1 00:00:02,720 --> 00:00:16,480 Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News. 2 00:00:18,360 --> 00:00:22,000 Speaker 2: Hello and welcome to another episode of the Odd Lots podcast. 3 00:00:22,160 --> 00:00:23,960 Speaker 3: I'm Joe Wisenthal. 4 00:00:23,480 --> 00:00:24,560 Speaker 4: And I'm Tracy Alloway. 5 00:00:25,000 --> 00:00:29,440 Speaker 2: So, Tracy, we recently published that episode about what it 6 00:00:29,520 --> 00:00:32,159 Speaker 2: was like to have done business during the Maduro years 7 00:00:32,200 --> 00:00:35,440 Speaker 2: in Venezuela. That was from a grain perspective, and I 8 00:00:35,520 --> 00:00:40,360 Speaker 2: think one thing that's very obvious is that sure Venezuela 9 00:00:40,479 --> 00:00:45,360 Speaker 2: may have plenty of natural resources oil obviously, but also 10 00:00:45,440 --> 00:00:49,920 Speaker 2: other ones, and perhaps that the relationship between the US 11 00:00:49,920 --> 00:00:53,159 Speaker 2: and the current government maybe better than it was, but 12 00:00:53,200 --> 00:00:57,160 Speaker 2: there's going to be you know, actually reviving the economy, 13 00:00:57,200 --> 00:00:59,360 Speaker 2: actually getting in a place of stability at thriving. 14 00:00:59,440 --> 00:01:01,280 Speaker 3: That's a it's a very long way off, to say 15 00:01:01,280 --> 00:01:01,720 Speaker 3: the least. 16 00:01:01,920 --> 00:01:04,920 Speaker 4: Right, So, if you have oil in the ground, yes, 17 00:01:05,080 --> 00:01:07,800 Speaker 4: that's great, but it's in the ground, and you need 18 00:01:07,840 --> 00:01:10,960 Speaker 4: to actually extract it in order to make money, and 19 00:01:11,080 --> 00:01:13,960 Speaker 4: also in order to encourage the type of people who 20 00:01:14,000 --> 00:01:17,080 Speaker 4: would extract it, you need to have some sort of 21 00:01:17,120 --> 00:01:21,200 Speaker 4: reliability in place, right, there has to be some sense 22 00:01:21,319 --> 00:01:25,440 Speaker 4: of stability of the future. Otherwise, as we heard from 23 00:01:25,520 --> 00:01:28,440 Speaker 4: our previous discussion, people just aren't going to want to 24 00:01:28,480 --> 00:01:30,120 Speaker 4: go there and do business right. 25 00:01:30,200 --> 00:01:32,480 Speaker 2: So one of the points that he brought up, which 26 00:01:32,480 --> 00:01:35,360 Speaker 2: I think is very germane to the future and the 27 00:01:35,440 --> 00:01:38,120 Speaker 2: questions about the country's future, is that, you know, he 28 00:01:38,200 --> 00:01:42,360 Speaker 2: talked about if there was a talented engineer who worked 29 00:01:42,360 --> 00:01:44,720 Speaker 2: on some sort of processing plant in his case, he 30 00:01:44,840 --> 00:01:47,280 Speaker 2: was talking about Cargill. Obviously, if there was someone who 31 00:01:47,400 --> 00:01:49,760 Speaker 2: is like talented in the sort of technical side of 32 00:01:49,760 --> 00:01:52,080 Speaker 2: them that hired them in Mexico, you know, they hired 33 00:01:52,120 --> 00:01:56,320 Speaker 2: them elsewhere. So many people left, and when you think 34 00:01:56,320 --> 00:01:59,800 Speaker 2: about the security situation on the ground even again, let's 35 00:01:59,840 --> 00:02:02,960 Speaker 2: say somehow the foreign money wants to come back in 36 00:02:03,720 --> 00:02:06,520 Speaker 2: this question of talent, yeah, and the question of like 37 00:02:06,560 --> 00:02:08,280 Speaker 2: where are they and do they want to come back, 38 00:02:08,320 --> 00:02:09,919 Speaker 2: and what it would take to get them to come 39 00:02:09,960 --> 00:02:13,480 Speaker 2: back such that you can actually sort of produce natural 40 00:02:13,520 --> 00:02:17,959 Speaker 2: resources among other things profitably. That's a huge difficult element 41 00:02:18,200 --> 00:02:19,720 Speaker 2: and there's no switch that you can flip. 42 00:02:19,960 --> 00:02:24,040 Speaker 4: I'm also just interested in Venezuela's economy from a historical 43 00:02:24,120 --> 00:02:28,280 Speaker 4: perspective one because I feel like Central and South America 44 00:02:28,400 --> 00:02:31,480 Speaker 4: have been a blind spot for us for various reasons. 45 00:02:31,520 --> 00:02:33,760 Speaker 4: I've been to Venezuela once, but I think it was 46 00:02:33,800 --> 00:02:36,480 Speaker 4: on a cruise when I was the only cruise I 47 00:02:36,480 --> 00:02:38,320 Speaker 4: ever went on, when I was like nine years old, 48 00:02:38,360 --> 00:02:41,320 Speaker 4: and all I remember is getting off the boat and 49 00:02:41,440 --> 00:02:45,400 Speaker 4: like being there for a few hours and seeing a 50 00:02:45,440 --> 00:02:47,680 Speaker 4: lot of stray dogs that I thought were really cute 51 00:02:47,680 --> 00:02:49,760 Speaker 4: and I wanted to take home with me. That's all 52 00:02:49,800 --> 00:02:54,600 Speaker 4: I remember, but that it didn't them thinking about the economy, 53 00:02:54,919 --> 00:02:57,760 Speaker 4: But also I find it really interesting because here we 54 00:02:57,840 --> 00:03:01,160 Speaker 4: have an economy which seems to have cola around one 55 00:03:01,200 --> 00:03:05,000 Speaker 4: specific resource. Yes, but as we learned from that episode, 56 00:03:05,280 --> 00:03:07,760 Speaker 4: they do make some other things, yes, And so I'm 57 00:03:07,800 --> 00:03:10,960 Speaker 4: curious about the trade offs between, you know, encouraging the 58 00:03:11,000 --> 00:03:16,080 Speaker 4: oil industry versus other types of jobs and businesses. There's 59 00:03:16,080 --> 00:03:16,919 Speaker 4: a lot to discuss. 60 00:03:17,120 --> 00:03:19,400 Speaker 2: And one other element before we get into this that 61 00:03:19,440 --> 00:03:20,760 Speaker 2: I think is very important is you. 62 00:03:20,760 --> 00:03:23,240 Speaker 3: Hear a lot about how prior. 63 00:03:23,040 --> 00:03:27,040 Speaker 2: To Hugo Chavez coming to Parlia, Venezuela was a fairly 64 00:03:27,440 --> 00:03:30,760 Speaker 2: well off country. But and again it speaks to maybe 65 00:03:30,800 --> 00:03:34,960 Speaker 2: the current moment. We know just looking internationally that there 66 00:03:35,000 --> 00:03:38,800 Speaker 2: is really not any sort of obvious connection between natural 67 00:03:38,880 --> 00:03:41,840 Speaker 2: resource endowment and the wealth of the public. 68 00:03:41,920 --> 00:03:44,000 Speaker 3: The curse, the resource curse. 69 00:03:43,800 --> 00:03:46,080 Speaker 2: Right and there are plenty of places that have a 70 00:03:46,120 --> 00:03:49,280 Speaker 2: lot of oil or some other commodity where the general 71 00:03:49,320 --> 00:03:53,160 Speaker 2: public is impoverished or does not live particularly well. I 72 00:03:53,200 --> 00:03:54,880 Speaker 2: think this is where you get a lot of that 73 00:03:55,000 --> 00:03:58,680 Speaker 2: element of the rule of law and skilled labor and 74 00:03:58,720 --> 00:04:02,720 Speaker 2: all of these things that are certain unevenly distributed throughout 75 00:04:02,720 --> 00:04:06,000 Speaker 2: the world and are not correlated necessarily with the existence 76 00:04:06,000 --> 00:04:11,200 Speaker 2: of commodities. Anyway, someone that we've had on the podcast 77 00:04:11,280 --> 00:04:14,320 Speaker 2: before who has talked a lot about these things, some 78 00:04:14,360 --> 00:04:18,640 Speaker 2: of the preconditions for sustainable growth, We've talked to him 79 00:04:18,680 --> 00:04:21,440 Speaker 2: about all this multiple times. He happens to be the 80 00:04:21,480 --> 00:04:26,000 Speaker 2: perfect guest because he was previously part of economic policy 81 00:04:26,120 --> 00:04:29,440 Speaker 2: making in Venezuela in the nineties. He was a Minister 82 00:04:29,480 --> 00:04:31,599 Speaker 2: of Planning. He was also more a member of the 83 00:04:31,600 --> 00:04:34,200 Speaker 2: board of the Central Bank. Truly the perfect guest. So 84 00:04:34,200 --> 00:04:37,360 Speaker 2: I'm thrilled to welcome back on the podcast Ricardo Houseman, 85 00:04:37,400 --> 00:04:40,520 Speaker 2: who is currently professor at the Harvard Kennedy School director 86 00:04:40,600 --> 00:04:43,560 Speaker 2: of the Harvard Growth Lab. So Ricardo, thank you so 87 00:04:43,680 --> 00:04:46,799 Speaker 2: much for coming back on odd Lots. Truly the perfect 88 00:04:46,839 --> 00:04:47,960 Speaker 2: guest and the perfect moment. 89 00:04:48,680 --> 00:04:50,400 Speaker 5: Thank you, thank you so much for having me. 90 00:04:51,000 --> 00:04:51,479 Speaker 2: What are you. 91 00:04:51,640 --> 00:04:53,080 Speaker 3: I'm trying to think where to start. Why don't you 92 00:04:53,160 --> 00:04:54,760 Speaker 3: tell us about You've been. 93 00:04:54,680 --> 00:04:57,440 Speaker 2: At Harvard for twenty six years, but as I mentioned, 94 00:04:57,640 --> 00:05:01,599 Speaker 2: used to be in policymaking in Venezuela prior to the 95 00:05:01,680 --> 00:05:03,920 Speaker 2: Java's years. What do you tell us a little bit 96 00:05:03,920 --> 00:05:04,839 Speaker 2: about your history there. 97 00:05:05,160 --> 00:05:08,960 Speaker 5: Well, if you want to understand Venezuela, you have to 98 00:05:09,360 --> 00:05:14,360 Speaker 5: really understand the fact that it's a very mature oil country. 99 00:05:15,000 --> 00:05:19,640 Speaker 5: Oil became important starting in nineteen seventeen with Royal Dutch shell. 