1 00:00:00,000 --> 00:00:17,320 Welcome to the Free Cities podcast. My name is Timothy Allen and this is the official podcast 2 00:00:17,320 --> 00:00:19,020 of the Free Cities Foundation. 3 00:00:30,000 --> 00:00:48,900 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. 4 00:00:48,900 --> 00:00:55,780 This episode, I'm going to be talking about what's been going on in Venezuela recently. 5 00:00:56,560 --> 00:01:04,200 This episode is a response to a Free Cities Foundation ambassador call that we had a couple of days ago, 6 00:01:04,520 --> 00:01:14,240 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. 7 00:01:14,240 --> 00:01:23,800 The conversation focuses on the reported capture of Nicolas Maduro, of course, and what this moment could mean in practice for Venezuela. 8 00:01:24,620 --> 00:01:36,220 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. 9 00:01:36,220 --> 00:01:42,320 We draw on first-hand experience, of course, and long-term perspective, and we explore how 10 00:01:42,320 --> 00:01:48,100 free cities could fit into Venezuela's next chapter and what the shift might imply for 11 00:01:48,100 --> 00:01:53,280 potential residents, investors, and pretty much anyone watching the future of autonomous 12 00:01:53,280 --> 00:01:54,780 governance unfold. 13 00:01:55,700 --> 00:01:59,400 Our two experts on the call were Tim Stern. 14 00:02:00,420 --> 00:02:05,100 Tim's project is on the island of Margarita in Venezuela. 15 00:02:05,100 --> 00:02:14,060 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. 16 00:02:14,460 --> 00:02:23,980 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. 17 00:02:23,980 --> 00:02:32,620 Our other guest is Jose Codero. If you've ever been to our conferences in Prague, then you'll have met Jose. 18 00:02:32,620 --> 00:02:36,760 He's a Venezuelan economist slash futurist. 19 00:02:36,900 --> 00:02:38,300 Right, let's get on with it. 20 00:02:38,820 --> 00:02:43,500 The focus of the call, as I said, was the same headline everyone's been seeing in early January, 21 00:02:43,500 --> 00:02:48,160 which was the capture of Venezuela's president, Nicolas Maduro. 22 00:02:49,240 --> 00:02:56,780 On the call, I suppose it was described very plainly as a stealth operation by US Delta 23 00:02:56,780 --> 00:02:59,400 Force that resulted in his kidnapping. 24 00:02:59,400 --> 00:03:03,820 There wasn't much time spent debating the legality of that phrasing in the beginning. 25 00:03:03,980 --> 00:03:07,640 The conversation moved almost immediately to the consequences. 26 00:03:08,080 --> 00:03:15,140 And the first person to speak was Tim Stern, who's been on the ground in Venezuela building CryptoCity for nearly three years. 27 00:03:15,840 --> 00:03:22,080 Now, bear in mind, the island of Margarita is somewhat of a bubble compared to the rest of Venezuela, but it is still Venezuela. 28 00:03:22,660 --> 00:03:23,760 Tim didn't start with the politics. 29 00:03:23,760 --> 00:03:28,420 He started with the moment when he heard he said it was quite funny. 30 00:03:28,420 --> 00:03:33,260 picture this being in bed sleeping peacefully and having your phone on the little bedside table 31 00:03:33,260 --> 00:03:41,560 beside you suddenly it goes absolutely wild 17 missed calls 18 missed calls he said he got loads 32 00:03:41,560 --> 00:03:47,320 of messages saying that they were bombarding caracas and their immediate response was to try 33 00:03:47,320 --> 00:03:52,080 and put together some kind of press relief because they have a lot of investors obviously and within 34 00:03:52,080 --> 00:03:57,940 two hours the story flipped almost immediately tim said until we had a statement done we we 35 00:03:57,940 --> 00:04:06,120 already got the message that maduro is out now his reaction was pure disbelief he stressed how 36 00:04:06,120 --> 00:04:12,560 fast it all happened this was like two hours he said crazy shit and if you know tim that's the 37 00:04:12,560 --> 00:04:17,320 kind of the way he speaks because of that we scrapped the statement and we decided to wait 38 00:04:17,320 --> 00:04:26,080 what happened next well obviously uh once again tim's words venezuela is fucking booming excuse 39 00:04:26,080 --> 00:04:32,280 the words but i i'm using that because just to give the gravitas the situation for example with 40 00:04:32,280 --> 00:04:37,940 regards to say real estate on margarita which is