Greg Wilpert and Temir Porras

Temir Porras, a former advisor to Venezuelan Presidents Chavez and Maduro, argues that the opposition’s division over boycotting the upcoming parliamentary election could end up marginalizing the extreme-right opposition faction and thus lead to a normalization of politics in Venezuela. Hosted by Greg Wilpert, author of “Changing Venezuela by Taking Power, The History and Policies of the Chavez Government”.


Gregory Wilpert
Welcome to podcast, I’m your host, Greg Wilpert. I’m doing a series of interviews
about the current situation in Latin America at the moment. Last week, I spoke to Kathryn Ledebur in
Bolivia. Today, I want to turn our attention to Venezuela. Those who have followed my reporting on
Latin America will know that I have covered Venezuela extensively, having lived there for about eight
years, written a book about the Chavez presidency, and also having co-founded the website back in 2003, 17 years ago now, which continues to publish news and analysis in
English about Venezuela from the perspective of progressive social movements in Venezuela.
After a fairly tumultuous 2019, when the Trump administration decided to support a parallel
government, Venezuela, led by the president of the parliament at the time, Juan Guaidó, Venezuela has
not been in the news that much recently. This does not mean, though, that nothing has been happening
in Venezuela. Rather, the political and economic situation there remains extremely tense, especially
under the conditions of the coronavirus pandemic. The Trump administration, under the guidance of
Secretary of State Colin Powell and a special Venezuelan adviser, Elliott Abrams, has continued to
tighten U.S. sanctions on Venezuela.
The sanctions have even reached the point that the US is confiscating gasoline shipments heading for
Venezuela, something that under different circumstances could be considered an act of piracy, except
that it happens purely via economic pressure on tankers and insurance companies.
Joining me now to discuss the current situation and also how Venezuela got to its current point is Temir
Porras. Temir was an adviser to both President Hugo Chávez and to the current president, Nicolás
Maduro. Temir resigned though shortly after Maduro’s election in 2013. He currently teaches at Science
Po in Paris as a visiting professor. Thanks for joining me today, Temir.

Temir Porras
Thanks for having me, Greg.

Gregory Wilpert
So let’s start with the current situation before we take a look back at how Venezuela got to this point.
Some interesting things are going on at the moment. First of all, there’s a new parliamentary election
scheduled for December sixth of this year. The last election, which took place five years ago in 2015,
resulted in a pretty overwhelming majority for the opposition. Now, this time around, the opposition
goes into this election actually very divided. The more hard-line sectors around self-declared president
Juan Guaidó are calling for a boycott and the presumably more moderate factions of the opposition,
which include former opposition presidential candidates, Henrique Capriles and Henri Falcón are calling
for participation.
Also as a goodwill gesture, President Maduro recently pardoned 110 opposition figures who had been
accused of trying to violently overthrow the government. Now, meanwhile, the coronavirus is gradually
affecting Venezuela more and more. Originally, Venezuela had one of the lowest infection rates, it still

does actually compared to the rest of Latin America, but the daily case rate is now over 1000 per day on
average. What I want to ask is, what’s the significance of the parliamentary elections that are coming up
for the political situation in Venezuela? And do you think that this election will actually happen if the
virus isn’t brought under stricter, tighter control?

