The Hollow Giant.

Towards the end of the Soviet Union, intelligence analysts in the US began to focus more on its social geography and less on its military capabilities (which if formidable were not keeping pace with US technological advancements). This came about because, unlike the Kreminologist bean-counters, more astute analysts saw in that technological stagnation fundamental signs of a society in decline. The simplest of the observations made during those years was this: the problem of productivity in the USSR “worker’s paradise” was in large part due to the fact that work only got done in the mornings. After a (liquid) lunch, workers simply were too drunk to put in more hours of hard graft. The problem was apparently pervasive, to include inside the Soviet military. This led to scrutiny of data on alcohol-related injuries, illnesses, deaths and other pathologies (street fighting, domestic violence) which, even if incomplete given the nature of Soviet rule, allowed the US intelligence community insight into the causes of what turned out to be a terminal malaise of the Soviet social economy.

Technological innovation is hard to come by, much less put into practice, when many of productive age prefer distilled spirits over spiritual or societal improvement. The “Socialist Man” was no more.

I say this because the US is starting to increasingly look like the Soviet Union in decline. The president just announced his 2020 budget proposal that includes US$714 billion on “defense” but cuts US$1.7 trillion from public health, education, welfare and social security allocations while decentralising and privatising nearly as much through the use of bloc grants to states and profit-oriented entities.

This is important to understand because the US is a nation with increasing numbers of elderly, fixed income residents who depend on social services to live out their twilight years with some measure of dignity and grace. It is in the midst of an opioid crisis of unparalleled dimensions, to the point that a US resident is more likely to die of an opioid overdose than in a car crash. The Trump budget does nothing to address that.

Income inequality continues to grow, with nearly 40 percent of US residents (140 million) living near or in poverty. Health indicators remain largely stagnant. While some areas improved, other declined, with geographic dispersion and income being major factors in health indicator scores nation-wide. Likewise, education statistics show a levelling off of the number of people graduating from both high school and tertiary institutions, while literacy rates are showing signs of slipping.

The point of these data source linkages is to show that while the US continues to devote huge amount of resources to its military, it is under-resourcing and therefore underachieving on major social indicators that are the backbone of a healthy, robust nation (both characteristics of the USSR in decline). With Trump in office the hollowing out process has accelerated to the point that the US has begun to cede ground to rivals when it comes to technological innovation: witness PRC advances in space exploration, Russian hypersonic weapons development and the myriad high tech incubators sprouting up everywhere from Mumbai to Buenos Aires.

This is not to say the the end is nigh, but it does indicate that if not Rome before the Fall, the US is starting to look more and more like the USSR before perestroika and glasnost.

The trouble for the US is that all of its ills are compounded by the crisis of its political system, which is not just embodied in the persona of Donald Trump and his entourage of grifters, incompetents and venal opportunists. It is also enshrined in the Republican Party, which abandoned any pretence of adhering to principle in pursuit of partisan gain and personal enrichment. That in large part is due to the profound corruption of the political system, now dominated by corporate lobbies and insider deal-making that are oblivious to the popular will. This extends to the judiciary, which far from being independent in many instances has deep ties to the private and public agencies that it is responsible for adjudicating (for example, via the appointment of corporate lawyers to state-level and federal district benches).

The USSR was fortunate to have Mikhail Gorbachev as its eighth and final leader. He knew that the pathologies mentioned at the start of this essay were irreversible under the system as given and that the USSR could not respond to, much less sustain the pace of the competitive pressures of strategic rivals pressing ahead with socio-economic and military advancements. He knew that the system was broken and had to change, not only economically, but socially and politically as well. As much as we may look back at his days as tinted with too much idealism and too little understanding of the deeply rooted authoritarian ethos embedded in Russian culture, he was able to resurrect Russia out of the ashes of the former USSR and set the stage for its return to great nation status under subsequent (and much less enlightened) leadership.

The US has no such saviour. What it has is the political equivalent of a drunken sailor lurching about after a night on the terps. In fact, to continue the analogy, the US political system is a bit like the drunk who finds himself lying in a gutter, bruised and covered in his own secretions. At that moment, he has two options: realise that he has hit rock bottom and get up and seek help; or roll over, sleep it off and continue on a bender once he can stand again. The US–or at least the Republican Party and the MAGA masses–has chosen the second option.

For Soviet workers in the late 1980s and early 1990s, the turn to liquid lunches represented a quiet, passive protest against the failures of the worker’s State. It was a weapon of the weak used against uncaring bureaucrats and apparatchiks who no longer related to the everyday struggles of the Soviet Man. Used as a form of collective action, it slowly ground the Soviet productive apparatus to a near halt, thereby making it vulnerable to the pressures of its external rivals at the same time that it no longer had the internal vigor, will or stability that allowed it to defeat the Germans in WW2 and grow into a super-power. It was just a shell of its old self, a mostly declawed paper tiger that while dangerous if cornered, was in need of rejuvenation based on fundamental social, economic and political change.

In a sense the US is in the same predicament, except that it does not know it yet. Its form of capitalism has gone from cowboy (they would say “entrepreneurial”) to rapacious. It is no longer a meritocracy for all (if it ever truly was), at least if the recent university admissions pay-to-pay scandal is any indication. It still has leading edge sectors of the economy, but the bulk of GDP is located in provision of services rather than production of tangible assets. It has a political class that is decadent, venal and corrupt. And it has an alcoholic’s blindness to its own flaws and failures, instead hiding behind short-sleeve patriotism and nationalistic bluster.

Robert Mueller will not be the US’s Gorbachev. Even when Trump is removed, the systemic problems that have caused the US decline will remain. The crisis, in a word, is organic. US politics is broken, society is fractured and the economy is more brittle that it appears at first blush. Maybe the Democrats will stage an intervention in 2020 and remove the addled-minded bully from the White House along with his congressional enablers. Perhaps a new social contract can emerge from the MAGA mess that rejects its core tenets of chauvinism, xenophobia, bigotry, ignorance and greed. It is possible that the era of short-sighted economic opportunism rooted in finance capital, the military-industrial complex, social media tech and fossil fuels will finally come to an end. But if that does not happen, then the Hollow Giant will plod along like Nero in a stupor or the USSR under Brezhnev until it, too, ultimately falls.

The unwanted jihadist.

It turns out that Kiwi-born Mark Taylor, known as the so-called “bumbling jihadist” because he left the GPS tracking feature on his phone while he made pro-Daesh videos (including one where he burns his NZ passport and another where he calls for jihadists to stab police and military officers at ANZAC Day celebrations), has surrendered to the Syrian Democratic Forces, a Kurdish peshmerga alliance that is part of the mostly Western military coalition fighting Daesh under the name “Operation Inherent Resolve.”

He was fortunate or smart enough to surrender to the Kurds, who respect the laws of war and Geneva Convention when it comes to captured jihadists, something neither the jihadists themselves or the Syrian Army are in the habit of doing. This means that he can be transferred to other, Western members of the coalition for juridical administration. He is merely being held by the Kurds after he admitted who he was and that he was a member of Daesh. As far as the Kurds are concerned he has committed no specific crimes under their laws (beyond, perhaps, criminal association), so he is taking up space in a cell reserved for more unpleasant characters.

The issue of what to do with him has become a political football in NZ. The PM says that there is little the government can do for him because it has no diplomatic representation in Syria, much less the East Syrian conflict zone. But she then says that as a NZ citizen he is “our responsibility” even if NZ cannot help him where he is. The Deputy Prime Minister/Foreign Minister says good riddance to him, in part because he turned his back on his birth country and in part because he is a bigamist. The Opposition and Right-wingers of all types set to xenophobic baying about his betrayal of his home country, the risk he poses and the amount of taxpayer dollars that would be wasted on his return both in terms of travel as well as monitoring and incarceration of him.

The PM went so far to say that NZ has “no relationship” with “the forces” fighting in Eastern Syria even though it is well known that US, UK, Australian, French and German forces are fighting alongside the Kurds and NZ SAS troops are rumoured to be doing so as well. The NZDF has senior officers on the Joint Task Force staff assigned to Operation Inherent Resolve, so the notion that NZ has “no relationship” to those fighting in Syria (the same forces who drove Daesh out of Mosul and westward into Syria) is disingenuous in the extreme.

What is worse, the Australian journalist who interviewed Taylor in the Kurdish jail claims that Taylor told him that he was interviewed by NZ intelligence officers (presumably SIS) shortly after his capture/surrender in December. If that is true, then the government has not only known for a while about his whereabouts but is claiming no possibility of contact with him even though he has had face-to-face meetings with NZ agents. Be that as it may, I am still of the opinion that he may have some useful intelligence value left in him, as questioning in a Kurdish jail in winter is a bit different than interrogations conducted in a NZ detention centre at any time of year.