100 00:05:20,120 --> 00:05:23,400 Speaker 5: Then in the nineteen twenties standard oil of New Jersey 101 00:05:23,480 --> 00:05:29,760 Speaker 5: came in now Exxon, and by nineteen twenty nine, Venezuela 102 00:05:29,760 --> 00:05:33,839 Speaker 5: was the largest oil exporter in the world and remained 103 00:05:34,040 --> 00:05:37,680 Speaker 5: the largest oil exporter in the world until nineteen sixty 104 00:05:37,800 --> 00:05:42,720 Speaker 5: five when it was taken over by Saudi Arabia. And 105 00:05:42,839 --> 00:05:48,480 Speaker 5: in that period going to say nineteen seventy eight nineteen eighty, 106 00:05:48,600 --> 00:05:53,400 Speaker 5: between say nineteen seventeen and nineteen seventy eight, say it 107 00:05:53,560 --> 00:05:58,000 Speaker 5: was you know, sixty years, Venezuela is probably the fastest 108 00:05:58,040 --> 00:06:01,880 Speaker 5: growing country in the world, and it was the country 109 00:06:01,880 --> 00:06:05,840 Speaker 5: with the lowest inflation rate in the world, and it 110 00:06:06,920 --> 00:06:09,800 Speaker 5: had a fixed exchange rate with a dollar. It had 111 00:06:11,200 --> 00:06:14,800 Speaker 5: a very developed financial market. It was a country a 112 00:06:14,920 --> 00:06:19,159 Speaker 5: very very large immigration, so that saying the census of 113 00:06:19,279 --> 00:06:25,480 Speaker 5: nineteen sixty seven percent of Venezuelans were born in Europe, 114 00:06:26,279 --> 00:06:31,240 Speaker 5: in mostly Spain, Italy, Portugal, but also it was a 115 00:06:31,279 --> 00:06:36,120 Speaker 5: source of attraction of Colombians, Dominicans, Ecuadorians, etc. So it 116 00:06:36,200 --> 00:06:39,839 Speaker 5: was a very prosperous country. And then got in the 117 00:06:39,920 --> 00:06:44,320 Speaker 5: nineteen seventies the oil boom, and the oil boom it 118 00:06:44,440 --> 00:06:48,200 Speaker 5: made us think very very big. Then came the second 119 00:06:48,240 --> 00:06:52,400 Speaker 5: oil shock of the Iran Iraq War, and that brought 120 00:06:52,440 --> 00:06:57,040 Speaker 5: in even more money. And then suddenly in the nineteen eighties, 121 00:06:57,040 --> 00:07:02,920 Speaker 5: the price of oil collapsed, revenues collapsed, and the US 122 00:07:03,200 --> 00:07:05,760 Speaker 5: jacked up interest rates like crazy in the early eighties, 123 00:07:05,760 --> 00:07:08,640 Speaker 5: and that led to a that crisis by nineteen eighty three, 124 00:07:09,160 --> 00:07:13,600 Speaker 5: and from nineteen eighty three to around nineteen eighty nine, 125 00:07:14,320 --> 00:07:17,840 Speaker 5: it's what in Latin America was called the last decade 126 00:07:17,880 --> 00:07:23,040 Speaker 5: of the eighties. We were all in a big balance 127 00:07:23,040 --> 00:07:28,400 Speaker 5: of payments crisis that was very painful. Happened in Venezuela 128 00:07:28,440 --> 00:07:30,400 Speaker 5: is a country in the world that went from triple 129 00:07:30,440 --> 00:07:34,160 Speaker 5: A to default more quickly it did, so it was 130 00:07:34,200 --> 00:07:37,840 Speaker 5: triple A like in nineteen eighty one, and it defaulted 131 00:07:37,840 --> 00:07:43,040 Speaker 5: in nineteen eighty three, So it was and then the 132 00:07:43,040 --> 00:07:46,800 Speaker 5: eighties were quite complicated. Then in the early nineties was 133 00:07:46,800 --> 00:07:51,920 Speaker 5: President Carlos Andres Pedes and his minister Miguel Rodriguez and 134 00:07:52,120 --> 00:07:57,200 Speaker 5: others Moises Naim and other ministers. I participated on that government. 135 00:07:58,160 --> 00:08:03,440 Speaker 5: A very major structuralogy lustment was done, that restructuring, opening 136 00:08:03,480 --> 00:08:08,760 Speaker 5: the economy, and the nineties were a period of a 137 00:08:08,840 --> 00:08:13,280 Speaker 5: difficult recovery. Oil was very volatile, going up and down. 138 00:08:13,960 --> 00:08:20,040 Speaker 5: But by nineteen ninety eight you had the Russian crisis 139 00:08:21,040 --> 00:08:24,640 Speaker 5: and the price oil collapsed dramatically. Interest rates went through 140 00:08:24,640 --> 00:08:28,520 Speaker 5: the roof financial markets dried up. And it is in 141 00:08:28,600 --> 00:08:31,720 Speaker 5: that year nineteen ninety eight that we had elections and 142 00:08:31,800 --> 00:08:35,080 Speaker 5: the public said, what the hell you told us that 143 00:08:35,120 --> 00:08:38,160 Speaker 5: all these reforms are going to pay off. You know, 144 00:08:38,280 --> 00:08:40,960 Speaker 5: where's the money, et cetera. There was no money because 145 00:08:41,000 --> 00:08:43,040 Speaker 5: the price of oil had gotten down to something like 146 00:08:43,080 --> 00:08:46,160 Speaker 5: eight dollars a barrel. But the truth is that they 147 00:08:46,240 --> 00:08:51,680 Speaker 5: voted for Chavis, massively voted for Chavis, and e. Chavis started, 148 00:08:51,720 --> 00:08:54,680 Speaker 5: you know, very moderately at the beginning. But as time 149 00:08:54,760 --> 00:08:57,400 Speaker 5: went on and as the price of oil recovered, and 150 00:08:57,440 --> 00:09:00,199 Speaker 5: we had a spectacular boom between two thousand and four 151 00:09:00,240 --> 00:09:04,240 Speaker 5: in twenty fourteen in the price of oil, well Chavis 152 00:09:04,280 --> 00:09:07,880 Speaker 5: felt that he was empowered. He had the money. The 153 00:09:07,920 --> 00:09:11,080 Speaker 5: oil money was coming in. He thought, giving all the 154 00:09:11,240 --> 00:09:15,080 Speaker 5: oil money that was coming in, he could borrow against it. 155 00:09:16,480 --> 00:09:19,960 Speaker 5: He put all these policies to restrict the private sector. 156 00:09:20,120 --> 00:09:24,920 Speaker 5: He nationalized everything that moved. He created these socialist enterprises 157 00:09:25,040 --> 00:09:27,680 Speaker 5: left and right. They all went broke eventually, but he 158 00:09:27,720 --> 00:09:32,760 Speaker 5: imposed exchange controls, import controls, price controls. If it moved, 159 00:09:32,800 --> 00:09:38,720 Speaker 5: you controlled it. And by twenty twelve he was very 160 00:09:38,720 --> 00:09:41,480 Speaker 5: sick with cancer, but he ran for the election. He 161 00:09:41,520 --> 00:09:45,680 Speaker 5: died probably immediately after the election. We don't know exactly 162 00:09:45,720 --> 00:09:51,199 Speaker 5: the day when he died because he didn't appear publicly 163 00:09:51,679 --> 00:09:55,640 Speaker 5: after early December, but they announced his death in March 164 00:09:55,840 --> 00:10:01,199 Speaker 5: of twenty thirteen. The year twenty twelve, the government spent 165 00:10:01,360 --> 00:10:03,680 Speaker 5: as if the price of oil was at two hundred 166 00:10:03,760 --> 00:10:06,640 Speaker 5: dollars a barrow, when it was only at one hundred 167 00:10:06,679 --> 00:10:09,800 Speaker 5: dollars a barrow. So they borrowed as if it was 168 00:10:09,840 --> 00:10:13,400 Speaker 5: going out of fashion. And then Suddenly in twenty thirteen 169 00:10:13,440 --> 00:10:17,280 Speaker 5: twenty fourteen, the price of oil collapsed to something like 170 00:10:17,360 --> 00:10:20,000 Speaker 5: in the thirties. So it's not that they had to 171 00:10:20,000 --> 00:10:24,280 Speaker 5: go from one hundred to thirty or it's that they 172 00:10:24,320 --> 00:10:28,240 Speaker 5: were spending at two hundred and borrowing, and when the 173 00:10:28,240 --> 00:10:31,359 Speaker 5: price of oil collapsed, nobody wanted to lend to Venezuela. 174 00:10:32,160 --> 00:10:35,640 Speaker 5: So suddenly they had no dollars, no dollars to import 175 00:10:35,679 --> 00:10:41,160 Speaker 5: praw materials, spare parts, seeds, fertilizers, whatever, and production came 176 00:10:41,320 --> 00:10:46,080 Speaker 5: tumbling down. And it was the biggest economic collapse that 177 00:10:46,240 --> 00:10:50,280 Speaker 5: ever happened in human history outside of wars, and bigger 178 00:10:50,320 --> 00:10:54,120 Speaker 5: than the collapse that happened in most wars. So without 179 00:10:54,200 --> 00:10:56,760 Speaker 5: money coming in, they still had to pay for a 180 00:10:56,880 --> 00:10:59,880 Speaker 5: huge public sector that they had created, so it just 181 00:11:00,080 --> 00:11:05,040 Speaker 5: printed money. In Maduro took out five zeros out of 182 00:11:05,040 --> 00:11:08,199 Speaker 5: the currency, and barely three and a half years later 183 00:11:08,720 --> 00:11:11,680 Speaker 5: he took six more zeros out of the currency. This 184 00:11:11,760 --> 00:11:15,240 Speaker 5: is a hyperinflation never seen before. Maybe I don't know, 185 00:11:15,360 --> 00:11:18,000 Speaker 5: in Germany in the nineteen twenties and for a brief 186 00:11:18,040 --> 00:11:21,360 Speaker 5: period in Germany after the Second World War. It's something 187 00:11:21,400 --> 00:11:24,800 Speaker 5: that has never happened. The financial system went from being 188 00:11:24,920 --> 00:11:28,680 Speaker 5: like eighty billion dollars in assets to like one billion 189 00:11:28,720 --> 00:11:33,240 Speaker 5: dollars in assets. So it was a total collapse of 190 00:11:33,280 --> 00:11:36,640 Speaker 5: the economy. Eight million people left the country. Now you 191 00:11:36,720 --> 00:11:39,360 Speaker 5: have to ask yourself the question, what the hell this 192 00:11:39,480 --> 00:11:42,079 Speaker 5: is not the only oil country in the world. I mean, 193 00:11:42,120 --> 00:11:44,520 Speaker 5: what happened to Saudi Arabia, what happened to Kuwait, What 194 00:11:44,600 --> 00:11:48,120 Speaker 5: happened to United Emirates or Kasakhstan or a Zerbadan. You 195 00:11:48,200 --> 00:11:51,040 Speaker 5: never heard of a collapse of this magnitude just because 196 00:11:51,080 --> 00:11:54,600 Speaker 5: the price of oil went down. So what really happened 197 00:11:55,040 --> 00:11:58,240 Speaker 5: is that the price of oil went down in a 198 00:11:58,360 --> 00:12:01,880 Speaker 5: system that presumed that people had no rights and all 199 00:12:01,920 --> 00:12:04,840 Speaker 5: the money was in the government. And when now the 200 00:12:04,880 --> 00:12:07,800 Speaker 5: government doesn't have the money, people are left with no 201 00:12:07,960 --> 00:12:11,400 Speaker 5: rights and nothing moves. And that's the underlying reason for 202 00:12:11,480 --> 00:12:12,520 Speaker 5: the Venezuelan Plus. 203 00:12:28,280 --> 00:12:32,080 Speaker 4: That was a fantastic summary of Venezuelan economic history. I 204 00:12:32,160 --> 00:12:35,319 Speaker 4: like speaking to professors because I don't even have to 205 00:12:35,360 --> 00:12:37,000 Speaker 4: ask questions. 