Temir Porras
Well, the parliamentary elections are mentioned are of extremely high importance for Venezuela, and I
say that because, as you mentioned, Venezuela has gone through pretty tumultuous 2019 and 2020
years, and it was far from guaranteed that at the end of the cycle, it’s been almost two years since,
again, Juan Guaidó self-proclaimed himself president, and since almost a tenth of secession of the
Venezuelan state happened, that at the end of the day, we would not only remain, I mean, the political
status quo in Venezuela would remain, president Maduro is still in charge, no signs, again, of regime
change, which is the policy pursued by the United States and that faction of the opposition, that radical
faction of the opposition, none of that happened. And at the end of the day, after even attempts of
negotiation between the federal government, of the Guaidó faction, attempts that in which the Guaidó
side was requesting for presidential elections to be called. You remember, their motive was that Maduro
should step down, and there should be a transitional government leading to presidential elections. But
none of those three things happened in the end.
The fact that, now, part of the Venezuelan opposition has backed the idea that the Venezuelan crisis
should be addressed through constitutional means. And that means that legislative elections should
happen at the end of the year 2020, because, as you rightly recall, the last elections were held in 2015
and there was a five-year legislature in Venezuela so the crisis should be resolved through negotiations
and at the same time through the means that the Venezuelan constitution provides, and that is through
Since last year, a smaller, moderate faction of the opposition started negotiations with the government
and basically came up to the agreement that provides some conditions where they would participate in
the legislative elections. But the core of the opposition, the one that was more frontally challenging not
only Maduro’s rule, but the whole regime, as they call it, was, of course, strongly opposed to that
outcome, and so it’s very important that now, as you recall, part of that radical historically anti-
Chavismo opposition is reconsidering its position, and that Henrique Capriles has basically split with
Guaidó’s, not only political line, but strategy, is taking the risk, if you will, to challenge the US policy vis-
à-vis Venezuela exposing himself potentially, I mean, potentially to measures like sanctions and the
different toolbox that the U.S. has applied to different actors in Venezuela, and engaging in national
politics and going to the parliamentary elections.
So this won’t solve everything, of course, the issue of recognition by a certain number of countries of the
so-called interim government led by Guaidó remains, the issue of the sanctions and needs to be
addressed also, and that won’t be solved by the parliamentary elections. But in a sense, it signals that
across the board, not only from Chavismo, but also from the opposition, people are increasingly aware
of the fact that this crisis needs to be dealt through, I would say, Venezuelan politics in a sovereign

And also you mentioned the dire situation Venezuela is in and because of the existing crisis, but also of
the COVID 19 created crisis.
I mean, there is a need to find some government way to address the multiple problems the society is
facing and it can only be done again through negotiation, the collaboration between the different
institutions instead of confrontation. And I think it’s a very good sign. And I believe also that the
elections will be held unless some external dramatic event happens. But despite the current spike, as
you mentioned, in the Coronavirus crisis, most political actors in Venezuela have pretty much decided to
participate in the elections and those elections happening on December the 6th.

Gregory Wilpert
Now, I just want to follow up a little bit on that. Now it looks like about half the opposition parties are
deciding to boycott the elections. That is Guaidó faction and that this would then, once again, serve for
them as a pretext to argue that the election is illegitimate, just as what happened back in the 2018
presidential election, when also about half of the opposition parties boycotted it. And that was then
used as an excuse essentially to elevate Guaidó as the president, self-proclaimed president, and then to
be recognized by the United States and then by a whole bunch of other countries, I guess, between 50
and 60 other countries around the world.
Now, if something like that happens again, don’t you think that could mean that the election might
come to nothing? I mean, what would be the positive result that would come out despite that?

Temir Porras
Yes, absolutely, there’s always that risk, but there is a fundamental difference between 2018 and 2020
and that’s exactly the participation or potential participation of Henrique Capriles. And I would say a
faction of more conservative groups in the opposition that were, I would say, unconditionally behind
Guaidó, but that had pretty strongly supported so far his, I would say, vision of the Venezuelan conflict,
which we can summarize in Maduro and Chavismo, in a broader sense, our problem that needs to be
solved or a sort of political disease that needs to be addressed.
And therefore, any solution in Venezuela requires the self-proclaimed democratic opposition to defeat
Maduro and basically ousted from power. And again, this vision of a crisis that is only attributable to the
government and to the Maduro government, and that needs to be solved through regime change and a
political transition that excludes that political faction. And again, from the beginning, that vision was
problematic in the sense that not only you can find many political reasons and legal reasons, of course,
and constitutional reasons to challenge that claim. But also when you see the situation on the ground
and specifically, for instance, the position of the Venezuelan armed forces, which are in any country,
but more moreover in Latin America and even more in Venezuela, where there is this connection from
the present to the war of Independence and Bolivar, et cetera, through an institution like the armed