tim's involved in he said agents told him that 41 00:04:37,940 --> 00:04:43,180 this is the first time in their lives they have nothing to offer because we sold so many houses 42 00:04:43,180 --> 00:04:53,916 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 43 00:04:53,916 --> 00:05:00,856 already running out of apartments to sell. He clarified that getting a sort of $20,000 or $30,000 44 00:05:00,856 --> 00:05:07,856 apartment on the beach in Margarita now is completely out of the question. Gone. Not existing 45 00:05:07,856 --> 00:05:12,876 anymore. Then he moved on to what several people on the call have treated as one of the clearest 46 00:05:12,876 --> 00:05:19,496 signals of reopening which are flights tim said that they've already got flights back to caracas 47 00:05:19,496 --> 00:05:28,316 from all the european countries starting on the 1st of february iberia tap and other i think laser 48 00:05:28,316 --> 00:05:33,136 and plus ultra and then he added what felt like the headline moment yesterday they announced 49 00:05:33,136 --> 00:05:40,056 direct flights from miami to caracas he didn't even know exactly how long it had been since 50 00:05:40,056 --> 00:05:46,856 they've had those flights from America to Venezuela, I think maybe 20 years, maybe 15 years, 51 00:05:46,996 --> 00:05:53,316 he said. Later in the call, this widened beyond Cracus. There was explicit mention of flights 52 00:05:53,316 --> 00:05:58,636 returning to Margarita itself. This wasn't just capital reopening, it was the island where 53 00:05:58,636 --> 00:06:03,296 CryptoCity is based, becoming reachable again for the very first time in years. 54 00:06:03,836 --> 00:06:08,616 Tim then did something that I can't show you here, but I can tell you, he asked to share 55 00:06:08,616 --> 00:06:17,996 his screen just to show us how crazy things have got. He basically showed us his inbox 56 00:06:17,996 --> 00:06:24,776 for sort of people wanting to sign up to CryptoCity. And he said, this is all the people entering 57 00:06:24,776 --> 00:06:29,916 on the homepage of CryptoCity. Every one of these messages is a name and an email address 58 00:06:29,916 --> 00:06:34,796 who wants to come and visit. This is just yesterday. And he said, I can scroll for 10 59 00:06:34,796 --> 00:06:43,016 minutes 800 or 900 people have entered on the home page summing up in tim's words it's bonkers 60 00:06:43,016 --> 00:06:49,296 it's crazy i'm absolutely overloaded i'm on the phone 24 7 and then he delivered what you could 61 00:06:49,296 --> 00:06:56,136 call the emotional anchor of the discussion uh tim's words this was the point of no return he 62 00:06:56,136 --> 00:07:03,296 said this change is going to be the start of an absolute bonanza here in venezuela okay he did 63 00:07:03,296 --> 00:07:08,676 pull back from the certainty obviously we're a little bit in the dark going forwards we don't 64 00:07:08,676 --> 00:07:13,696 know exactly what's happening now he said is there going to be a change is there going to be a working 65 00:07:13,696 --> 00:07:20,776 agreement with the acting president is the ex-vice president delci rodriguez is there going to be a 66 00:07:20,776 --> 00:07:27,636 total transition and then obviously nobody is 100 sure but judging by the response from the outside 67 00:07:27,636 --> 00:07:35,576 world you can conclude a few things okay jose cadero came on next jose's reaction was immediate 68 00:07:35,576 --> 00:07:40,536 and emotional of course as a venezuelan fantastic news he said it only took two hours to capture 69 00:07:40,536 --> 00:07:46,576 this criminal and send him to prison in new york he didn't hedge he said all venezuelans we are 70 00:07:46,576 --> 00:07:52,636 very happy he then zoomed out to the scale of the national trauma about a third of the population 71 00:07:52,636 --> 00:07:54,916 is already outside of Venezuela. 72 00:07:55,776 --> 00:07:59,056 He gave numbers between eight and nine million who've left Venezuela 73 00:07:59,056 --> 00:08:01,156 and pointed out that in Spain alone, 74 00:08:01,276 --> 00:08:04,496 there were over half a million who are originally from Venezuela. 75 00:08:05,196 --> 00:08:07,616 Jose also warned against thinking this was the end. 76 00:08:07,976 --> 00:08:09,236 This is not the end, he said. 77 00:08:09,516 --> 00:08:10,656 This is just the beginning. 