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Bolivarian of : Nicolas Maduro’s Cabinet Chair: Peter Derrah

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Table of Contents 3. Letter from Chair 4. Members of Committee 5. Committee Background A.Solving the Economic Crisis B.Solving the Presidential Crisis

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Dear LYMUN delegates,

Hi, my name is Peter Derrah and I am a senior at Lyons Township High School. I have done MUN for all my four years of high school, and I was a vice chair at the previous LYMUN conference. LYMUN is a well run conference and I hope that you all will have a good experience here. In this committee you all will be representing high level political figures in the Bolivarian , as you deal with an incomprehensible level of and general , as well as internal political disputes with opposition candidates, the , and massive and general civil unrest. This should be a very interesting committee, as these ongoing issues are very serious, urgent, and have shaped geopolitics recently. I know a lot of these issues are extremely complex and so I suggest that you do enough research to have at least a basic understanding of them and solutions which could solve them. For this reason I highly suggest you read the background. It is important to remember the ​ ​ individual background for your figure (though this may be difficult for lower level politicians) as well as the political ideology of the ruling coalition and the power dynamics of Venezuela’s current government. I hope that you all will put in good effort into preparation, write position papers, actively speak and participate in moderated and unmoderated caucus, and come up with creative and informed solutions to these pressing issues. These are roughly the metrics the vice chairs and I will use to give out awards. Just as a reminder, this is a crisis committee not a general assembly, which I expect to make this committee more engaging and interesting. I hope you all will have a good time, develop your MUN skills, learn a lot, and I wish you all good luck. Email me at [email protected] if you need help or have any questions. These crisis are ongoing and ​ subject to change so keep a brief attention to any major news regarding the current situation in Venezuela. Peter Derrah,

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Members in Committee: 1. Nicolas Maduro, President of the Bolivarian Republic of Venezuela 2. , President of the 3. Delcy Rodriguez, Vice President of the Bolivarian Republic of Venezuela 4. Francisco Torrealba, Minority Leader of the National Assembly 5. , Minister of Foriegn Affairs 6. Vladimir Padrino Lopez, Minister of Defence 7. , Former Vice President, current Minister of , and current Minister of National Production 8. Aristobulo Isturiz, Former Vice President and current Minister of Education 9. Jorge Rodriguez, Former Vice President and current Minister of Communication 10. Eneida Laya Lugo, Minister of Commerce 11. Simon Zerpa, Minister of Economics and Finance 12. Wilmar Soltedo, Minister of Agriculture 13. Nestor Reverol, Minister of the Interior 14. Hipolito Abreu, Minister of Transportation 15. Gonzales, Minister of Health 16. , First Lady of Venezuela and member of the Constituent Assembly

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A Brief History of contemporary Venezuela:

Pre-Bolivarian Era: Venezuela was blessed with something its South neighbors lacked, the largest in the . This oil money propelled 20th century Venezuela into being the wealthiest and most prosperous nation in , but Venezuela still suffered from many of the same problems as its neighbors: crime, high levels of , inequality, and . In the late 80s and early 90s, a combination of failing oil prices, controversial IMF supported neoliberal economic reforms, and general dissatisfaction led to massive riots in the capital and a destabilized political environment, which was an opportunity for a young ambitious military officer named Chavez. After his disillusionment with the economic and political structures in Venezuela, he became inspired by historical such as the legendary general Simon Bolivar, and formed cells within the military in order to revolt against the political and economic elite, and put himself and his supporters in power. In 1992, he and his sympathizers in the army launched a coup d'etat, which ultimately failed due to a lack of popular support and landed Chavez in jail. The next president Caldera later pardoned him, which was a very fateful decision.

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Chavez Era:

After continuing economic decline, an increasingly disillusioned Venezuelan populace voted in the same man who tried to overthrow the government less than a decade ago. In the 1998 Venezuelan elections, Hugo Chavez represented the socialist party and won with 56% of the vote, after running a populist campaign focusing on anti-poverty measures and changing the stagnant political arena. From the beginning, Chavez’s autocratic tendencies were showing as he sought to radically change Venezuela. In 1999 a new created by his party was passed in a referendum, which changed the Republic of Venezuela into the Bolivarian Republic of Venezuela (named after revolutionary Simon Bolivar). This created a unicameral legislature, and centralized the country among other alterations. To legitimize his new changes and to increase his political control, he called for new elections in 2000, which saw Chavez win the presidency with 59% and major victories in the National Assembly and local . His initial economic policies were not considerably radical, as he sought to improve foreign investment while funding programs and increasing the state-run oil company PDVSA’s share of Venezuela’s reserves. However, his friendship with Communist and his authoritarian tendencies were off-putting to much of Venezuela's population, and his nepotistic appointments to government positions were unpopular. His radical rhetoric and centralization of power made Chavez a lot of enemies, and in 2002 a coup d'etat was attempted. Though the coup was supported by many groups including public workers, the business community, and opposition parties, ultimately it failed. The coup’s