forces. And those armed forces, of course, were strongly opposed to that vision, that Washington led
vision, and basically a vision that instead of offering a solution to the crisis, basically what it did was to
dramatize it a bit more and make it almost become a potential civil conflict between different
Venezuelan factions that didn’t imagine coexisting with each other in some sort of institutional
So that vision had been backed in 2018 and before by people like Henrique Capriles, who is the founder
of a conservative, but important, political party Primero Justicia. That has a connection, I would say, with
the Christian Democratic tradition. These are center-right and right-wing Christian Democrats, basically.
And therefore, there is also, I would say, a connection with the views of the Catholic Church and the
conservative factions or groups in Venezuelan society. It’s also a group that represents maybe the urban
elites, business elites, and again, conservative, educated people.
So it’s a group that is a strong component of the so-called G four, which is the coalition of four main
political parties that basically challenged the Venezuelan institutions and backed Guaidó in January
So the fact that this important group is now switching and changing its strategic view and taking a more,
I would say, nationalistic or Venezuelan approach to the problem and a more pragmatic, more political
approach to the problem makes it harder, if you will, to make the case with the international community
that these elections are basically attended by Maduro, the PSUV, and a bunch of, I would say,
collaborationists, so-called fake opposition parties or people who are fake opponents because they are
former Chavistas, etc., which is the narrative that has been held vis-à-vis someone like Henri Falcón, for
instance, in the 2018 elections, and the fact that these groups, which cannot be suspected of any sort of
complicity or dependence, economic dependence of the government, makes it more difficult to make a
case for dismissing the legitimacy of the elections.
Of course, the US administration under Trump, and the Trump administration has a priori, this means
the legitimacy or even the legality of the legislative elections. But, well, we need to see what will happen
in the US during the November presidential elections. And on the other hand, you also have an
important player, which is the European Union, which again, is influenced, if you will, by the fact that
the opposition is really participating in the elections, and again, there are connections between the
Christian Democrats in Germany and in other countries in the European Union, and the Christian
Democratic formations and parties in Venezuela, the Catholic Church, you know, the Venezuelan
bishops, a very conservative institution that had so far aligned itself with the Guaidó opposition, made a
public statement calling for the opposition to participate in the elections.
So I think the situation is changing, maybe slowly, but it’s changing. And I think it will be much more
difficult to make a case for the elections to be just ignored and dismissed. And yeah, and there’s one
additional factor, which is that the Constitution, as you and I mentioned, mandates that there have to
be elections for the National Assembly in December 2020, or at least that in January 2021 a new
national assembly should start working.

And the problem is that the Guaidó faction and the parties that are backing him have offered no
alternative. They’re just making the case for the extension of the mandate of the previous national
assembly, which is of course not envisaged in the Venezuelan constitution. There is no provision for that
to happen. And they are now cornered by their own argument, that was basically that Guido was the
interim president because he was the president of a legitimate national assembly by the time they
challenged Maduro’s mandate.
So, again, there are these constitutional arguments, political arguments, and I would say broadly public
opinion arguments.
The Venezuelan public opinion has also shifted, and even if there is a faction that still aligns with the
boycott of the elections, the Venezuelan society is also requesting solutions, solutions for their daily
problems. And they don’t see how abstention and the continuation of the current status quo can deliver
those solutions.

Gregory Wilpert
And I think you raise some really excellent points on all of those and everything you’re saying there. So I
want to turn now to the economic situation. Now, I haven’t been to Venezuela in a while, but the
numbers that we know of paint a very dire picture at the moment. For example, oil production is at one
of its lowest levels ever, at just under one million barrels per day, which is about 1/3rd of its peak in

  1. And this is, of course, significant because in the past, Venezuela depended on oil exports for 95
    percent of its export earnings.
    And export earnings obviously are essential for Venezuela since something like, and I haven’t seen the
    recent figures but, there used to be talk that around 60 percent of everything that’s consumed in
    Venezuela had to be imported. Now, the US sanctions on Venezuela, together with a decline in oil
    production, have, of course, caused significant shortages in the areas of food, medicine, and gasoline.
    And according to an estimate made by Mark Weisbrot and Jeffrey Sachs about two years ago, I think it
    was, at least 40,000 Venezuelans have died as a result of the sanctions.
    Now in early September of this year, the UN even listed Venezuela as one of the countries that could
    experience famine because of the coronavirus economic crisis, that is if international aid isn’t increased
    dramatically. Now, what’s your assessment of this current economic situation? How serious is it, and
    how much of that do you think is traceable to US sanctions?

