Tag Archives: chavismo

Not a banana republic, but an avocado economy

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CARACAS, Venezuela — Since the end of the Bretton Woods system, or at least since the end of the ‘currency snake’ in Europe that preceded formal monetary union, it’s become difficult not to think about currency in terms other than a floating price determined on the free market.Venezuela Flag Icon

Sure, China still sets its own currency, and the renminbi may well be undervalued, but that matters less to China because its whole macroeconomic game is exporting. Manufacturers from a factory in Guangdong province assemble their goods, sell them to the United States, and promptly turn over their dollars to the Chinese government, which then exchanges them for renminbi. That’s how China ended up with such a glut of dollars in the early 2000s, and that’s why relatively fewer exports could mean fewer dollars, which could be one of the few market pressures to cause U.S. bond yields to rise after five years of historically low borrowing costs for the U.S. government.

Of crude oil and curses

But in Venezuela, there’s one major export — oil — and that revenue is in the hands of the government. In one sense, economics in Venezuela or in any other petrostate is pretty facile: when the oil price goes up, the country has a boom; when the oil price goes down, the country goes bust. That’s why the oil crisis 1970s and early 1980s were such a great time for Venezuela but such a bad time for the United States, why the cheap-oil era of the 1990s was so bad for Venezuela and, conversely great for the United States. It’s why Hugo Chávez was riding so high in the early 2000s, and why the brief drop in oil prices with the global financial crisis in 2008 and 2009 was bad for Venezuela as well as everyone else.

Unlike China, which had a $231 billion trade surplus in 2012, however, Venezuela’s trade surplus masks its growing dependence on imports, and so the key market for dollars is among those who import those goods (and for Venezuelans who want to take business trips — or shopping trips — to Miami).

For lots of reasons,there are disincentives for homegrown production in Venezuela. Many of those reasons have to do with the behavioral economics aspects of the ‘resources curse’ and the petrostate, but they also include the uncertain business climate under the last 14 years. Why start a farm in 2003 when the Chávez government might decide to expropriate it on live television in 2008?  So the country is increasingly importing even those products, such as fresh produce, that it could arguably grow for itself more efficiently. It’s even started importing refined oil products rather than develop the capital to clean the ultra heavy crude that comes out of the ground in Venezuela. A similar dynamic exists in Puerto Rico, where the U.S. government intervened in the 1950s with subsidies for industry during ‘Operation Bootstrap,’ thereby decimating the boricua agricultural sector to this day — produce in tropical San Juan is imported from Florida, Texas and California.

Of dollars and devaluations

Today, the official rate of the Venezuelan currency, the bolívar, is 6.3 per U.S. dollar.

But no one actually pays that, especially these days.

There’s a black market rate, rumored to be up to four times the official rates, a tourist rate that’s discounted a little from the going black market rate, and even a couple of weeks ago, when the Venezuelan government auctioned off dollars through a new system called SICAD (Sistema Complementario de Administración de Divisas) to currency-starved importers, they didn’t release the price for which the dollars sold, but it’s rumored to be something like between 10 and 15, which is quite a devaluation from the 6.3 rate.

It’s still technically illegal for local media to report any black market rates for the bolívar, of course — through March, at least, you could follow the price through a plucky Twitter account, which slyly presented the daily price for ‘fresh avocados.’ That account — and another one, for ‘fresh lettuce,’ shut down after Venezuelans, their businesses starved for vital dollars, lost their bolívares in a twisted online scam.

The new SICAD dollar auction comes after a formal devaluation in February, which lowered the rate from 4.3 bolívares to 6.3.

It’s fairly common for people to talk about two devaluations, in fact — the first formal devaluation of the official exchange rate from 4.3 to 6.3, and the second informal devaluation, whereby Venezuelans may have been buying dollars from the government for as high a price as 15 bolívares.

(Oh, by the way — the actual price of an avocado? I bought a huge one today for 60 bolívares. A tube of imported toothpaste manufactured in the United States, which is subsidized, costs just 20 bolívares. Another example of the distortions in a heavily-subsidized economy that depends on imports for many of its staples.) Continue reading Not a banana republic, but an avocado economy

Maduro campaign active on penultimate campaign day in Caracas

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CARACAS, Venezuela — One morning spent traipsing through Sabana Grande and Altamira is all you need to know who has the greater resources in Venezuela’s snap presidential campaign.Venezuela Flag Icon

It’s clear that election activity is very much in full swing. In the heart of cosmopolitan Caracas — and even in the eastern districts that are wealthier and which you’d expect to be very much behind opposition candidate Henrique Capriles — the more pronounced street presence belongs to the chavistas and their candidate, acting president Nicolás Maduro, the hand-picked candidate of his late predecessor, Hugo Chávez (pictured below in effigy in Altamira earlier today), notwithstanding a massive rally last Sunday on the Avenida Bolívar in support of Capriles.

