Paranoid Plots and Empty Aisles

Paralyzed by Chávez's absence, Venezuela's shaky government is inventing threats from abroad. But the hungry masses aren't buying it.

CARACAS - Lidia Gonzalez doesn't have time to look for counter-revolutionaries. She's too busy looking for sugar.

Hours after Venezuelan Vice President -- and current de facto leader of the country in Hugo Chávez's absence -- Nicolás Maduro told the nation that government security forces had uncovered a plot to assassinate him and the president of the National Assembly, Gonzalez was waiting in line at the store. Shelves were riddled with empty spaces where the food used to be.

An employee at the Agriculture Ministry here in Venezuela's capital city, she was returning home when a friend called to let her know that sugar had just been delivered at their local supermarket. She promptly forgot about Maduro and his exhortations to beware of foreign agents looking to destabilize the country.

"I haven't seen sugar in weeks," she says. "The revolution is important and I love our president. But I suspect Maduro was just talking nonsense. It's just another farce, another show. They have cried wolf too often."

Maduro made his accusations before tens of thousands of red-shirted followers who heeded the government's appeal to flood the streets of Caracas on Jan. 23 in a show of support for President Hugo Chávez. The president remains in intensive care in a Cuban hospital and hasn't been seen or heard from since Dec. 11, when he underwent his fourth operation for cancer. Since then, there have been repeated rumors that he is unconscious, breathing with a ventilator, or dead. All have vehemently been denied by Maduro and the government. Doubts only grew after the Madrid-based El Pais erroneously published a photo of a man it claimed was Chávez breathing with the help of a machine. The paper subsequently said it had been duped and that the photo had come from a medical website. The Venezuelan government has vowed to sue the paper in Spanish courts.

Maduro said during the Jan. 23 rally -- which was held on the 55th anniversary of the overthrow of Venezuela's last dictator, Marcos Pérez Jiménez -- that right-wing extremists from both Venezuela and abroad were involved in the assassination plot. He often had to shout above the din of his supporters, many of whom were chanting "With Chávez and Maduro, the country is safer!'' and "They will not return!" in reference to the country's pre-Chávez leaders.

"We have been following for some weeks groups who have infiltrated the country with the objective of making an attempt against the life of my colleague, [National Assembly President] Diosdado Cabello and against my life," Maduro said to the crowd. "The criminals who have slipped into our country aren't here to ask us for cacao." 

Maduro, who was anointed Chávez's heir apparent on Dec. 8, provided no proof of his allegations, but said the government would shortly take action against the plotters. After the speech, Maduro left for Cuba where he said he would meet with Chávez, leaving others to give more details.

Interior and Justice Minister Néstor Reverol said on Jan. 24 that the groups had even given code names to their targets. Maduro, whose first job was driving a bus, was codenamed the "bus driver," while Cabello, a former military man, was "the little lieutenant."             

"We're not going to give the far right even one millimeter to destabilize the country," Reverol told journalists. "We have activated all of the police and intelligence officials. We have strengthened security measures for the comrades." 

Reverol didn't announce any arrests, and gave no reason why none had yet been made. State Attorney General Luisa Ortega Díaz told listeners of her radio program that they should "be alert" for plotters and people seeking to destabilize the country. A special prosecutor has been assigned to investigate, she said.

Assassination plots are nothing new in the Bolivarian Republic of Venezuela. During Chávez's 14 years in power, the president alerted the country to more than a dozen such plots against his life. Few arrests were ever made; no proof was ever given. The charges have usually surfaced at times when Chávez was facing domestic problems, and Maduro seems to be following suit, says Vanessa Neumann, an analyst who follows Venezuela at the Foreign Policy Research Institute.

"It is a page right out of the Chávez playbook that fits well with the traditional Bolivarian narrative of a revolutionary force fighting evil, plotting imperialists who want to oppress the Venezuelan people and undermine democracy for their own benefit," Neumann says. "Chávez has used it to marvelous effect over the years to change the topic of domestic discontent. Maduro has shown us how much he has learned from Chávez and been groomed by the Cubans: he uses some of the same rhetoric as Chávez and has improved his public speaking markedly."

This time, Maduro's playing of the assassination card coincides with mounting food shortages throughout the country, and rumors of a growing feud between himself and Cabello. Staples such as sugar, coffee, cooking oil, meat, wheat flour, rice, corn meal, and chicken are in very short supply, leading to long lines outside supermarkets. Toilet paper, toothpaste, and dishwashing liquid have also disappeared. Canisters of liquid natural gas, which Venezuelans use to cook their meals, are in short supply as well.

"There is no cornmeal, no rice, no pasta, no wheat flour," said Luisa Mendez, a 36-year-old housewife in the central industrial city of La Victoria. "And when supplies arrive they immediately vanish. What kind of revolution is this?"