Given the amount of dissembling and ignorant ranting going on, I thought that I would clarify some of the issues at stake.

On the matter of whether or not Mr. Taylor has NZ citizenship in light of his renouncing it: Only a State can confer and withdraw citizenship. A person claiming to renounce citizenship without State sanction is just stating intention, not deed. Burning a passport (a token of sovereignty) just prevents one from legal inter-State travel. Citizenship is conferred by birth or by application and only lost when the State withdraws its recognition of it. That has not happened with Mr. Taylor. He remains a NZ citizen.

Under international law undocumented criminal suspects, including terrorists, are to be returned to country of birth if known. If an undocumented suspect is captured in battle or surrenders to an allied belligerent in a recognised conflict, s/he is a POW and must be treated as such. This includes irregular non-State belligerents captured by non-State actors like the SDF working alongside State militaries during an internationally approved (in this case UN-sanctioned) conflict against a common (in this case non-State) foe.

If possible, captured undocumented enemy POWs must be returned to their known country of origin to face justice. They can be kept in allied and home country military custody during transfer. There is no need for consular assistance or travel docs if they remain in military custody, just access to legal advice during process. Conversely, the military can transfer the prisoner to a location where his country of origin has diplomatic representation, whereupon he can be issued emergency travel documents. NZ has representation in both Iraq and Turkey, both of which have ties to the anti-Daesh coalition. It is therefore relatively easy to move Mr. Taylor out of Kurdish custody, into Western military custody and onwards to a location that either has NZ diplomatic representation and /or NZDF presence to whom he can be delivered (think, for example, of moving him from Kurdish-held Eastern Syria to Camp Taji in Iraq).

Should Mr. Taylor be returned to NZ he can be arrested and charged at the border under the Terrorism Suppression Act for being a member of an internationally-designated terrorist entity. To that can be added other charges depending on what he is suspected of having done while with Daesh and the evidence compiled of him doing so. At a minimum he could receive a 6-7 year jail term for aiding and abetting a criminal organization. At a maximum he could he found guilty of war crimes or crimes against humanity if he is found to have participated in atrocities or collective acts of violence against civilians (such as the enslavement of Yaziri women and girls as sex slaves. He has admitted he would have liked to have had a sex slave but could not afford one, so the question remains as to whether he participated in any act of kidnapping or enslavement while in Syria). NZ has legal authority to prosecute its citizens for war crimes and even though it does not have the death penalty (except, apparently, for treason), a guilty verdict on a war crime could result in life imprisonment.

Concerns have been voiced that if he returns home the leniency in the judicial system could see him freed and out on the streets. There is a possibility of this if his defence attorneys ask for psychiatric evaluations that prove that he is not mentally competent to stand trail. He clearly is intellectually sub-par (an uncle of his claims that he suffered brain damage as a toddler during a fit of some sort), and his actions over the years indicate that he may be a bit of a lost soul. Even his co-religionists at the mosque that he worshipped at in Hamilton say that he was more interested in companionship and a sense of belonging than in waging jihad.

If he is released he undoubtably will be monitored closely, not only by the security services but members of his own religious community. In fact, I would not be surprised if he is shunned by the latter because of the disrepute he has brought upon them. So as far as posing an on-going risk to society if he returns and is freed, I would hazard the guess that it would be very low.

The more likely scenario is that he will return in custody, be held on remand during the time he is on trial, be found guilty of terrorism-related crimes and sentenced to a significant period in prison. Some believe that if that happens he will then work to radicalise fellow inmates, as is often a common practice in US and UK jails and which has some precedent in NZ. But the truth is that Mr. Taylor is a follower not a leader and does not have the cunning and agile thought processes that would make him a convincing jailhouse preacher. So here too my reckon is that he will not pose a threat of radicalisation to other inmates. If anything, other inmates will pose a threat to him (think white supremacists, gang members and others who make take a dim view of his citizenship renunciation and embrace of Islam and jihad).

There is question as to whether he has wives and/or children in Syria. That is a humanitarian concern because arguably they are innocents caught up in his mess. If it turns out that he does in fact have family in Syria, the question is then what to do with them? If they have no connection to NZ it is perhaps best for them to return to their hometowns, but that is a question that refugee resettlement and immigration officials will have to address in the event that he is returned to NZ.

The most sorry aspect of this is that the fate of Mr. Taylor has become yet another pawn in the partisan bickering in Wellington. The truth is that the case is straight-forward: he is a NZ citizen and member of a terrorist organisation who was captured by allied forces. His return is mandated by international law. NZ law requires that he be arrested, charged and tried according to provisions in the Terrorism Surpression Act and perhaps other related laws. Anything other than this is an abdication of responsibility by the NZ government and a denial of his democratic rights to a fair trial and legal defence (because even bad guys have legal rights in democracies).

For NZ there is opportunity in this process. Returning him and putting him on trial demonstrates that NZ is a responsible international citizen that assumes the burden of dealing with its own when they misbehave (because let us be clear: membership in Operation Inherent Resolve is not just about contributing to the military campaign against ISIS in the Levant; it is also about accepting responsibility for deciding the fate of coalition member citizens who joined ISIS and lived to tell the tale after capture). It gives the Crown an opportunity to test the TSA after the fiasco of the Urewera 18 case (the so-called “dog’s breakfast” case that saw seven people eventually tried on firearms, not terrorism charges). It shows that NZ is a a nation where the rule of law supersedes political cynicism and popular sentiment. It serves as a cautionary tale and possible deterrent to other home-grown would-be jihadists. And it keeps at least one foreign fighter from returning to Daesh any time soon.

The Bully’s gambit.

It has been an open secret in US foreign policy circles that Donald Trump wants to go to war with Venezuela. He has said as much on a number of occasions, not always disguised by the “all options are on the table” rhetoric his advisors urge him to use. In his recent book former FBI Deputy Director Andrew McCabe mentions that Trump asked his national security team “why can’t we go to war with Venezuela,” claiming that it should be easy to do so. He may soon get his wish.

Let’s be clear on why Trump wants to wage war on a southern neighbour. It stems from the fact that he is an ignorant bully who believes in the 1823 Monroe Doctrine (or as much as he is told of it, especially the part about being the Western Hemisphere’s police force) and pines for the days of Teddy Roosevelt’s Roughriders and gunboat diplomacy. He covets Venezuelan oil even though its decrepit pumping and refining infrastructure, US oil surpluses and relatively low oil prices make his notions of “controlling” it a bit more complicated than his simple mind can grasp. But as a deep-seated xenophobic racist he hates Latinos in any event, and the corruption and incompetence of the olive-skinned Venezuelan leadership led by Nicole Maduro feeds into all of is prejudices about them. Add to that the fact that, even though he himself is a draft-dodging silver-spooned coward who has no real comprehension of the sacrifices and costs of going to war, he revels in it and the bloodlust it incites amongst the MAGA morons who follow him.

What he is not interested in is the plight of the Venezuelan people or the nature of Maduro’s rule. After all, he heaps praise on Kim Jong-un, Mohammed bin-Salman, Rodrigo Dutarte and Vladimir Putin, so respect for human rights, providing for the common good and freely-chosen open government are not high on his list of priorities. Instead, the Venezuelan crisis, which essentially is an economic crisis brought about by government mis-management, corruption and incompetence that evolved into a national humanitarian crisis and now a political crisis–or what Gramsci called an organic crisis of the State–provides Trump with a window of opportunity for him to act out his fantasy of being a war-time president.

The machinery for going to war appears to have been switched on. Since I have been involved in such things in a past life, let me explain how it works.

The move to war starts with the White House via the National Security Council (NSC) asking the Department of Defense (DoD) to draw contingency plans for an armed confrontation with Venezuela. The request is conveyed to the regional units responsible for Latin America, in this case the office of the Assistant Secretary of Defense for International Security Affairs and the Deputy Assistant Secretary of Defence for the Interamerican region (OSD-ISA-IA). The request is also sent to the Joint Chiefs of Staff and its directorates responsible for war-planning in Latin America (especially J2 (Intelligence) and J3 (Operations)), as well as the Undersecretary of Policy and Plans (OSD-US-PP). These agencies often combine resources into a Joint Task Force (JTF) that games out a number of scenarios.

Military intelligence agencies such as the DIA are tasked to gather actionable intelligence on key targets, and the regional military command responsible for Latin America, the Southern Command based in Miami, is assigned the role of drawing up battle plans. The US Special Operations Command in Tampa will also be involved, and between these commands and the JCS the specific mix of airforce, naval and ground forces will be calibrated, then activated (the US favours an air-sea-land approach to conventional warfare, especially if special operators are involved). This will include units with regional focus such as the US Atlantic Fleet and 12th Air Force, as well smaller detachments like Special Boat Units and Air Force special operations wings.