206 00:12:37,240 --> 00:12:38,679 Speaker 3: Yeah, because those are all the questions. 207 00:12:38,440 --> 00:12:39,040 Speaker 5: I was going to ask. 208 00:12:39,120 --> 00:12:42,280 Speaker 4: Yeah, that was great, Okay, Well, actually a serious question though, 209 00:12:42,480 --> 00:12:48,040 Speaker 4: were there any real efforts throughout I guess the nineteen 210 00:12:48,120 --> 00:12:52,439 Speaker 4: hundreds the last century to diversify Venezuela's economy away from oil. 211 00:12:52,600 --> 00:12:55,840 Speaker 5: Yes, that was the mantra in Venezuela. It's harder to 212 00:12:55,920 --> 00:13:00,800 Speaker 5: do than to say right that trouble is that we 213 00:13:00,800 --> 00:13:04,120 Speaker 5: were going to sow the oil. We're going to sow 214 00:13:04,200 --> 00:13:08,160 Speaker 5: the oil, and so we developed our hydro potential in 215 00:13:08,200 --> 00:13:10,360 Speaker 5: the south of the country. We have the best hydro 216 00:13:10,400 --> 00:13:13,400 Speaker 5: electric river in the world, the Calony River. It should 217 00:13:13,480 --> 00:13:19,000 Speaker 5: be producing like thirty two jigawatts of power and by 218 00:13:19,040 --> 00:13:21,720 Speaker 5: the way, twenty four to seven if you want three 219 00:13:21,800 --> 00:13:25,120 Speaker 5: hundred and sixty five days a year, it's fantastic. From 220 00:13:25,520 --> 00:13:33,080 Speaker 5: its hydrological marvel, it's not producing eight megawatts agigoads, so 221 00:13:33,120 --> 00:13:37,000 Speaker 5: it's they messed that up to we were going to 222 00:13:37,080 --> 00:13:43,920 Speaker 5: use that to produce aluminium steel. We have enormous agricultural potential, 223 00:13:44,000 --> 00:13:48,320 Speaker 5: especially with the agricultural revolution that has happened in mostly 224 00:13:48,320 --> 00:13:51,280 Speaker 5: in Brazil in the last twenty years. It didn't reach 225 00:13:51,400 --> 00:13:56,080 Speaker 5: Venezuela during Chavismo, so we could be producing over twelve 226 00:13:56,080 --> 00:14:01,320 Speaker 5: million hectares and we're producing less than a million. So 227 00:14:01,480 --> 00:14:05,640 Speaker 5: the potential for diversification is huge. But the story of 228 00:14:05,920 --> 00:14:09,920 Speaker 5: Venezuela has been the story of this incredible uncertainty over 229 00:14:09,960 --> 00:14:14,199 Speaker 5: what the future brings because we have not managed the 230 00:14:14,760 --> 00:14:17,760 Speaker 5: volatility in oil incomes in a way that protects the 231 00:14:17,840 --> 00:14:21,360 Speaker 5: domestic economy. So more than you know, just the old 232 00:14:21,440 --> 00:14:24,120 Speaker 5: Dutch disease of being. You know, you're earning so many 233 00:14:24,160 --> 00:14:28,080 Speaker 5: dollars that you're so appreciated that other things are not competitive. 234 00:14:28,640 --> 00:14:32,160 Speaker 5: It's really that since the nineteen eighties, it's been up 235 00:14:32,200 --> 00:14:34,840 Speaker 5: and down, up and down in oil incomes that have 236 00:14:35,160 --> 00:14:39,240 Speaker 5: made the economy quite unpredictable. And the only way to 237 00:14:39,360 --> 00:14:42,600 Speaker 5: deal with that is to protect the economy from oil 238 00:14:42,640 --> 00:14:47,040 Speaker 5: price volatilities through stabilization funds and those I wrote the 239 00:14:47,120 --> 00:14:51,040 Speaker 5: law for the stabilization fund. But the moment Chavis got in, 240 00:14:51,240 --> 00:14:52,480 Speaker 5: that's the first thing he killed. 241 00:14:53,160 --> 00:14:55,960 Speaker 2: I was just going to ask, since you were on 242 00:14:56,000 --> 00:14:58,680 Speaker 2: the board of the central bank. You know, we know 243 00:14:58,800 --> 00:15:02,680 Speaker 2: that in a lot of resource rich countries the approach 244 00:15:02,720 --> 00:15:05,800 Speaker 2: of the central bank they might just peg to the dollar. 245 00:15:06,120 --> 00:15:07,360 Speaker 3: You know, something very simple. 246 00:15:07,600 --> 00:15:10,400 Speaker 2: What was the sort of general philosophy of the central 247 00:15:10,400 --> 00:15:11,960 Speaker 2: bank when you were on it. How did you think 248 00:15:11,960 --> 00:15:16,000 Speaker 2: about sterilizing foreign currencies preventing inflation? Was what was the 249 00:15:16,040 --> 00:15:18,000 Speaker 2: framework that the central bank used. 250 00:15:19,200 --> 00:15:24,200 Speaker 5: That's a very good question, because Venezuela until nineteen eighty 251 00:15:24,240 --> 00:15:28,360 Speaker 5: three had pegged the exchange rate to the dollar, except 252 00:15:29,280 --> 00:15:32,120 Speaker 5: in one small crisis we had in the early sixties, 253 00:15:32,160 --> 00:15:36,280 Speaker 5: and then when the US devalued the currency in nineteen 254 00:15:36,320 --> 00:15:38,840 Speaker 5: seventy one seventy two, when it abandoned the Breton Woods 255 00:15:38,880 --> 00:15:44,480 Speaker 5: Agreement the US, we revalued Visa Vigo US, but we 256 00:15:44,520 --> 00:15:47,320 Speaker 5: had fixed exchange rates, so it was very simple, fixed 257 00:15:47,320 --> 00:15:50,800 Speaker 5: exchange rate. The market believed the exchange rate was fixed 258 00:15:50,840 --> 00:15:53,880 Speaker 5: and pegged, and it worked quite well until the nineteen 259 00:15:53,880 --> 00:15:56,800 Speaker 5: eighty three crisis. And then in the nineteen eighty three crisis, 260 00:15:56,840 --> 00:16:01,320 Speaker 5: first they tried exchange controls, multiple extra rates, and when 261 00:16:01,320 --> 00:16:04,720 Speaker 5: I was at the central bank, we decided to unify 262 00:16:04,720 --> 00:16:07,840 Speaker 5: the exchange rate to float and to adopt something more 263 00:16:07,960 --> 00:16:13,080 Speaker 5: like inflation targeting. But it was not easy to do 264 00:16:13,200 --> 00:16:18,360 Speaker 5: because you know, inflation targeting is easier to achieve when 265 00:16:18,440 --> 00:16:21,920 Speaker 5: inflation is under control and things are more stable. So 266 00:16:21,960 --> 00:16:23,240 Speaker 5: we had a pretty bumpy road. 267 00:16:24,240 --> 00:16:27,760 Speaker 4: You know, you mentioned that stability fund. As a policymaker, 268 00:16:27,880 --> 00:16:31,800 Speaker 4: what was it like to witness I guess the transition 269 00:16:32,120 --> 00:16:36,360 Speaker 4: to the Chavas administration, and I guess see some of 270 00:16:36,400 --> 00:16:39,720 Speaker 4: your work, your earlier work dismantled. 271 00:16:40,240 --> 00:16:46,760 Speaker 5: Well, it was initially quite gradual. Chavis left the finance 272 00:16:46,840 --> 00:16:51,320 Speaker 5: minister from the previous administration. She gave some confidence to markets. 273 00:16:51,360 --> 00:16:54,200 Speaker 5: And he first thing he did is he changed the constitution, 274 00:16:54,760 --> 00:16:58,440 Speaker 5: and the constitution concentrated power in the presidency. It went 275 00:16:58,440 --> 00:17:01,360 Speaker 5: from two chambers of Congress to single chamber of Congress. 276 00:17:01,840 --> 00:17:04,800 Speaker 5: And then and then the checks and balances were eroded. 277 00:17:06,240 --> 00:17:09,879 Speaker 5: And but what really changed his mind was the moment 278 00:17:09,880 --> 00:17:12,199 Speaker 5: the price of oil went up. He felt he no 279 00:17:12,280 --> 00:17:16,720 Speaker 5: longer needed society, that the private sector needed him. He 280 00:17:16,760 --> 00:17:20,920 Speaker 5: didn't need a private sector. So he started. He had 281 00:17:20,920 --> 00:17:26,080 Speaker 5: the money to buy everybody off, but he expropriated, didn't 282 00:17:26,080 --> 00:17:29,399 Speaker 5: pay for most of it, and created an environment in 283 00:17:29,440 --> 00:17:32,520 Speaker 5: which people thought that they really had no rights. You had, 284 00:17:32,920 --> 00:17:35,840 Speaker 5: your property could be taken away, you could not set prices, 285 00:17:35,880 --> 00:17:39,879 Speaker 5: you could not buy foreign exchange without permission, and to 286 00:17:39,920 --> 00:17:43,879 Speaker 5: buy to get that permission, you had to behave and 287 00:17:43,960 --> 00:17:48,040 Speaker 5: so it created an environment to quite oppressive environment. By 288 00:17:48,080 --> 00:17:51,560 Speaker 5: the way, we had a free press and now there's 289 00:17:51,800 --> 00:17:56,200 Speaker 5: no free press whatsoever. So it's it's this erosion of rights, 290 00:17:56,560 --> 00:18:03,919 Speaker 5: property rights, information rights, voting rights, just political rights. So 291 00:18:04,160 --> 00:18:07,240 Speaker 5: it was the complete erosion of all rights in the 292 00:18:07,280 --> 00:18:11,119 Speaker 5: transformation of a long standing democracy into a dictatorship. Was 293 00:18:11,200 --> 00:18:12,280 Speaker 5: quite horrible to watch. 