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It’s astonishing the extent to which the Maduro campaign is really just a rehash of the October 2012 Chávez campaign — at one booth on the Sabana Grande, a Maduro volunteer handed me a poster of el comandante himself with a pamphlet describing Chávez’s 2012 campaign plan for the next term. While it’s a function of facility, there’s also certainly no electoral downside for Maduro in making Chávez very much his 2013 running mate.

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Capriles signs are few and far between, but they do exist and they are around, though I certainly didn’t see much in the way of boisterous caravans of Capriles supporters in the way that red-shirted chavistas paraded throughout the city today:

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I didn’t see much in the way of anti-chavista or anti-Maduro graffiti, though it’s very much in favor of Maduro — and in opposition to Capriles. Here’s one building with the words ‘un gran cobero,’ a slur that roughly translates to ‘big liar’ in Venezuelan slang, against Capriles that Chávez was known to use in the 2012 campaign:

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I’ve never been to a country with such a basketcase economy (more on that later), Maduro has less personal commitment and charisma than Chávez had, Capriles has run a much more aggressive campaign, and polls even showed the race tightening last week. So there’s really no way to extrapolate a Maduro victory just because the government has more resources to use to bring carloads of supporters out or to print more posters to hand out. But if one morning and afternoon stroll is worth anything (and it’s anecdotal, nothing more), Maduro has the upper hand — the key, of course, is whether the ground game on Sunday will turn out as effectively.

Photo credit to Kevin Lees.

Does Venezuela need its own Margaret Thatcher?

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Though the snap Venezuelan presidential election — just six days away — will likely have huge implications for the country’s economic policy, and though most economic commentators would agree that Venezuela is in dire need of economic reform, neither candidate seems especially keen on discussing those reforms in a campaign that’s been heavy on personality and emotions.Venezuela Flag Icon

But the negative aspects of legacy of chavismo — a growing public sector and nationalized industries, ever-expanding army of bureaucrats, widespread power outages, crumbling infrastructure — sound an awful lot like much of the problems that the United Kingdom faced in the late 1970s.

Is Venezuela entering its own ‘winter of discontent?’  And if so, does it need a Margaret Thatcher?

When it comes to South America, Thatcher is most well-known for the Falklands War against Argentina in 1982 (see Thatcher pictured above during that war).

But one Venezuelan blogger has already argued that Romuló Betancourt, the first democratically elected president of Venezuela in 1958, was its ‘Thatcher.’  Betancourt’s major contribution was normalizing democratic elections and peaceful transfers of power, an institution that has so far continued in Venezuela without interruption, even throughout the chavismo era.  Economically, the Betancourt government’s most notable achievement was land reform that boosted rural peasants.

Perhaps the better example of Thatcherite economics in Venezuela is the second term of Betancourt’s successor (and one-time interior minister) Carlos Andrés Pérez (pictured below).  Despite presiding over the largesse of the oil bonanza that to the rest of the world was an oil crisis, Pérez (or ‘CAP’) returned to office with high hopes that he could unlock another era of plenty on a relatively populist campaign built on empty promises.

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Upon election, he rapidly sought a $4.5 billion loan from the International Monetary Fund, in return for crushing reforms that included a tax overhaul, a reduction in tariffs and custom duties and privatizations of state-owned companies.  But those reforms (the ‘paquete‘ or the ‘package’) most controversially caused the price of gasoline prices to rise (and the secondary price of public transportation) due to the elimination in Venezuela’s famous gasoline subsidy — to this day, Venezuelan gas prices are the lowest in the world, and Venezuelans believe cheap gas is practically a birthright.

The reforms led directly to the Caracazo riots in Caracas on February 27, 1989 — as Francisco Toro and Juan Cristobal Nagel write in their wonderful compilation of 10 years of blogging about chavismo (from an opposition viewpoint), the Caracazo marked an incredible rupture in Venezuelan life:

Until then, Venezuelans had seen themselves as different, more civilized, more democratic, better than their Latin American neighbors.  Thirty-one years of unbroken, stable, petrostate-funded democracy had made us terribly cocky.  In a sense, the riots market Venezuela’s re-entry into Latin America.  The country was no longer exceptional: just another hard-up Latin American country struggling to put its democracy on a stable footing.

Those riots ultimately led to the dismantling of Venezuela’s two-party system, CAP’s impeachment in 1993, and two coup attempts in 1992 — one in February 1992 by a little-known lieutenant colonel named Hugo Chávez, who would of course take power by democratic means just six years later in a landslide election victory.

So if Thatcherite policies ultimately paved the way for chavismo, could chavismo pave the way for a countervailing turn back to neoliberal reforms?  Fast-forward two decades, and the country with the world’s largest proven reserves of petroleum finds itself with a budget deficit last year that equalled 17% of GDP and a public debt burden that’s now equal to 50% of GDP.  So if he wins the presidential election, Chávez’s anointed successor Nicolás Maduro will have far fewer economic tools at his disposal than Chávez did to achieve his goals.