78 00:08:11,576 --> 00:08:15,756 He explained that control still rested with the Chavistas. 79 00:08:16,616 --> 00:08:18,056 They have the arms. 80 00:08:18,196 --> 00:08:19,016 They have the army. 81 00:08:19,296 --> 00:08:22,376 The transition, in his view, will take time. 82 00:08:22,636 --> 00:08:28,976 That led into questions of legitimacy, which became one of the most serious parts of the call, I would say. 83 00:08:29,076 --> 00:08:34,296 Even people who hated Maduro might be uncomfortable with foreign intervention like this. 84 00:08:34,296 --> 00:08:38,976 Venezuela has, well, I suppose, a deep sensitivity to colonialism. 85 00:08:39,356 --> 00:08:45,216 Jose answered directly, the opposition is very happy, he said, because we couldn't do this ourselves. 86 00:08:45,456 --> 00:08:47,316 We don't have the arms. We're peaceful people. 87 00:08:47,816 --> 00:08:49,976 He contrasted that with the regime. 88 00:08:49,976 --> 00:08:53,636 The state obviously is the monopoly on arms. 89 00:08:54,596 --> 00:08:57,876 He estimated public sentiment quite bluntly. 90 00:08:58,396 --> 00:09:03,936 I would say that 90% of Venezuelans are happy that the USA helped us. 91 00:09:04,236 --> 00:09:05,716 That's Jose's opinion. 92 00:09:06,156 --> 00:09:12,616 He then outlined what he said were three reasons Trump gave publicly for the intervention. 93 00:09:12,776 --> 00:09:15,196 Drugs, petroleum and immigration. 94 00:09:15,196 --> 00:09:20,136 He described Venezuela as being controlled as a drug cartel. 95 00:09:20,676 --> 00:09:24,596 He linked mass immigration to regional instability, especially in Colombia. 96 00:09:25,276 --> 00:09:29,516 And on oil, he said something that came up repeatedly later in the call. 97 00:09:29,596 --> 00:09:31,776 Before, it was given away to Cuba for free. 98 00:09:31,876 --> 00:09:46,372 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 99 00:09:46,372 --> 00:09:54,492 zone status on margarita could be revoked because it was granted under the previous regime something 100 00:09:54,492 --> 00:10:02,512 we have had a version of happening in Honduras when regimes change. Tim Stern's answer was calm. 101 00:10:03,312 --> 00:10:08,332 He said politically that the new direction was a free market direction for increased productivity 102 00:10:08,332 --> 00:10:13,512 and to attract investment. So in his words, why would they eliminate special economic zones? 103 00:10:14,252 --> 00:10:20,612 More importantly, explained how he had built resilience into CryptoCity. Years ago, 104 00:10:20,612 --> 00:10:27,972 he said he faced the decision to get permissions for the project the legal way which meant hundreds 105 00:10:27,972 --> 00:10:34,712 of pages of studies port studies environmental surveys underwater coral profiles for the harbour 106 00:10:34,712 --> 00:10:42,892 etc etc the alternative of course was paying a few under the counter dollars and then moving faster 107 00:10:42,892 --> 00:10:47,692 but he chose the legal route fortunately and he said in in the current concert he said 108 00:10:47,692 --> 00:10:54,452 because we always knew if one day change comes and they're going to check and if you can't present 109 00:10:54,452 --> 00:11:00,632 them with the studies you're basically in trouble because they can present them he said we are really 110 00:11:00,632 --> 00:11:06,852 really relaxed about anything changing but he was pretty sure that why would you change the special 111 00:11:06,852 --> 00:11:15,812 economic zone status of crypto city on margarita anyway energy security was the next major issue 112 00:11:15,812 --> 00:11:20,932 questions were raised about Venezuela's power. Tim answered locally, he said he couldn't necessarily 113 00:11:20,932 --> 00:11:26,612 speak for the whole of Venezuela, but on Margarita, the governor of Margarita had stated that they had 114 00:11:26,612 --> 00:11:32,292 quote, energy and gasoline and food for the next three or four months. He explained Margarita also 115 00:11:32,292 --> 00:11:39,252 had two big gas turbines supplying most of its electricity locally. He added some context as well, 116 00:11:39,252 --> 00:11:46,452 pointing out that for a long time they haven't actually had power outages. And he acknowledged 117 00:11:46,452 --> 00:11:51,732 that he lives in one of the better parts of the island, let's say. But in the past, it was much 118 00:11:51,732 --> 00:11:59,012 worse and they used