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unintentional consequences were drastic, as it pushed Chavez from his ideas of moderate economic reform and conciliatory stance towards business into increased radicalization, and his retaliatory firings of PDVSA employees and leadership permanently damaged the crown jewel of Venezuela. Chavez continued his agenda, using increasing oil profits to go towards social programs. Though the programs were unsustainable as they put serious financial pressure on the PDVSA, they were successful, at least in the short-term. His “” social programs ​ ​ reduced extreme poverty in half from around 20% to 10%, and bolstered his support among working class people. In 2006 he won another presidential election with 63%. With ’s leftist Tide, Chavez had many friends in the regions and rising oil costs brought increased government revenue, putting him in a secure position and made him popular domestically. Despite this, Chavez suffered his first major defeat in a close 2007 referendum where 51% of voters rejected his plan to make Venezuela into a ‘’. Some issues were becoming apparent in Venezuela by the late . Crime was rising heavily and despite the successes of his social programs, his poorly managed price control policies created that were becoming more and more prevalent every year. The economic issues were exacerbated by the 2008 financial crisis, with volatility in the oil markets hurting Venezuela’s subsidized imports and inflation increasing. Corruption and the incompetence of appointments ruined the potential of various state run corporations. The cult of personality that Chavez promoted worried many who saw him as increasingly autocratic. Though these issues decreased Chavez’s popularity, they were not serious enough to vote him out of office. In 2012 he was reelected by 55%, though his health issues prevented him from continuing his presidency, shortly after in 2013 he died after a heart attack. He chose his long time protege Nicolas Maduro to succeed him.

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Maduro Era:

In a 2013 Presidential Election, which was called after the death of President Chavez, the United Socialist Party of Venezuela’s candidate Nicolas Maduro won a very close election with 50.6% of the vote. Almost immediately, an economic crisis was created with the sharp drop in oil prices. Chavez’s and Maduro’s overreliance on oil profits and hostile attitude towards business made failing oil prices a catastrophic economic disaster waiting to happen. Venezuela’s social programs had no funding, neither did their state-run corporations, and the poorest people who depended on subsided goods to meet their basic needs lost it all. This was all correlated with inflation, which skyrocketed with the general economic collapse and brought down the private sector with it. Maduro’s decision to rule by to combat these issues made him essentially a , and his forceful action did not really solve any of these issues. He applied that philosophy to dealing with massive unrest and protests, which only made him more unpopular and brought the ire of the international community over his human rights abuses, including sanctions from the US and the EU. In 2015, the PSUV lost the legislative assembly election to a united opposition, winning only 40%. Though a thorn in the side of the Maduro presidency, he basically overrode any legislative powers the National Assembly with the formation of the Constitutive Assembly, a consultative group assembled with the de jure purpose of changing or drafting a new constitution. Stacked with Maduro loyalists, they gave themselves legislative powers, essentially creating an alternative National Assembly while voiding any of the National Assembly’s powers. The 2017 referendum which voted for its creation was clearly rigged, with opinion polls showing

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80% people disapproving of it, yet it still passed. Another clearly rigged election was the 2018 presidential election, with many major opposition candidates blocked, Nicolas Maduro claimed to have 67% of the vote, while polls had him at 20%. This clear election fraud prompted the National Assembly to appoint Juan Guaido of the social democratic party as president. While Maduro’s approval rating was at 50% after his election, now it is lower than 15%. Inflation continued to rise during Maduro’s presidency to unimaginable amounts, with the value of the Venezuelan Bolivar decreasing by millions each month at its worst in early 2019. The general economic collapse has sent millions of Venezeulans out of their homeland into mainly other Latin American countries. Crime is now a way of life, with gangs and organized crime having more power than the corrupt police force, and with the government supposedly using illegal mining and drug trafficking to raise revenue. Millions lack basic services and scarcity is common. Almost all Latin American countries have disassociated with the Maduro government, and even most of the various Pink Tide leaders, who once courted Chavez, are weary.