Strategic planners in DoD will narrow down feasible options using multi-level cost/benefit analyses. Interagency working groups will be formed in order to coordinate information flows and policy feedback across affected bureaucracies (for example, the State Department, Homeland Security, Treasury and Customs, since all are involved in the pre-and post conflict response). US military attaches will be ordered to liaise with their Latin American counterparts in order to gauge reaction to any hostile US move (and explore the possibility of cooperation in operations in the case of Brazil and Colombia) and diplomats will be dispatched throughout the region to shore up support for the US and explore the possibility of material assistance from individual countries.

The CIA, NSA and DIA will assign regional and country specialists to the planning and covert assets and signals specialists will increase their reporting on the Venezuelan regime’s internal dynamics and its military’s behaviour, movements and communications. In a case like Venezuela’s where the regime is under siege and the US backs the opposition, the CIA will facilitate backdoor talks between exiles, opposition figures, disgruntled military personnel and US officials so as to ensure that all are playing off of the same page in the lead up to war. If needed, a cover plan–say, the need to provide urgent humanitarian assistance to desperate people as requested by the US friendly opposition–is drawn up in order to pre-position assets and material in preparation for hostilities.

All of this has already been or is being done by the US with regards to Venezuela. Reports have it that numerous flights operated by a CIA-front air charter service from a civilian airbase adjacent to Fort Bragg, North Carolina (home to US Army special forces) have departed for Colombia carrying humanitarian aide. The US special envoy for Venezuela, Elliot Abrams, and the US Deputy Assistant Secretary of Defence for Interamerican Affairs traveled to the Colombian-Venezuelan borders last weekend to meet the Opposition leader Juan Guaido and oversee the unloading of provisions destined for Caracas (a move that was blocked by Venezuelan National Guardsmen). Cuban authorities have reported that US special forces have deployed to Puerto Rico and other Caribbean islands in a pre-positioning move (the Cubans have their own reasons to make such claims but their intelligence is very often accurate).

If plans are in an advanced stage, contact with opposition resistance groups in the Venezuelan capital and other population centers will have been made and perhaps weapons supplied. A plan to neutralise the regime leadership and its intelligence networks will be readied. A provocation ploy (say, murder of a US-backed Opposition figure) or excuse for action plan (e.g. threats to US citizens) may be drawn up should it be required as a justification for war.

These things take time, so it is safe to say that if by this point the battle plan is well developed, Trump gave the war order very early in his presidency. DoD and JCS cannot refuse the president’s request even if they oppose it; their duty is to comply with what the Commander-in-Chief has requested. This may not preclude them from approaching Congress about concerns regarding the proposed operation. After all, this is would not be a war of necessity but rather one of opportunity (if not vanity), and the costs involved may not justify what is achieved even in a best-case scenario. But with people like Senator Marco Rubio baying for regime change in Venezuela, the congressional mood to resist the president at this stage is mixed at best, so military concerns about it may not find a receptive audience on the Hill.

In any event, the CIA and US Air Force planes ferrying supplies to Colombia land and take off from the town of Cucuta, located on the Venezuelan border and the site of a violent confrontation last weekend on the transnational bridge linking the two countries. Abrams flew in a USAF aircraft to that town’s airport, which is home to an Army mobile infantry brigade and conventional infantry brigade (largely made up of counter-insurgency companies). This reminds the Venezuelans that Colombia is the US’s closest Latin American military ally, having fought decades together against drug traffickers, the FARC and other guerrilla groups. Colombia is signalling that it will, at a minimum, allow the US to stage and pre-position forces on its territory, even if just on military bases. The Colombians have despised the Bolivarian regime since Chavez’s times, and now their ideological enmity has been practically reinforced because the crisis has seen a mass refugee migration from Venezuela into Colombia at the same time that increased smuggling flows head in the other direction. Social cohesion in border regions has been negatively affected and the public purse is being stretched by the need to provide for the refugees as well as maintain public order and border security. The Colombians have had enough.

Usually the Brazilian military would be reluctant to allow the US to stage and deploy military forces from Brazilian territory. But the election of right-wing populist Jair Bolsonaro, who explicitly modelled himself on Donald Trump during the 2018 campaign, means that things have changed. Bolsonaro is keen to cultivate the White House’s good graces, and offering forward positioning rights along the Venezuelan border is one way of doing so. Brazilian and US commandos will welcome the opportunity to hone their skills together in a real operational environment. Here too ideological enmity dovetails with practical necessity, as Venezuelan refugees have fled into Brazil in increasing numbers over the past few months. It is therefore likely that Brazil has agreed to a US military presence on its border with Venezuela.

As the crisis accentuates and the impasse continues, US military planners will pour over maps and powerpoints, then hammer down the details of the means, methods and tactics to be used, as well as Plan B and C scenarios. Assets will be discretely transferred to staging areas and liaison with host militaries and resistance groups will be established. Strategic targets such as oil derricks and refineries will be given special attention.

Trump has a short term reason to activate the war plan: the 2020 elections. His political rationale in the upcoming election year is to influence the outcome via manipulation of nationalistic sentiment at home. This comes naturally to him given his vulgar political mind, and he sees Venezuela as an easy nut to crack. Aided by his allied media outlets, the drumbeat for war has been banging loudly for the last few months and is getting louder. Given the potential results of the Mueller investigation as well as those of several Democrat-controlled House Committees (such as the Michael Cohen hearings now underway), to say nothing of his failed summits with Kim Jong-un about denuclearising the DPRK (as if that was a realistic prospect), Trump might not be able to wait to pull an “October Surprise” even this year (they usually happen in the month before the election, not a year before). So we can expect that the pace of war preparations will increase over the next weeks to months.

For the Maduro regime, the issue is simple: raise the costs to the US (and possibly others) of any armed intervention in the country while either exhausting the opposition via attrition or negotiating a transition pact with it. The military will need to use stealth, manoeuvre and cover against a superior force, hoping to prolong the conflict so that Trump begins to pay a price for his folly. In this it will have the help of Cuban advisors skilled in the art of guerrilla warfare, including proficiency in tunnelling (learned from the Vietnamese) and the use of tactics such as helicopter trapping (where attack helicopters are lured into range of anti-aircraft weapons by small arms fire). If the conflict can be prolonged and US soldiers begin to die in significant numbers, then the bully gambit may just backfire on Trump.

I may have omitted or erred on a few details, but this will be the general thrust of things should Trump decide to pull the trigger that starts a war. I have not included post-conflict reconstruction and nation-building scenarios, but I assume that State Department planners, including those from the Agency for International Development (AID, already on the ground in Cucuta) will be hard at work figuring out post-conflict plans (although truth be told the US is not very successful at producing post-conflict outcomes that are clearly favourable to it). The matter of “what happens next?” once the war is over remains open to conjecture.

The bottom line is that a lot of preparation and resources go into contingency planning for war even against a relatively weak opponent, and even if the costs and fallout are uncertain and multidimensional in nature. This is true even if war is avoided: the costs of the preparations alone are monumental. One thing is therefore certain. The US path to war with Venezuela would have to have started some time ago and the costs are real even if battle is not joined. And if it is, the consequences will be felt for a long time to come way beyond Caracas.

Legacy investments versus speculative investments.

Among the arguments about instituting a capital gains tax in NZ (common in many parts of the developed world) is the claim that much property is family residence or inheritance in nature. The argument goes that it is unfair to not differentiate between the sale of a family home, granny flat or holiday residence by middle and working class people and the sale of properties bought by developers and speculators with the intention of “flipping” them for a profit. The first category are long-term, emotionally laden investments whereas the second is simply about making money.

I see merit in the argument for differentiation of property investment categories. In particular, I see a difference between legacy investments and speculative investments. Legacy investments are those where property is bought for family use over time. These can be the main family home but more often are second, smaller flats or holiday homes that are passed on between the generations (think of the archetypical bach or a crib). The emotional as well as financial investment in such places is not based on eventually securing returns but on preserving collective experiences and traditions from generation to generation and giving off-spring the chance to acquire a property stake without the exorbitant financial costs associated with the contemporary real estate market (for example, an equity share in a family bach may help towards securing a first time mortgage loan). It specifically excludes using family members as fronts for speculative purchases (say, of a family farm).

Speculative investments are just that: property investments that are designed to be on-sold in a relatively short period of time in order to secure a positive financial return. Here the intention is to make short-term money off of the buy/sell transaction.

