Saturday, March 9, 2013

What's Next In Venezuela?

In Venezuela, Hugo Chavez leaves behind a political movement firmly in control of a badly deteriorated state where institutions such as the police, courts and prosecutor's offices have been converted into tools of political persecution and where most media are firmly controlled by the government.

Chavez rose to fame by launching a failed 1992 coup, but over the years, his ego led to a failure to groom a successor.  Within 24 hours of Chavez's death, there were signs of an emerging split within the ruling United Socialist Party of Venezuela. While Foreign Minister Elías Jaua said Mr. Maduro would become interim president, some members of the National Assembly called for legislative head Diosdado Cabello to assume the post, citing Venezuelan law.

Supreme Court chief Luisa Estella Morales did little to clear up matters, telling Venezuelans to "have faith in your institutions" but not specifying how officials would move forward with the transition of power.  Analysts reported a fierce power struggle was under way this week  between Maduro, a one-time bus driver and union organizer, and Cabello, seen as well-connected and ruthless.

Maduro
Many have longed believe that power will swing to Chavez-annointed Maduro, since he has also spent the last several months courting the loyalty of army commanders.  (In true Chavez fashion, the constitution is no matter when it comes to getting grabbing power in this country-- it was announced late yesterday that Maduro will be sworn in as interim leader.)  It now seems clear that the government candidate in a snap election will be Maduro, who was the country's foreign minister for seven years and helped cultivate closer relations with nations opposed to U.S. interests.

There is a widely held belief that Maduro lacks the political heft to follow in Chavez's footsteps.  Because of this, political analysts believe that he is more inclined to go on the attack as the presidential campaign begins in earnest.  A sign of such aggressive tactics by Maduro was his move last week to haul into court last week a leading opposition politician, Leopoldo Lopez, to face charges of influence peddling in a 15-year-old case that his lawyers say has passed the statute of limitations.

Lopez, who calls the charges ludicrous, ran campaign logistics for opposition leader Henrique Capriles in the October election after the government barred Lopez from running for office.  Lopez expects to be burdened by considerable legal distractions as he helps try to dislodge the Chavistas from power in upcoming elections to pick Chavez's successor.

Opposition leader Capriles
Opposition leader Henrique Capriles, who lost to Chavez in the October presidential election is widely expected to be the opposition's candidate to oppose Maduro.  Capriles, a lean and sports-loving lawyer who is a regular at Caracas half-marathons, won a creditable 44 percent of the vote last year, the opposition's best showing against Chavez in a presidential vote.

Aware of his single status, women screamed at him like a pop star at every campaign stop, many shouting "marry me!" Polls at the time showed him more popular than any of the president's allies.  During the October election campaign, government supporters threw racist and homophobic taunts at Capriles, who has Jewish roots and lost great-grandparents in the Treblinka concentration camp in German-occupied Poland during World War Two.

Though he has cultivated a man-on-the-street image, dressing and talking simply, Capriles does come from a wealthy family, and class prejudices are sure to figure in the campaign.

Either way the election goes, the eventual winner will inherit an economy that has grown quickly over the past decade thanks largely to high oil prices and ramped up government spending.

A recent currency devaluation of the Bolivar to 6.3 per dollar from 4.3 sent shock waves through the economy., putting renewed pressure on prices in a country where inflation is running at about 20%.  The devaluation also did little to stop growing shortages of basics like flour and meat, which are scarce due to a lack of dollars.

Venezuela's industrial base has largely been hollowed out by widespread nationalizations under Chavez, leaving the country increasingly dependent on imports. It also has a growing foreign debt load, at about $90 billion.

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