Opposition candidate Henrique Capriles certainly isn’t going around the country advocating the elimination of gasoline subsidies, but Capriles seems far likelier than Maduro to enact the kind of policy reforms that could balance Venezuelan finances back toward a more stable equilibrium.

But say what you will about the positive aspects of chavismo in reducing poverty in Venezuela and giving voice to a largely forgotten underclass excluded from the country’s oil wealth for a half-century, Venezuelan finances are hardly in great shape, and the winner of Sunday’s election will face significant financial pressures — all the more so if oil prices fall over the next six years.

 

Lula’s Maduro endorsement highlights strategic Brazilian ties to Venezuela

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Though the full-throated nature of the endorsement of former Brazilian president Luiz Inácio Lula da Silva of acting Venezuelan president Nicolás Maduro is perhaps somewhat of an eyebrow-raiser, it should not be unexpected, and it highlights the extent to which much of official Latin America has a vested interest in the continuation of chavismo — for now at least. brazilVenezuela Flag Icon

Lula is perhaps second to just Fidel Castro in terms of living politicians who are nearly universally popular throughout Latin America, so his hearty endorsement gives Maduro some international credibility, extolling both Chávez and Maduro for their passion for the rights of the poor, and it may well sway some voters who are on the fence between Maduro and challenger Henrique Capriles:

Lula says in a video released by VTV, astate-controlled television station, that he got to know Maduro in his years as foreign minister, and that Maduro will carry on Chávez’s grand hope of transforming Venezuela into a more just country where oil wealth is shared with those suffering most in society.  While Lula (pictured at top, left, with Chávez) notes that the decision is for Venezuelans alone, and he doesn’t want to interfere, but he could not help but share his testimony about Maduro, declaring, ‘Maduro Presidente; es la Venezuela que Chávez soñó‘ (Maduro for President! It’s the Venezuela of which Chávez dreamed!

But as Reuters noted last month, there may be more to Lula’s endorsement than just ideological solidarity:

“In the near term, a Maduro win would be best,” said Jose Augusto de Castro, head of Brazil’s Foreign Trade Association….

Key infrastructure projects launched during the 14 years of Chavez’s government, from the Caracas metro expansion to bridges across the Orinoco river that divides Venezuela, are run by Brazilian firms like Odebrecht.

Lula refused throughout his tenure as president from 2003 to 2010 to criticize Chávez openly, to the consternation of U.S. foreign policymakers.  But Chávez’s more strident socialist path may have made Lula’s more moderate leftism seem even tamer in contrast, and Lula’s example in Brazil stands as a pointed counter-example to chavismo in many ways — Lula managed to reduce poverty in Brazil much as Chávez did in Venezuela, but he did so while also cultivating ties to the business elite and development from the United States, the European Union and the People’s Republic of China alike.

Lula’s friendship with Chávez meant that Brazilian firms were shielded from many of the tumultuous aspects of doing business in Venezuela, most of all Chávez’s snap decisions to expropriate and nationalize industries.  Furthermore, Brazil has benefitted from Venezuela’s oil wealth, and trade between the two countries quintupled over the course of Lula’s presidency, though the ties were strategical as well:

[T]he main goals of Lula and Chávez were geopolitical. Samuel Pinheiro Guimarães, the most influential diplomat in the Brazilian chancellery, explained that Brazil’s strategy sought to prevent the “removal” of Chávez through a coup, to block the reincorporation of Venezuela into the North American economy, to extend Mercosur with the inclusion of Bolivia and Ecuador and to hinder the US project to consolidate the Pacific Alliance, which includes Chile, Colombia, Mexico and Peru.

If you didn’t need a reminder, Latin American leaders and politicians from the moderate left, populist left and the right all attended Chávez’s funeral in March — showcasing just how entrenched chavismo has become in the region, if for no other reason than as a channel for oil subsidies and alternative finance.

Indeed, with the suspension of Paraguay from Mercosur (Mercado Común del Sur) following the impeachment and removal of Fernando Lugo in June 2012, Brazil and other countries wasted little time in making Venezuela a full member — Paraguay’s senate had long blocked Venezuela’s membership.

Campaigning kicked off today officially for the April 14 presidential race.  I attempted yesterday to argue a rationale for supporting each candidate — the policy case for Maduro is here, and the policy case for his challenger, Capriles, is here.

The policy case for Maduro in Venezuela

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In my earlier companion piece today, I discussed the policy case for electing Henrique Capriles as the next president of Venezuela in an attempt (however vain) to separate the emotional divide in Venezuela from the policy rationales that underline each candidacy.Venezuela Flag Icon

Separating the policy from the personal is even more difficult in the case of Nicolás Maduro, however, whose campaign at every turn has been one massive embrace of Chávez, not only as a predecessor, but as nearly a deity in his own right.  So far, the Maduro campaign begins and ends with ‘Chávez,’ and there’s no guarantee that once elected, Maduro would wield a sufficient personal mandate even to take sufficient control of Chávez’s Partido Socialista Unido de Venezuela (PSUV, or United Socialist Party of Venezuela).