294 00:18:12,680 --> 00:18:15,480 Speaker 2: I think one of the most surprising aspects, and now 295 00:18:15,480 --> 00:18:18,639 Speaker 2: that I think about it from our recent conversation, was 296 00:18:18,680 --> 00:18:21,920 Speaker 2: just how long some of these businesses stuck it out 297 00:18:22,040 --> 00:18:25,399 Speaker 2: under a deteriorating situation. You'd think, okay, you get this 298 00:18:25,480 --> 00:18:28,320 Speaker 2: hyper inflation, and you hear these stories about, okay, are 299 00:18:28,320 --> 00:18:31,600 Speaker 2: there some warehouses full of sugar somewhere that we could 300 00:18:31,640 --> 00:18:34,440 Speaker 2: sell abroad so that we could get the hard currency 301 00:18:34,640 --> 00:18:38,600 Speaker 2: in in order to buy you know, buy spare parts, 302 00:18:38,640 --> 00:18:41,879 Speaker 2: et cetera. This idea that like you know, it was 303 00:18:41,960 --> 00:18:44,159 Speaker 2: not a it was a sort of slow boil. So 304 00:18:44,280 --> 00:18:46,920 Speaker 2: to spect them, the big international companies, they didn't leave 305 00:18:46,960 --> 00:18:49,159 Speaker 2: right away. They actually they kept trying to make it 306 00:18:49,200 --> 00:18:50,840 Speaker 2: work for as long as they possibly could. 307 00:18:51,520 --> 00:18:56,320 Speaker 5: Absolutely, and it was uh. I mean, Cargill is a 308 00:18:56,320 --> 00:19:00,840 Speaker 5: good example in your in your previous show, Cargill, you know, 309 00:19:00,960 --> 00:19:06,440 Speaker 5: the government nationalized international trade, so you had to buy 310 00:19:06,760 --> 00:19:10,680 Speaker 5: you had to sell everything through a state owned company 311 00:19:11,240 --> 00:19:15,560 Speaker 5: that would buy on behalf of your customers, and they 312 00:19:15,560 --> 00:19:19,119 Speaker 5: were the ones kind of siphoning the differential between the 313 00:19:19,160 --> 00:19:24,320 Speaker 5: official exchange rate and the market exchange rate, or the 314 00:19:24,359 --> 00:19:28,320 Speaker 5: black market exchange rate, which was at some stages, you know, 315 00:19:28,880 --> 00:19:31,760 Speaker 5: ten to one, one hundred to one. So the best 316 00:19:31,800 --> 00:19:35,840 Speaker 5: business was to sell a dollar at the parallel rate 317 00:19:36,680 --> 00:19:39,840 Speaker 5: and convert that into dollars at the official rate. That 318 00:19:39,880 --> 00:19:42,080 Speaker 5: would have been a rate of return of ten thousand 319 00:19:42,160 --> 00:19:46,520 Speaker 5: percent in a day. So it was it was that 320 00:19:47,200 --> 00:19:53,480 Speaker 5: craziness in that led to the economic collapse that I 321 00:19:53,600 --> 00:19:54,320 Speaker 5: mentioned before. 322 00:19:54,760 --> 00:19:57,840 Speaker 4: Since we're talking about dollars, talk to us a little 323 00:19:57,880 --> 00:20:01,359 Speaker 4: bit about the impact of sanctions. So you know, you 324 00:20:01,440 --> 00:20:04,480 Speaker 4: were no longer a policy maker when those sanctions came 325 00:20:04,600 --> 00:20:08,360 Speaker 4: into effect. But I think part of the difficulty when 326 00:20:08,359 --> 00:20:11,440 Speaker 4: it comes to assessing Venezuela right now is we're trying 327 00:20:11,440 --> 00:20:15,160 Speaker 4: to figure out how much of the economic issues there 328 00:20:15,240 --> 00:20:20,399 Speaker 4: are the results of sort of homegrown structural issues versus 329 00:20:20,600 --> 00:20:24,160 Speaker 4: external factors like the sanctions that have been in placed 330 00:20:24,200 --> 00:20:25,640 Speaker 4: for two decades now. 331 00:20:26,080 --> 00:20:28,560 Speaker 5: No, the sanctions haven't been in place for two decades. 332 00:20:28,800 --> 00:20:34,840 Speaker 5: The sanctions. The sanctions were actually imposed starting around second 333 00:20:34,920 --> 00:20:41,040 Speaker 5: half of twenty seventeen, and the economy imploded. The worst 334 00:20:41,040 --> 00:20:45,440 Speaker 5: implosion was in the year twenty sixteen. In the year 335 00:20:45,480 --> 00:20:50,119 Speaker 5: twenty sixteen, the government cut back on imports by something 336 00:20:50,200 --> 00:20:54,119 Speaker 5: like eighty five percent, imports of food, imports of medicine. 337 00:20:55,280 --> 00:20:59,240 Speaker 5: They just collapsed imports. I wrote an article in those 338 00:20:59,320 --> 00:21:03,439 Speaker 5: days testing that Venezuela should go to the IMF and 339 00:21:03,480 --> 00:21:07,160 Speaker 5: restructure its debt because since it had borrowed so much 340 00:21:07,200 --> 00:21:09,880 Speaker 5: money and the price of oil had declined so much 341 00:21:09,920 --> 00:21:13,119 Speaker 5: and it had no savings, it could not keep on 342 00:21:13,320 --> 00:21:16,800 Speaker 5: servicing the debt and it would need to restructure its 343 00:21:16,880 --> 00:21:22,760 Speaker 5: dead ideally with some support from the IMF. So I 344 00:21:22,800 --> 00:21:25,719 Speaker 5: asked the question in the title of that article was 345 00:21:26,520 --> 00:21:32,760 Speaker 5: should Venezuela default? And that got me banned from the country, 346 00:21:33,119 --> 00:21:37,479 Speaker 5: so fortunately I published it abroad. But it gives you 347 00:21:37,520 --> 00:21:42,800 Speaker 5: an idea of how this was the year twenty sixteen, 348 00:21:43,000 --> 00:21:48,680 Speaker 5: okay before sanctions, okay, twenty fifteen, twenty sixteen, before sanctions. 349 00:21:48,680 --> 00:21:52,560 Speaker 5: So it was the writing was on the wall. The 350 00:21:52,600 --> 00:21:56,520 Speaker 5: oil production had collapsed because in two thousand and three, 351 00:21:57,320 --> 00:22:02,040 Speaker 5: Chavez fired the oil company gone on strike because Chaves 352 00:22:02,280 --> 00:22:08,040 Speaker 5: was messing with their meritocracy, with their hierarchical rules of 353 00:22:08,119 --> 00:22:10,679 Speaker 5: you know what, you needed to do to reach a 354 00:22:10,720 --> 00:22:15,119 Speaker 5: certain level in the structure of the company, which was 355 00:22:15,600 --> 00:22:20,480 Speaker 5: a culture that we inherited from Excellent Mobile and from 356 00:22:20,680 --> 00:22:23,440 Speaker 5: a shell that were sort of like the two large 357 00:22:23,480 --> 00:22:27,359 Speaker 5: producers in Venezuela before they were nationalized in the seventies. 358 00:22:29,200 --> 00:22:33,240 Speaker 5: So there was a deep culture that in that company. 359 00:22:33,560 --> 00:22:38,000 Speaker 5: They went on strike. Chaves fired twenty thousand out of 360 00:22:38,040 --> 00:22:41,720 Speaker 5: thirty two thousand, starting from the top, So he eliminated 361 00:22:41,760 --> 00:22:46,320 Speaker 5: all the human capital of that company, and immediately productions 362 00:22:46,320 --> 00:22:49,840 Speaker 5: started to decline. We had the capacity to refine one 363 00:22:49,840 --> 00:22:52,760 Speaker 5: point three million barrels of oil a day. Today we 364 00:22:52,840 --> 00:22:57,560 Speaker 5: can't refine one hundred thousand. We import gasoline. So this 365 00:22:57,760 --> 00:23:03,960 Speaker 5: destruction way proceed semi sanctions. Now, the sanctions were imposed 366 00:23:04,000 --> 00:23:07,639 Speaker 5: because Maduro started to get farther and farther away from 367 00:23:07,720 --> 00:23:12,720 Speaker 5: democratic norms, and it was a way of trying to 368 00:23:12,760 --> 00:23:17,879 Speaker 5: force him to to move back to democratic norms, and 369 00:23:19,280 --> 00:23:23,280 Speaker 5: instead he radical He became more radicalized than his in 370 00:23:23,359 --> 00:23:26,159 Speaker 5: his name. But just to tell you the importance of 371 00:23:26,240 --> 00:23:28,520 Speaker 5: human capital and all you might say, oil is not 372 00:23:28,720 --> 00:23:30,879 Speaker 5: that important, you know, human cap It's kind of like 373 00:23:30,920 --> 00:23:34,240 Speaker 5: a basic industry. When they kicked out of Venezuelan and 374 00:23:34,280 --> 00:23:38,240 Speaker 5: oil engineers. They went to Colombia. There was a field 375 00:23:38,240 --> 00:23:43,119 Speaker 5: in Colombia called Rubialis. It was producing thirty thousand barrels 376 00:23:43,160 --> 00:23:46,880 Speaker 5: of oil a day. The Venezuelan and oil engineers came 377 00:23:46,920 --> 00:23:50,040 Speaker 5: in and in no time they it was producing two 378 00:23:50,119 --> 00:23:52,840 Speaker 5: hundred and fifty thousand barrels a day. So it's it 379 00:23:53,080 --> 00:23:56,360 Speaker 5: just you need to know what it is that you're 380 00:23:56,400 --> 00:24:00,200 Speaker 5: doing well. That human capital they kicked out that that's 381 00:24:00,240 --> 00:24:02,760 Speaker 5: the real collapse of the Venison oil production. And then 382 00:24:02,800 --> 00:24:07,200 Speaker 5: obviously he could have negotiated around sanctions, but he would 383 00:24:07,280 --> 00:24:12,720 Speaker 5: rather be poor and in power then you know, provide 384 00:24:12,760 --> 00:24:16,560 Speaker 5: some more rights and norms and and and and maybe 385 00:24:16,840 --> 00:24:17,919 Speaker 5: risk losing an election. 