Economic and political turmoil is cresting the conditions which permit both Governments to practice totalitarianism. In Venezuela the increasing chaos is as a result of perusing absurd socialist dogma creating hostility from surrounding countries other than impoverished Bolivia and Nicaragua itself on the brink of collapse. In Iran, despite the best attempts of the Religious leaders to conceal the domestic chaos, the situation is approaching that of Venezuela. In Iran’s case the economic chaos has been caused by internal mismanagement, funding external wars and sanctions imposed by the USA.
The paradox is that given the increasing price of oil, a commodity in abundance to both geographies, their economies are desperate and getting worse daily. The Venezuelan Bolivar is actually worthless and barter has replaced currency – the absurdity of creating a crypto currency has failed. Similarly the Iranian Riyal recently hit a record low of 140,000 to 1 US$ and is set to weaken further. Sanctions by the Trump Administration have had a devastating impact but internal mismanagement , similar to Venezuela , exacerbated by the cost of financing external conflict has had a devastating impact from which there seems little chance of recovery.
Venezuela, economically is broken – the health system has collapsed completely as pharmaceuticals are no longer available and as professionals are leaving the country , administrative infrastructure has all but collapsed . Government workers are not being paid , food supplies are running low and reliance on Chines aid is finite. Despite pouring billions of dollars into Venezuela to support Government bonds the Chinese , other than getting a vote at the UN have gained nothing and lost all their money as Venezuela has defaulted on its debt. It would be futile for China to further physically prop up the economy not only for fiscal reasons but in the knowledge that Maduro probably will not last as the military and opposition must surely depose him. The nauseating publicity of the overweight Maduro gorging himself in Turkey as he attempted to gain financial aid was the last straw for many Venezuelans as they protested with whatever strength they could muster.
The US and Donald Trump can easily afford to play for time as clearly China , usually so astute in foreign diplomacy has clearly backed the wrong horse. The Palestinians, so dear to Maduro and their Arab backers have put the V sign up to Venezuela too. No wonder Maduro through the UN made sycophantic moves towards the USA who quite rightly ignored him. Anecdotally the following is relevant. A toilet roll would cost 6000 times its own weight in paper if currency were to be used to pay for the toilet roll. The Government cannot afford to print the paper. Jeremy Corbyn and John McDonnell the UK opposition Leader and Chancellor are great admirers of Maduro’s administration and equally of their rabidly anti semitic foreign policy.
Now to Iran. For those of us following domestic events, the last year has seen deathly riots, strikes, beatings, buildings and infrastructure demolished , arson on foreign embassies , anti military bombings, numerous terrorist attacks and an economy that cannot possibly survive.
The US are at odds with their European allies about how to deal with Iran and the differences are easy to explain and it has absolutely nothing to do with the nuclear non proliferation treaty and everything to do with economics. The European Banks have exposure to Iran and the American Banks do not. Already under capitalised, Europe’s Banks saw Iran as a money making venture and did not bank ( excuse the pun ) on Trump imposing sanctions. The Europeans are over committed to a weakening economy and this could be disastrous for financial markets.
Domestically, the Iranians have no love for the Houthis in Yemen, Assad in Syria , Hizbollah in Lebanon nor Hamas in Gaza and yet the mad Mullahs are financing costly military adventures in all these places and at enormous human and financial cost that Iranians do not want nor can afford . Perversely recent Iranian riots have been totally supportive of Israel and opposing the Palestinians – the Iranian Government is not in tune with its population.
Internal airlines cannot find replacement parts, the infrastructure needs drastic repair , the Imams and their army supporters are getting richer and the majority of Iranians poorer . The recent execution of a young Iranian woman caused outrage and countrywide riots ( without any support from western feminists ) against the religious fanatics ruling Iran.
Russia has played Iran like a fiddle – putting Iranian troops in the frontline against the Syrian opposition and the human cost is taking its toll as Iranian casualties ever increase – and for what. Russia is aware of the growing internal opposition and is not going to back a possible loser having experience of Syria . Iran is nevertheless continuing with its overseas military expansion in the knowledge that Europe, given the financial exposure it has committed is not going to oppose them.
Venezuela is lost….Iran has months ….a natural disaster so common in Iran will bring the end nearer.
Peter Baum is a contributor of Blitz. He can be reached at @baum_p