There’s frustratingly little substance as to what Maduro (pictured above) would do with a six-year presidency, let alone whether he could come to dominate a governing regime with a handful of key powerbrokers, such as energy minister Rafael Ramírez, finance minister Jorge Giordani, and national assembly president Diosdado Cabello, none of whom will easily step aside from their relative and significant fiefdoms in government.

But, as I asked with respect to Capriles earlier today, what policy arguments should motivate a moderate voter who enthusiastically supported Chávez in 1998 but who’s become increasingly disenchanted about the reality of Venezuelan governance and who may be flirting with supporting Capriles — is there a rational case for supporting Maduro over Capriles?  Continue reading The policy case for Maduro in Venezuela

The policy case for Capriles in Venezuela

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Tuesday kicks off the official start of the campaign in Venezuela for the presidential election on April 14.Venezuela Flag Icon

It’s a little artificial, given that the campaign really began unofficially the day that Hugo Chávez died and certainly both the pro-chavismo and opposition forces have been preparing for such a campaign since Chávez left for his final, unsuccessful round of treatment in Cuba.

Not surprisingly, much of the pre-campaign has been waged on visceral and emotional lines — the pro-/anti- chavismo debate in Venezuela has become inextricably so linked to personalities and identity politics that it’s often hard to step back and articulate the policy rationale for each candidate.  Henrique Capriles, the opposition candidate, has even stepped up his attacks against acting president Nicolás Maduro, in a much more insistent (even populist) tone than he ever took in his 2012 presidential campaign against Chávez.

That seems likely to intensify over the next 13 days.

But to the extent it’s possible to put aside the emotional in favor of policy, what policy arguments should sway, say, the moderate voter who enthusiastically supported Chávez in 1998 and well into the last decade but who has doubts about the performance of the government in recent years to make the jump to support Capriles (pictured above) and the broad Mesa de la Unidad Democrática (MUD)?

Continue reading The policy case for Capriles in Venezuela

Book review: ‘Comandante: Hugo Chávez’s Venezuela’ by Rory Carroll

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I’ve been reading an increasing amount of material in advance of the Venezuelan presidential election on April 14 (and will be covering it in Caracas), so luckily for me, Rory Carroll’s newly released book on the Chávez era was right on cue.Venezuela Flag Icon

Like most thoughtful writing on Chávez and chavismo, Carroll notes how incredibly complex the phenomenon has been — Chávez is neither hero nor villain, and he captures with credibility the reasons why Chávez was, and remains, so popular with a majority of Venezuelans, especially the country’s poorest.

It’s a fascinating read throughout, very highly recommended — I learned something about Venezuela on nearly every page.

The most jaw-dropping parts of the book are those that explain the ‘through-the-looking-glass’ nature of Miraflores, the presidential palace, and El Silencio, the colonial Caracas neighborhood that’s home to Venezuela’s government ministries.

This part of the book felt inspired by Ryszard Kapuściński’s The Emperor, a short (perhaps fictionalized) work on the final years of Ethiopian emperor Haile Sellassie II’s reign, so thick does the sycophancy hang in the air among Venezuela’s ministers — ministers nervously laugh over Chávez’s public claim that capitalism may have killed off life on Mars, and they fret when suddenly Chávez appeared in a yellow shirt (not the trademark red shirt that had become associated with his Bolivarian revolution) and announced there was too much read.  What follows is something out of Kapuściński or even Kafka:

Consternation around the palace. What to do? Some ministers hesitantly abandoned the color, worrying it was a trick.  Others flashed just a bit of red, trying to gauge the correct level.  When, a few weeks later, the comandante resumed wearing red again without elaboration, the crisis passed, and ministers reverted to red.

The winner of the survival game, Jorge Giordani, Chávez’s longtime finance minister, comes off as especially craven and incompetent, the ‘monk,’ a man of austere personal finances who turned a blind eye to widespread corruption and economic mismanagement, all while expending energy to retain his own favor in the administration.

The Castros in Cuba come off as wily as ever, having tapped into Chávez a willing disciple (or, less charitably, a dupe) to provide the ostracized island with precious fuel subsidies and cheap credit, and the relatively rapid infiltration of the G2 Cuban intelligence apparatus into Chávez’s security regime.

Here too are also details from the ill-fated April 11, 2002 coup against Chávez, and Carroll here paints one of the most damning portraits of Pedro Carmona, who took power for just hours and who, ‘drunk with power,’ literally failed to fit into the gold-plated sphinx chair, feet dangling, in the presidential office in Miraflores.

There are anecdotes a-plenty, too, like the episode of ¡Alo, Presidente! in which Carroll is invited to ask Chávez a question, lobs a mildly critical question, and is treated to a long diatribe about colonialism in the New World, Christopher Columbus and, oddly enough, given Carroll’s Irish background, the British monarchy.