Temir Porras
Well, as you said, the Venezuelan economic crisis is an unprecedented collapse in the history of that
country, and it’s barely comparable to anything previous happening in the region, basically, because
Venezuela has I mean, there is debate about what the actual size of the Venezuelan economy is today,
because it’s not only difficult to measure given the current circumstances, but there are no official
figures for the very last period.

But at least when we go back to 2017, 2018, the decline in Wednesday’s GDP could be as much as 65%
from if you go back between 2013 and 2017, there is this massive collapse in the economic output. And
that has to do of course first with maybe some pre-existing conditions. Venezuela faced challenges in
2013, at the end of Hugo Chavez’s period where there had been a period of expansion of social rights
and welfare policies that were supported by a massive mobilization of the oil rent, which was one of the
cornerstones of what Hugo Chavez’s policies, basically seizing control over the oil industry and
mobilizing that income that was officially controlled by the government because the oil industry there is
But for political reasons, and management reasons, of course, that hadn’t translated, if you will, to into
welfare for the majority, so that was the key that allowed the Chavez government to deliver the well-
known advancements in most social areas, in education, in health, etc., and the expansion of rights. And
at the end of the period, of one of the challenges facing Venezuela was the lack of diversification of its
economy and, among other things, the one that you mentioned, that on the one hand, Venezuela
produced a massive oil rent
That could be measured, this is one of the topics I’ve been working on, in a very good year that could
equate 25-30% of the country’s GDP. So it’s sizable, it’s very important. But on the other hand,
Venezuela, because also of that rent-seeking behavior of the Venezuelan economic elites, was extremely
dependent on imports. So the fact that you had both that dependency, and on the other hand, the state
relying almost exclusively on the oil rent to expand public expenditure, government expenditure for,
again, expanding the social welfare, made it pretty challenging.
Venezuela was reaching a point where the question of sustaining that expansion through again, an
income that is highly variable because of the variability and volatility of the prices of oil. That was a
challenge. And when in 2014, the oil prices collapsed, that created an important crisis that again, could
be addressed through policy means, and there is debate about how the Maduro administration dealt
with the crisis. But the fact is that the Venezuelan economy started to shrink in 2014, and a decline in 14
and 15.
And then the political situation became more complicated when, as you mentioned, the National
Assembly was lost by the government and won in a landslide by the opposition. The political debate
became more bitter, and the United States started, well actually, the United States has been aggressive
vis-a-vis the Chavista government since the since the very beginning of the Bolivarian revolution, but the
U.S. administration started for the very first time implementing more aggressive policy. In the past, the
stances of the U.S. administrations translated mostly in rhetoric, in coordination with other countries
around the world to basically prevent some sort of expansion of the Venezuelan model in the Caribbean
and in the Western Hemisphere, as its goal in Washington.
But from 2015 onwards, basically, the U.S. administration started implementing sanctions, and
sanctioning first officials, and then from 2017 onwards, implementing sanctions on the on the financial
side. The Venezuelan government and state-owned enterprises were basically prevented from accessing
foreign credit. A company like Televisa for instance, that is a massive company that invests, and needs
working capital, and used to interact with US clients and clients overseas. Such a massive corporation
needs access to basically the financial system that is called the international financial system, but which
is mainly centered in the US, and the trades in oil are settled in U.S. dollars.

