Venezuela- OAS: New Chapter in a Long Story

By Stefano Palestini Céspedes*

Special Meeting of the Permanent Council, April 3, 2017

On April 3, a special meeting of the OAS Permanent Council voted to condemn Venezuela’s action that allows the Tribunal Supremo de Justicia (TSJ) to take over the functions of the National Assembly. / Juan Manuel Herrera/ OAS / Flickr / Creative Commons

Venezuelan President Nicolás Maduro seems determined to validate critics’ claims that the separation of powers in Venezuela has been breached, thereby strengthening diplomatic efforts to force him to reverse course.  After the OAS Permanent Council met for two days to discuss Secretary General Almagro’s call for Caracas’ suspension, Venezuelan courts on March 29 authorized the Tribunal Supremo de Justicia (TSJ) to take over the functions of the National Assembly, and to limit the immunity of the members of the parliament.  The action reinvigorated an exhausted domestic opposition and further infuriated international observers.  Two days later, the TSJ overturned the two rulings after Maduro, casting himself as a mediator between competing constitutional powers, requested it.  These erratic actions signaled the worsening erosion of the rule of law as well as the divisions in the government and the Bolivarian movement.

  • The reversal did not take the edge off OAS General Secretary Almagro’s and others’ condemnation of the power grab as an autogolpe or “self-coup.” The Inter-American Democratic Charter was designed in 2001 precisely to provide the OAS with instruments to deter self-coups in the aftermath of those carried out by Alberto Fujimori (Peru) and Jorge Serrano (Guatemala) in the 1990s.

The TSJ decisions and Venezuela’s defiance didn’t put Almagro’s suspension efforts over the top, but the Permanent Council is now much more actively involved in the crisis.  Venezuela has isolated itself within the Permanent Council.  Speaking at the Council, its delegation severely criticized individual member states the day before the TSJ decisions.  Chile and Peru recalled their ambassadors for consultation after it.  Ecuador, an ally since the time of Hugo Chávez, distanced itself from Maduro.  On April 1, MERCOSUR invoked the Protocol of Ushuaia – the group’s democracy clause – against Venezuela, and it joined Colombia and Chile in a forceful public statement on behalf of UNASUR.  Mexico, historically a jealous guardian of the principle of non-intervention, has assumed the leadership in holding Venezuela accountable for its undemocratic practices.  As a result, the Permanent Council on April 3 approved a resolution condemning the TSJ decisions and committing to “undertake as necessary further diplomatic initiatives to foster the restoration of the democratic institutional system,” including convening a ministerial meeting.

Building a consensus for tougher action in the Permanent Council will be difficult, however.  Last week’s resolution was approved by 19 member states, but four abstained and 10 were absent.  Any proposal to suspend Venezuela will require two-thirds of the members’ affirmative votes.  Although there is still a long way to go to make the OAS part of the solution of the Venezuelan crisis, the General Secretary’s activism has set an important precedent in rallying a majority of states in the Americas to come together to discuss a member’s erosion of democratic principles and institutions – and to condemn the non-democratic actions of a democratically-elected government.  This is a first for the organization, and it is a big step toward fulfilling the original purpose of the drafters of the Inter-American Democratic Charter.

April 10, 2017

* Stefano Palestini Céspedes is a CLALS Fellow and Postdoctoral Fellow at the Department of Political and Social Sciences at the Freie Universität Berlin, where he specializes in international organizations and regional governance.

Downsides of Decentralization: Lessons from Peru

By Eric Hershberg
Embed from Getty Images
Decentralization – the buzzword among Washington-based specialists on governance during the 1990s and well into the first decade of the 21st century – failed to fulfill technocrats’ lofty expectations wherever it was implemented in the absence of a strong central government.  In one country after another, the World Bank, Inter-American Development Bank, and USAID prescribed political and administrative decentralization as a recipe for deepening democracy and boosting efficiencies in the delivery of governmental services.  An alliance of strange bedfellows united behind the “good governance” cause of decentralization, including grassroots democracy activists of the left who, in the aftermath of authoritarian rule, valued the notion of devolving decision-making authority to the citizenry.  Neoliberal economists, in turn, were attracted to virtually any initiative that would diminish the authority of central states, which they considered to be incorrigible bastions of inefficiency, rent-seeking and patronage.  Cautionary notes from skeptical political scientists were routinely dismissed as anachronistic.  At a seminar in Lima around a decade ago, USAID staff were utterly perplexed by the suggestion that, in the absence of central institutions holding the new regional authorities accountable, the headlong quest to political decentralization in Peru could bring extremely serious adverse consequences for democratic governance.  In their view, the capabilities of the central government had nothing to do with the success of decentralization.

Their enthusiasm was not entirely misplaced – but in many places the reforms eventually backfired.  The authoritarian regime of Alberto Fujimori (1990- 2000) had centralized power excessively, eliminating the handful of regional governments that had been created during the 1980s and ensuring that the social programs they had administered would be entirely dependent on the executive branch.  Fiscal decentralization, already minimal, was eliminated to make provincial municipalities completely dependent on transfers from the central government.  The few regional authorities who survived the Fujimori period were appointed by the president.  When President Alejandro Toledo (2001-06) and his Peru Posible party took office, the need to restore some decentralization was clear, but the two traditional parties – the APRA and Acción Popular –gradually coopted the movimientos regionales, creating clientelistic networks employing mafia-style tactics.  In the Ancash Department, for example, a rogue president is associated not only with corruption scandals – common in regional governments – but also with the assassination of his political enemies, including a political opponent murdered in March.  President Ollanta Humala has frozen the region’s assets, thereby putting a stop to some of the corruption but at the same time delaying needed infrastructure projects and social services.