We meet Giovanni Scutaro, tailor to chavismo (and, one suspects, everyone with enough money for fashion in Caracas), the American writer and Chávez enthusiast Eva Gollinger, and Baldo Sansó, a fast-talking executive at Venezuela’s state-owned oil company.

Later in 2010 during an energy shortage, we’re treated to Chávez counseling Venezuela to take three-minute showers:

‘Some people sing in the shower, in the shower half an hour.  No, kids, three minutes is more than enough.  I’ve counted, three minutes, and I don’t stink.’ He wagged his finger. ‘If you are going to lie back in the bath, with the soap, and you turn on the, what’s it called, the Jacuzzi… Imagine that, what kind of communism is that? We’re not in times of Jacuzzi.’

But it’s not all fun and games and showers.

Despite the histrionics of U.S. conservatives and others, Chávez’s administration been a largely bloodless regime, though there are plenty of chilling tales human rights shortcomings: stories of folks like Raúl Baduel, who was imprisoned on a politically motivated conviction after asserting the separation of the Venezuelan military from politics and becoming increasingly critical of Chávez’s rule, and María Lourdes Afiuni, a judge who delivered an acquittal of disgraced superstar Eligio Cedeño, who thereupon found herself imprisoned.  We also meet the Nuñez brothers of the El Cementerio barrio, caught in a bleak life-and-death struggle for survival as the leaders of El Cementerio’s gang in the rough hills above the Caracas valley.

Though Carroll could hardly have known his book would emerge nearly simultaneous with the death of Chávez, its publication comes at a time when both Venezuelans and non-Venezuelans are wondering about what comes next — under either Nicolás Maduro or Henrique Capriles.

I would have liked to see more discussion on how chavismo actually replicates many of the elements of the petrostate of the regimes that preceded it in Venezuela, and in other petrostate regimes throughout the world, as well as more discussion of the future of chavismo after Chávez, but those are topics that could easily be volumes of their own.  And it’s notable that neither Maduro nor Capriles play a starring role over the past 14 years.  Máduro himself is a bit player in the book, a sycophant who’s managed to survive in El Silencio from the earliest days of Chávez’s ‘Movement for a Fifth Republic’:

Whatever hour Chávez phoned, whatever law he wanted amended or revoked, Maduro assented.  He became head of the assembly in 2005 and then, despite not speaking any foreign languages, foreign minister in 2006, a post he held for six years.  He crisscrossed the world following Chávez’s orderes and reading Chávez’s script, never deviating, never ad-libbing, never proposing his own initiatives… When the comandante praised Maduro in public — ‘Look at Nicolás there, handsome in his suit, not driving a bus anymore’ — he just smiled.  Foreign ambassadors said the foreign minister grew into his job but that he never took a big decision.  Only Chávez was allowed to shine, so Maduro did not shine.  And thus he prospered.  He acquired an extensive wardrobe, put on weight, grew thick around the trunk.

That perhaps explains why Maduro, not the more cunning current assembly president, Diosdado Cabello, won Chávez’s pre-death endorsement as his successor.

Carroll begins with an anecdote from an interview from beloved Latin American writer Gabriel García Márquez, who wrote the following about Chávez on the eve of his inauguration in 1999:

While he sauntered off with his bodyguards of decorated officers and close friends, I was overwhelmed by the feeling that I had just been traveling and chatting pleasantly with two opposing men.  One to whom the caprices of fate had given an opportunity to save his country.  The other, an illusionist, who could pass into the history books as just another despot.

Carroll’s sophisticated treatment of chavismo produces examples of all of the above — Chávez as savior, Chávez as illusionist and Chávez as despot — and takes chavismo up as a mirror to reflect how all of those impressions have marked Venezuela for the past decade and a half.

In death, the Chávez cult has become even creepier

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If you already thought that Venezuela was the Turkmenistan of Latin American politics, you need no further proof than the latest stunt on Tuesday from acting president Nicolás Maduro.Venezuela Flag Icon

In the clip below, Maduro has launched an oversized check up to the heavens to a grateful Hugo Chávez, representing the dividends received by CANTV, the Venezuelan telephone company that Chávez nationalized in 2007.  It’s another great find from Caracas Chronicles, which has been on quite a roll in the post-Chávez era in covering Venezuelan politics:

‘!Vuela, Vuela!, ¡en homenaje al Comandante!,’ Maduro exclaims (‘Fly! Fly! In tribute to the comandante!’), as red balloons (red symbolizing the color most associated with Chávez) float the check of 1,800 million bolívars upward to the skies.

As outrageous as it seems, it’s part of a series of impressions that the post-Chávez era is featuring an even creepier cult of personality in Venezuela than when el comandante was alive.

