Welcome to the Free Cities podcast. My name is Timothy Allen and this is the official podcast
of the Free Cities Foundation.
Hello and welcome to this news episode of the Free Cities podcast. This is where you get a chance to listen to what goes on a little bit more behind the scenes, especially with reference to things that are going on in the news that affect Free Cities.
This episode, I'm going to be talking about what's been going on in Venezuela recently.
This episode is a response to a Free Cities Foundation ambassador call that we had a couple of days ago,
on which we were joined by two Venezuela experts to discuss the situation currently in the country and what it might mean for the future.
The conversation focuses on the reported capture of Nicolas Maduro, of course, and what this moment could mean in practice for Venezuela.
We look at whether this signals a real political transition, how people inside the country are reacting and what it might mean for free cities projects in the country and other special economic zones.
We draw on first-hand experience, of course, and long-term perspective, and we explore how
free cities could fit into Venezuela's next chapter and what the shift might imply for
potential residents, investors, and pretty much anyone watching the future of autonomous
governance unfold.
Our two experts on the call were Tim Stern.
Tim's project is on the island of Margarita in Venezuela.
It's called Crypto City. He has special economic zone status. It's a very large project. I've spoken to Tim on this podcast before.
So look back in the history to learn more about that. He's basically living in country on Margarita Island and is very well connected in the country.
Our other guest is Jose Codero. If you've ever been to our conferences in Prague, then you'll have met Jose.
He's a Venezuelan economist slash futurist.
Right, let's get on with it.
The focus of the call, as I said, was the same headline everyone's been seeing in early January,
which was the capture of Venezuela's president, Nicolas Maduro.
On the call, I suppose it was described very plainly as a stealth operation by US Delta
Force that resulted in his kidnapping.
There wasn't much time spent debating the legality of that phrasing in the beginning.
The conversation moved almost immediately to the consequences.
And the first person to speak was Tim Stern, who's been on the ground in Venezuela building CryptoCity for nearly three years.
Now, bear in mind, the island of Margarita is somewhat of a bubble compared to the rest of Venezuela, but it is still Venezuela.
Tim didn't start with the politics.
He started with the moment when he heard he said it was quite funny.
picture this being in bed sleeping peacefully and having your phone on the little bedside table
beside you suddenly it goes absolutely wild 17 missed calls 18 missed calls he said he got loads
of messages saying that they were bombarding caracas and their immediate response was to try
and put together some kind of press relief because they have a lot of investors obviously and within
two hours the story flipped almost immediately tim said until we had a statement done we we
already got the message that maduro is out now his reaction was pure disbelief he stressed how
fast it all happened this was like two hours he said crazy shit and if you know tim that's the
kind of the way he speaks because of that we scrapped the statement and we decided to wait
what happened next well obviously uh once again tim's words venezuela is fucking booming excuse
the words but i i'm using that because just to give the gravitas the situation for example with
regards to say real estate on margarita which is tim's involved in he said agents told him that
this is the first time in their lives they have nothing to offer because we sold so many houses
and apartments in the last 13 days He repeated the time frame like he couldn quite believe it himself Imagine that It like 13 days ago we had the president of Venezuela snatched by the Americans Now we
already running out of apartments to sell. He clarified that getting a sort of $20,000 or $30,000
apartment on the beach in Margarita now is completely out of the question. Gone. Not existing
anymore. Then he moved on to what several people on the call have treated as one of the clearest
signals of reopening which are flights tim said that they've already got flights back to caracas
from all the european countries starting on the 1st of february iberia tap and other i think laser
and plus ultra and then he added what felt like the headline moment yesterday they announced
direct flights from miami to caracas he didn't even know exactly how long it had been since
they've had those flights from America to Venezuela, I think maybe 20 years, maybe 15 years,
he said. Later in the call, this widened beyond Cracus. There was explicit mention of flights
returning to Margarita itself. This wasn't just capital reopening, it was the island where
CryptoCity is based, becoming reachable again for the very first time in years.
