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Venezuela – What next?

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The Venezuelan President Hugo Chávez, who had been in a Caracas hospital battling complications after cancer treatment in Cuba, died of a massive heart attack on 5 March at age 58.

The day after his death, throngs of Venezuelans flocked to the streets lining the route between the military hospital and the military academy, where his body was laid.
Vene5During the funeral on Friday 8, thousands were there to pay tribute to their president. Some were singing, “Now more than ever, we are with Chávez.” The songs that played throughout election campaigns and official rallies blared on.
More than 30 Heads of State attended the funeral. Most were from Latin American and Caribbean countries, including Raul Castro of Cuba and Rafael Correa of Ecuador.
The Iranian President Mahmoud Ahmadinejad and the Belarusian leader Alexander Lukashenko were also in Caracas. President Dilma Rousseff of Brazil and Cristina Fernandez of Argentina returned home after paying their own respects.
On 10 March, the country’s electoral commission announced that a presidential election will be held on 14 April. Chávez’s personally anointed heir, Vice-President Nicolás Maduro, will run and probably win, ensuring continuity of the existing administration until 2018. However, in the absence of its populist leader, extreme uncertainty surrounds Venezuela’s moving forward.
vene3Once elected president, Maduro should be able to coast along for an extended period on the back of the quasi-religious myth now consolidating around Chávez. Nevertheless, divisions within the ruling party run deep and, although most Chavistas were loyal to the late leader, it does not mean they will be loyal to Maduro.
The elected-president’s first move will be to cool potential rivals and earn the trust of his party before infighting breaks out. In particular, Diosdado Cabello, the president of the national assembly, who has amassed considerable political power, is one to watch closely. Mr Cabello has many powerful allies in the armed forces and his contemporaries have reached the rank of general. He is young enough – at 50 – to bide his time for the right moment to challenge Mr Maduro.

The Military, a decisive factor
One of Chávez’s legacies was to bring the military back into political life. The military now plays a huge role within Chavismo: former military men won 11 of the 20 state governorships secured by the movement in last December’s regional elections. There is little doubt that the military will be a decisive factor in Venezuelan politics for years to come. Chávez learnt to control the military but Nicolás Maduro will find it much more difficult to deal with them, including the less ‘Chavista’ and more nationalist faction represented by some prominent military officers. For the time being, the defence minister, Admiral Diego Molero, has already said that the mission of the armed forces is to ensure that Mr Maduro is elected president.
President Chávez’s outstanding positive legacy is in the area of social justice. Poverty fell from 49.4% in 1998 when he won the election to 27% in 2011; the Gini co-efficient, measuring inequality, fell from 0.49 in 1998 to 0.39 in 2011 – the lowest in the region. The availability of medical assistance and pensions for the poor has increased dramatically.
On the other hand, the Chávez administration has mismanaged the all-important oil sector. Since it exerted full control over the state oil company PDVSA in 2002 through nationalisations, oil production has slumped 25%. Much of PDVSA’s profits were siphoned off into opaque discretionary funds, like the national development fund (Fonden).
The late president promised to reduce Venezuela’s dependence on oil, and increase agricultural production to cut food imports, but Venezuela is even more of a renter state now than when he took power, ever-more reliant on imports of basic foodstuffs. Chávez spent billions of dollars on military equipment and billions more on buying geopolitical influence in the region and beyond.
vene4Soon after the elections, Maduro will have to tackle some serious economic challenges, including rising food prices, the highest inflation rate in the hemisphere, and mounting debt. All these will create social tension and political instability.
Maduro will not change short-term foreign policy. However, in the middle-term, Venezuela will revise the huge preferential oil rates granted to Caribbean countries through Chávez’s Petrocaribe initiative. The Chávez administration donated around US$42.4bn to a group of 40 nations in the region in 2000-11. This is in addition to the oil it sells on subsidised terms to a number of countries in Central America and the Caribbean.
Many analysts agree that chavismo will survive Chávez but it is not clear in what form. For now, Maduro will focus on trying to imitate Chávez. At the same time, he will work on mythologizing Chávez. Maduro described Chávez as a “new liberator” drawing parallels between Chávez and Bolívar. Maduro hopes to establish and then use the Chávez myth just as Chávez did with the Bolívar myth.

Pedro Santacruz

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