Matt Gertken: Hi, I'm Matt Gertken. I'm here with Karen Hooper and we're going to be talking to you about the situation in Venezuela. So Karen, we've seen massive protests in Ukraine, and we've seen the government turn over and a lot of conflict between Russia and Western powers over how to deal with that situation going forward. At the same time, there's a lot of protesting and unrest in Venezuela that has kind of gone under the radar. What's the situation right now?
Karen Hooper: So we've had a few weeks of protest in Venezuela. It really started off in early February, with scattered protests as a result of some student arrests in Tachira state that really escalated on Feb. 12, when everyone came to the streets in Caracas. There were some altercations with the government forces and at this point we're seeing those style and size of protests being repeated every week or so. The last one was yesterday, and still today, people are on the streets in a lot of different cities in Venezuela, from Merida to Caracas. And so we're looking at a situation of really persistent unrest. It doesn't seem to have the same kind of I guess stationary character that Ukraine did. They aren't camping out, but they are marching the streets to the tune of 100,000-200,000 people pretty regularly and that's very notable.
Matt: There was intelligence that was leaked from Diosdado Cabello's account, basically, some of his emails came forward, and they seemed to show some things suggesting that he's setting himself up as an alternative to Maduro or maybe a rival. Is that kind of struggle in the political elite something we should take seriously?
Karen: So there's been a lot of rumors and a lot of speculation and a lot of indications that there isn't entirely unity in the inheritors of Chavez's regime. The leak that came out this weekend was reportedly showing Cabello's emails, showing that he was coordinating with colectivos, which have been harassing the protesters, that he was potentially plotting against Maduro. But the authenticity of that leak is really in question. There's a lot of reason to believe that it is perhaps not real.
Matt: Yea, and if you look at a movement like Chavez's, where its so centered on his personality and his charisma, and then he passes away and you have this succession process, that often opens the doorway for some much trickier management for the incoming administration. How is Maduro's regime faring so far?
Karen: Well, Maduro really doesn't seem like he's ruling with the same kind of authority as Chavez. He's ruling more with a collective authority of Chavez's former ministers, and when Chavez designated Maduro as his heir, Diosdado was the assumed second, and we really have seen a lot of speculation over the past year that there's a power struggle between them. They do seem to be working together, but there are some signs that there's friction there, and that potentially Diosdado might be calling the shots a little more than you would expect from the head of the national assembly.
Matt: So going forward, what does that mean? In particular, I think economic stability would be a major factor in how the regime is able to cope and survive. What's the economic situation, and how to do you think that plays into this?
Karen: Well the economic situation is really the foundation for most of this instability. Inflation this year reached over 50 percent; in 2014 it'll be even higher. The challenge is that they are actually having a cash flow problem, which is a major conundrum for a country that is a major oil exporter. So they don't have enough foreign exchange to finance their imports, and this is causing shortages, this is causing the black market dollar to sky-rocket, and we are really seeing a lot of economic instability throughout the country. There are shortages right now in Tachira state that are really outstripping the rest of the country. The government over the weekend made a lot of effort to distribute food — thousands of tons is what they said they've distributed throughout the country — but they're not distributing it in opposition strongholds, or at least that's where it appears right now. And so, in a circumstance where you have a lot of scarcity, you have inflation, you have a paucity of dollars in the system, there's not a very clear answer for how they're going to address the problems that are affecting even the base of support that was Chavez's constituents. Those people are now starting to question — we're not seeing them come out in protest of the government — but we do hear reports that there's just a lot of unhappiness with the degree to which economic hardship is affecting everybody in the country.
Matt: Ok. So you have a chronically unstable country that seems this time to be entering into more political difficulty as a result of that: no clear solution on the horizon. What's the international impact of this?
Karen: The international impact is relatively limited, at least so far. The protests themselves are isolated to big cities, the Maduro government hasn't fallen. They have rejected offers of international mediation, but we're watching very carefully former Brazilian President Lula da Silva and the current president of Uruguay, Mujica. They've offered to mediate between the opposition and the government. We'll see where that goes. But for now it looks like the government is trying to solve its own problems in its own way. The big question on everyone's mind is whether or not this impacts oil. The answer is, probably not. The situation that affected Venezuela in 2002, when oil workers went on strike and there was a cessation of — or a significant reduction of export to the United States — that situation is no longer the case. The unions, the people who work at the national oil company PDVSA, they are for the most part on the side of the government. The government recently gave them a 90 percent raise, so there's good reason to believe they might not have the same problems internal to PDVSA that they had in 2002. Add to that the fact that most of the oil infrastructure is relatively isolated from where this unrest is happening. You would have to see a significant militant effort develop in order to degrade or interrupt oil shipments in any meaningful way.
Matt: Given that we've seen unrest underestimated across the world, we'll be continuing to watch Venezuela very closely. Thank you for joining us.