Tim then did something that I can't show you here, but I can tell you, he asked to share
his screen just to show us how crazy things have got. He basically showed us his inbox
for sort of people wanting to sign up to CryptoCity. And he said, this is all the people entering
on the homepage of CryptoCity. Every one of these messages is a name and an email address
who wants to come and visit. This is just yesterday. And he said, I can scroll for 10
minutes 800 or 900 people have entered on the home page summing up in tim's words it's bonkers
it's crazy i'm absolutely overloaded i'm on the phone 24 7 and then he delivered what you could
call the emotional anchor of the discussion uh tim's words this was the point of no return he
said this change is going to be the start of an absolute bonanza here in venezuela okay he did
pull back from the certainty obviously we're a little bit in the dark going forwards we don't
know exactly what's happening now he said is there going to be a change is there going to be a working
agreement with the acting president is the ex-vice president delci rodriguez is there going to be a
total transition and then obviously nobody is 100 sure but judging by the response from the outside
world you can conclude a few things okay jose cadero came on next jose's reaction was immediate
and emotional of course as a venezuelan fantastic news he said it only took two hours to capture
this criminal and send him to prison in new york he didn't hedge he said all venezuelans we are
very happy he then zoomed out to the scale of the national trauma about a third of the population
is already outside of Venezuela.
He gave numbers between eight and nine million who've left Venezuela
and pointed out that in Spain alone,
there were over half a million who are originally from Venezuela.
Jose also warned against thinking this was the end.
This is not the end, he said.
This is just the beginning.
He explained that control still rested with the Chavistas.
They have the arms.
They have the army.
The transition, in his view, will take time.
That led into questions of legitimacy, which became one of the most serious parts of the call, I would say.
Even people who hated Maduro might be uncomfortable with foreign intervention like this.
Venezuela has, well, I suppose, a deep sensitivity to colonialism.
Jose answered directly, the opposition is very happy, he said, because we couldn't do this ourselves.
We don't have the arms. We're peaceful people.
He contrasted that with the regime.
The state obviously is the monopoly on arms.
He estimated public sentiment quite bluntly.
I would say that 90% of Venezuelans are happy that the USA helped us.
That's Jose's opinion.
He then outlined what he said were three reasons Trump gave publicly for the intervention.
Drugs, petroleum and immigration.
He described Venezuela as being controlled as a drug cartel.
He linked mass immigration to regional instability, especially in Colombia.
And on oil, he said something that came up repeatedly later in the call.
Before, it was given away to Cuba for free.
Now he said no discounts free market prices for petroleum From there the conversation shifted into free cities specific risks in the country one concern raised was whether crypto cities special economic
zone status on margarita could be revoked because it was granted under the previous regime something
we have had a version of happening in Honduras when regimes change. Tim Stern's answer was calm.
He said politically that the new direction was a free market direction for increased productivity
and to attract investment. So in his words, why would they eliminate special economic zones?
More importantly, explained how he had built resilience into CryptoCity. Years ago,
he said he faced the decision to get permissions for the project the legal way which meant hundreds
of pages of studies port studies environmental surveys underwater coral profiles for the harbour
etc etc the alternative of course was paying a few under the counter dollars and then moving faster
but he chose the legal route fortunately and he said in in the current concert he said
because we always knew if one day change comes and they're going to check and if you can't present
them with the studies you're basically in trouble because they can present them he said we are really
really relaxed about anything changing but he was pretty sure that why would you change the special
economic zone status of crypto city on margarita anyway energy security was the next major issue
questions were raised about Venezuela's power. Tim answered locally, he said he couldn't necessarily
speak for the whole of Venezuela, but on Margarita, the governor of Margarita had stated that they had
quote, energy and gasoline and food for the next three or four months. He explained Margarita also
had two big gas turbines supplying most of its electricity locally. He added some context as well,
pointing out that for a long time they haven't actually had power outages. And he acknowledged
that he lives in one of the better parts of the island, let's say. But in the past, it was much
worse and they used to have outages every single day. He also said that at CryptoCity, we do our
own energy production because we don't want to be dependent. Right. The call then turned out was
towards capital flow. Tim described being contacted by groups from Dubai and New York
claiming to have hundreds of millions or even one guy $1 billion to invest. It's crazy, he said.