to have outages every single day. He also said that at CryptoCity, we do our 119 00:11:59,012 --> 00:12:05,092 own energy production because we don't want to be dependent. Right. The call then turned out was 120 00:12:05,092 --> 00:12:10,772 towards capital flow. Tim described being contacted by groups from Dubai and New York 121 00:12:10,772 --> 00:12:16,852 claiming to have hundreds of millions or even one guy $1 billion to invest. It's crazy, he said. 122 00:12:17,412 --> 00:12:23,692 It's really a country which has been closed down for 20 years. Chinese investment came up 123 00:12:23,692 --> 00:12:29,352 repeatedly in the call. Tim said that the Chinese had invested heavily, particularly in infrastructure 124 00:12:29,352 --> 00:12:36,412 and oil. Jose confirmed this, saying China was the biggest investor in Venezuela right now and that 125 00:12:36,412 --> 00:12:43,332 most of the money had gone into infrastructure. Both of them agreed that China was being cautious 126 00:12:43,332 --> 00:12:50,792 publicly, denouncing events, but taking little action. Trying not to jeopardise existing investments 127 00:12:50,792 --> 00:12:57,032 was the way that they looked at that. Right. Now, towards the end of the call, the conversation 128 00:12:57,032 --> 00:13:02,832 widened beyond Venezuela and moved to Honduras. We had Alex Eugorji on the phone who lives in 129 00:13:02,832 --> 00:13:09,892 Ciudad Morazan. And if you may remember, the last news episode we had was on what's happened 130 00:13:09,892 --> 00:13:16,432 recently in Honduras in the elections. So we got a bit of an update from Alex. There's similarities 131 00:13:16,432 --> 00:13:22,872 with Venezuela. They're both politically messy transitions happening in parallel with real 132 00:13:22,872 --> 00:13:30,272 consequences for special economic zones context matters here on the previous ambassador call 133 00:13:30,272 --> 00:13:36,352 he focused on honduras and at that time the general election result still hadn't been finalized 134 00:13:36,352 --> 00:13:42,372 weeks had passed without a clear outcome which had already raised concerns about institutional 135 00:13:42,372 --> 00:13:48,592 credibility but by the time of this call there was finally a declared winner and we all wanted 136 00:13:48,592 --> 00:13:55,232 to know what that actually meant on the ground. So Alex explained that while a new president had 137 00:13:55,232 --> 00:14:01,872 been elected, and in his words, it's not over until the fat lady sings, she's opened her mouth 138 00:14:01,872 --> 00:14:07,592 and getting ready, but she hasn't fully sung yet. The implication was that the transition looked 139 00:14:07,592 --> 00:14:14,252 likely, but the outgoing administration might still try to delay, negotiate or create noise 140 00:14:14,252 --> 00:14:16,092 right up until the end. 141 00:14:16,592 --> 00:14:18,832 He explained why tensions were so high. 142 00:14:18,912 --> 00:14:31,408 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 143 00:14:31,408 --> 00:14:37,148 retaliation could follow once the new government took over. The fear, he said, was shaping the 144 00:14:37,148 --> 00:14:42,988 behaviour of the people that are still in office. He also referenced a series of actions taken by 145 00:14:42,988 --> 00:14:47,908 the outgoing government that were now under scrutiny, including the declaration that the 146 00:14:47,908 --> 00:14:55,008 ZAs were unconstitutional alleged requests for bribes and pressure placed on the Supreme Court 147 00:14:55,008 --> 00:15:00,848 from his perspective the legal case for the ZAs had been handled improperly and the current 148 00:15:00,848 --> 00:15:07,348 administration knew that once power shifted those decisions could be revisited and probably would 149 00:15:07,348 --> 00:15:13,808 despite that Alex said the international environment had changed the US and neighboring 150 00:15:13,808 --> 00:15:19,108 countries had spoken out clearly and the international community was not backing any 151 00:15:19,108 --> 00:15:27,128 attempt to overturn or stall the election result. In his assessment, while there might still be noise, 152 00:15:27,788 --> 00:15:32,868 it was extremely unlikely that the outgoing government could actually stop the transition, 153 00:15:33,028 --> 00:15:38,888 especially without military support. When he was asked what this meant for special