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Topic A: and Collapse of Production

Introduction: Since the mid 20th century, Venezuela has relied on oil production as the driving force of its economy, making up over 75% of its exports for decades. Blessed with the world's largest oil reserves and oil prices which have generally risen, Venezuela has rode the wave of success; however, it crashed hard when prices fell in 2013. The Bolivarian government’s policies of poorly managed utilization of money and other assets for social welfare programs from the PDVSA, the Venezeualan state-run oil company, severely hampered their ability to expand production and when prices fell, the company did as well. Oil revenues made up a majority of the government's income, and with the extensive network of state run corporations and social security services being dependent on the government budget, they collapsed as well. Stringent government policies regarding business, including currency exchange limitations and improper price controls, as well as institutionalized corruption and bitter foreign relations, made foreign

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bailouts unfeasible and both public and private corporations left paralized. Corresponding to this sharp decrease in revenue and production was an inflation rate that grew exponentially, the result of government actions to devalue the Bolivar. After harsh government crackdown on dissent, and after rigged elections, crippling sanctions were added which left the government even more unable to find revenue. Oil Markets:

Oil is one of the most valuable resources on the planet, and can do wonders for a country if managed properly; however, Venezuela is suffering from the ‘’ instead of prosperity. Profits from the famously volatile market made up over 50% of the government’s revenue, and its decline sent shockwaves throughout Venezuela. Unsustainably borrowing funds from the PDVSA and turning the public company into a political instrument damaged the important oil company permanently, with many skilled workers leaving even before the

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economic crisis. The Bolivarian government's management of the PDVSA ruined its chance at recovering from the oil price drop, and production has fallen severely, with it having its lowest production for almost 30 years in 2017. Sanctions placed from the US in 2017 and harsher in 2019 have severely limited the ability of the PDVSA to export and work with international private-sector partners, further decreasing its ability to recover. The world’s largest oil reserves is obviously a vital part of Venezuela, and would be an essential resource to use in its recovery. Hyperinflation:

The Bolivar, like many other currencies during hyperinflation crises, have become essentially useless. The collapse of government services and revenue brought the printing machines on to repay government debts, and the increasing money supply being used by a country with decreasing production and trade further devalued the money. The amount of value lost by the Bolivar has become incompredible, reaching over 2,500,000% monthly in early 2019, compared

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to the 2% annually of the USD, though it has decreased to being around 4,000% monthly in mid 2020, still a disgustingly large amount. With the government's harsh business policies aside, the lack of a steady currency has stopped businesses from producing and selling in Venezuela, vanished savings, and caused USD to become a widespread currency instead, though even that is being inflated. A solution to the Bolivar is one step that Venezuela needs to get its economy fixed. Food Production and Lack of Basic Services:

The hyperinflation crisis, oil production decrease, and lack of government revenue has created a serious lack of basic needs for most Venezuelans. Food, which Venezuela heavily relied on imports for even before the crisis, was sharply decreased. Hyperinflation, strong currency restrictions for international trade, and a dropping of previously generous state-subsidies for food imports drastically decreased the food available. Domestic production also struggled as gas production decreases made it difficult for farmers to attain gas to use machinery. In 2017, 64% of Venezeulans lost weight as a result of food shortages and 61% go to sleep hungry. An

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inadequate solution to the problem has been CLAP (Local Community for Supply and Production) boxes which are government subsidized food containers; however, the military bureaucracy in charge of operations has been subpar and the operation has been criticized for catering selectively to government supporters. A sharp decrease in medical funding led to a large exodus of medical professionals and shortages of basic medical needs. The extensive Venezuelan medical network, which was once one of Chavez’s prime achievements, has decayed, with a 70% of medicines in pharmacies and a revival of diseases such as among others. Widespread electricity blackouts have been common since 2019, after a loss of professionals had severely damaged Venezuela’s public infrastructure. To regain the trust of the Venezuelan people and to get out of the crisis, a reinvestment and solution to the lack of basic services must be made. Questions To Consider: How can the PDVSA be returned to its former competitance? What industries could replace the oil sector, if necessary, to return Venezuela's economy? Will a solution need to sacrifice ideological purity, or is pragmatism not worth the issue? How can public services be adequate with the lack of funds? How can the government regain revenue to fund an economic recovery? Which foriegn countries could be strong economic partners in the face of American and European sanctions? Additional resources: https://foreignpolicy.com/2018/07/16/how-venezuela-struck-it-poor-oil-energy-chavez/ https://www.history.com/news/venezuela-chavez-maduro-crisis https://www.brookings.edu/testimonies/made-by-maduro-the-humanitarian-crisis-in-venezuela-a nd-us-policy-responses/

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Topic B: Presidential Crisis

Introduction: After the 2015 Venezuelan Legislative elections, the PSUV and its predecessor the MVR suffered its first electoral loss since Chavez first ran in 1999, gaining only 55 seats to the opposition coalition’s 109. The economic crisis shook many former Chavistas into voting for the opposition, and seemed to signal a winding down, if not the end, of the Bolivarian . However, the ruling officials of the government knew that to keep power, elections couldn’t be or fair anymore as public support sank. An independent removed the ability for the upper echelon of the PSUV to have free reign on legislation, so the Maduro administration called for a Constitutive Assembly to be created and was backed with a rigged 2017 referendum. The Constitutive Assembly, stacked with PSUV members and other loyal government officials, gave themselves legislative powers and nullified the legal powers of the National Assembly; meanwhile, the National Assembly was still an existing governmental body which met. In the 2018 presidential elections, the MUD opposition coalition was banned from participating, and Maduro won a rigged election against a few picked opponents. A final disheartening blow to the opposition was during the 2020 December legislative elections, in which PSUV seized the majority of the National Assembly seats in a fraudulent election. As of now, the Constitutive Assembly is no longer relevant, and the PSUV has secure control over all branches of

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government- but for how long can they maintain their power with such civilian discontent, organized opposition parties, and international antagonism?