386 00:24:18,280 --> 00:24:22,280 Speaker 2: That's truly a remarkable statistic about that, uh, that Columbian 387 00:24:22,320 --> 00:24:25,280 Speaker 2: oil field. I want to get to the present tense 388 00:24:25,560 --> 00:24:29,080 Speaker 2: soon and talk about the challenges now, but maybe to 389 00:24:29,119 --> 00:24:33,520 Speaker 2: help us understand, you know, through these years of deterioration, 390 00:24:34,200 --> 00:24:38,960 Speaker 2: whether we're talking about the latter years of Chavez or 391 00:24:39,080 --> 00:24:43,280 Speaker 2: the earlier years of Maduro, what was the constituency that 392 00:24:43,440 --> 00:24:48,359 Speaker 2: allowed them to stay in power despite these disruptions. Because 393 00:24:48,440 --> 00:24:53,280 Speaker 2: even the most absolute dictator anywhere, to some extent has 394 00:24:53,320 --> 00:24:58,119 Speaker 2: to have some credibility with some pocket that's powerful, something 395 00:24:58,160 --> 00:25:00,920 Speaker 2: that preserves I would I would think, et cetera, talk 396 00:25:00,960 --> 00:25:04,240 Speaker 2: to us about where was the constituency for this new 397 00:25:04,280 --> 00:25:07,159 Speaker 2: trajectory of the country that started under Javis. 398 00:25:07,800 --> 00:25:12,000 Speaker 5: So initially the constituency was very large. But as the 399 00:25:12,040 --> 00:25:15,399 Speaker 5: economy started to deteriorate and as people thought that there 400 00:25:15,440 --> 00:25:19,439 Speaker 5: were less and less opportunities within that regime, Maluda had 401 00:25:19,480 --> 00:25:24,160 Speaker 5: to get nastier. So Chaves was very you know, liked 402 00:25:24,359 --> 00:25:28,320 Speaker 5: if you want. He was popular in he could actually 403 00:25:28,400 --> 00:25:32,919 Speaker 5: win elections. Madula couldn't really win elections, and so he 404 00:25:33,080 --> 00:25:36,639 Speaker 5: had to get nastier and masterier. So today what you 405 00:25:36,760 --> 00:25:42,000 Speaker 5: have is essentially extreme repression, extreme repression not only on 406 00:25:42,160 --> 00:25:46,159 Speaker 5: civil society, but extreme repression on the military. They distrust 407 00:25:46,240 --> 00:25:49,560 Speaker 5: the military to death. They have a secret police for 408 00:25:49,640 --> 00:25:52,800 Speaker 5: civilians called Sabine, and then there's a secret police for 409 00:25:53,080 --> 00:25:57,119 Speaker 5: the military called the Hesim, and the de Hesem has 410 00:25:57,400 --> 00:26:00,959 Speaker 5: hundreds of officers in jail. They are the worst treated 411 00:26:01,000 --> 00:26:05,000 Speaker 5: political prisoners in Venezuela. They are starved, they are tortured. 412 00:26:05,400 --> 00:26:09,560 Speaker 5: They have deeply penetrated all the communications of anybody in 413 00:26:09,600 --> 00:26:13,000 Speaker 5: the army the Cubans are deeply into it. They're using 414 00:26:13,080 --> 00:26:17,720 Speaker 5: Russian technology so that they're trying to prevent the army 415 00:26:17,760 --> 00:26:21,159 Speaker 5: from organizing against the government. So the army is not 416 00:26:21,280 --> 00:26:24,800 Speaker 5: really there to defend the country. That's why the attack 417 00:26:24,880 --> 00:26:28,560 Speaker 5: on January third was such a cakewalk. It's that, you know, 418 00:26:28,600 --> 00:26:32,439 Speaker 5: the army was there to be kind of controlled so 419 00:26:32,480 --> 00:26:38,800 Speaker 5: that they wouldn't break from the government. So it's really 420 00:26:39,640 --> 00:26:43,240 Speaker 5: that's why in the election of July twenty eighth, twenty 421 00:26:43,280 --> 00:26:46,000 Speaker 5: twenty four, in spite of the fact that they didn't 422 00:26:46,080 --> 00:26:49,600 Speaker 5: let eight million Venezuelans a broad vote, in spite of 423 00:26:49,600 --> 00:26:51,920 Speaker 5: the fact that they did not let three million young 424 00:26:52,000 --> 00:26:56,200 Speaker 5: Venezuelans register for the first time in the electoral roles, 425 00:26:57,160 --> 00:26:59,080 Speaker 5: in spite of the fact that they did not let 426 00:26:59,119 --> 00:27:03,480 Speaker 5: the candidate that the primaries to run, Maria Corina Matchalo. 427 00:27:03,600 --> 00:27:07,159 Speaker 5: She appointed somebody who nobody knew. She raised his hand, 428 00:27:07,800 --> 00:27:11,399 Speaker 5: and he won seventy thirty. He would have won eighty 429 00:27:11,480 --> 00:27:14,520 Speaker 5: five fifteen if other people had been allowed to vote. 430 00:27:15,240 --> 00:27:18,159 Speaker 5: Now that's a margins, even seventy to thirty, that's a 431 00:27:18,200 --> 00:27:22,119 Speaker 5: margin that you haven't seen Trump win. You know, train bound, 432 00:27:23,119 --> 00:27:26,440 Speaker 5: nobody wins by those margins. So there is a huge 433 00:27:26,560 --> 00:27:30,879 Speaker 5: political majority in Venezuela for change that has that is 434 00:27:30,960 --> 00:27:35,119 Speaker 5: behind one clear political leadership. So Venezuela is not Iraq. 435 00:27:35,200 --> 00:27:39,040 Speaker 5: Venezuela is not a polarized country. Venezuela is a unified country. 436 00:27:39,560 --> 00:27:44,640 Speaker 5: In those elections, the opposition won in all twenty four states, 437 00:27:45,000 --> 00:27:47,920 Speaker 5: they won in ninety percent of the three hundred and 438 00:27:47,960 --> 00:27:51,520 Speaker 5: thirty five municipalities. That means it's a natural there's a 439 00:27:51,640 --> 00:27:55,199 Speaker 5: political majority in Venezuela that wants to go in a 440 00:27:55,240 --> 00:27:58,840 Speaker 5: different direction, but there's a small clique that's trying to 441 00:27:58,920 --> 00:28:02,679 Speaker 5: prevent it. And so that is the current situation, and 442 00:28:02,720 --> 00:28:07,399 Speaker 5: that's my concern that the Trump administration has announced that 443 00:28:07,480 --> 00:28:11,880 Speaker 5: they want to rule by indirectly, by controlling that trick 444 00:28:12,200 --> 00:28:15,040 Speaker 5: when there is a big political majority that wants to 445 00:28:15,080 --> 00:28:16,119 Speaker 5: go in a different direction. 446 00:28:32,160 --> 00:28:34,119 Speaker 4: This is actually going to be my next question. So 447 00:28:34,359 --> 00:28:38,640 Speaker 4: we're now up to January twenty twenty six. Maduro is gone. 448 00:28:39,440 --> 00:28:43,000 Speaker 4: The US says it wants more private investment in Venezuela, 449 00:28:43,120 --> 00:28:46,080 Speaker 4: so maybe, you know, some of the sanctions issues go away. 450 00:28:46,480 --> 00:28:50,479 Speaker 4: But on the other hand, the acting president is straight 451 00:28:50,560 --> 00:28:53,760 Speaker 4: out of the Maduro regime, and it doesn't seem that 452 00:28:53,800 --> 00:28:59,440 Speaker 4: you're having any significant political or structural change. Is that right? 453 00:29:01,400 --> 00:29:05,800 Speaker 5: It's very hard to read exactly what the Trump plan 454 00:29:05,960 --> 00:29:09,320 Speaker 5: is for Venezuela. Marco Rubio had talked has talked about 455 00:29:09,320 --> 00:29:13,920 Speaker 5: three phases, first stabilization, then recovery, and then eventually a 456 00:29:13,960 --> 00:29:18,400 Speaker 5: political transition. I think, and I have argued that it's 457 00:29:18,480 --> 00:29:22,520 Speaker 5: the wrong phasing because there's going to be very little 458 00:29:22,600 --> 00:29:27,720 Speaker 5: recovery unless you know what is the those rules of 459 00:29:27,760 --> 00:29:29,800 Speaker 5: the game, what is what is the what are the 460 00:29:29,880 --> 00:29:32,840 Speaker 5: rights that people have? Right now? People in Venezuela are 461 00:29:32,880 --> 00:29:36,920 Speaker 5: afraid to speak, are afraid to to to do anything 462 00:29:36,960 --> 00:29:40,360 Speaker 5: because they're still being deeply harassed and put in jail 463 00:29:40,800 --> 00:29:45,120 Speaker 5: for just you know, tweeting something or for having an 464 00:29:45,160 --> 00:29:48,080 Speaker 5: opinion or for you know, they have put in jail 465 00:29:48,680 --> 00:29:54,400 Speaker 5: young girls in order to pressure military officers that have say, 466 00:29:54,440 --> 00:29:57,920 Speaker 5: broke rank, and they want them to to to turn 467 00:29:57,960 --> 00:30:01,680 Speaker 5: themselves in. So it's a very very oppressive regime. And 468 00:30:02,160 --> 00:30:05,120 Speaker 5: the idea is that, yes, we are going to give 469 00:30:05,560 --> 00:30:08,400 Speaker 5: this regime orders of what to do, even though at 470 00:30:08,400 --> 00:30:11,600 Speaker 5: the heart they are the ones that brought the economy 471 00:30:11,640 --> 00:30:14,320 Speaker 5: to where it is. And the idea is we're now 472 00:30:14,320 --> 00:30:17,600 Speaker 5: going to eliminate sanctions. But it's not sanctions that destroyed 473 00:30:17,600 --> 00:30:22,560 Speaker 5: the Venezuela and oil industry. It was the expropriations that 474 00:30:22,600 --> 00:30:25,240 Speaker 5: were done in two thousand and seven and two thousand 475 00:30:25,280 --> 00:30:28,760 Speaker 5: and nine. It was the firing of all the oil 476 00:30:28,840 --> 00:30:32,120 Speaker 5: workers in two thousand and three. It was the rules 477 00:30:32,240 --> 00:30:34,880 Speaker 5: that they created for the oil industry. In the oil industry, 478 00:30:35,040 --> 00:30:38,160 Speaker 5: according to the law, production can only happen through the 479 00:30:38,240 --> 00:30:41,920 Speaker 5: national oil company or in joint ventures where the national 480 00:30:42,080 --> 00:30:45,440 Speaker 5: oil company has fifty one percent of its shares. The 481 00:30:45,520 --> 00:30:49,160 Speaker 5: national oil company is broke, it's in default with all 482 00:30:49,200 --> 00:30:53,560 Speaker 5: its creditors. So if it were to receive some dollars 483 00:30:53,840 --> 00:30:57,080 Speaker 5: in some bank account in the US, you know, there 484 00:30:57,080 --> 00:31:01,200 Speaker 5: are judgments in US courts that would freeze those assets 485 00:31:01,200 --> 00:31:04,960 Speaker 5: to pay creditors. So nobody wants that as a partner. 