If there is one thing that both government supporters and the opposition in Venezuela can agree on: daily life in is an endless series of unnecessary frustrations.
Here are just a couple of recent examples: problems with the ports delayed the arrival of Christmas trees – which are imported from Canada – raising the price so much that a tree now goes for $100. There are essentially no spare parts for cars on the markets. Homes that are constructed for the government are built so quickly that there is no quality control and the pipes leak all over.
So how can you explain the fact that a sick Hugo Chavez was reelected with a large margin last October?
The answer lies in Chavez’s personality and his ability to seduce, as well as in the money that he has given away, with equal doses of generosity and irresponsibility. Like all of the caudillos (Spanish for military strongman) in history – there are plenty of examples – he managed to convince the majority of the people that there is no other boss but him. He convinced them that his revolution is good, and that he, Chavez, is a symbol of that revolution. And if the reality does not fit that conviction, then that is not his fault; it is because of North American imperialism. Or it is because of the opposition. Or perhaps the middle managers in the Venezuelan government who don’t know how to put his ideas into practice.
There are other factors that led to Chavism, like corruption, the decay of traditional political parties and the lack of solid civil society institutions. Chavez and Chavism are products of Venezuelan history.
But now that Chavez is facing the prospect of his own death, he is also facing the death of his politic project. Just as has happened to all caudillos in history.
A head of government who does not value the structures of government can only take them apart if he constructs others to take their place. But autocrats don’t trust structures, because that would require trusting other people, and autocrats, by definition, don’t trust anyone. They want to make all of the decisions and give all orders.
The responsibility of the head of government, more than giving all the orders or making all the decisions, is to lead a group of people who together complete a program of governance. Governing a country, perhaps more than any other thing, is a team job.
Chavez never understood that. By insisting on making all the decisions himself and surrounding himself by yes-men, he weakened the political, economic and administrative institutions in Venezuela, and his attitude of “after me, the flood,” turned into a self-fulfilling prophecy.
Oncologists who have followed Chavez’s surgeries, radiation and chemotherapies agree that his symptoms, recurrences and treatments is consistent with a diagnosis of sarcoma, a rare form of cancer that is very difficult to fight, that attacks the muscles and ligaments in the pelvic zone. The Venezuelan government has guarded a strict silence regarding the clinical details of their caudillo’s health, but a couple of American doctors who are specialists in Sarcoma told the Wall Street Journal that Chavez probably has about a 50% chance of dying in the next six months.
Venezuela is preparing for Chavez’s impending death, if he even manages to make it to his third inauguration as president, planned for Jan. 10. That means – according to Venezuela’s constitution – presidential elections within 30 days of his death.
Chavez has named his loyal vice-president, Nicolas Maduro, as his successor, but Maduro is incapable to replace Chavez – not as a leader, nor as a candidate – precisely because of his loyalty. Maduro represents the “civil wing,” a more socialist branch of Chavezism. Another wing of Chavez’s party is more nationalistic than socialist, and has distanced itself from Havana and has already found a potential presidential candidate, the former soldier, deputy and president of the National Assembly, Diosdado Cabello.
The opposition, which has been divided in countless factions since the beginning of Chavez’s reign, finally united behind Henrique Capriles for the last presidential elections in Oct. and won 45% of the vote. If Capriles runs in the next presidential elections, it is likely that the opposition will remain united around him. That scenario is even more likely given that Capriles was re-elected governor of the state of Miranda.
The tragedy for Venezuela is that in all of the probably scenarios, the power vacuums and the institutional weakness will likely translate to battles in the government, which has been weakened by Chavez, who governed like a caudillo instead of acting like a president. The government will tend towards fragmentation and the armed forces will entrench themselves in the bastions of economic power that they have already conquered. The Venezuelan military controls companies and businesses to an extent that is not seen anywhere else in modern Latin America, and the military will be an incredibly important variable no matter what scenario ends up being the reality in Venezuela.
All of this is happening as a new year starts, one that is projected to be economically difficult, after the overspending in 2012. Predicted economic troubles include the devaluation of the Bolivar, Venezuela’s currency, high inflation and growth rates much lower than in 2012.
Even if the opposition remains united and manages to elect Henrique Capriles as president of Venezuela in 2013 or 2014, turning the country into a real democracy will by no means be an easy task.
It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.
PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.
Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.
Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.
Share capital of one billion
The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).
The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.
Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.
While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.
The infamous typo that brought the Air Next scam down
Raising Initial Coin Offering
Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.
For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."
What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".
Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.
Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.
Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.
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