I would suggest that a capital gains tax is appropriate for all speculative investments. They become another cost of playing the real estate flipping game and will eventually be incorporated into the real estate price architecture. On the other hand, I do not think that capital gains tax is appropriate for legacy investments. If a family property is on-sold within blood lines or divided into part ownerships to children and grandchildren, it seems to me that the less financial burden imposed the better for all. People get to keep their properties within the family and share in the collective benefits over time and generational change. That includes rental income from family owned property subject to the requirement that the property must be used by family members for given periods within a specified time frame (this would allow seasonal rentals and other short-term lease arrangements to non-family).

The system would work if there is a legacy declaration made on a property at the time of purchase. Again, this may be less appropriate for a main family home that could likely be on-sold to strangers as the family demographic shifts. There a capital gains tax would apply. But it very much should not apply to properties that families hope to preserve within the bloodlines for posterity. Here on-selling to relatives should not incur capital gains taxes.

On-selling under the legacy clause will require verification of family lineage, and any sale to non-family voids the legacy declaration and makes the sale subject to capital gains tax. Those who try to cheat the system and are caught will be subject to heavy financial penalties in excess of the tax otherwise to be paid.

I am not an economist much less a taxation expert but it seems to me that distinguishing between legacy and speculative investments in the property market strikes a good balance between profiteering and homesteading. I admit to not having thought through all of the implications inherent in this proposed scheme so if any readers want to illuminate me please feel free to do so.

I have no doubt that clever devils will immediately try to game the system and seek out ways to turn legacy homesteading into profit-driven speculation. But with a detailed code of compliance and robust enforcement regime in place, it is possible for this approach to split the fair difference between an all or nothing capital gains tax on property and one that reflects the nuances in property buying preferences. Or perhaps that is simply too much to ask in an ideological climate where the very idea of taxing something other than salaried income, business earnings and consumer purchases and services is considered sacrilegious by the Right.

PS: I have been informed by the smarter adult in my house that this is a silly idea and unworkable. She also points out that trusts already allow for inter-generational transfers of wealth/assets without being subject to tax on the transfer. I am not familiar with trust law and am not going to risk savaging by pointing out that family trusts are something more likely to be created by the well-to-do rather than the middle class, so must accept the scolding and move on. If anyone is familiar with the intricacies of trusts, please feel free to explain.

Interest, values, trade and security.

The media frenzy about the NZ-PRC relationship got me to thinking, but as I got to thinking I found myself meandering off of my original train of thought. You see, at first I was pondering the one-sided, hectoring nature of the media coverage, where pro-China shills like the business writers at the Herald and assorted corporate types and National Party flunkies like Tod McClay were allowed to run their mouths about how the relationship with China was headed down the tubes. There was the Kiwi coward resident 34 years in China* who implicitly disparaged Anne Marie Brady by saying that “(i)t’s unhelpful for politicians and a few anti-Chinese professors to feed uncorroborated McCarthyite conspiracies about Chinese spy networks in their countries and targeting anyone who doesn’t share their view.” There was Audrey Young’s reference to “ivory tower” eggheads in her regurgitation of business lobby bullet points. All of this was offered without a single rebuttal.

  • *I am not going to mention this useful fool’s name but it would have been nice if a “journalist” has asked him, given his long residency in China and successful business ventures there, whether he was a dual citizen and/or member of or has ever had any formal contact with the Chinese Communist Party, whether he has ever had to “facilitate” transactions or provide pay-offs to party or local officials and whether he is on any Chinese government payroll as a spokesperson, business “ambassador,” representative, go-between or in any other capacity. I say this because it is unusual for Chinese authorities to allow non-diplomat Westerners to comment on official reactions to PRC-related events in foreign countries even if they are citizens of the country in question.

There were even pro-China academics featured in the media and assorted pundits opining that the Labour-led government needed to pull an about-face and correct things ASAP. There were the usual skeptics about the GCSB rational for advising against using Huawei in the 5G roll-out. One of them, a well known rightwing blogger and pollster, used a 2012 junket to Huawei headquarters paid for by the company to proclaim that all the security concerns were a stich up up of an honest company so that Western telecom firms could gain a competitive advantage. There were the usual shouts of racism from the Chinese language media and wanna-be “influencers.” There was even something that looked suspiciously like a planted fake news article in an English language mainland media outlet that was extensively and uncritically quoted in the Herald that said that Chinese tourists in Aoetaroa complained about being “stabbed in the back” by the Kiwis. I shall leave aside the curious fact that the article only appeared in English and used rather odd quotes to describe the reaction of tourists to a minor diplomatic row involving their home and host countries–a row that had zero effect on them.

It was all so sickly obsequious to the Chinese that my initial thought centred on whether most of NZ’s business and political elites (and their lackeys in the media and academia) were so obsessed by self-enrichment, greed and short term opportunism that they completely lost sight of their moral compasses. After all, China is a one-party authoritarian state that uses mass internment camps to control a restive ethno-religious minority, mass surveillance as a form of social control, violates human rights in systematic fashion, transgresses international norms and laws as a matter of course (such as in the island-building projects in the South China Sea) and uses bribery, corruption, fraud and intellectual property theft as an integral part of its business development models. This would seem inimical to the values of the paragons of virtue extolling the “special relationship” between the PRC and NZ but nooooooo. The Chinese are good for the NZ economy and that is all that matters. It would seem that the trade-oriented business elites and their political puppets are China’s Vichy representatives in Aotearoa.

That sent my thoughts in a more academic direction. I recalled that Marx wrote that the combination of private ownership of the means of production and universal suffrage could not hold because if everyone got an equal vote and only a few were property owners (capitalists), then capitalism would be voted out of existence. He was wrong about that due to the reform-mongering function of the capitalist State, but that got me to thinking that he also wrote that capitalists were incapable of being patriots because profits were made globally and hence their interests were not confined to their countries of origin. People may recall that in the Manifesto he wrote “workers of the world unite!” as a response to capitalism as it entered the Gold Age of imperialism, a topic that Lenin subsequently developed a greater length.

It occurred to me that in the arguments about China we see a NZ variant of this. NZ capitalists and their toadies do not give a darn about democratic values, transparency, norms, a rules based order or the security concerns of Western states. They are in it for the buck and if that means kowtowing to a dictatorship then so be it. Given that NZ business and political elites have kowtowed to the likes of the Saudis, this should not be surprising. In their view if there is money to be made then the less impediments to doing so the better.

The smarter types will show the structural impact of Chinese trade with NZ by citing the usual $27 billion in 2018 bilateral trade figure and 8,700 jobs connected to it. But this trade is mostly in milk powder, tourism and English language and tertiary education (as NZ exports) and consumer non-durables (electronics, light machinery and plastics, mostly) as imports, so it is not as if NZ is going to turn into a high tech artificial intelligence and robotic hub thanks to the Chinese. The bottom line, then, is the bottom line: NZ capitalists by and large will cling to the window of opportunity presented by the opening of the Chinese market even if it confirms our trade dependency on primary goods and agro-exports and even if it means sacrificing NZ’s commitment to principle when it comes to exercising an independent foreign policy.

That was going to be the end of my thought process on the matter. I was going to balance the criticism of China by noting that the US and traditional Western partners have less than stellar records in their foreign relations and spy histories and that the US under Trump is an insane clown posse when it comes to international affairs even if the intelligence and security professionals who staff the 5 Eyes network would not be swayed by the craziness swirling around them and would make assessments about security matters on objective grounds. But then I got to thinking about something I read repeatedly on right-wing political sites: values.

One of the major objections to the Chinese and NZ’s relationship with the PRC appears to be the issue of values, or the fact that we do not share values. People point out the long cultural ties that bind NZ to the UK and Anglophone Commonwealth as well as the US. They point to joint sacrifices in war and peace, common sports, notions of good and bad, proper behaviour, etc. These folk do not want these shared values to be usurped and replaced by Asian values, or at least the Confucian-derived cultural mores that contact with China brings to NZ. The list of fears and concerns is long but the bottom line is that many on the conservative side of the political ledger have real fears of the Chinese “other” that go beyond the “Yellow Peril” of the Cold War.

That prompted a turn in my thought. You see, although I have a fairly idealistic streak and understand the utility of constructivism in international relations practice, I am a realist at heart. And realists are not sappy snowflakes looking for a global group grope. Instead, they focus on two things as the currency of international relations and foreign policy: power and interest. As the saying goes, in an anarchic world or Hobessian state of nature where values are not universally shared and norms are contingent on voluntary acceptance by independent State actors as forms of self-imposed restraint, then what matters is the exercise of power in pursuit of national interest.

That leads me to the following pseudo-syllogism:

States have interests, not friends.