So it’s basically a US-centered financial system. So from August 2017, no US entity was allowed to
basically fund or finance the operations of not only the Venezuelan government, but the Venezuelan oil
industry. So very rapidly, this combination of pre-existing challenging conditions and the imposition of
sanctions led Venezuela to default on its debt in November 2017.
So basically, the sanctions made it isolated from the financial markets, and from that point onward, in
2018 and 2019, those sanctions became more aggressive because they basically targeted directly the
ability of PDVSA (Petróleos de Venezuela, the Venezuelan state-owned oil and natural gas company)
from even selling oil. In early 2018, the provisions taken by the Trump administration prevented any US
entity from settling oil trades with PDVSA in US dollars. They didn’t formally forbid U.S. entities from
buying oil, but they basically blocked any means of payment. And I’ll remind you that PDVSA
traditionally used to sell around one million barrels of oil a day to the US, considering that PDVSA back in
the day used to own a very important company there, centered around refining and distributing gas,
which is called Citgo.
And later in 2019, when the US recognized the Guaidó administration, or the so-called interim
government, as the lawful government of Venezuela, even those assets, Citgo and other assets sitting in
the US jurisdiction, were seized and transferred to the Venezuelan opposition. So there has been this
unprecedented attack on the ability of Venezuela’s economy to function basically, because of its pre-
existing dependence on oil and the oil industry, and its historic links with the US financial system and US
markets where it was very, very aggressively targeted.
And as you rightly mentioned, in the last months, the US has gone even beyond that, basically tracking
on a daily basis any foreign entity that is willing to enter into oil trades with Venezuela, as you say,
engaging in acts of piracy, sanctioning even the captains of the vessels, threatening personally the
personnel that eventually would operate vessels to travel to Venezuela to lift oil for Asia or some other
regions in the world.
So it’s been an extremely aggressive policy, something unprecedented in the region, that basically has
made it impossible for Venezuela to export oil, and therefore has affected its ability to produce, because
at the end of the day, when you have a capacity installed of three million barrels a day, and Venezuela is
not, I mean, Venezuela is a pretty large country, but it doesn’t consume internally that quantity of oil.
And again, progressively, if you asphyxiate the possibility of this country to export its oil, it has to
progressively wind down the ability to produce.
And again, that situation, with the lack of access to international capital, and the general decline, if you
will, of the Venezuelan economy, has progressively but very quickly eroded the ability of PDVSA and
even international oil companies to operate normally in Venezuela.
So today, you have a situation where, you know, this economic crisis has affected every aspect of the
Venezuelan economy. So even if you were to find the means to export your oil, any company in
Venezuela is exposed to power shortages. They are exposed to the lack of human resources, because
there has been this massive migration of professionals overseas.
You have to deal again with the possibility that even if you’re a non-US entity, that the U.S. government
could impose sanctions if you keep engaging in business with Venezuela, or trying to make some equity
investments in order to jump-start the oil production. So it’s it’s a situation, to summarize, that had pre-

existing conditions. Of course, the government has a responsibility in the way the country is managed,
but definitely, the sanctions have not only made things much worse, but they are sort of preventing
Venezuela from addressing those issues and eventually coming up with solutions.
If today you want to find an agreement between factions of the opposition and the government, if there
is a cooperation between the government and the National Assembly, if the National Assembly can
finally vote on a budget or an investment program for this or that part of the Venezuelan economy,
today, the sanctions act as a massive constraint on Venezuela. So those who dismiss the sanctions as
only targeting the government and putting pressure, political pressure, on Maduro and his government
in order to generate some sort of political change, I mean, not only are they lying, the effect is broader
and it has impoverished and accelerated the collapse of Venezuelan society, but it also prevents any
easy route, if you will, out of the current situation the country is in.

Gregory Wilpert
The point that you make about the argument that the sanctions aren’t having an effect on the larger
society is just so ridiculous that even Mike Pompeo, once in a press conference, accidentally let slip that
his hearing about how the country is becoming immiserated and was basically rubbing his hands saying,
“oh, yeah, that will lead soon to Maduro’s overthrow,” which, of course, hasn’t happened.
But the immiseration certainly has. But I want to turn to look back a little bit now, and we’re kind of
running out of time so let’s see if we can keep this relatively short. I know it’s difficult because there’s a
lot of details that we can get into but, you recently gave a presentation on Facebook kind of countering
basically the argument that if Venezuela had only saved more money during its boom years, than it
would be in a better position today.
And so I just want you to briefly summarize your argument, as to how you were rebutting that argument
about the savings, that it would have basically led to a different situation.

