true that the government has cheated deviated but it is also true that we have made very costly mistakes every time we have advanced we have arrived at a dead end and in the end the result hasn't weakened maduro faces a big test in november of 2021. regional elections the next few months are critical to get international observers lined up for the november elections will he let venezuelans vote freely and fairly that and more coming up in this bloomberg special report inside venezuela [Music] venezuela's disputed election in 2018 made president nicolas maduro a pariah in the west and provoked a crushing series of u.s sanctions now he has a chance to reverse the damage if the regional elections in november 2021 are considered free and fair enough the biden administration might relieve some of the pressure on the venezuelan economy and its people i would create a humanitarian oil for food program so that venezuela can regain access to the oil revenues that it's lost because of sanctions and it can use them in addressing its economic and humanitarian crisis it appears maduro is willing to make concessions though he clearly won't surrender all of his negotiating leverage you can't put a gun to the head of the people of venezuela with the united states telling us what we need to do we would turn into a colony we would turn into a protectorate the path forward is strewn with obstacles like the political opposition it's fragmented and there's no one leader to rally around president that is as unpopular as maduro that has so mismanaged the economy and that is accused of the type of atrocities that maduro is accused of cannot win an election what can happen is that the opposition can lose it the opposition is in such disarray right now then there's the government from the outside it looks like maduro has absolute authority inside it's a different story i'm not sure that you could say that maduro is a traditional dictator in other words he doesn't really have full control it's not a one-man you know it's not it's not the position he's in he really has to balance off a lot of competing factions within his own party the longer it takes to reach a solution the longer maduro has to fortify his position without access to oil markets he turned to china russia iran and cuba for help and in caracas there's evidence the economy is growing again for now venezuela can't issue repay or restructure its debt and sanctions bar u.s investors from trading the bonds they're worth just pennies on the dollar right now venezuela wants to pay but it can't because of the blockade i'm not going to tell you our strategy but i will note our willingness and our commitment venezuela has always been a good borrower hans humes owns venezuelan bonds and makes frequent trips to caracas if the trading ban gets dropped and the government is allowed to negotiate with its lenders he says it could be a bonanza something in this sort of 50 60 range on a you know net present value basis i don't think it's out of the question latin america has a long history of authoritarian regimes venezuela's surely won't be the last yet maduro is clearly longing for a future that looks more like the past he once knew i've driven with my wife i've driven in new york i myself have driven new york boston baltimore philadelphia the whole east i've driven in miami i've had a little drink and i have danced salsa on kaya ocho of miami i know the united states atlanta i've gone to the place where the remains of martin luther king are and all those neighborhoods i've gone through them while trump was president many thought military intervention was the best way to change the regime in venezuela that's no longer on the table i will not support a coup d'etat a coup d'etat is what led venezuela to this catastrophe in 1992 chavez tried to seize power by force speaking of resentment and hate to a certain sector of society and we're seeing the consequences now all that was accomplished was disaster catastrophe francisco rodriguez was chief economist to venezuela's congress during the chavez years he doesn't think there's any chance maduro will step down before the 2024 presidential election not unless the u.s gives him the one thing he craves recognition as president legitimacy in exchange for an orderly exit maduro would be essentially committing to not running again to stepping down in 2024 at the end of his term uh and you could do something that changes the venezuelan situation that opens up the space for a transition for a new figure to emerge which might come from franchise mode might come from the opposition uh but which will essentially allow the country to take a step forward will he or won't he run in 2024 it could be the most consequential question for venezuela's future maduro won't say my destiny my future honestly honestly it's not the most important thing the most important thing is the country and that's where our efforts are focused [Music] you

Channel: Bloomberg Television

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Length: 24min 6sec (1446 seconds)

Published: Fri Aug 20 2021