Foreign partnerships are based on interest, not friendship.

Trade and security relationships are therefore interest-based.

They may overlap, complement but should never countervail.

A State’s degree of interest in any matter is self-defined.

Values help define but do not determine interest.

Interest may be influenced by values and values may involve shared cultural mores, norms and history that make for notions of “friendship,” but interest is not reducible to them.

Interest prevails over values when interest and values are at odds.

It is the relationship between values and interest that concerns me now. If I accept that values are only part of the definition of interest, then I must accept that shared values do not necessarily place some forms of interest above others. Nor does the absence of shared values do likewise in the negative. And if that is the case, then the matter of trade versus security must be weighed based on the degree of value-free interest in each and the impact each has on the ability of NZ to wield what limited power it has on the global stage.

The issue is problematic because NZ has long claimed to have a “principled” foreign policy that is based on the values of independence, multilateralism, transparency, non-proliferation, human rights adherence and assorted other good things. I do not believe that NZ actually adheres to these when push comes to shove or even as a foreign policy bottom line, but if virtue signaling in international relations is characterised as lauding the role of “principle” in foreign policy, then NZ is the semaphore of that movement.

To be sure, NZ is a trading nation and is committed in principle to it. Securing a favourable balance of trade that helps GDP growth and distribution is a matter of economic security and must be included in any national security estimates, to include threat assessments. There are as a result practical and principled reasons why the issue of assessing relative interest is so important and why it may favour the trade whores.

Put another way, what are the interests at stake in NZ’s security relationships and what is their worth to the national well-being when juxtaposed against the country’s trade relationships (since security and trade have been uncoupled in the NZ foreign policy perspective)? If the benefits of trade are real and immediate while the benefits of security partnership are more ethereal or hypothetical than real (especially given the actual and opportunity costs involved), interest would dictate that trade should be favoured over security. But what if the benefits of security relations are more like those of insurance policies, in which you only fully realise them when you need them? How do you calculate the pluses/minuses of the trade-security dichotomy over the medium to long-term?

I do not have the answer to this. I have written plenty about the NZ-PRC-US strategic triangle and the unfortunate balancing act NZ has to engage in because of the misguided attempt to trade preferentially with China, on the one hand, and seek security guarantees through partnership with the US, on the other. Either could have worked in isolation or when the two great powers were not in competition, as it seemed when the two-track foreign policy approach was developed and refined in the late 1990s and early 2000s. But those days are long gone. There are ascendent and descendent great powers contesting for dominance in the Western Pacific, and we are just another pawn in their increasingly acerbic game.

So the question now is how do we measure “interest” in our trade and security relationships and which, on balance, should we favour given the centrifugal pull of each on our policy-makers? Do we give up our Western-centric security ties to fully embrace a China-led Asian/non-Western foreign policy orientation? Or do we give up the material benefits of our Asian-focused trade, learn to live within our means and reaffirm our security ties to our “traditional” partners? Is there a middle road or happy medium that can be pursued without suffering the consequences of alienating our partners on either side?

That seems to be the preferred option for the moment. But that assumes that NZ has a choice in the matter and that its behaviour will influence the corresponding behaviours of its larger, contending interlocutors because their respective interests are maintained by our dichotomous foreign policy approach. That is a very tenuous assumption to make because it is also quite possible that in the end it will be a larger partner who, exercising its power over us in its own national interest within a strategic context dominated by great power rivalries, that makes the choice for us.

Spare a thought for Anne-Marie.

Put yourself in the following position: You are a professor at a NZ university, a NZ citizen who although well-known in your academic sub-field is virtually unknown outside of academia. Your research interests focus on the foreign policy of an Asian country and you have written well-received books and articles about aspects of it. You speak and read the language of that country and have many contacts in it. Because of your acknowledged expertise, you are invited to give talks and presentations on these subjects and are awarded visiting fellowships at prestigious institutions overseas.

In 2017 you write a paper about how the country you study influences politics in NZ. The paper is not theoretical or conceptually ground-breaking, but instead gives a fairly detailed description of the people and organisations involved in promoting the interests of that country in Aotearoa. It demonstrates the pervasiveness of this influence-mongering amongst the NZ political elite, including the two major political parties. It also shows the systematic way in which this country uses front organisations to control the foreign language media related to it as well as shut down independent ex-pat voices critical of it. The country you study is, not surprisingly, ruled by a one-party authoritarian regime and intolerant of criticism at home and abroad.

The paper is first presented overseas, whereupon the local media seize upon it to highlight how that country is exploiting the NZ political system. You receive much media attention and gain your five minutes of fame.

However, within weeks of it being made public, you begin to receive threatening messages and phone calls from people who apparently do not like the thrust of your paper. A few months after its publication your university office and home are burgled, twice. Nothing of value is taken other than some cell phones, lap tops and flash drives. The thieves make no attempt to disguise the robberies.

You go to the police to report the crimes. You have not had this happen to you before and you are concerned that the burglaries may be connected to the threats about your paper. The police initially fob you off saying that burglaries are a low-level crime and therefore of low priority, but then re-open their investigation after you go to the media to express your concerns that something sinister may be at play. The police dedicate a special investigative unit to the task and contact Interpol, the international police information sharing organisation, about the case. Months go by.

Almost a year after the burglaries, while your car is being warranted, the mechanics doing the job notice that your front tires appear to have been deliberately deflated. Not knowing who you are they contact the police because they believe the vandalism could result in a serious accident. The car in question is used by other family members as well as yourself, so when the police contact you it causes you further alarm. You worry about the safety of your husband and children as well as your own.

A few months after the tire-tampering the Police issue a statement saying that the investigation has concluded with no culprits having been found, either for the burglaries or the tampering. They encourage people with additional information to come forward but reiterate that they will not continue to investigate the case. The offenders have gone free. Meanwhile, even though statements of support for your right to academic freedom and freedom of expression have been signed by scholars and activists at home and abroad, the government–including the Prime Minister–refuse to be drawn on the case.

What are you to do? Here you are, a NZ citizen who has every reason to believe that the actions taken against you have the hand of a foreign power. behind them. The police offer you no protection but instead advise you to up your own security and have the university do likewise in your workplace. You do not know if the offenders are still in your home town or if they will come back again. You put on a brave face but you are afraid. You might even consider moving to a safer place, perhaps out of the country.

This is the situation facing Anne Marie Brady. All she did was write a paper detailing Chinese influence in NZ politics. She deserves to have her rights as an academic and a person of conscience defended by those entrusted with protecting the security of NZ citizens. Instead, those responsible for doing so decided that there was nothing that they can do. She is on her own in her own country.

Perhaps there are reasons of State behind the Police decision to wind up the investigation. Perhaps the Police are simply incompetent and wasted over a year chasing shadows. Either way, professor Brady has reason to feel that she has been abandoned by the authorities.

If in fact the burglaries and vandalism were done to intimidate her because of what she wrote, and if the perpetrators were aided, abetted or acted as agents of the Chinese regime, then they succeeded. Because even if professor Brady will not be intimidated, the real message from the NZ Police and the Labour-led government is that those who write critically about the PRC do so at their peril even if they do so while on NZ soil.

Is Israel Democratic?

An interesting thing happened after I wrote last week’s first blog post about Venezuela ( https://www.kiwipolitico.com/2019/02/on-the-venezuelan-mess/). A gentleman from the Israel Institute of New Zealand wrote me at my business email address to request a correction or retraction for something I had written in that post. The objectionable phrase was my reference to Israel as “semi-democratic.” He pointed out that Israel ranked just one point away from France as a “flawed” democracy in the latest Economist democracy ratings, not far behind Germany. In that post I characterised France and Germany as Right-leaning “advanced democracies” so he reckoned that I had slighted Israel when I labeled it as “semi” democratic instead.

We backed and forthed on the subject for a day or so. I told him that I based my characterisation on the fact that Arab Israelis are treated as second class citizens. I told him that I would leave it at that and not get into the subject of settlements on occupied land, the drift rightwards towards extremism and intolerance in its politics under the Likud Party (created by those paragons of democratic virtue Menachem Begin and Ariel Sharon and now led by Benjamin Netanyahu), the corruption of its government under Netanyahu (and his predecessor), its approach to Palestinians etc. He countered by pointing out that Arab Israelis have all rights given to non-Arabs, that they do not have to do compulsory military service but can vote and that a High Court judge who will hear Netanyahu’s corruption trial is an Arab.