Temir Porras
Yeah, the idea is basically, I mean, the narrative that the right-wing and the conservatives are selling
about Venezuela is that the current misery of the country is directly linked to the fact that during the oil
boom years, instead of saving money, the Chávez government and the Chavismo basically wasted the oil
And they tend to compare Venezuela with countries like Norway, for instance, saying Norway is a
country that has built over the years a massive sovereign fund. So it’s a wise country that saves the
money and doesn’t spend it in demagoguery and overspending, as the Venezuelan populists used to do.
So basically, the challenge that I make is not only the idea, because any progressive would understand
that the underlying idea is that any social spending, spending on the people’s needs, is basically wasting
money and an unnecessary intervention in the economy.

But what the figures that we put together and try to explain show that the oil rent is not a surplus.
Economically it’s a surplus because it’s an input of money, an inflow of money that comes from the
international markets. But from a government perspective, the fiscal policies and the government
spending, expenditures, in Venezuela have historically basically relied on the oil rent.
Venezuela is historically a country where the private sector pays very, very low taxes. One not at all
socialist Venezuelan economist who sadly passed away this year, Asdrúbal Baptista, basically showed
that between 1982 and 2008, the average tax rate imposed on the private sector in Venezuela was no
higher than 2.5% of the GDP. 2.5% of the GDP was the whole contribution of the private sector through
taxes, again, to the government revenue.
So the mostly all of the government revenue came out of oil, oil production, and oil rent.
So when you’re in that situation, of course, if suddenly Venezuela started to save its oil rent, basically, it
would have to give up any possibility of spending even in general functioning. These conservatives tend
to say that the oil rent is a surplus that needs to be saved, while at the same time Venezuela has a public
education system and has a health system. So there is this contradiction of people complaining today
that doctors and nurses are underpaid in public hospitals, while at the same time they’re praising the
ability of Norway to save the oil rent and build a gigantic fund.
So the fundamental question is, if you’re asking the Venezuelan government to save the oil rent, how
are you going to pay for even the most basic needs of the Venezuelan people?
And the answer to that is, again, that Venezuela, even during the Chavez years and the transformation it
underwent, didn’t address the question of income and wealth redistribution, and the fact that mostly,
the wealthy Venezuelans have never paid their fair share for the common good and for the common
So, the idea is, “yes, why not save the oil rent?” But at the same time, we need to substitute that income
with more traditional tax income for the government, and of course, with a more progressive and
redistributive approach to the economy.
So our idea is basically that, yes, there might be interest in overcoming this, I would say, rent
dependency situation that we have lived through for almost one century, and one of the benefits of
overcoming that dependency is eliminating the variation and the instability of the oil prices that
basically makes the government unable to plan ahead for its spending, because it depends on a very
variable revenue. But on the other hand, that would require an internal social rearrangement that
would make the wealthy Venezuelans pay a fair share that they haven’t paid for the last century.
So you can imagine if we are already in a very polarized country, the elites were reluctant even to
concede that the government needed to spend the oil rent in education and health care. How would it
be if we had to increase all of a sudden the tax pressure on those social groups in order to meet the
standard government expenditure that you would have in the US, which is more or less 35% of the GDP?
Or even if you go to the Norwegian case, which is praised by the Venezuelan conservatives, they never
say that the Norwegians are able to save their oil rent because there is a very, very high tax pressure in
Norway that that is near 50% of the GDP.

And again, we are interested in that in that discussion, but people should be aware of the idea that,
again, Venezuela is in a very peculiar situation, is a country in a peripheral situation, an economic
situation vis-a-vis the countries of the center, of the core, and that Venezuelan elites have never been
willing to participate in the national solidarity and wealth distribution that you even have in capitalist
countries like the US.