It began with the plans — now apparently aborted — to embalm Chávez and place him on display, just like Vladimir Lenin is on display in Moscow or Mao Zedong is on display in Beijing.  Those plans were belatedly phased out after officials determined that officials had waited too long after Chávez’s death in order to embalm him.

Then there are the over-the-top tributes like this, mingling the legacy of Chávez with that of Venezuelan founding father Simón Bolívar and other left-wing martyrs, and even Chávez’s Cuban benefactors have a thorough celebration of his life at Granma. 

Maduro even joked (or was it a serious claim?) that Chávez, his place in heaven secured, nudged God to make Argentine cardinal Jose Maria Bergoglio the world’s first Latin American pope.

It wouldn’t surprise me if, like in Turkmenistan, Maduro started trying to rename the months of the calendar after Chávez — there’s even a snarky website, madurodice.com, that tracks the number of Maduro’s mentions of Chávez on the campaign pre-campaign trail.

But the massive miles-long queues of people waiting to pay tribute to Chávez in death, and an extremely elegant funeral that drew nearly every leader in Latin America from Chile to México, with a ley seca (dry law) implemented to keep life in Caracas especially a bit more subdued in the potentially challenging days following Chávez’s death should have been enough to mark the extremely oversized impact that Chávez played within Venezuela’s political system — and above all in the spoils system that funneled oil wealth from the government to its supporters, from top government officials on downward.

All of this and Venezuela’s formal campaign season doesn’t even kick off until April 1.

French public intellectual Bernard Henri-Lévy has already decried the growing chavismo cult of personality:

What is less known, something that we will regret overlooking as the posthumous cult of Chávez swells and grows more toxic, is that this “21st-century socialist,” this supposedly tireless “defender of human rights,” ruled by muzzling the media, shutting down television stations that were critical of him, and denying the opposition access to the state news networks.

For Chávez supporters, there are certainly myriad policy reasons to support Maduro in the upcoming election over challenger Henrique Capriles — like him or not, he fundamentally transferred Venezuela’s oil wealth to the poorest Venezuelans in amounts unknown in nearly a century of the country’s oil wealth.  You can argue that Chávez’s redistribution of wealth has been inefficient, that his expropriations and other economic policies have left Venezuela mired in debt, a pariah of the global financial system and ill-prepared for the day that oil prices drop, and that other more moderate regimes from Perú to Brazil have notched records of poverty reduction just as impressive as — or more so than — Venezuela under chavismo. Continue reading In death, the Chávez cult has become even creepier

Meet the new heir to Hugo Chávez: the feistier, populist Capriles 2.0

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Just days after the death of longtime Venezuelan president Hugo Chávez, his previous opponent in the 2012 election, Henrique Capriles, lost no time in taunting acting president Nicolás Maduro:Venezuela Flag Icon

Nicolás, nobody elected you president. The people didn’t vote for you, kid.

It was quite a bit out of character for Capriles (pictured above), who often campaigned against Chávez, then ailing with the cancer that ultimately took his life, with kid gloves — after all, Chávez remained the beloved champion of Venezuela’s poor, and Capriles himself pledged to retain the misiones that provided education and health benefits in the event of his election.

In fact, Capriles’s sneering and taunting attitude was more reminiscent of Chávez, who never lost an opportunity for a little name-calling.

Although Capriles is reported to have seriously considered boycotting the election, he announced March 10 that he would accept the presidential nomination of the opposition coalition, the Mesa de la Unidad Democrática (MUD) with the kind of intensity that critics claimed his previous 2012 campaign lacked.  In a fiery, nearly hour-long speech, he attacked the record of chavismo and pursued Maduro with a newfound aggression, challenging Maduro by his first name (¡Y tu, Nicolás…) and attacking the government’s handling of the constitutional succession and its performance since Chávez won reelection:

Maduro was hand-picked by Chávez as his new vice president and anointed as his preferred successor, and he has — for now — secured the support of the Partido Socialista Unido de Venezuela (PSUV, or United Socialist Party of Venezuela) and much of the Venezuelan army, now sympathetic to the ruling chavista regime after 14 years of Chávez in power.

But from his newfound abilities in populist rhetoric and campaign aggression, it may well be Capriles who is becoming the true heir to Chávez.

For example, on March 10, in response to ‘homophobic’ slurs from Maduro, Capriles took the opportunity not only to deny them, but to make a full-throated attack on the machismo of the chavistas and to argue forcefully for social inclusion for all Venezuelans, no matter what their sexual orientation:

That takes a lot of brass — and perhaps it’s the kind of brass that comes from a campaign against Maduro that seems more doomed than the one last year.

The conventional wisdom is that Maduro will ride the wave of sympathy for Chávez to victory so soon after the funeral, and polls show that Maduro is leading Capriles, in some cases by a wider margin than the 11% victory Chávez won in 2011 (such as a recent Datanalysis poll that gives Maduro a 14-point lead).

