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BNamericas talked with political risk expert Ian Bremmer on the sidelines of an event hosted by Scotiabank in Santiago, where the founder of Eurasia touched on a range of global hotspot issues, including the critical situation in Venezuela.
BNamericas: What can we expect to happen in Venezuela?
Bremmer: More violence. I think Maduro has made it clear that he's going to do everything possible to stay in power, including fundamentally subverting democratic institutions in Venezuela and use violence. And he has already done so and demonstrators have died in the last couple weeks, which is very unfortunate. He has been using the informal Chavista gangs and the police. He hasn't had to call in the military yet.
One interesting thing is that the economy has gotten so bad, as has his willingness to go after the national assembly and the recall process, that even the opposition is now coming more together. This has helped lead to these big numbers of demonstrators, the biggest you have seen since 2014 just in the last couple of weeks, with over a million on the streets.
If this continues, at some point they will have to call out the military, and that's when the military will start saying, 'We won't fire on our own people, we're not going to kill all these people.' And that's when it falls apart.
BNamericas: So you don't expect the military to stay loyal to Maduro?
Bremmer: If it becomes seriously violent, they will not stay loyal. Then he has to leave.
BNamericas: And with Maduro goes the Chavismo?
Bremmer: I think so. The military will not want to run the place, so there would be a short period of a military-installed government and then they would have democratic elections to end up with a new government.
BNamericas: Even with a new government, it would take years to fix an economy so badly damaged.
Bremmer: It's a disaster, but improvements would feel dramatic for the people who are there. All you have to do is start actually stocking shelves in the stores and creating some rule of law. Companies aren't suddenly going to come to Venezuela overnight, because the economy has nothing going for it right now. But I do think that the people would feel very differently.
BNamericas: Moving on to the strained US-Mexico relations. Do you expect Trump to implement a boarder adjustment tax?
Bremmer: I don't, because there is no support for it in congress. It's enormously complicated to actually put into place and it would lead to a lot of hits to major corporate interests in the US. The big multinationals, who have a lot of influence with many members of the cabinet that Trump has appointed, are all completely opposed to it.
BNamericas: What can we expect with Nafta? Do you see Trump going full out on his election promise there?
Bremmer: When Trump became president he actually believed that he could fix Nafta in like a couple of weeks. He really didn't understand how difficult, how many entrenched interests there are in the US, in Canada and Mexico, that make these multilateral deals so complicated to change.
There are two possible outcomes in terms of Nafta. The most likely outcome is they make some small changes that congress supports, which largely amount to improving the deal by modernizing it and using TPP already-agreed negotiations on top of Nafta. The second most likely outcome is they run out of time and nothing happens, and you go back to the status quo ante. That's increasingly likely and quite possible.
BNamericas: Pension reform is a controversial issue right now in Latin America. Do you see President Temer succeeding in getting it approved in Brazil?
Bremmer: I think it's going to happen in Brazil because congress has been so de-legitimized by the Lava Jato scandal that they know they have to show some success, and they cannot have the economic growth get hit by doing things that the markets hate.
About Ian Bremmer
Widely regarded as a pioneer in the field of political risk analysis, Ian Bremmer founded the Eurasia Group in 1998 and he has become a best-selling author and a frequent international speaker. Bremmer is also the foreign affairs columnist and an editor-at-large at Time magazine.
About the company
The New York-based Eurasia Group is one of the largest firms that specialize in political risk analysis and consulting. The company also has offices in Washington, San Francisco, London, São Paulo, Singapore, and Tokyo.