486 00:31:05,280 --> 00:31:08,640 Speaker 5: So it is in this context that Trump says, oh, 487 00:31:08,680 --> 00:31:12,040 Speaker 5: I want US companies to go back. Well, the law 488 00:31:12,120 --> 00:31:15,680 Speaker 5: doesn't allow for those companies to go back. And if 489 00:31:15,720 --> 00:31:17,720 Speaker 5: you want to change the law, who's going to change 490 00:31:17,720 --> 00:31:21,640 Speaker 5: the law? Well, we had stolen elections last year for 491 00:31:21,720 --> 00:31:24,960 Speaker 5: the National Assembly that the US does not recognize Latin 492 00:31:24,960 --> 00:31:28,360 Speaker 5: America does not recognize, Europe does not recognize. There is 493 00:31:28,400 --> 00:31:33,240 Speaker 5: no legitimate power to change the hydrocarbon's law. Right now, 494 00:31:33,280 --> 00:31:36,000 Speaker 5: you have a dollar at the official rate of three 495 00:31:36,080 --> 00:31:38,920 Speaker 5: hundred and something, and the black market rate is that 496 00:31:39,720 --> 00:31:43,160 Speaker 5: four hundred, five hundred, six hundred. It reached one thousand. 497 00:31:44,240 --> 00:31:46,600 Speaker 5: So if you are going to invest at what exchange 498 00:31:46,680 --> 00:31:48,520 Speaker 5: rate do you come in? At what exchange rate do 499 00:31:48,560 --> 00:31:53,360 Speaker 5: you convert your profits back out? It's what the president 500 00:31:53,400 --> 00:31:57,680 Speaker 5: of Excellent said that Venezuela is uninvestable. It's just a 501 00:31:57,800 --> 00:32:04,040 Speaker 5: description of reality. It's it's that the system was not 502 00:32:04,240 --> 00:32:10,200 Speaker 5: designed for private investment independent of sanctions, and that's that's 503 00:32:10,240 --> 00:32:13,360 Speaker 5: what needs to change. But it needs to change through 504 00:32:13,400 --> 00:32:17,920 Speaker 5: a government that has legitimacy to change things that is 505 00:32:17,960 --> 00:32:21,200 Speaker 5: perceived as being, you know, the reflection of the will 506 00:32:21,240 --> 00:32:22,920 Speaker 5: of the people that you know, they are the ones 507 00:32:22,960 --> 00:32:25,960 Speaker 5: who decided that, you know, what course of action to take. 508 00:32:26,560 --> 00:32:28,920 Speaker 5: I don't think any serious investor is going to go 509 00:32:29,040 --> 00:32:31,080 Speaker 5: in into such a messy situation. 510 00:32:31,680 --> 00:32:34,080 Speaker 2: I certainly take your point, and it certainly sounds very 511 00:32:34,080 --> 00:32:36,320 Speaker 2: logical what you say that you're never going to get 512 00:32:36,640 --> 00:32:40,600 Speaker 2: real investment of capital. You're certainly not going to get 513 00:32:40,880 --> 00:32:45,720 Speaker 2: this sort of perhaps remigration of talent that left and 514 00:32:45,760 --> 00:32:49,720 Speaker 2: so forth, until there's some sort of political stability, until 515 00:32:49,720 --> 00:32:51,640 Speaker 2: there's some sort of confidence this is the new thing. 516 00:32:52,000 --> 00:32:55,480 Speaker 2: But how do you do that functionally? I mean, clearly 517 00:32:55,960 --> 00:33:00,200 Speaker 2: sanctions didn't work right, Sanctions didn't have any effect on 518 00:33:00,800 --> 00:33:06,680 Speaker 2: removing the Maduro regime. There's not an impulse to put 519 00:33:06,880 --> 00:33:10,400 Speaker 2: boots on the ground American troops and so forth. That 520 00:33:10,480 --> 00:33:13,920 Speaker 2: doesn't seem like there's any appetite. So is there some 521 00:33:14,040 --> 00:33:18,200 Speaker 2: mechanism in which the Trump administration, even if it wanted 522 00:33:18,240 --> 00:33:22,880 Speaker 2: to take your advice and put political stability before economic revival? 523 00:33:24,080 --> 00:33:28,200 Speaker 2: Does the tool exist practically to establish that sequence? 524 00:33:28,880 --> 00:33:31,160 Speaker 5: I think it does, and I think you might see 525 00:33:31,200 --> 00:33:34,360 Speaker 5: them moving in this direction in the coming days and weeks. 526 00:33:35,320 --> 00:33:37,880 Speaker 5: And I think that it's important they that they listen 527 00:33:38,760 --> 00:33:41,479 Speaker 5: to the fact that you know they this is not they. 528 00:33:41,760 --> 00:33:44,640 Speaker 5: You know, they are obsessed about not committing the mistake 529 00:33:44,800 --> 00:33:48,720 Speaker 5: that the US made in Iraq, right, But Iraq has 530 00:33:48,760 --> 00:33:51,960 Speaker 5: nothing to do with Venezuela. Iraq is you know, a 531 00:33:52,040 --> 00:33:57,360 Speaker 5: country that goes back to Mesopotamia, was five thousand years old. 532 00:33:57,760 --> 00:34:02,040 Speaker 5: In those five thousand years until Salam Hussein, there had 533 00:34:02,080 --> 00:34:05,840 Speaker 5: never been an election. There had never been political parties 534 00:34:06,160 --> 00:34:10,319 Speaker 5: in Venezuela was democracy. We have political parties. We ran 535 00:34:10,400 --> 00:34:14,040 Speaker 5: an election not one hundred years ago, in twenty twenty four. 536 00:34:14,719 --> 00:34:17,520 Speaker 5: We were able to secure the results of those elections 537 00:34:17,560 --> 00:34:20,520 Speaker 5: because we had six hundred thousand people across the whole 538 00:34:20,520 --> 00:34:24,840 Speaker 5: country supervising and protecting the votes for the opposition. You 539 00:34:24,920 --> 00:34:29,160 Speaker 5: have a political organization, a majority political organization there. So 540 00:34:29,200 --> 00:34:31,879 Speaker 5: what you need to do right now is to say 541 00:34:32,080 --> 00:34:35,360 Speaker 5: is to tell the army, we're not going to fire 542 00:34:35,480 --> 00:34:37,960 Speaker 5: you the way they fired all the army in Iraq. 543 00:34:38,400 --> 00:34:40,360 Speaker 5: You tell the bureaucracy, we're not going to fire the 544 00:34:40,360 --> 00:34:43,920 Speaker 5: way you fired all the bureaucracy in Iraq. Everybody's going 545 00:34:43,960 --> 00:34:48,080 Speaker 5: to have their salaries, everybody's going to have their pensions, right, 546 00:34:48,560 --> 00:34:53,719 Speaker 5: but they are going to be under civilian control. And 547 00:34:53,880 --> 00:34:58,560 Speaker 5: if you tell them, you know, they have already seen 548 00:34:58,600 --> 00:35:02,640 Speaker 5: what happened to Maluru, they are very clear that it's 549 00:35:02,760 --> 00:35:07,480 Speaker 5: much cheaper a treatment alasule money. Right. You don't have 550 00:35:07,560 --> 00:35:11,560 Speaker 5: to put the special forces on the ground to extract somebody, 551 00:35:11,560 --> 00:35:14,040 Speaker 5: you know alasule money. You just send some missiles and 552 00:35:14,560 --> 00:35:17,520 Speaker 5: no boots on the ground. So the pressure you can 553 00:35:17,560 --> 00:35:25,960 Speaker 5: put to say, listen, guys, Let's define a timetable for elections. 554 00:35:26,320 --> 00:35:32,160 Speaker 5: Let's define a credible electoral council to supervise those elections 555 00:35:32,680 --> 00:35:37,120 Speaker 5: with international supervision. Let's have a date for those elections. 556 00:35:37,200 --> 00:35:40,040 Speaker 5: Let's open up the role so that young people can 557 00:35:40,120 --> 00:35:43,840 Speaker 5: register and diaspora can register, and we have an election 558 00:35:43,960 --> 00:35:46,520 Speaker 5: on a certain date. And by the way, you have 559 00:35:46,600 --> 00:35:49,400 Speaker 5: to free all the political prisoners. You have to allow 560 00:35:49,560 --> 00:35:52,800 Speaker 5: the diaspora to go back, and you have to allow 561 00:35:52,880 --> 00:35:56,640 Speaker 5: a free press, otherwise you get a Soulay money treatment. 