Over the last few days, government officials have moved to seize stockpiles of foodstuffs held by companies, which have been accused of hiding products while waiting for prices to rise. The companies, on the other hand, have complained that the government is seizing the inventories they need to produce more goods. Pepsi, for instance, has complained about stockpiles of sugar it imported from Guatemala being seized. 

The supply shortage is partly due to the government's own economic policies and Maduro's refusal so far to take long-delayed economic decisions. Chávez had been expected to devalue the country's currency this month. The government derives nearly half of its revenue from oil sales, which are dollar-denominated. Any devaluation would give the government more bolívares to spend. Anticipating a devaluation, the black market bolívar has fallen to 18 to the dollar. The official exchange rate, however, still stands at 4.3 to the dollar.

There were also expectations that the government would raise the costs of many items, the prices of which are set by the state, including toothpaste, toilet paper, and dishwashing liquid. These items have been in short supply as producers, arguing that they can't make a profit at current prices, have reduced output. 

Key decisions on these and other policies now seem to be indefinitely delayed in the ongoing power vacuum. During his 14 years as president, Chávez eroded the autonomy of the country's political institutions, and was personally involved in nearly every key decision. His absence has now paralyzed the government, with seemingly no one willing to take control.

Miranda state Governor Henrique Capriles Radonski, who unsuccessfully ran against Chávez in October and is expected to be the opposition candidate if new elections are held, criticized the government for not moving to solve the country's problems. Those who don't know how to govern "cover up the reality with insults and threats," he said at a local council meeting.

Maduro and others have said that Chávez is more and more animated, talking and showing signs of recovery, but doubts persist. Maduro said that Chávez appointed former Vice President Elías Jaua as the country's new foreign minister and showed a document on television bearing the president's signature. The opposition quickly pounced, saying that if Chávez was well enough to sign documents, why couldn't he make a call to the state television station to let people know he was alive and recuperating?

"I think we would have heard from Chávez by now if he were able to speak," says Risa Grais-Targow, an analyst with Eurasia Group. "That he hasn't appeared suggests his condition is very delicate."

The country's Supreme Court ruled earlier this month that Chávez could stay indefinitely abroad while remaining head of state. The justices also rejected opposition calls for an independent medical commission to examine the president to see if he is still fit for office.

The reason is simple: If Chávez were unable to serve, Cabello would become acting president and would have to schedule fresh elections within 30 days. Backers of the president may be stalling to allow Maduro more time to grow into the job while the deification of Chávez progresses.

Meanwhile, state television runs constant footage of Chávez embracing children and elderly women. They also released a remix of John Lennon's "Imagine" with new revolutionary lyrics. "Imagine Venezuela, leaving forever in peace," the song suggests. But the president's most fervent supporters have shorter term concerns, Neumann warns. "Venezuelans, even those who support Chávez, will be fed up after another month of this," she says.



Ski Camp

Does Davos still matter?

DAVOS, Switzerland - On the face of it, Davos doesn't seem to make much sense. For business and political leaders who are increasingly mistrusted by the public, cloistering themselves in a luxurious mountain redoubt for a week seems like a good way to sharpen the perception that they are far removed from the interests and concerns of their constituents. And in a world of ever-proliferating global forums -- TED and Google Zeitgeist for the techies, Clinton Global Initiative for the high-minded policy and business types, the list goes on -- the World Economic Forum (WEF) has a bit of an identity problem. Aside from the invigorating alpine freshness, the good skiing, and the chance to meet Charlize Theron, is there any reason to come here? And does what happens here still matter at all?


First, for all the interconnectivity enabled by social media and information technology, personal meetings still matter, and Davos consistently gathers some of the most powerful and intelligent people in the world in one place. That includes the nearly 40 sitting prime ministers and presidents who are here, figures such as Shimon Peres of Israel, Mario Monti of Italy, David Cameron of Britain, and Angela Merkel of Germany. 

But more importantly, that includes guys you've probably never heard of -- guys like Carl Ganter, who I've befriended here. Carl runs Circle of Blue, an organization that provides data on the world's water crises. He's one of the smartest guys in the world on the question of dwindling water resources, and is particularly attuned to how water shortage exacerbates risks pertaining to food, energy, and health. I have no particular expertise on the topic -- but it's interesting, it's important, and it helps me to think more clearly about an issue that directly affects the global political risk focus of my own work. I wouldn't have bumped into him were it not for the WEF. Davos unearths the interdisciplinary aspects of your profession thanks to serendipitous encounters with other attendees.

Second, a lot gets done here. Not "by" Davos. Davos itself doesn't do anything. But the key word in World Economic Forum is "forum" -- the event provides a platform for powerful people to pursue their distinct interests. There's no fat here. Sure, there are people who are just here for the parties and the scene -- but you won't slot them in for a 30-minute meeting.