I explained to him that I do not take the Economist’s ranking as gospel. In fact, I think that they are flawed due to an Anglo-Saxon bias and formal procedures and frameworks rather than substantive interactions (for example, I believe that New Zealand is ranked too high and Uruguay is ranked too low in the Economist list). I pointed out that I had an academic background that included writing about democratic theory (and democratisation in practice), so understand democracy to involve procedural (free and fair elections), institutional (impartial application the rule of law), societal (toleration, equality as mass values), and economic (fair distribution of productive wealth) dimensions, all of which I believe are deficient in Israel. He replied that Israel fulfilled the first three criteria. I also told him that I was raised in a strongly pro-Israel household and that I understood its unique security and geopolitical conditions as well as the fact that, when compared to pretty much every other nation in the Middle East, Israel was the most democratic of them. But that is just damning it with faint praise.

Perhaps I expect more of the Israelis, but its behaviour in the last two decades (and more) leads me to believe that it is no longer (if it ever was) a liberal democracy. Just because people have formal, de jure rights on paper does not mean that they have de facto rights on the ground. It may not be apartheid but in its treatment of Arab Israelis, African migrants and other non-European Jewish peoples, it falls very short of the “equality for all” mark that I would expect of a truly substantive democracy and well short of most European, North American and Antipodean democracies. This is not to say that the latter are all healthy and above reproach. It just means that Israel does meet even their lowered standards.

We agreed to disagree. I did not print a reaction or correction. I invited him to explain his views in a comment on the thread but he declined. After our correspondence I found myself thinking about how KP readers would classify Israel. I realise that given the ideological leanings of the blog many will be firmly in the anti-Israeli camp, but I wonder what, upon honest reflection, readers think about Israel’s form of governance. In other words, what argument do readers make to themselves about where they stand on Israel?

So here is an invitation for readers to express their views on the matter, formally posed as this question: is Israel democratic? . That way we can get a sense of how intelligent (mostly Left and Kiwi) readers see the Jewish state. But first a few rules:

No anti-Semitic anything. One can be anti-Zionist without being anti-Semitic (as an example, see this). One can criticise Israel without running nasty alt-Right tropes. One can defend Israel without resorting to false charges of anti-Semitism against those who oppose it, and one can defend Israel without making bigoted or other prejudiced remarks about Arabs, Palestinians etc. No re-litigating history. Israel is here to stay regardless of what some might prefer. And, as other democracies have done, it has behaved ruthlessly towards its enemies. So please, do not go down the worm-hole of who did what to who first.

IT goes without saying but is worth repeating nevertheless: No personal attacks on other commentators. Keep the discussion polite, rational and on-topic. I say this because any time Israel is mentioned people tend to lose their senses when confronted with contrary views. It really is a hot button issue.

I shall moderate the comments section a bit more vigorously given the subject matter. But by all means have at it because I am genuinely curious as to how people come to form their opinions on Israel.

The Venezuelan mess, again.

I continue to watch developments in Venezuela with interest, including the reaction of the international community to the crisis. Increasing numbers of democracies are lending their support to Juan Guaido’s presidential challenge, including 11 of 14 members of the Lima Group convened to facilitate negotiations on a peaceful resolution. Spain, Portugal, Denmark, Austria, the Netherlands, Sweden, Latvia and Lithuania joined the UK, France and Germany (and Canada!) in siding with Guaido after the Maduro government refused to call for new elections within the eight day deadline demanded in an ultimatum issued by the EU members. It seems that much of the Western democratic world is now openly opposed to seeing Maduro continue in office.

That got me thinking more about Juan Guaido. How could this young (age 35) man emerge so quickly and be received so warmly by so many democracies? What I found out is interesting.

Guaido is a former student activist and industrial engineer who received post-graduate training at George Washington University in Washington DC. He got into politics when the Chavez government closed down the most popular private TV station in Venezuela and proposed constitutional reforms that strengthened the presidency at the expense of the other two government branches, and has reportedly spent time since entering public life at several Right-leaning think tanks in the US and Europe. After his introduction to politics he came under the wing of the well-known anti-Chavista Leopoldo Lopez. Lopez, now under house arrest, is a neoliberal economist by training (he has degrees from Kenyon College and the Kennedy School of Government at Harvard). He is the son of a former president and former mayor of Caracas himself, so his elite credentials are impeccable (he even did his high school education at an exclusive private boarding school in the US). Reportedly a friend of Elliot Abrams (see previous post), he was a leader of the 2002 abortive coup against Hugo Chavez and spent several years in military prison as a result. In 2014 he led another failed uprising against Maduro, getting house arrest rather than popular support for his efforts. He agitates from his home, where he uses social media and encrypted apps to communicate with foreign and domestic allies and uses his telegenic wife to serve as his spokesperson.

In 2009 Lopez and Guaido formed the Voluntad Popular (Popular Will) Party. Although it claims to be a Social Democratic Party affiliated with the Socialist International, VP gained notoriety for its uncompromising, hardline anti-Bolivarian orientation and direct action street tactics. Although some of its thuggery was in response to that of Bolivarian militias and para-militaries, the strategy employed by VP was essentially a two-track approach: work within the institutional framework as given by contesting elections for the National Assembly and presidency; and use direct action on the streets to foment mischief and undermine Bolivarian attempts to establish law and order.

Under an agreement with Lopez, Guaido became VP’s parliamentary leader while Lopez retained the party chairmanship. First elected as an alternate delegate in 2010, Guaido was elected to a full National Assembly seat in 2015 and, given that more senior party members were either under arrest or exiled, named Opposition Leader in 2018. Under the power sharing arrangement in the National Assembly, Guaido assumed the rotating parliamentary leader’s position on January 5 of this year. A week later he declared his presidency, arguing that Maduro’s re-election was illegitimate due to massive fraud and low voter turn-out (both of which are true). Under the Venezuelan Constitution, the National Assembly leader is declared president if the elected President and Vice President are disqualified, absent or cannot serve, which Guaido claims is the case here.

There is strong suspicion that Lopez has a direct connection to neoconservative circles in Washington, and through them, the Trump administration. There is speculation that some form of material assistance is being funnelled from the US, including from Venezuelan exiles, to VP in order to support its anti-regime efforts and the Guaido campaign. Although I have no direct knowledge of this, it would not be surprising if these claims prove to be true given the quickness in which Guaido emerged on the scene, the strength of the organisation supporting him and the rapidity with which the US recognised his claim. What is confirmed is that emissaries from a number of the region’s democracies as well as the US met quietly and exchanged secret messages with Guaido and his representatives in the weeks leading to his assumption of the parliamentary presidency.

This has me wondering why so many democracies have been quick to jump on the Guaido bandwagon. They surely are not acting just out of ideological distaste for the Bolivarian regime. They surely have good information on Guaido’s background and connections to Lopez and US interlocutors. They surely must know that although Maduro and his cronies are reprehensible thieves posing as a popular government, Guaido’s connections to the US will make it very difficult for him to claim legitimacy and could in fact, spark a violent backlash from the 30 percent of the Venezuelan population that continue to support Maduro (mostly the poor and working class). They also must understand the perils of supporting a foreign-backed constitutional coup (which is essentially what being attempted), especially when the move is closely tied to the threat of US military intervention. So why would they abandon long-held commitments to upholding the doctrine of non-intervention?

Some will argue that the humanitarian crisis in Venezuela requires drastic action and that action cannot come from within Venezuela under present circumstances. Yet even the issue of humanitarian assistance has turned into a political tug of war. The Lima Group and European democracies, led by Spain, have pledged humanitarian assistance, mostly in the form of food and medical provisions, to Venezuela. The same is true for Argentina, Canada and Brazil. But they insist on having Guaido and his supporters administer the aid provision, something that the Maduro government categorically rejects. Neither contender is interested in talking to the other about jointly administering relief assistance and instead are busy staging demonstrations and claiming support from within the military (where so far Maduro has a considerable advantage).

Perhaps the show of external support for Guaido is designed to be no more than a form of pressure on Maduro to call for new elections under international supervision, and not really a vote of confidence in Guaido per se. Coupled with the redoubling of sanctions by the US, UK and others against Maduro, his entourage and state agencies suspected of money laundering, the idea seems to be that the combination of forces being applied to the Boliviarians will make them cave to the election demands. The reasoning may well be that Maduro will see this option as preferable to civil war or a coup because it gives him the chance to run again rather than be run out of town in a hearse. After all, the primary rule for coup-plotters is that the people being ousted must not survive the ouster less they come back to haunt the usurpers–something the failed coup against Chavez demonstrated in spades.

This assumes that the target of the foreign pressure a) feels it to the point of pain and b) has no other options other than to cave to it. At this moment there is no evidence to suggest that Maduro and company are close to either concern. And for all his foreign support, Guaido does not appear to have moved the dial with regards to popular support significantly in his direction.