The emergence of authoritarian enclaves was predictable of fledgling democratic regimes in Latin America, and the phenomenon is not unique to Peru (click here).  Sub-national authorities have access to vast resources to distribute to their clients (and themselves), and all too often the central state lacks the capacity or control over the purse strings to rein them in.  Social scientists have long been aware of the “paradox of decentralization,” and indeed at American University it is a concept that we typically teach freshmen in Comparative Politics – that decentralization only promotes democracy when it follows the consolidation of a strong central state.  This insight escaped the gaze of the technocrats so enamored of decentralization in Peru.  There, as elsewhere, the absence of horizontal accountability – that is, the ability of different branches of government to check one another’s authority – is aggravated by the inability of civil society to hold leaders accountable and allows for the emergence of local mafias in control of sub-national institutions.  Decentralization took on such steam at a time when Latin America’s national governments had been weakened by the economic crisis of the 1980s and the ideological assault on the central state that continued well into the current century.  It will take many years to rectify the damage.  

Nicaragua: Government-Private Sector Tactical Cooperation

Leaders of Nicaragua’s private sector and political opposition have teamed up with the government to press Washington not to go overboard with sanctions in response to flawed elections last November.  Their traditional allies in Congress, including the Cuban-Americans who dominate the Obama Administration policy toward Latin America, are pressing for suspension of two waivers to U.S. laws that suspend bilateral and multilateral aid to Nicaragua.  One waiver depends on progress on fiscal “transparency,” and the other on the resolution of property disputes from the 1980s.  The former, which would affect several million US dollars in bilateral aid (apparently for an AIDS program), is doomed, according to insiders.  But a decision on the property waiver – suspension of which would require the United States to oppose Nicaraguan loans from the Inter-American Development Bank, World Bank and IMF worth more than $200 million in 2011 – has not yet been made.

In public and private appearances, leaders of the Nicaraguan business community and political opposition, including Nicaraguan Liberal Alliance standard-bearer and Presidential Candidate Eduardo Montealegre, have forcefully stated their differences with the government of President Daniel Ortega, particularly regarding the conduct of elections and the lack of “institutionality” – i.e., the politicization of government institutions.  But the business community has pleaded for U.S. flexibility.  They estimate that suspension of the property waiver would threaten $1.4 billion in development assistance, deal a serious blow to their own prospects, and thrust Nicaragua into deep crisis.  Montealagre said he would lobby “neither for nor against” the waiver, but his participation in the delegation signaled a clear preference for Washington to be cautious.  Ortega’s personal emissary for foreign investment, Alvaro Baltodano, has emphasized the growing commercial links between the two countries and the benefit it provides directly to the Nicaraguan people.

The private sector and opposition are in the odd position of trying to persuade their own friends in Washington to be practical – not to be more anti-Sandinista than they.  Suspension of the property waiver would not only hurt them in the pocketbook; it would give a propaganda boost to President Daniel Ortega and make the population even more dependent on his social programs, heavily subsidized by Venezuela.  All of the U.S. aid and most of the multilateral aid provides direct benefit to the Nicaraguan people.  Ortega’s opponents do not want U.S. sanctions to close the business and political operating space they have enjoyed in recent years, despite Ortega’s excesses.

The Demise of Partnership?

Graphic: Summit of the Americas organization; public domain.

The real news at the Summit of the Americas in Cartagena, Colombia, in April was the dissonance between the Obama administration – with its sincere but content-free rhetoric of partnership – and Latin American leaders across the political spectrum, even among the friendliest.  This was in sharp contrast to the Summit in 2009, when the region was palpably excited about the new American President.  This year, press reports portrayed President Obama as unaware that the hemisphere is changing, and noted that he oddly said that criticism of U.S. policy was reminiscent of the Cold War, while he put himself out on the fragile limb of defending a Cuba policy rooted in, precisely, the Cold War.

Most observers in the region judge that the main takeaway from Cartagena is that while Washington offers little and listens less, Latin America is moving away.  Over the past decade South America has sustained rates of economic growth higher than any since before the oil shock of 1973, and the U.S. is hardly an unchallenged source of trade and investment.  (Chinese and EU trade with South America has surpassed that with the United States.)  Chavez’s aid to Cuba and Nicaragua far exceeds Washington’s meager offerings to even best friends like El Salvador.  The Brazilian National Development Bank, BNDES, provides more loans in the region than the World Bank and Inter-American Bank combined.

Americans’ fascination with the Cartagena prostitutes dwarfs interest in the lessons of the serious regional dynamics that played out in the Summit.  Whether U.S. political leaders and pundits acknowledge it or not, failure to dialogue seriously with neighbors about the 50-year effort to change the Cuban regime or the failure of the 40-year “War on Drugs” will have consequences for the United States.  Washington rejects the region’s efforts to re-think issues, such as the wisdom of the current approach to narcotics, at its peril.  Central America was an unhappy front-page story in the 1980s and now threatens to reemerge as a major headache because of domestic crime (fueled by U.S. deportations) and the drug trade – while Washington fiddles with time-worn formulas and programs.  The Obama Administration still has time to make good on its pledge of “partnership” and get serious about listening to and working with our neighbors.