Venezuela: Political Situation

John Spellar Excerpts

Tuesday 5th September 2017 Westminster Hall

[Graham Jones]

I am grateful for the hon. Lady’s intervention. I say to her that it is the Government—her party—who are in power, and I am asking the current Government to tackle the situation on the streets of the United Kingdom. I can speak for myself and I condemn the regime, as I have done.

I want to turn briefly to the economic and political situation. I asked the House of Commons Library to update Members of the House and am grateful that it has done so. I am also pleased that it provided a debate pack for Members before the debate. It does a marvellous job and we should all thank it for that.

Venezuela is an economic basket case. Despite more than $1 trillion of oil revenues and billions of dollars from narco-trafficking and remittances, it is possibly the most mismanaged economy in modern history.

[John Spellar (Warley) (Lab)]

My hon. Friend describes Venezuela as a socialist state. It is in fact yet another failed communist state, and shows the inability of a command economy to run the economy properly or, indeed, to feed its people. We should note that as well as huge revenues, it has the world’s largest oil reserves; but oil production is going down because of failed management.

[Graham Jones]

My right hon. Friend is absolutely right. It is a failed authoritarian communist state, but are not all communist states authoritarian in their outlook? It is certainly a basket case.

I do not need to elaborate on the stories from Venezuela that we have all witnessed over the summer and before. Recent political events have been condemned by all—the UN, the EU, the Inter-Parliamentary Union, the South American trading bloc Mercosur and Venezuela’s neighbouring countries. Importantly for Opposition Members, and coming to my right hon. Friend’s point, Socialist International has also condemned the Chavista regime, and we stand alongside our sister socialist parties in opposition to the Venezuelan regime.

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[Graham Jones]

The hon. Gentleman raises a very important point. I cannot cover all aspects of the issue in this debate, but the misery of those who have had to flee Venezuela to neighbouring countries is considerable. I think we underestimate the numbers involved and are not fully aware of the scale of the problem of those refugees who have had to flee for their own safety into neighbouring countries and the pressure that puts on those countries. The hon. Gentleman raises a very good point.

[John Spellar]

My hon. Friend and the hon. Member for Fylde (Mark Menzies) rightly identify those who are poor, dispossessed and being forced to flee, but is not the additional tragedy of Venezuela that many with university educations and technical skills are also fleeing because of the breakdown of civil society inside Venezuela? That is a long-term tragedy for that country, which, because of its natural resources, should be a very prosperous state.

[Graham Jones]

My right hon. Friend is absolutely right; it is probably the most mismanaged country in the world. As a result, it is experiencing a brain drain: those who are educated are leaving Venezuela, because the regime is strangling intellectuals’ careers and the economy, and because their human rights are being undermined and they are being persecuted for taking part in demonstrations. Many of them are taking the decision to leave, which is having an adverse effect on Venezuela.

Venezuelan cities are the most violent in the world. Gangland violence, political brutality and drugs have taken hold as the economy collapses. The motorbike militia are quite frightening, and seem to operate hand in hand with the Maduro Administration to oppress the people of Venezuela. Inflation is at 720%, according to the International Monetary Fund, and is expected to surpass 2,000%. Rather than cutting budgets and raising taxes, the Chavista Government have borrowed from their communist allies Russia and China at high prices, and have resorted to printing money. The value of the Venezuelan bolívar has plummeted 99% against the US dollar since Hugo Chávez came to power.

The crunch will come later this year when Venezuela’s debt repayments come due. According to the World Bank, Venezuela has run a budget deficit in 15 of the last 17 years, and over the last four years, that deficit has averaged about 15% and climbing. Most of Venezuela’s reserves—what little it has—are in the form of gold, so in order to make debt repayments this year, Venezuela shipped gold bars to Switzerland. China has bailed out Venezuela by loaning it an eye-watering $60 billion, but now, according to analysts, even it is reluctant to give its Latin American ally more credit. Despite all this borrowing and huge receipts from legal and illegal exports, the country remains in dire straits. Food prices are soaring and hospitals are broken. If Members want further information, there are some good illustrative examples in the House of Commons paper provided for the debate.

Transparency International consistently ranks Venezuela as one of the most corrupt countries in the world. The House of Commons Library briefing paper states that former president Hugo Chávez

“inherited a weak economy which deteriorated further under the initial phase of his Presidency”,

with an average fall of 5.1% in economic performance, which was finally offset only by significant increases in world oil prices. Its modest rises in GDP between 2004 and 2008 were financed solely by rising oil prices. Oil accounts for 98% of total exports and 59% of official fiscal revenues.

Economic problems were exacerbated from 2005 onwards, when so-called unproductive land was nationalised, along with strategic industries including electricity, steel, cement, tourism, telecommunications, agriculture, oil services, and food distribution. By 2013, the World Bank ranked Venezuela 160th out of 185 nations for electricity availability, and 185th out of 185 for paying taxes.