What we have, thus, is what the Latin American political scientist Guillermo O’Donnell (of bureaucratic-authoritarianism and democratic transitions fame) once called (with reference to Argentina 1946-1983) an “organic crisis and hegemonic stalemate” where both sides can check the other but where neither can unilaterally impose its vision for arresting the national decline.

Under those conditions, it may well be external actors who play a decisive role in determining the outcome, something that does not bode well for the prospects of national reconciliation required to reaffirm democracy while returning peace and stability to Venezuelan life.

The Venezuelan mess.

WARNING: This post is long and somewhat meandering, as it gathers several strands of thought about the issue.

There has been some concern voiced about New Zealand’s refusal to take a side in the power contest now being waged in Venezuela, where the leader of the National Assembly, Juan Guaido, has declared himself interim president in opposition to fraudulently re-elected Nicolas Maduro, the successor to Hugo Chavez in what is known as the “Boliviarian Revolution” that started in 1999. The Maduro administration is notoriously corrupt and incompetent and has driven Venezuela into the ground, to the point that millions are starving and more than 2.1 million have fled the oil-dependent country in the last two years (the largest refugee crisis in Latin American history). The reasons for this human-made disaster are many and will not be covered here. Instead, let’s start with the NZ reaction and proceed to how things might eventuate over the next weeks and months.

When first asked about US support for Guaido (the US recognised his presidency a few hours after he made his claim public) and whether New Zealand would follow suit, Prime Minister Arden said that NZ supported “neither side.” That sent the NZ political right into paroxysms of indignant fulmination, with politicians and commentators claiming that she supported Maduro, communism, evil-doers in general and people who kick their dogs. Not surprisingly, her ad-lib was followed shortly thereafter by a more measured comment by Foreign Minister Winston Peters that NZ does not choose between foreign political parties and contenders and prefers to allow them to settle differences on their own.

Coming after the PM’s comments (which reminded me of her “there are no undeclared Russian spies in NZ” remark in March 2018), Peter’s tidying up was appropriate. Although the Maduro regime is odious, it is less repressive than many other authoritarian regimes that NZ recognises and trades with (its major flaws are grotesque corruption and incompetence). NZ also has a long-standing public commitment to the principle of non-intervention and support for peaceful constitutionally-driven political change. The Maduro regime is now being confronted by an externally-backed constitutional coup in the form of the Guaido challenge (and no one elected him to be anything other than an opposition National Assemblyman. He only assumed leadership of the National Assembly in December as part of a rotation-in-office deal with other opposition coalition parties). Guaido and his supporters are not necessarily democratic champions themselves and their promises to hold new elections in a timely fashion are vague at best, so immediate recognition of him as “president” is more an act of faith or cynicism rather than a demonstrable fact of his democratic inclination. In that context Peter’s statement strikes a good diplomatic balance.

With some notable exceptions most of the Latin American governments supporting Guaido are right-leaning like that of Mauricio Macri of Argentina, Jair Bolsonaro in Brazil and Sebastian Pinera in Chile, with the advanced democracies supporting his challenge also being governed by Right administrations (UK, Australia, France, Germany as well as semi-democratic Israel). Meanwhile, left-leaning democracies such as those of Bolivia and Uruguay support the Maduro government. So there appears to be an ideological bias at play in how some democracies are casting their lots on the matter. The majority of the global community have taken a stance akin to that of NZ.

The usual clustering of dictatorships and semi-democracies that are backing Maduro such as the Cuba, PRC, Russia, Iran, Turkey and Syria have hard-nosed geopolitical as well as ideological reasons for doing so. Cuba gets the majority of its oil from Bolivia at discounted prices and has propped up the Boliviarians with both civilian and security assistance. Russia has cultivated Venezuela as an anti-US bulwark with weapons sales and military aid. China has spent billions investing in Venezuelan infrastructure. Iran and Syria have both benefitted from the Boliviarian’s alliance with Hezbollah and Iranian Revolutionary Guards. None of them may be particularly enamoured of Maduro but they have serious investment stakes in the game.

As for the NZ response, think of the PRC’s potential reaction to New Zealand siding with the US after its “choose a side” demands, particularly in light of the Huawei imbroglio. Think of the US response if it sides with Maduro. In other words, the diplomatic consequences of taking sides are not positive regardless of which side is chosen. That is why Peter’s statement is judicious–it annoys no one.

In summary, NZ is correct to not choose sides in the Venezuelan crisis, both for principled as well as pragmatic reason

With regards to the crisis itself, the solution has to be internal rather than externally imposed. They key is for the military–the 130,000 troop Army in particular since it will have to do the repressing–to drop support for Maduro in favour of a transitional government that schedules elections in the near future (the Navy has a limited land presence and along with the the Air Force can only support or resist what the Army does, but neither can prevail on their own no matter which side is chosen). To this end, Guaido’s emissaries have been working hard to establish a dialogue with the armed forces, something that, at least with regard to the Venezuelan high command, so far has been rebuffed.

Venezuelan flag rank officers are Maduro cronies who are deeply corrupt and incapable of leading troops in battle. Instead, they have been siphoning off “tax” from the ministries and border commands that they control (which cover drug, people, petrol and arms smuggling routes). The ones that are the key to what happens next are field grade officers (Colonels, LTCs, Majors and Captains) and NCOs who command the enlisted soldiers with the guns. That means bridging the division between constitutionalists (those who swear an oath to protect the constitution no matter who is president) and nationalists who see themselves as saviours of the nation in a time of need–but those include both pro- and anti-Maduro factions. The move involves mending horizontal (between service branches and ideological factions) and vertical (between ranks or military school graduating class) cleavages, something that often involves intra-institutional violence as a precursor to what follows.

In this type of scenario, the military is subject to what are known as “push” and “pull” factors. The “push” factors are those internal to the military that compels them to intervene in politics. These can be a loss of combat readiness or military discipline and professionalism, overt politicisation of the officer corps, rampant corruption etc. All of these are present within the Venezuelan military.

“Pull” factors are external events or conditions that draw the armed forces out of the barracks and into politics. They include armed challenges to military monopoly over organised violence (say, by paramilitaries, guerrillas, criminal organizations and the like, all of which operate with some impunity in Venezuela), and what is known as civilian pleading. Civilian pleading refers to calls from civil society for the military to act. This includes appeals by business groups, unions, religious and community organizations as well as external actors such as Venezuelan exile communities and foreign governments and organisations such as the OAS.

The sense of compulsion is reinforced by the personal experiences of troops when not in uniform. Militaries do not exist in a vacuum and in fact are reflective, in their own way, of the society from which they are drawn. Venezuela has a volunteer military and many of its personnel return to their families and homes after a day’s work. So they are living the crisis both as uniformed personnel as well as citizens.

In short, the Venezuelan military is getting an earful from many sides and has internal, “corporate” reasons to act in order to preserve its position as the pre-eminent institution responsible for managing organised violence in that society. Whether it adopts an arbitrator or governing role once it does so remains to be seen, but it is now the primary determinant of the nation’s political future.

If the field ranking officers and NCOs abandon support for Maduro he is finished, although his loyalists in the Cuban-dominated intelligence and police/paramilitary services will resist the move. It is also likely that, barring massive defections, the 70,000-strong National Guard (which is the agency primarily responsible for domestic repression and which has gained a reputation for brutality) and 150,000 strong National Militia will continue to side with Maduro. The scene is then set for mass violence and prolonged resistance (remember that the Cubans have helped Maduro create thousand of small-scale neighbourhood militias that are trained to use guerrilla tactics against any superior force, foreign or domestic. Along with National Guard resistance that could protract the conflict and drag foreign forces into another long-term ‘pacification” campaign).

The military could opt to simply lay down their weapons, but that is unlikely given the presence of loyalists in the ranks and the National Guard still loyal to Maduro. Or the military can unite around Maduro and ward off US interference by getting Guaido to back down on his presidential challenge, possibly in exchange for new elections and/or constitutional and political reforms. That is the most peaceful option but it does not solve the underlying economic and social problems or the issue of a potential US military intervention if Maduro remains in power (it is highly unlikely that any Latin American country will contribute troops to any US-led intervention force, although it is feasible that Colombia and Brazil might allow US forces to forward deploy and stage in their territories).

So the likely scenario is that Maduro is removed by force, be it threatened or actual. While inevitably bloody, a pro-Guaido military coup will be better than an external military intervention, where many erstwhile opponents of Maduro will rally against armed foreign interference, especially from the US. If it is revealed that Guaido and his supporters have been receiving advice, money and logistical help from the US, that could backfire hard on his military and civilian allies and increase as well as prolong the bloodshed.