It's like 2,000 of the world's top decision-makers having Hillary Clinton's U.N. General Assembly schedule for a week. I'd say six weeks of work actually gets done here in just a few days. That's certainly true for me. It's not the way I'd want to live my life -- I'm thoroughly exhausted by the end of the trip. There are a huge number of business deals getting done here.  This year, I know of two technology agreements involving U.S. firms, one energy deal involving an African firm, and a medical devices agreement.

Once again, Davos isn't a government -- it's a forum.  It enables private and public players to get on the same page. For example, in a public session I hosted, there was a great back and forth between the governor of Brazil's development bank and a major investor in the country; it led to a private discussion after, cards were exchanged, and I strongly expect interactions like this ultimately lead to an improved business climate down the road.  Davos may not make policy, but it's at least a nice little uptick for global productivity.

But even if Davos is a place where lots of powerful and intelligent people can meet each other and exchange ideas, does that matter for the rest of the world? Does Davos live up to the WEF's claim to be "committed to improving the state of the world"? 

Again, I think the answer is yes. But we need to rethink how we understand Davos.

First, it's a good thing that Davos isn't global. And let's be frank, with 67 percent of attendees hailing from Europe or North America, this is not a Benetton ad of global interests. Emerging markets may drive two-thirds of global growth, but they drive about a tenth of the WEF agenda. But to be fair, Davos was never global (just like the World Bank was never global), we just pretended it was because it made us feel good -- and, well, the rest of the world had to follow what the West wanted, anyway.

But the result of a more insular WEF, while imperfect, is at least substantial: It avoids the dysfunction of the G-20, where nothing gets done, besides the adoption of vague "coalitions of the willing" strategy documents. Folks at the WEF actually share a common worldview -- a devision to transparency, free trade, global governance, liberal democracy, and the rule of law. This lets them align their interests and boost productivity, even if it isn't global. This is becoming more important, precisely because there are growing alternative models out there.

Take the fact that China, which will soon be the world's largest economy, subscribes to state capitalism rather than the free-market variety, and its authoritarian government clamps down on many of the values that are extolled at Davos. (While Russia does the same, the leadership at least recognizes the utility of engaging with these ideas as it seeks to attract more foreign investment.) Sure, some important Chinese executives were in attendance -- but none of the political players of real importance showed.

The absence of China means, on the one hand, that Davos can't presume to be global. On the other hand, it means a Western agenda can actually be set without the conflicting viewpoints that a country like China would bring to the table. That may stoke tension, but at least it makes the positions and agendas clear. 

Lastly, while the theme of this year's gathering -- "Resilient Dynamism" -- has been criticized for sounding like a scrap of corporate jargon, the idea that it represents is an important one that business and political leaders everywhere should learn from. I interpret the term as follows: In a world of uncertainty and volatility, the ability to navigate these shoals and troughs -- and even grow because of them -- is paramount. As Klaus Schwab, the founder of the World Economic Forum, explains: "Either attribute -- resilience or dynamism -- alone is insufficient, as leadership in 2013 will require both."  

The other key theme at Davos this year is the vulnerability of political elites. Leaders marred by corruption, special interests, or a lack of transparency will be held accountable by their constituents. The same goes for elites that are witnessing a growing disparity of wealth, a weak economic outlook, or biting austerity. Want an example? Take a look at the record-low approval ratings of the U.S. Congress.

Many of today's most pressing challenges, such as stubbornly high unemployment or the onset of climate change, are largely out of leaders' hands. Incumbents are getting shunted out everywhere. Business leaders probably don't feel as vulnerable in this Davos as they did after the financial crisis, but perhaps they should feel more so: The combination of improving information technology and growing inequality is going to lead to much more scrutiny and attention on them. That doesn't mean class warfare, but when any of these leaders are seen to do something amiss, the reaction will be sharp and relentless.

Ensuring that leaders get this message is part of the value of Davos -- though it's an area where it still has a ways to go. As 2,600 of the world's high and mighty meet on a mountain, the forum's themes represent issues they need to stop sweeping under the rug. Part of the problem today is the investment world's fetishizing of growth at the expense of focusing on the widening gap between rich and poor. These corporate attendees, through the lofty cost of attending Davos, are essentially footing the bill for thought leaders to bring vital global issues to their attention. 

These economic, political, and media elites -- who are very much in the public eye, and increasingly perceived as not upholding the public interest -- are the very people who must pay closest attention to the increasing vulnerability of elites. Davos is their opportunity to acknowledge this trend, brace themselves, and then overcome it. After all, if they ignore the deeper issues in play, they may not have a ticket to Davos come next year.