Prospects for an Uncertain Future

Presidency of Venezuela / CC BY-NC-SA 2.0

Venezuela’s precarious economic and social situation has prompted speculation of how the remainder of Nicolas Maduro’s term as president will unfold. With the world’s highest inflation rate, widespread scarcity, and rampant crime, Venezuela is struggling on multiple fronts, while at the same time facing internal government divisions. Despite these divisions, the opposition is not faring much better, as it is also exhibits signs of fracturing. Protests and alleged human rights violations further complicate Venezuela’s situation with international and regional criticism. These issues, compounded with recent U.S.-imposed sanctions on top Venezuelan officials , pose an uncertain future for not only what remains of Maduro’s term, but also for the next election and beyond.

On Thursday, August 14, The Dialogue was pleased to host two Venezuela experts to discuss the country’s future. Javier Corrales is a professor of political science at Amherst College and leading expert on Venezuela, U.S.-Venezuela relations, and Latin American politics. Joining him was Michael McCarthy, a professional lecturer with the Latin American program at Johns Hopkins-SAIS who served as senior researcher to the Carter Center’s Venezuela Presidential Elections Study Missions in 2012 and 2013. Dialogue president Michael Shifter moderated the event.

Much of the discussion focused on Maduro’s relationship with the public and with his own party and government. McCarthy noted that Maduro came into power on “life support” during the “heart attack conditions” following the death of Chavez and the subsequent election. Despite the media portraying him as an unpopular leader with an unorganized government, both of the speakers’ comments suggested that Maduro has an action-plan and a sense of direction. Corrales characterized Venezuela as a competitive authoritarian regime, one where competitive elections take place but where the government remains highly authoritarian. He mentioned the creation of a troika consisting of Maduro, Rafael Ramirez, and Diosdado Cabello that the president most likely established for the purpose of concentrating powers within the PSUV. What he called a “very Leninist” party is now supporting and approving Maduro’s decisions, as opposed to the communal councils or national assembly. This step away from the one-man rule practiced by Chavez could give rise to party rule—particularly one-party rule—in Venezuela as opposed to the previous dependence on parties as simple electoral machines. However, Corrales warned that the party could become a “Frankenstein”, eroding the power of the presidents’ rule and overtaking him as the central political player.

Economically, Venezuela has been faring poorly. After two monetary devaluations, inflation remains the highest in the world and foreign investment continues to be deterred. Many international airlines, for example, have significantly cut their flights to Venezuela due to payment disputes. Corrales suggested that Venezuela’s economic ditch may have been dug by the continuation of Chavez’s aggressive statist spending in an attempt to salvage some support from the population who once so strongly backed his predecessor. Heavily subsidized gas prices and a very active black market have also drained funds from the already precarious treasury. Further, Maduro has allotted more money for military spending, in what Corrales described as way of compensating for not being a military man himself and of following the Cuban/Chavez model of having a strong military presence in the government.

Venezuelan and international experts generally agree that Ramirez, despite what the media projects, has an economic plan, but the question lies in the ability to implement the it. McCarthy predicts Ramirez will try to step up the process of signing oil agreements with foreign nationals and loosen price controls to help the private sector. It is likely that the oil reserves in the Orinoco belt will be developed to produce crude, but the government needs foreign technology to make this happen. Despite the poor economic conditions, Venezuela will continue to receive support from China and plans to repay China’s $4 billion contribution with additional barrels of crude oil. In regards to privatization, Corrales believes that Venezuelan-owned Citgo could be sold. If this happens, however, it may be a hint that development of the Orinoco belt is going poorly, as well as a sign of economic desperation: a viable plan in the Oronico belt wouldn’t force the government to seek revenue through Citgo’s sale. Regardless of whatever path is taken the experts predicted that economic changes might result on political costs for Maduro.

One of the most important issues raised by the audience was the question of how much political capital Maduro has gained, and whether it is enough to propel him through the end of his term and into another one. Both within the government—the radicals in the PSUV who believe Maduro is too sympathetic to capitalism—and outside of the government—those who feel repressed and silenced—there are factions that feel Maduro lacks power and is running the country poorly. However, changes during his government suggest that Maduro may be aware of the difficult situation and that he has an action-plan to try to tackle it. Whether it’s an effective plan or not remains to be seen.

Related Links

Suggested Content