We must question how Chávez’s daughter, Maria Chávez, has amassed a personal fortune of $4.2 billion. The Bolivarian revolution has spawned many “boligarchs”; the presidential palace, according to elected opposition members, costs more than $3.6 million a day to run. Such profligacy extends to the state oil company, whose US subsidiary, as reported in April by The Guardian, donated $500,000 to Donald Trump’s inauguration. All overseas trade is currency-controlled. Since 2003, the Chavista Government have controlled currency. The real currency rate is now thought to be 700 Venezuelan bolívars to the dollar, but those needing dollars require a Government permit.

As the economic situation deteriorates, the dollar is becoming the de facto currency, yet poor people cannot access it, which means they cannot access many basic goods that must be imported. The four Government rates, including what can only be described as mates’ rates, are just another means by which the Chavista elite can gain material advantage. Corruption and incompetence have been endemic throughout the Chavista regime. According to Transparency International, when the state oil company, PDVSA, took over a programme to buy food in 2007-08, more than

“1 million tons of food were bought for US $2.24 billion, but only a little more than 25% of the food was received. And of this figure, only 14% of the food was distributed to those in need. At one port alone, 3,257 containers with a total of 122,000 tons of rotten food were found.”

The United Nations says that President Maduro, the country’s leader, is responsible for “widespread and systemic” human rights abuses. The UN has said that blame for the oppression there lies

“at the highest level of the Venezuelan Government”

and slammed Maduro’s use of excessive force. More than 5,051 protesters were detained and 1,000 are still in custody after months of clashes, according to Foro Penal. Some 600 cases of torture have been referred to the International Criminal Court; according to the Casla Institute, 70% of torture cases involve sexual assault. There are 620 political prisoners in Venezuela, according to the Organization of American States, and 73 people have been killed by security forces during protests, according to UN High Commission for Refugees. The UN states that violations include house raids, torture and ill-treatment.

Before I conclude, it is worth briefly mentioning democracy in Venezuela. Although elections take place, the Government spend most of their time manipulating the law—either breaking it or changing it—with the sole intention of undermining the opposition. That has gone on for a considerable time. The line dividing state and the ruling party spending has been erased. Citizens and organisations loyal to the Government get most state jobs, contracts and subsidies, while overt opponents get nothing or are locked up. Proportional representation has been manipulated and mayors sacked to favour the PSUV.

I would like to ask the Minister about UK nationals caught up in Venezuela. My constituent Judith Tregartha-Clegg is worried that political turbulence could leave her daughter stuck in the country. She states:

“A few airlines have been cancelling flights out of Caracas because of the trouble and some just won’t fly there anymore.”

She expressed her worry and her daughter’s about the journey to the airport. She has received no support from the Foreign and Commonwealth Office so far. What support have the UK Government given to UK nationals living in Venezuela? Do they have a plan to evacuate all UK nationals from Venezuela if the situation deteriorates?

Judith has described to me the dire situation. Her daughter now lives in the town, as their home was taken over by squatters following 2006 legislation allowing for requisitioning of property. It is not safe outside urban areas. Schools do not have teachers, because they have not been paid.

In summary, condemnation is not enough. The UK Government must show resolve through tangible actions that will put pressure on President Maduro and his allies to respect democracy, human rights and the rule of law. The UK Government should lead on targeted sanctions against individuals in the Venezuelan Government responsible for drug trafficking, human rights violations and breaches of democracy. Those sanctions should include: freezing any UK assets belonging to those individuals; preventing UK individuals and companies from doing business with them; enforcing a travel ban against them; enforcing a ban on exporting weapons or any equipment that might be used for internal repression in Venezuela. I note that we give Venezuela export licences for military equipment. Surely that must stop.

Those are not economic sanctions against Venezuela. It is important that the UK targets the regime and not its citizens. Can the Minister update the House on what progress he has made in introducing sanctions, and when we are likely to see some? Many thanks for your patience, Mr Stringer; I look forward to the rest of the debate and to the Minister’s reply.

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[Mr Clarke]

I completely share my hon. Friend’s condemnation of the regime. I would not have thought it so difficult for the advocate of a “kinder, gentler politics” to condemn state violence and murder.

[John Spellar]

I think my cold war credentials are fairly clear, but I recognise that the hon. Gentleman and some other Members who have made interventions are fairly new to the House. Do they recognise that one can make a greater advance by uniting across party lines on issues of common agreement than by trying to score cheap political points? The points speak for themselves, but what we need is a united attitude from the British Government and the British Parliament on this issue. He is not getting the balance right.

[Mr Clarke]

I am afraid I totally disagree. The Leader of the Opposition speaks for the right hon. Gentleman’s party, and he is absolutely and totally mealy-mouthed in refusing to condemn violence by the regime. He talks about condemning violence by all sides. What does that mean to the victims of this monstrous tyranny?