In order to avoid civil war the military will have to be united in its support for one or the other presidential contender and willing to demonstrate its resolve. That is easier over the short term if the field officers and NCOs side with their superiors in defence of Maduro, but given the circumstances that is unlikely to hold over the longer-term and could lead to a direct confrontation with US forces should the Trump administration determine that it is expedient (say, as part of a declaration of “national emergency” that includes emergency funding of the border wall by Executive Order) to sacrifice lives in order to see him ousted (the annotation of “5000 troops–>Colombia” on John Bolton’s press briefing notes this past week may or may not be a real statement of intent but certainly signals that “all options are on the table,” even if they are not well thought out. After all, 5000 troops are not enough to control all Venezuelan territory and will have difficulty subduing militias, guerrilla groups and nearly 1 million strong volunteer military that even with defections and intra-service clashes will dwarf the invading force coming across a well defended land border. Which is to say, armed intervention by the US will involve a lot more than a brigade and a lot more than a land assault from Colombia).

It is telling that the person nominated to lead the US Venezuela task force is Elliot Abrams, of neocon Iran-Contra, death squads and the 2002 coup attempt against Chavez fame. His “skill set” is a dark and narrow one, so his appointment pretty much reveals the foundation of the current US approach to the crisis. The irony is that Abrams was originally a “never-Trumper,” who was initially blacklisted from any administration job. But with fellow neocon John Bolton as NSC advisor, the time for redemption is apparently at hand. It will be the Venezuelans who pay the price for that. 

Foreign supporters of Maduro like to claim that US sanctions imposed on his government are a large part of why the country was crippled. This ignores the fact that the sanctions targeted Maduro administration officials and state-controlled firms suspected of money laundering and pilferage. The sanctions did not target economic activities connected to the provision of basic goods and services, nor did it target average citizens. The loss of basics such as food and medicines is not due to sanctions, but to the rampant thievery and incompetence of what now can only be called a kleptocracy as well as the response by the private sector to it.

On the other hand, the Venezuelan political opposition, when not in-fighting, have behaved less than honourably towards the Boliviarians even before Chavez began to tighten his grip after the 2002 coup–a coup that business elites, domestic political opponents and the US government were quick to support even before his arrest was made public (he was freed and launched a counter-coup just hours after being detained). Business elites have largely liquidated assets and decamped the country rather than accept increased taxes on individual wealth and corporate profits. Since 1999 political opponents have schemed and plotted with the ex-pat community and other Latin American rightwing groups to overthrow the Boliviarians. So there is much blame to spread around and choosing between Maduro and Guaido will not necessarily solve the underlying fundamentals of the national decline.

Let us be clear on a key point: if Maduro and his associates had one shred of decency and honour they would have resigned rather than rig last year’s election. They have managed to squander Chavez’s already diminished legacy, allied themselves with some rather unsavoury foreign actors, alienated most of their regional counterparts and overseen the collapse of what once was a prosperous country. Some of that may be due to the so-called “oil curse,” where countries dependent on fossil fuel exports almost inevitably succumb to authoritarianism and the vicissitudes of commodity booms and busts (as has happened in Venezuela). But the blame for what Gramsci would call an organic crisis of the Venezuelan state lies squarely on the shoulders of Boliviarians, not imperialists and domestic reactionaries. The extent of their perfidy and ineptitude is outlined here.

Guaido is believed to have offered Maduro and his associates (including the military leadership) amnesty for their crimes in exchange for abdication. There are reports that he has offered safe passage into exile for regime leaders along with much of their ill-begotten assets. There are rumours of secret talks between his representatives and field rank officers. His supporters have gathered outside military bases clamouring for the troops to lay down their arms or join with the opposition. It is clear to everyone that the military holds the key to what happens next, but the question remains open as to whether the military will choose a side, fracture or simply remain neutral while the civilian actors negotiate or fight for political control. So far the military leadership remains loyal to Maduro, but defections in the ranks are commonplace (including the military attache to Washington, who defected and requested asylum).

It is unlikely that Guaido would have made his move spontaneously or without the encouragement and support of the US. It is very likely that US representatives worked with him in the weeks leading to his challenge for power, and it would not be surprising if the US has provided logistical and material assistance to his campaign. It is also likely that discrete overtures have been made to military officers by the US, if nothing else then to ascertain the mood of the troops. The emergence of a right-leaning political bloc in Latin America provided Guaido with a favourable geopolitical context in which to make his move (Argentina, Brazil, Chile, Colombia, Peru, Guatemala, Honduras and Costa Rica all have right-leaning governments at the moment). This has translated into Organisation of American States (OAS) support for Guaido, something that breaks with a long-standing tradition of promoting non-interference in the sovereign affairs of its members.

The bottom line is that Maduro’s position is increasingly untenable but Guaido is somewhat tainted by his association with the US. The solution to the impasse rests in the hands of middle and junior rank Army officers and NCOs, who must choose to defend Maduro or opt to support an election-based political transition to a post-Bolivarian regime (that may or may not be led by Guaido or Maduro if the elections are genuinely free and fair). That requires a public move one way or the other from within the Army as a signal of intent. There is likely to be violence involved with either choice, both within and between armed service branches, paramilitary organisations, intelligence agencies and guerrilla cadres connected to civil society and political parties. But that will be the lesser price to pay if the alternative is US military intervention.

In the meantime the international community can do its part by marshalling humanitarian assistance for the Venezuelan people. The UN and OAS can lead those efforts and the contending political factions can broker an interim agreement on priority needs and the means and methods of conveying that aid, something that could lessen factional and partisan tensions and set the stage for more substantive negotiations on the terms and conditions for the political transition that, one way or another, is an inevitable part of Venezuela’s future.

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KP ten years on.

In January 2009 KP started publication. I was living in Singapore and was part of the original team that included Anita and Pete. Shortly thereafter Lew joined us. Over the years Pete, then Anita and later Lew dropped out (much to my regret) and others came and went. We have had a couple of guest contributors (Kate and Selwyn Manning) but these days it is just me rattling around the shed. I am not sure about Anita but Lew is a prolific presence on twitter, although I believe that however brilliant a 140 character snark may be, it is no substitute for the type of essays he used to write here. Pete moved into work roles that prevented him from continuing after the first few months and a couple of years later Anita made clear that work conflicts precluded her further participation, which is fair enough.

During the last decade I returned to NZ and welcomed a son into the family. I stay connected to academia through my partner but justify my existence with some consulting and commentary work. Most of the time, when not researching and writing for applied or personal reasons I dedicate my time to watching that boy grow up in the splendorous settings of the Waitakere seaside bush. He is lucky to have been born in such a place. He is not quite the hunter-gatherer yet but he is most certainly an outdoor kid who knows his way around livestock, dogs, poultry and wild birds and who knows which varmints are good and which are bad (in our household, the latter referred to as “evildoers” or, in the case of stoats, “Trumps”).

So, what have the ten years brought? We have published 1,072 posts, 542 of which are mine. There have been 901, 090 page views and 14, 825 approved comments (that does not included deleted troll comments and spam, which runs into the thousands). The greatest single day for pages views saw 4000 readers, but the average now is just 60-150 per day. Domestic topics get the most hits, which is slightly unfortunate given that my major focus is on international relations, comparative foreign policy, US politics, intelligence and military-security issues. As one can see from the Archives column on the right hand side of the front page, we started off with a bang but then gradually diminished the amount of posts published per month. Things dropped off markedly after Lew departed and now average around 1-3 per month depending on my mood, work commitments and what is happening the in the world. I continue to hope that Lew will return or that I can find another regular contributor but so far those hopes have not worked out.

The blog gets traffic from other NZ political blogs but most of what gets directed over is via search engines and mass consumption social media (Twitter, FB, Reddit). Although it is asked to accept advertising or paid content from time to time, it was the intention of the KP originators that we never go down that path, something that I continue to honour.

There is a dedicated cadre of regular commentators, some who have been around since the inception. Since I am unwilling to indulge ill-informed people, trolls or political onanists, it does not have much in the way of regular contrarians amongst the commentators, although people like Tom Hunter, Phil Sage, Redbaiter and, to a lesser extent, Paul Scott drop in to keep me on my toes. Otherwise the commentators display clear Left leanings, often considerably to the Left of me.

At this juncture KP survives as a tiny niche blog with a majority NZ audience but predominantly international focus. That is OK with me and justifies paying the server fees (it is a WordPress platform hosted by Dreamhost). For me it fits somewhere in between editorial commentary in corporate media, personal opinion and professional writing–a bit more ideological and subjective in many cases but most often somewhat above a rant.

It is hard to discern what the future holds for the blog but in the interim it will plod along in its current form in its designated space in the blogosphere. Thanks to those who continue to come along for the ride.