Gregory Wilpert
I agree with everything that you’re saying, and especially I mean, this comparison with Norway is just
ridiculous. But there are two things that I do want to push slightly back on. One is, well, I mean, this not
really pushing back. it’s more like pointing out, actually, both of them are. One is that, it seems to me
though that even though Chavez didn’t increase the taxation for the upper class, he did indirectly, I
would say, in the sense of actually forcing them to pay taxes for the first time in ages that is. As far as I
recall, the tax evasion was extremely high before Chavez came into office, and he really pushed hard,
and reformed the SENIAT, the tax collection agency, I think, to really make sure that they actually did
pay at least, what was at that time required by law. So in that sense, that probably did raise some of the
revenues more than what they had been paying before. The other thing that I want to address quickly,
and I know we’re basically out of time but, you make the point of the importance of evening out the
income situation in order to plan better ahead.
And also, I recall when I first got to Venezuela, actually in 2000, a year after Chavez took office, and I
remember he was talking actually with pretty great enthusiasm at the time about this macroeconomic
stabilization and investment fund, which was called FIEM, by its Spanish acronym, and the basic idea of
the FIEM, just to summarize it quickly, I think it was basically to take the previous five years of the oil
price and average it, and whenever the price of oil was above that five-year average, then the additional
income would go towards a savings account or the fund, the FIEM fund.
And if it was below that, the government could withdraw from it. And so that would then even out the
spending situation for the government. But Chavez actually started dismantling it. I think it was around
2005, 2006, when the price of oil just continued to go up and up and up. And it looked like there would
be, people were talking about $200 per barrel, and there just didn’t seem any need for the FIEM, I think.
And that was the reason, it wasn’t explicitly, but I think it was kind of implicitly the reason for
dismantling it.
However, if it had been in place, don’t you think that that would have at least prevented kind of the
worst of the downturns that happened basically with the great financial crisis of 2009, and then the next
one, which was in 2013? Don’t you think that would have improved the situation a bit, and perhaps
maybe even helped evade the hyperinflation and the economic weakness that Venezuela is in today?

Temir Porras
Well, I mean, I agree with the point that you’re making. My point is the following; Venezuela’s oil rent is
a sizable income that was more or less equal, in the oil boom years, to 30% of the GDP. On the other

hand, Venezuela’s government expenditure, I mean, yearly expenditure is on average around 33% of the
GDP, which is a pretty decent government expenditure, if you compare it to Latin America, but which
pales in comparison to the public spending that you can find in Western Europe, where you have
massive health care and retirement, not state-owned, but public retirement plans and all that.
So if you look at that picture, and you look at the size of the oil rent, I don’t mean that through
exceptional years it wouldn’t be wise to save some of that money. And again, I agree, I’m sympathetic to
that idea, but that would require to go further. You’re right. The Chávez government increased the level
of taxation and in a way, the income tax and the corporate tax increased, the corporate tax collection
increased during the Chávez years, but by no means could the tax collection be enough to even fund a, I
would say, average decent government expenditure, not to mention any sort of ambitious plan that
would basically follow the road of Norway or France, etc., in the midterm.
So in order to achieve that, you need to engage in a very deep tax reform in the country, which again,
doesn’t come without political difficulties. I mean, I advocate for that, but what I’m just pointing out is
that even without any, I would say, transformational tax reform during the Chávez years, already the
mobilization of rent was enough for Venezuelan’s elites to push back. So my point is, basically, as you
mentioned from 2005, the Chávez government made the decision, instead of transferring that money
into a, I would say, savings fund, it transferred that money into a different fund, which is the Fonden
(Venezuela’s National Development Fund), a development fund.
And there was this idea that the oil rent should mobilize, and I agree with the idea that it should
mobilize to be invested in the Venezuelan economy, in the development of the Venezuelan economy.
That means infrastructure and all sorts of transformational investments. I’m not criticizing what was
done, what I’m saying is that what we were not aware of, and what we were insufficiently addressing, is
that once that oil rent is mobilized and is invested in the Venezuelan economy, which back in the day
functioned, I wouldn’t say as a market economy, but as a pretty open economy, at the end of the
economic cycle, the Venezuelan elites, the traditional elites, which are the owners of the major
companies and those who control the, for instance, the import activity, and basically who are the
dominant actors in the private economy. At the end of the day, those small groups were able to capture
most of that rent, that in the middle was being invested in education and health and infrastructure, but
at the end of the day, those who were increasing their wealth and increasing their revenue were the
Venezuelan elites, and at the same time, there was not a progressive taxation system in place in order to
make sure that that increase in income and wealth was redistributed through whatever government
plans the Venezuelan government decided.
So that’s a pending issue that any progressive government in the future, I think, should try to address.
And at the same time, increasing the taxation and increasing the funding of government spending
through taxes and not through oil rent would allow for what you’re mentioning, would allow for the
country to increase its savings in foreign currency, in U.S. dollars, which mainly come from oil exports,
and then to constitute a fund that could be mobilized in critical years or difficult situations like the one
Venezuela is facing now.