562 00:35:56,880 --> 00:35:59,120 Speaker 5: And I tell you that if you do those things, 563 00:35:59,440 --> 00:36:02,040 Speaker 5: what is going to do. They're going to want to 564 00:36:02,080 --> 00:36:05,160 Speaker 5: participate in those elections, to organize for those elections, to 565 00:36:05,239 --> 00:36:08,719 Speaker 5: start thinking about the future, and to have the credibility 566 00:36:08,719 --> 00:36:11,560 Speaker 5: that the future is going to be possible because there 567 00:36:11,560 --> 00:36:15,279 Speaker 5: will be a democratic government committed to a market economy, 568 00:36:16,040 --> 00:36:22,240 Speaker 5: not a socialist government under threat of American attack and 569 00:36:22,280 --> 00:36:26,000 Speaker 5: with a cash flow control by the American power. So 570 00:36:26,400 --> 00:36:29,800 Speaker 5: that is a much better situation in which to recover 571 00:36:29,880 --> 00:36:33,680 Speaker 5: the economy, to achieve social peace, and to have a 572 00:36:33,800 --> 00:36:35,480 Speaker 5: Venezuela become prosperous again. 573 00:36:35,960 --> 00:36:39,560 Speaker 4: Could you have some sort of hybrid structure here where 574 00:36:40,520 --> 00:36:44,920 Speaker 4: Venezuela maintains some aspects of socialism but also tries to 575 00:36:45,000 --> 00:36:48,440 Speaker 4: reintroduce those market signals that you've been talking about. 576 00:36:48,840 --> 00:36:51,840 Speaker 5: First of all, I don't understand exactly the logic of 577 00:36:52,000 --> 00:36:57,360 Speaker 5: a hybrid. You mean, like when Trump won the election, 578 00:36:57,880 --> 00:37:01,120 Speaker 5: did you say, why don't we have a hybrid? You know? 579 00:37:01,360 --> 00:37:03,719 Speaker 5: Why do you know one off trick? You know? Why 580 00:37:03,760 --> 00:37:07,200 Speaker 5: do we need a hybrid? There is a majority political 581 00:37:07,320 --> 00:37:11,319 Speaker 5: opinion in Venezuela in favor of one direction. If it 582 00:37:11,480 --> 00:37:14,160 Speaker 5: has to be done gradually for ex ra, why reason 583 00:37:14,520 --> 00:37:18,120 Speaker 5: let them figure it out. It's not there is something 584 00:37:18,160 --> 00:37:22,120 Speaker 5: that has failed, and has failed catastrophically. There is no 585 00:37:22,320 --> 00:37:25,720 Speaker 5: other catastrophic failure that you can compare to the collapse 586 00:37:25,760 --> 00:37:30,520 Speaker 5: of the Venezuelan and economy. People want change. There's a 587 00:37:30,560 --> 00:37:33,680 Speaker 5: state that is not working. By the way, Venezuela is 588 00:37:33,719 --> 00:37:38,680 Speaker 5: going to have a free education, free healthcare, free many things. 589 00:37:38,760 --> 00:37:41,919 Speaker 5: Because it's kind of like in the DNA, don't it's 590 00:37:41,960 --> 00:37:46,960 Speaker 5: always been The consensus is by US standards, relatively liberal. 591 00:37:47,920 --> 00:37:50,520 Speaker 4: By standards, that sounds very socialist. 592 00:37:51,040 --> 00:37:57,560 Speaker 5: Yeah, exactly. So the problem is not socialism, not socialism. 593 00:37:58,200 --> 00:38:06,640 Speaker 5: The problem is individual rights, freedom, property rights, free press. 594 00:38:07,520 --> 00:38:11,120 Speaker 5: Those are the basic things, because those things convert individuals 595 00:38:11,120 --> 00:38:13,840 Speaker 5: into agents of their own destiny. And that's how you 596 00:38:13,880 --> 00:38:17,200 Speaker 5: get investment, that's how you get the economy going. If 597 00:38:17,680 --> 00:38:21,520 Speaker 5: the Venezuelans abroad don't feel that it's a place where 598 00:38:21,520 --> 00:38:24,719 Speaker 5: they can live in freedom safely, the human capital of 599 00:38:24,760 --> 00:38:27,080 Speaker 5: the country has left, it won't want to come back. 600 00:38:27,400 --> 00:38:30,640 Speaker 5: But if you tell them, look, recovery is coming in 601 00:38:30,680 --> 00:38:34,239 Speaker 5: a free place with a government that wants a restitution 602 00:38:34,360 --> 00:38:38,239 Speaker 5: of rights. Venezuelans has always been a country of immigration, 603 00:38:38,360 --> 00:38:42,560 Speaker 5: not out migration. It's a country that has been a 604 00:38:42,640 --> 00:38:46,279 Speaker 5: source of attraction of people everywhere. So that transition. I 605 00:38:46,360 --> 00:38:52,000 Speaker 5: tell you that transition can be done quickly and without 606 00:38:52,960 --> 00:38:58,399 Speaker 5: conflict if enough pressure is put on the clique that 607 00:38:58,480 --> 00:39:01,720 Speaker 5: has sequestered the government. That's why they can't get votes, 608 00:39:02,360 --> 00:39:06,879 Speaker 5: that's why they look. Even in the voting centers in 609 00:39:07,120 --> 00:39:15,040 Speaker 5: military bases. The government lost seventy to thirty in spite 610 00:39:15,080 --> 00:39:20,560 Speaker 5: of its repression. So let the majority of Venezuela something 611 00:39:20,600 --> 00:39:23,600 Speaker 5: that did not exist in Iraq, it did not exist elsewhere. 612 00:39:23,840 --> 00:39:27,960 Speaker 5: It's a society that has undergone a catastrophe and has 613 00:39:28,120 --> 00:39:31,400 Speaker 5: learned from that catastrophe, it has figured out what doesn't 614 00:39:31,440 --> 00:39:34,960 Speaker 5: work and what course of action it wants to continue. 615 00:39:35,520 --> 00:39:38,239 Speaker 2: So I want to say I take your point absolutely 616 00:39:39,600 --> 00:39:42,040 Speaker 2: as you put it very well. Venezuela, in your view, 617 00:39:42,080 --> 00:39:44,520 Speaker 2: is not a polarized society. There is a consensus, there 618 00:39:44,560 --> 00:39:49,000 Speaker 2: is a view both domestically and Venezuelan's abroad that there 619 00:39:49,120 --> 00:39:53,040 Speaker 2: needs to be major political change, And I certainly take 620 00:39:53,040 --> 00:39:56,200 Speaker 2: your point highly intuitive that you're not going to get 621 00:39:56,239 --> 00:40:00,480 Speaker 2: the influx of capital or talent until that political change 622 00:40:00,520 --> 00:40:03,719 Speaker 2: takes place. On the other hand, you know, when the 623 00:40:03,840 --> 00:40:07,080 Speaker 2: US just kidnapped the head of state, which is a 624 00:40:07,200 --> 00:40:09,680 Speaker 2: shocking turn of events. I think we're all shocked the 625 00:40:09,760 --> 00:40:12,480 Speaker 2: day that we woke up on January third and you're 626 00:40:12,520 --> 00:40:15,239 Speaker 2: talking about you know, you say the Soleimani treatment, So 627 00:40:15,280 --> 00:40:18,799 Speaker 2: that is assassination that you're saying should be would be 628 00:40:18,840 --> 00:40:23,279 Speaker 2: the threat against the clique. Do you see possibility that 629 00:40:23,800 --> 00:40:27,640 Speaker 2: you essentially engender a sort of I don't know about 630 00:40:27,640 --> 00:40:34,239 Speaker 2: a necessarily defense of the existing regime, but a defensive 631 00:40:34,239 --> 00:40:38,279 Speaker 2: sovereignty that what is this other country doing kidnapping our 632 00:40:38,360 --> 00:40:41,320 Speaker 2: head of state? What is this other country doing threatening 633 00:40:41,360 --> 00:40:44,480 Speaker 2: to assassinate the people who run our government. This is 634 00:40:44,480 --> 00:40:48,160 Speaker 2: our government, et cetera. Do you not see or is 635 00:40:48,200 --> 00:40:52,000 Speaker 2: it completely off the mark to talk about risk of 636 00:40:52,280 --> 00:40:56,120 Speaker 2: backlash there and the impulse to rally around the flag 637 00:40:56,160 --> 00:41:00,640 Speaker 2: and sovereignty when another country is being this aggressive about 638 00:41:00,719 --> 00:41:01,680 Speaker 2: controlling our government. 639 00:41:02,239 --> 00:41:08,520 Speaker 5: I think that's why narratives matter, and I don't particularly 640 00:41:08,760 --> 00:41:15,800 Speaker 5: like the narrative that sometimes Trump uses. The narrative about 641 00:41:15,840 --> 00:41:19,400 Speaker 5: the US getting into Europe in the Second World War 642 00:41:21,000 --> 00:41:25,600 Speaker 5: was we came to liberate, not to conquer. Okay, that's 643 00:41:25,640 --> 00:41:28,480 Speaker 5: the idea. We came to liberate, not to conquer. Today 644 00:41:28,600 --> 00:41:32,520 Speaker 5: in Venezuela, Trump is very popular. Getting rid of Maluro 645 00:41:32,800 --> 00:41:38,040 Speaker 5: is super popular. Why because the perception is that we 646 00:41:38,400 --> 00:41:41,520 Speaker 5: had been taken over by Cubans. You saw that in 647 00:41:41,560 --> 00:41:45,319 Speaker 5: the attack on January third, cub announced that thirty two 648 00:41:46,040 --> 00:41:50,799 Speaker 5: of its members were killed. Because that was the security 649 00:41:50,880 --> 00:41:55,799 Speaker 5: apparatus around Maduro. Maduro didn't rely on Venezuelans for his security. 