economic zones 154 00:15:38,888 --> 00:15:46,128 specifically as in the ZAs Alex gave a typically nuanced answer from Alex he explained that 155 00:15:46,128 --> 00:15:51,668 while there had been three major candidates none of them were existential threats to the ZAs 156 00:15:51,668 --> 00:15:57,768 in the way that the current socialist government had been as long as the socialist party lost he 157 00:15:57,768 --> 00:16:04,668 said we can make a deal with them in his words he emphasized that any durable agreement would require 158 00:16:04,668 --> 00:16:11,228 congressional support anyway meaning cooperation across parties was unavoidable he also made the 159 00:16:11,228 --> 00:16:17,768 point that practically speaking personality mattered less than incentives one of the leading 160 00:16:17,768 --> 00:16:23,548 figures tito was described as someone who loves to build loves infrastructure and loves visibility 161 00:16:23,548 --> 00:16:30,208 from that angle there was a plausible path where za projects like prospera and ciudad morazan could 162 00:16:30,208 --> 00:16:36,288 continue, even thrive, because they were aligned with the new government's desire to show tangible 163 00:16:36,288 --> 00:16:41,388 economic progress. There was also acknowledgement that the election itself had been messy. 164 00:16:42,128 --> 00:16:47,848 It took nearly the maximum legally allowed time to declare a winner, and only after significant 165 00:16:47,848 --> 00:16:53,908 international pressure, and that only after significant international pressure. Alex noted 166 00:16:53,908 --> 00:16:59,788 that this created controversy and suspicion, of course, especially given public comments from 167 00:16:59,788 --> 00:17:05,568 Donald Trump supporting one candidate, which appeared to swing prediction markets dramatically. 168 00:17:06,428 --> 00:17:11,668 But even with that controversy, the overall direction was seen as favourable compared to 169 00:17:11,668 --> 00:17:17,588 where things have been. Right. The key takeaway from the Honduras part of the discussion mirrored 170 00:17:17,588 --> 00:17:24,128 Venezuela in an important way. Transitions were not clean. They were tense, legally contested and 171 00:17:24,128 --> 00:17:29,488 emotionally charged. But the direction of travel mattered more than the noise. In Honduras, as in 172 00:17:29,488 --> 00:17:36,048 Venezuela. The expectations were that a shift away from socialist governance would create more room 173 00:17:36,048 --> 00:17:41,368 for negotiated settlements around special economic zones rather than outright hostility. 174 00:17:41,948 --> 00:17:45,788 By the time we wrapped up the Honduras segment, which was the last one on the call, the mood 175 00:17:45,788 --> 00:17:52,468 was cautious but optimistic. Not certainty, not celebration, but a sense that both Venezuela 176 00:17:52,468 --> 00:17:59,868 and Honduras were moving into a phase where deals, legal frameworks and negotiated coexistence were 177 00:17:59,868 --> 00:18:07,028 again possible. So there you have it. Good news from both countries as far as I'm concerned. 178 00:18:07,028 --> 00:18:13,048 Certainly the people we're speaking to are very excited about Venezuela but I think that will 179 00:18:13,048 --> 00:18:21,688 peter out obviously over the next months as reality hits home. Certainly Tim Stern is saying 180 00:18:21,688 --> 00:18:25,048 that interest in crypto city has exploded. 181 00:18:25,768 --> 00:18:28,468 And we could imagine that the same sentiment 182 00:18:28,468 --> 00:18:30,748 could be mirrored all over the country. 183 00:18:30,968 --> 00:18:32,668 Hopefully, hopefully. 184 00:18:32,908 --> 00:18:34,068 Anyway, thanks for listening. 185 00:18:34,308 --> 00:18:36,648 I hope you've got a bit of information from this call. 186 00:18:36,788 --> 00:18:38,608 These are private calls that we have 187 00:18:38,608 --> 00:18:40,028 at the Free Cities Foundation 188 00:18:40,028 --> 00:18:41,988 with our ambassadors and with experts 189 00:18:41,988 --> 00:18:44,788 that we know around the world dealing with free cities. 190 00:18:45,408 --> 00:18:48,588 I hope I've brought you information that is useful 191 00:18:48,588 --> 00:18:50,448 on your free cities journey. 192 00:18:50,448 --> 00:18:54,928 and I hope you'll be back for the next news episode. 193 00:18:55,248 --> 00:18:57,168 Thank you and see you next time.