So, again, Venezuela would have been able to save more money if it had had such a tax system.
But at the same time, when you look at it in the long run, the Chávez years, Chávez and his government
ruled Venezuela from 1999 to 2013. And the boom years, the years when the oil prices were over 80 or
90 dollars on average, are fairly four or five years. So yeah, that’s an important income for four or five
years, but it’s not enough to say that Venezuela could have made a reserve or a sovereign fund of the
size that Norway has put in place since 1970.
Again, if you want to engage in that, you would have to come up with a way to fund public spending,
and to fund the welfare state, the functioning of the welfare state in the country.

Gregory Wilpert
I think we’re basically in agreement. I think it’s so important, and as you suggest also, that this is
something that the left and progressives really ought to look at exactly what happened in order to kind
of construct a better strategy for the future. And so this is, you know, it’s not too late. I think this is
something that they should definitely do. And I mean, to make the comparison to Bolivia, I think is very
interesting, where Bolivia seemed to have maneuvered a more careful kind of economic course, and
therefore its economy ended up, well for a variety of reasons, but ended up doing a little bit better.
However, it was still overthrown by a coup with U.S. support, and there the failing wasn’t so much
economic was more kind of military-political. But anyway, unfortunately, we’re going to have to leave it
there. We’ve been talking about this for almost an hour now, but hopefully, we can continue this
conversation sometime in the future. I was speaking to Temir Porras, a former adviser to both
Venezuela’s President Chávez and to Nicolas Maduro. Thanks again Temir for having joined me today.

Temir Porras
Thank you. Thank you very much, Greg.

Gregory Wilpert
And once again, I’m Greg Wilpert, guest host for podcast. Thanks again for having
tuned in today.


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  1. “A company like Televisa for instance, that is a massive company that invests, and needs
    working capital, and used to interact with US clients and clients overseas. …. So from August 2017, no US entity was allowed to basically fund or finance the operations of not only the Venezuelan government, but the Venezuelan oil industry.”

    Televisa? or PDVSA?

  2. “The Trump administration, under the guidance of Secretary of State Colin Powell and a special Venezuelan adviser, Elliott Abrams, has continued to tighten U.S. sanctions on Venezuela …”

    I didn’t know that Powell was still SecState, nor that he backs sanctions.

  3. I found the interview very, very informative. The world is changing, people en masse are asserting the appreciation of the value of each life. This is spurring the change in Ven. and in the world. The moneyed elite are being taken over by the democratic majority. The value of personal accumulation is being replaced by social benefit. I’m reminded that the Credit Suisse Bank issues a Global Wealth report yearly, and in 2019 total global wealth amounted to $360 trillion dollars. It is incomprehensible, $360 trillion. $70,000 per adult worldwide. Page 102 of the Credit Suisse Databook, Ven. total private savings a mere $307 billion. Per adult is $15,074, and median per adult is $5,508. 44% of all wealth is held by 1% this Cr. Suisse reports states. $70K is the average, in Ven. $5 is the median. (2017) This interview states that the taxation of Ven. elites was always under-taxed, and resulted in a perpetual extreme inequality. And Chavez never remedied that flaw. The best article about the improvements made by the Chavez government is at Global Research, — — a portion of it reports: following the election of Chavez in 1999. The number of doctors increased from 20 for 100,000 to 80 for 100,000, a quadrupling of doctors, a reduction in the poverty rate by half, improvement in education, the eradication of illiteracy states UNESCO in 2005, number of children in school from 6 million in 1998 to 13 million in 2011, enrollment at 93%, the gini coefficient measuring inequality fell from 0.46 to 0.39, pension jumped from under 400K to over 2 million, malnutrition decreased from 21% to 3%, calorie per day increased by 50%, land reform, democracy reform, and so on, very impressive.

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