650 00:41:56,160 --> 00:41:59,040 Speaker 5: He relied on Cubans for his security because he doesn't 651 00:41:59,080 --> 00:42:02,200 Speaker 5: trust Venezuela. So the perception was that we were a 652 00:42:02,200 --> 00:42:05,160 Speaker 5: colony of Cuba. If you want, we were a colony 653 00:42:05,200 --> 00:42:08,960 Speaker 5: of foreign interests and now we want to get back 654 00:42:09,000 --> 00:42:12,560 Speaker 5: to our freedom. So the narrative I would want to 655 00:42:12,719 --> 00:42:17,080 Speaker 5: us to stick to is we came to liberate, not 656 00:42:17,120 --> 00:42:22,560 Speaker 5: to conquer. We came to reestablish your freedom. And if 657 00:42:22,760 --> 00:42:27,480 Speaker 5: freedom gets re established, Venezuelans will naturally be good partners 658 00:42:27,520 --> 00:42:30,640 Speaker 5: of the US as they had historically been, the fact 659 00:42:30,680 --> 00:42:36,840 Speaker 5: that Trump is popular in Venezuela and is a condemnation 660 00:42:36,960 --> 00:42:43,200 Speaker 5: of Chavismo, it's how disastrous these guys have been, how 661 00:42:43,320 --> 00:42:47,759 Speaker 5: aligned with foreign powers that have nothing to do with us. 662 00:42:47,800 --> 00:42:50,239 Speaker 5: You know their language, Cuba. They're aligned with Russia, they're 663 00:42:50,280 --> 00:42:55,319 Speaker 5: aligned with Iran, they're aligned with Belarus. So it's that 664 00:42:55,400 --> 00:42:58,240 Speaker 5: kind of government that has taken over with no domestic 665 00:42:58,280 --> 00:43:01,520 Speaker 5: political base, that is, it's been threatened to be kicked out, 666 00:43:01,800 --> 00:43:04,759 Speaker 5: and that's why I think it makes the transition so 667 00:43:04,840 --> 00:43:05,400 Speaker 5: much easier. 668 00:43:05,840 --> 00:43:08,680 Speaker 2: Professor Hauseman, thank you so much for coming back on 669 00:43:08,760 --> 00:43:12,640 Speaker 2: odd lots, fascinating perspective. Truly the perfect guests, and really 670 00:43:12,680 --> 00:43:14,560 Speaker 2: appreciate you taking your time to chat with us. 671 00:43:14,840 --> 00:43:16,120 Speaker 5: Thank you, thank you for having me. 672 00:43:16,440 --> 00:43:17,600 Speaker 4: Thank you, Ricardo. 673 00:43:29,840 --> 00:43:30,200 Speaker 3: Tracy. 674 00:43:30,280 --> 00:43:34,480 Speaker 2: That was a fascinating conversation from someone who I guess 675 00:43:34,520 --> 00:43:38,160 Speaker 2: I would say has an unmatched perspective, Right, that is 676 00:43:38,239 --> 00:43:42,279 Speaker 2: an excellent view to get from someone who has both 677 00:43:42,320 --> 00:43:45,360 Speaker 2: served in government but also has made it his career 678 00:43:45,960 --> 00:43:48,960 Speaker 2: as an economist to talk essentially about some of these 679 00:43:49,280 --> 00:43:53,560 Speaker 2: human capital problems that will certainly be set Venezuela for 680 00:43:53,600 --> 00:43:57,040 Speaker 2: a very long time, regardless of how the political situation unfolds. 681 00:43:57,400 --> 00:44:00,399 Speaker 4: You know, I can't think of Ricardo without thinking about 682 00:44:00,440 --> 00:44:05,120 Speaker 4: monkeys swinging from trees and his description of how countries 683 00:44:05,200 --> 00:44:09,120 Speaker 4: actually develop new industries and one area can lead into 684 00:44:09,280 --> 00:44:13,560 Speaker 4: a new to more technologically advanced area. But anyway, one 685 00:44:13,600 --> 00:44:16,640 Speaker 4: thing is stuck out from that conversation for me, which is, 686 00:44:17,200 --> 00:44:21,840 Speaker 4: you know, the emphasis on institutional and structural decline versus 687 00:44:21,920 --> 00:44:26,839 Speaker 4: the external factors like the sanctions. And it seems to 688 00:44:26,880 --> 00:44:31,240 Speaker 4: me that that makes it more difficult in the current environment, 689 00:44:31,320 --> 00:44:35,520 Speaker 4: right because again, US involvement in Venezuela, I don't even 690 00:44:35,520 --> 00:44:38,320 Speaker 4: know how to describe it nowadays would suggest that maybe 691 00:44:38,520 --> 00:44:40,680 Speaker 4: dollar shortages aren't going to be as much of a 692 00:44:40,719 --> 00:44:43,480 Speaker 4: thing as they were in the past, maybe sanctions go away, 693 00:44:43,800 --> 00:44:47,080 Speaker 4: stuff like that. But if the major problem is that 694 00:44:47,160 --> 00:44:52,640 Speaker 4: institutional decay and the acting president is still still from 695 00:44:52,680 --> 00:44:56,240 Speaker 4: the Maduro regime, that seems a much harder problem to solve. 696 00:44:56,400 --> 00:44:59,480 Speaker 4: By the way, your last question about whether or not 697 00:45:00,320 --> 00:45:07,719 Speaker 4: US involvement maybe like Coalesces Venezuelans around sort of nationalist regime. Uh, 698 00:45:08,000 --> 00:45:11,200 Speaker 4: there's a headline out right now saying that Venezuela's acting 699 00:45:11,239 --> 00:45:15,080 Speaker 4: president says she's had enough of ES orders. So you know, 700 00:45:15,120 --> 00:45:17,880 Speaker 4: you get kind of like a glimmer of it. 701 00:45:17,880 --> 00:45:19,160 Speaker 3: It seems very tough. 702 00:45:19,200 --> 00:45:23,680 Speaker 2: And to talk about the Sulemani treatment there's a euphemism 703 00:45:23,880 --> 00:45:25,840 Speaker 2: for assassination. 704 00:45:25,600 --> 00:45:28,759 Speaker 3: Of not even sure it's a euphemism, it's not even 705 00:45:28,800 --> 00:45:30,040 Speaker 3: a euphemism at all. 706 00:45:30,120 --> 00:45:33,040 Speaker 2: Look, I certainly take the point though that this idea 707 00:45:33,080 --> 00:45:36,239 Speaker 2: of let's get the economic stabilization done first and then 708 00:45:36,280 --> 00:45:40,160 Speaker 2: the political stabilization that might simply be impossible. And I 709 00:45:40,160 --> 00:45:43,560 Speaker 2: thought professor Hausman did a great job of laying out 710 00:45:44,040 --> 00:45:46,719 Speaker 2: there's sort of the reality of human capital and the 711 00:45:46,760 --> 00:45:49,040 Speaker 2: idea that you know, this is not just some vague 712 00:45:49,040 --> 00:45:49,279 Speaker 2: thing that. 713 00:45:49,320 --> 00:45:50,799 Speaker 3: We want talented people back. 714 00:45:50,880 --> 00:45:54,600 Speaker 2: And that stat about the Columbian oil field very remarkable. 715 00:45:54,640 --> 00:45:57,120 Speaker 2: But then also some of the legal aspects of why 716 00:45:57,200 --> 00:46:01,120 Speaker 2: the system is not designed as a currently is for 717 00:46:01,400 --> 00:46:05,160 Speaker 2: multinational oil companies to come back into the country. But 718 00:46:05,560 --> 00:46:09,000 Speaker 2: on the other hand, I mean again, sanctions didn't work 719 00:46:09,280 --> 00:46:12,719 Speaker 2: for years to get Maduro out. We've had sanctions against 720 00:46:12,760 --> 00:46:15,720 Speaker 2: Cuba for how long they'll work? Like getting the government 721 00:46:15,800 --> 00:46:18,560 Speaker 2: you want, even if you're much more powerful than the 722 00:46:18,800 --> 00:46:22,760 Speaker 2: other country, is far from a trivial exercise in almost 723 00:46:22,800 --> 00:46:24,200 Speaker 2: every example that we can think. 724 00:46:24,000 --> 00:46:27,360 Speaker 4: Of, absolutely well. I'm also thinking back to again that 725 00:46:27,480 --> 00:46:31,400 Speaker 4: episode that we did with the Cargill employee and this 726 00:46:31,560 --> 00:46:36,560 Speaker 4: idea that well, maybe if you have enough private investors 727 00:46:37,360 --> 00:46:40,520 Speaker 4: multinationals that come together and say, you know, we are 728 00:46:40,680 --> 00:46:43,480 Speaker 4: interested in Venezuela, but we need to see the following changes, 729 00:46:43,840 --> 00:46:47,120 Speaker 4: maybe that acts as some sort of catalysts to strengthen 730 00:46:47,200 --> 00:46:49,960 Speaker 4: up the rule of law. But it's a sort of 731 00:46:50,000 --> 00:46:54,759 Speaker 4: chicken and egg situation, right, because those companies need to 732 00:46:54,760 --> 00:46:59,680 Speaker 4: be incentivized. They need to want to come in to Venezuela. Yeah, 733 00:47:00,000 --> 00:47:02,480 Speaker 4: in order to advocate for like the conditions that would 734 00:47:02,520 --> 00:47:05,800 Speaker 4: make it possible for them to enter Venezuela. 735 00:47:05,920 --> 00:47:10,240 Speaker 2: I wonder how much vacancy there is at the apartment 736 00:47:10,320 --> 00:47:13,120 Speaker 2: complex where asad is living in Moscow. Like, the question 737 00:47:13,280 --> 00:47:15,960 Speaker 2: is like how many people need to be promised a 738 00:47:16,120 --> 00:47:21,360 Speaker 2: very cushy retirement in a nice gated Moscow high rise 739 00:47:22,120 --> 00:47:24,840 Speaker 2: for them to say, Okay, we'll just do this the 740 00:47:24,960 --> 00:47:27,719 Speaker 2: easy way. I'm curious, like the what the number would 741 00:47:27,719 --> 00:47:30,880 Speaker 2: be and how much capacity there is for that movement 742 00:47:30,880 --> 00:47:33,400 Speaker 2: that would be the sounds like it could be a solution, 743 00:47:33,480 --> 00:47:34,960 Speaker 2: but I don't know if that's really on the table. 744 00:47:35,120 --> 00:47:37,799 Speaker 4: That would be an interesting statistic. I don't think you're 745 00:47:37,840 --> 00:47:40,320 Speaker 4: going to get it anytime soon, but anyway, shall we 746 00:47:40,400 --> 00:47:40,680 Speaker 4: leave it there? 747 00:47:40,800 --> 00:47:41,480 Speaker 3: Let's leave it there. 748 00:47:41,640 --> 00:47:44,239 Speaker 4: This has been another episode of the Authoughts podcast. I'm 749 00:47:44,280 --> 00:47:47,439 Speaker 4: Tracy Alloway. You can follow me at Tracy Alloway and. 750 00:47:47,360 --> 00:47:50,080 Speaker 2: I'm Jill Wisenthal. You can follow me at the Stalwart. 751 00:47:50,280 --> 00:47:53,800 Speaker 2: Follow our guest Ricardo Houseman. He's at Riccardo Houseman. Follow 752 00:47:53,840 --> 00:47:57,279 Speaker 2: our producers Carman Rodriguez at Kerman armand Dashel Bennett at 753 00:47:57,360 --> 00:48:00,960 Speaker 2: Dashbot and kill Brooks at kill Brooks. 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