It's really a country which has been closed down for 20 years. Chinese investment came up
repeatedly in the call. Tim said that the Chinese had invested heavily, particularly in infrastructure
and oil. Jose confirmed this, saying China was the biggest investor in Venezuela right now and that
most of the money had gone into infrastructure. Both of them agreed that China was being cautious
publicly, denouncing events, but taking little action. Trying not to jeopardise existing investments
was the way that they looked at that. Right. Now, towards the end of the call, the conversation
widened beyond Venezuela and moved to Honduras. We had Alex Eugorji on the phone who lives in
Ciudad Morazan. And if you may remember, the last news episode we had was on what's happened
recently in Honduras in the elections. So we got a bit of an update from Alex. There's similarities
with Venezuela. They're both politically messy transitions happening in parallel with real
consequences for special economic zones context matters here on the previous ambassador call
he focused on honduras and at that time the general election result still hadn't been finalized
weeks had passed without a clear outcome which had already raised concerns about institutional
credibility but by the time of this call there was finally a declared winner and we all wanted
to know what that actually meant on the ground. So Alex explained that while a new president had
been elected, and in his words, it's not over until the fat lady sings, she's opened her mouth
and getting ready, but she hasn't fully sung yet. The implication was that the transition looked
likely, but the outgoing administration might still try to delay, negotiate or create noise
right up until the end.
He explained why tensions were so high.
The current administration had reason to be afraid of losing power The previous president had already been extradited to the United States and was facing life in prison And there was a very real fear that
retaliation could follow once the new government took over. The fear, he said, was shaping the
behaviour of the people that are still in office. He also referenced a series of actions taken by
the outgoing government that were now under scrutiny, including the declaration that the
ZAs were unconstitutional alleged requests for bribes and pressure placed on the Supreme Court
from his perspective the legal case for the ZAs had been handled improperly and the current
administration knew that once power shifted those decisions could be revisited and probably would
despite that Alex said the international environment had changed the US and neighboring
countries had spoken out clearly and the international community was not backing any
attempt to overturn or stall the election result. In his assessment, while there might still be noise,
it was extremely unlikely that the outgoing government could actually stop the transition,
especially without military support. When he was asked what this meant for special economic zones
specifically as in the ZAs Alex gave a typically nuanced answer from Alex he explained that
while there had been three major candidates none of them were existential threats to the ZAs
in the way that the current socialist government had been as long as the socialist party lost he
said we can make a deal with them in his words he emphasized that any durable agreement would require
congressional support anyway meaning cooperation across parties was unavoidable he also made the
point that practically speaking personality mattered less than incentives one of the leading
figures tito was described as someone who loves to build loves infrastructure and loves visibility
from that angle there was a plausible path where za projects like prospera and ciudad morazan could
continue, even thrive, because they were aligned with the new government's desire to show tangible
economic progress. There was also acknowledgement that the election itself had been messy.
It took nearly the maximum legally allowed time to declare a winner, and only after significant
international pressure, and that only after significant international pressure. Alex noted
that this created controversy and suspicion, of course, especially given public comments from
Donald Trump supporting one candidate, which appeared to swing prediction markets dramatically.
But even with that controversy, the overall direction was seen as favourable compared to
where things have been. Right. The key takeaway from the Honduras part of the discussion mirrored
Venezuela in an important way. Transitions were not clean. They were tense, legally contested and
emotionally charged. But the direction of travel mattered more than the noise. In Honduras, as in
Venezuela. The expectations were that a shift away from socialist governance would create more room
for negotiated settlements around special economic zones rather than outright hostility.
By the time we wrapped up the Honduras segment, which was the last one on the call, the mood
was cautious but optimistic. Not certainty, not celebration, but a sense that both Venezuela
and Honduras were moving into a phase where deals, legal frameworks and negotiated coexistence were
again possible. So there you have it. Good news from both countries as far as I'm concerned.
Certainly the people we're speaking to are very excited about Venezuela but I think that will
peter out obviously over the next months as reality hits home. Certainly Tim Stern is saying
that interest in crypto city has exploded.
And we could imagine that the same sentiment
could be mirrored all over the country.
Hopefully, hopefully.
Anyway, thanks for listening.
I hope you've got a bit of information from this call.
These are private calls that we have
at the Free Cities Foundation
with our ambassadors and with experts
that we know around the world dealing with free cities.
I hope I've brought you information that is useful
on your free cities journey.
and I hope you'll be back for the next news episode.
Thank you and see you next time.