Venezuela faces a new political landscape after a landslide Opposition victory in the last parliamentary elections. But the country’s destiny will be decided on an economic rather than a political basis.
The opposition coalition, known as MUD (the Democratic Unity Roundtable) won a key two-thirds majority in the legislative elections held in Venezuela on 6 December 2015. The MUD in fact, won the112 seats out of the 167 it needed for a supermajority in the assembly. President Maduro’s party, the United Socialist Party of Venezuela (PSUV), won only 55 seats. The outcome of this vote, supported by the high turnout (74.3% of 19 million voters), marks the end of the 17 year Chavista era. The opposition victory has placed Maduro in a tough spot. Although the Venezuelan constitution gives the president more powers than the National Assembly, the commanding opposition majority in the latter will constitute an effective counter-power to limit what the Maduro administration can do from now until the end of his term in 2019.
The new National Assembly members took their seats last 5 January. What will the new majority do now? First of all the new majority will pass an amnesty law to free political prisoners jailed for their dissent to Maduro’s government – which opposition leaders had said would be their first priority once they were sworn in. The second priority will be trying to force Maduro, whose term ends in April 2019, out next year through a recall referendum, which can be convened, however, only after April 2016. The third priority, the most complex one, will be demanding the removal of the judges of the Supreme Court of Justice, a necessary step to convene a new constituent assembly later to amend the socialist-inspired Constitution wanted by Hugo Chavez in 1998.
While conceding defeat, Maduro does not seem willing to bow to these demands. He vowed to veto opposition plans for an amnesty law for jailed politicians, while he has also announced a cabinet reshuffle and said that the Socialist Party will hold an ‘extraordinary congress’ and established commissions to ‘evaluate the situation and emerge with concrete proposals’. In the meantime, Venezuela’s ruling socialist party used the final days of its legislative majority to name 34 new judges to the country’s highest court, just before the opposition leaders assume power on 5 January. Those judges could in theory reverse any legislation the new National Assembly approves.
The MUD, an ideologically diverse group of 21 small parties, is presented as a coalition of center-right, but it actually incorporates social democratic parties, leftist parties and even some former ‘Chavistas’ belonging to the PSUV who switched to the MUD. Will all these small groups united only in their opposition to their common enemies, Maduro and Chavismo, be able to cope once their enemies are not a threat anymore?
Another issue is the MUD’s leadership ahead of possible early presidential elections. The MUD has been characterized by its internal power struggle between the radical Leopoldo Lopez, currently in jail where he is serving a long sentence, and the more moderate, Henrique Capriles, who was defeated by Maduro in the 2013 presidential election. The economic initiatives will play a key role for the future of Venezuela.
The country is immersed in one of its most severe economic crises. Venezuela had the world’s highest inflation in 2015, and the IMF forecast it will increase to 200 percent in 2016 with an economic contraction of 16 percent. In recent months, the government has tried to control the prices of consumer goods, but most traders basically kept prices fixed. The Venezuelan economic collapse, however, is due to the substantial decline in oil prices. Oil revenues, in fact, account for 90 percent of export earnings. The price of oil has fallen to $40 per barrel whereas the price stood at $115 last June. The decline in oil prices has slowed GDP growth. Despite this, the government of Caracas has continued to produce crude oil in the attempt to compete against the shale gas production.
On January 15, the Venezuelan government announced a 60-day economic emergency to deal with the country’s worsening crisis. The edict includes tax increases and puts emergency measures in place to pay for welfare services and food imports. The decree also imposed more state controls on businesses, industrial productivity and on electronic currency transactions.