Capriles has attacked the polls, too, arguing that the government are paying pollsters to show Maduro leading.  True or not, it’s a classic play from the Chávez playbook — disregard the facts, and turn a negative into a way to attack your opponent.

What it means is that Capriles is running the kind of offensive campaign that Chávez ran throughout his career, and Maduro is running the kind of defensive, hesitant campaign that’s typically been associated with the opposition.

But regardless of whether Capriles has a chance to win, he’s now free to run against chavismo without having to run against the charismatic commandante himself.

After a setback for opposition forces in the regional and gubernatorial races in December 2012 (Capriles himself won reelection only narrowly against Elías Jaua, a well-financed former Chávez vice president), a feisty loss in the April 14 presidential election would not only energize the opposition, but keep it united and prepare it to take on the PSUV in parliamentary elections due in 2015.

Even more slyly, one of the subtle themes of the Capriles campaign is simply, ‘Maduro is no Chávez.’

The subtext here is that, even if you supported Chávez, and perhaps especially if you supported Chávez, you don’t necessarily need to support Maduro, who doesn’t measure up to Chávez.  Capriles has argued that Maduro, in less than a hundred days as the de facto acting president during Chávez’s terminal illness, has already begun to dismantle the achievements of the Chávez era.

That’s one reason Capriles has been so aggressive in attacking Maduro’s February devaluation of the bolívar, Venezuela’s currency, which lowered its value by 32%.  Maduro doubled down this week, however, announcing a second devaluation that is expected to cut even more deeply into the value of the currency, and a new foreign exchange system to assist importers acquire increasingly rare U.S. dollars.  The devaluations are also designed to cut a budget deficit that swelled in 2011 and 2012 in advance of Chávez’s reelection, despite abundant oil wealth.

It’s also why Capriles has gone on the offensive about cutting subsidies to Cuba — it’s widely believed that Maduro was Havana’s preference as Chávez’s successor, hoping that Maduro’s election will secure the uninterrupted flow of oil subsidies, cheap credit and other goodies to the Castro regime.  Again, the anti-Cuba rhetoric is subtle way of reclaiming nationalism at the expense of Maduro’s relatively weaker position.  Capriles would never have been able to attack the nationalist bona fides of Chávez, the 21st century champion of ‘bolivarian’ revolution.  Not so with Maduro.

Consider, too, this television advertisement from the Capriles campaign yesterday — although it’s only a simple 21-second spot, it’s a harsh indictment of chavismo that lists five reasons for change: violence, power outages, expropriations, deficient hospitals and lack of water:

Capriles may well still lose the election because the wall of sympathy for Chávez was always going to be too high to surmount.

But make no mistake, Capriles is certainly waging a more spirited campaign than anyone every really anticipated — it may not be enough to win the election, but it may well make it a far closer run than the chavista regime would have liked.  That, in turn, will lay the groundwork for a future challenge if Maduro wins and conditions deteriorate in advance of parliamentary elections or before the next presidential election in 2018.

World leaders descend upon Chávez funeral: one photo, but mil palabras

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What’s always been so interesting about chavismo is the way that the late Venezuelan president Hugo Chávez managed to build alliances both with just about every leader in Latin America, no matter how radical or moderate, while also building close alliances with a ‘who’s who’ of world rogue leaders on poor terms with the United States of America.Venezuela Flag Icon

It makes for an interesting set of photos from Chávez’s funeral — the photo above comes from the Facebook feed of Enrique Peña Nieto, the president of México, a country that’s had relatively little use for Venezuela over the past 14 years — former president Felipe Calderón used Chávez as a boogeyman in the 2006 Mexican presidential election to warn voters against the one-time leftist frontrunner, former Mexican City mayor Andrés Manuel López Obrador, and that may have made the difference in that election.

Chávez died Tuesday in Caracas after a long fight with cancer, suddenly bringing to life Venezuelan politics that had largely been frozen in waiting on Chávez’s health since his 11-point reelection in October 2012.

Peña Nieto was expected to move Mexican relations closer to Venezuela than under the more right-wing Calderón, but Peña Nieto and Chávez were hardly best friends.  That relationship was part and parcel of the diverse set of relationships that Chávez had with the rest of Latin America — sometimes ally, sometimes foil, sometimes donor and often, all three simultaneously.  Those relationships, all of which are on display this week in Caracas, give us a rough sense of whether chavismo — and the broader form of the populist, socialist left that has been on the rise in Latin America (though not necessarily in its largest, most economically successful, countries like México and Brazil) — will live beyond Chávez.

Peña Nieto is in the fourth row, standing between businessman Ricardo Martinelli, Panama’s conservative president to his left and Peruvian president Ollanta Humala to his right.  Humala, who won a very close election in 2011 in Perú, was feared as a potential chavista radical leftist, anathema to Peru’s business elite, despite renouncing a chavista-style government in Perú.  In fact, Humala has turned out to govern as a business-friendly moderate, garnering relatively more criticism from environmentalists and social activists on the left since his election.