Ascension of Juan Guaido:

As a aftermath to the 2018 presidential election, the National Assembly declared an opposition to the illegitimate election and stated Juan Guaido, the current President of the National Assembly, to be President of a transitional government. Obviously, the Bolivarian government was not too happy to see this development, and decried Guaido as a foriegn puppet and unlawful. Protests, which have been constant since the beginning of the economic crisis in 2014, accelerated in 2019. Pro-Guaido protesters have clashed in the streets with government security forces and pro-government counter-protesters, and reached its peak with the April 30 failed uprising attempt, although many of the protests are non-violent. Still, the threat of a successful pro-Guiado uprising, if not outright , is present. Guaido and the opposition has the support of a majority of Venezuelans, while Maduro and the PSUV has a general loyalty among

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the military and security services, as well as a few remaining dedicated civilian Chavistas and paramilitary Colectivos. Though dialogue and compromise is possible, the lack of electoral fairness has made it appear that force is the only way for the opposition to achieve political reform.

The most crucial demand for the MUD coalition is the resumption of free and fair elections- which is too disagreeable for the PSUV, who doubts its capacity to win legitimately. However, in order to keep the veneer of democracy, the PSUV will not outright remove opposition. This creates a stalemate, which just perpetuates the dysfunctional status quo. So to solve the crisis, the PSUV could either choose the carrot or the stick. Due to the PSUV victory in the recent 2020 legislative elections, the opposition lost their last governmental stronghold and as such would be negotiating from a position of extended weakness- which may create a golden opportunity to permit seemingly meaningful yet actually overstated reform to appease the populace. On the other hand, the complete removal of the MUD from governance enables PSUV greater options to forcefully neutralize political opposition..

Foreign Intervention:

(Blue- Nations supporting Guaido, - Nations supporting Maduro, Grey- Neutral nations)

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Since the Chavez era, the Venezuelan government has had an anti-western , describing themselves as anti-imperialist while promoting unity. Though words were stated on both sides, it was only following the economic collapse and resulting political crackdown that Venezuela became truly defiant. Sanctions placed on the Maduro government by the and European Union further alienated remaining political and economic ties, and brought Venezuela closer towards , , and , while retaining its socialist allies in , Cuba, and . During the 2019 presidential crisis, sides were clearly drawn- with the West and most of Latin America supporting Guaido whereas China, Russia, and other countries who are oppositional to the west, support Maduro. With geopolitical stakes involved, a solution to the presidential crisis would need to involve intervention and compromise by the great powers of the world as well as Latin American neighbors.

Currently, Bolivarian Venezuela’s pan-Hispanic rhetoric is a travesty- given how loathed the Maduro administration has become among its Latin American neighbors. Venezuela greatly damaged the intergovernmental Union of South American Nations, which many members left as a rebuke of the Maduro and USAN’s acceptance of it. Some of those former members, such as and , aligned to form a rival PROSUL, which Venezuela is excluded from. Also, Venezuela is suspended from (a South American free ), which entails significant lost revenue. Overall, most South American nations are hostile, rather than cordial, to Venezuela- which is a serious problem that the Maduro administration would need to address, if it can be without resigning power. The current state of relations with the rest of Latin America has forced Maduro to seek allies abroad, with decent success; however, with a failing economy, it is hard to attract worthwhile trade agreements.

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Questions To Consider: Is dialogue possible or worthwhile with Guaido? Can compromise be made that allows the PSUV to retain some power? What foreign relations could be utilized to counterbalance Western involvement? Could rapprochement with other Latin American nations be successful? How can the ability of the military and security forces be maintained? Additional Resources: https://www.bbc.com/news/world-latin-america-36319877 https://www.cfr.org/global-conflict-tracker/conflict/instability-venezuela Bibliography: https://foreignpolicy.com/2018/07/16/how-venezuela-struck-it-poor-oil-energy-chavez/ https://www.history.com/news/venezuela-chavez-maduro-crisis https://www.brookings.edu/testimonies/made-by-maduro-the-humanitarian-crisis-in-venezuela-a nd-us-policy-responses/ https://www.bbc.com/news/world-latin-america-36319877 https://www.cfr.org/global-conflict-tracker/conflict/instability-venezuela

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