There in the front row, you can see Iran’s president Mahmoud Ahmadinejad, Cuba’s president Raúl Castro (who has the distinction of belonging to both the ‘rogue state’ and ‘Latin American’ groups), the new ‘acting’ first lady of Venezuela Cilia Flores, and her husband, acting president Nicolás Maduro. Continue reading World leaders descend upon Chávez funeral: one photo, but mil palabras

With Chávez’s health in doubt, regional Venezuelan elections assume greater importance

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With Venezuelan president Hugo Chávez recovering from surgery, due to what may be terminal cancer, it’s easy to forget that this weekend will mark a handful of key regional races throughout Venezuela, including a gubernatorial race in Miranda state that pits Chávez’s former presidential rival against Chávez’s former vice president.zuliamiranda flagVenezuela Flag Icon

Although the attention this week has been mostly on Chávez’s health, his departure to Cuba for surgery and, perhaps above all, his speech last Saturday night indicating that his preferred successor is former foreign minister and vice president Nicolás Maduro, the results of Sunday’s races will establish the backdrop for the leading figures of both Chávez’s Partido Socialista Unido de Venezuela (PSUV, or United Socialist Party of Venezuela) and the broad opposition coalition, the Mesa de la Unidad Democrática (MUD).

Indeed, with rumors flying of complications after his surgery, the weekend’s races have counterintuitively become more important as Venezuela prepares for the possibility, at least, of a new early presidential election if Chávez resigns or dies in office.

In their own right, however, because 20% of the federal budget is (theoretically) allotted to state governments, governorships provide the MUD and other opposition candidates a platform for government, notwithstanding the centralization of Venezuela’s federal system under PSUV rule.

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The key race that everyone will be watching is the governor’s race in Miranda, where the incumbent, Henrique Capriles, recently finished his unsuccessful presidential campaign against Chávez as the MUD’s standard-bearer — although he lost by 9 points, Capriles won 45% of the vote, making him Chávez’s most successful political opponent in his 13-year reign.  Miranda state is likely Venezuela’s most developed state and its second most populous, bordering (and in some cases including) the broad Caracas metropolitan area.  Chávez actually won this state in the October presidential race by a squeaker — with 49.96% to Capriles’s 49.52%, and Capriles won the 2008 election with just over 52% of the vote.

His opponent is the somewhat humorless former vice president, Elias Jaua, and although one poll has shown Jaua with a five-point lead against Capriles, other polls have shown varying Capriles leads and it’s certainly difficult to believe Capriles is an underdog.  By all accounts, the fresh-faced Miranda governor has been a more-than-capable administrator in the past four years, bringing a dose of good government to Miranda after the corruption of his predecessor, Diosdado Cabello.  Furthemore, Jaua’s record as a colorless Chávez yes-man makes it seem like he’s less than likely to sweep to victory, although if Chávez’s health takes a serious turn for the worst between now and Sunday, Jaua may yet benefit from a vote of sympathy.

Capriles defeated Cabello, the governor from 2004 to 2008, in the prior election, and Cabello, who’s since become the leader of Venezuela’s PSUV-dominated National Assembly, would temporarily take over as president in the event that Chávez resigns or dies after he is sworn in for his next term (set to begin January 10), with a snap presidential election to follow within 30 days.  Despite Chávez’s speech anointing Maduro as his preferred successor, Cabello has long harbored presidential ambitions, he, along with Jaua (especially if Jaua wins) may try to become the PSUV’s presidential candidate in any such election instead.

Of course, in the event of such a rapid election, Capriles is very likely to lead the opposition against Maduro, Cabello or whomever the PSUV runs.  But that  could change if Capriles doesn’t win Sunday’s vote in Miranda handily — given his narrow loss to Chávez and the very short 30-day window for a new presidential election, Capriles may nonetheless still be the main opposition candidate.  But it would open the door for another candidate to emerge, likely from among the other six states where opposition governors are currently in power.

That brings us to Zulia state and with 3.8 million people, it’s Venezuela’s most populous.  Nestled in Venezuela’s far northwest bordering Colombia along the Caribbean coast, Zulia’s oil and agricultural wealth makes it, like Miranda, one of the country’s wealthiest states.  Pablo Pérez (pictured above, top), who widely lost the MUD’s presidential nomination to Capriles by a 2-to-1 margin way back in February 2012, is running for reelection in what should be an even more solid opposition win for Un Nuevo Tiempo (UNT, a New Era), the centrist party that was founded in Zulia in the late 1990s and which has controlled the governor’s office since 2000 (until 2008, under Manuel Rosales, who lost the 2006 presidential election against Chávez by a 25-point margin).  Pérez is running against the PSUV’s Francisco Arias Cárdenas, governor of Zulia from 1995 to 2000, though Pérez is heavily favored.  Capriles did better in Zulia than he did nationwide in October, winning 46.27% to just 53.34% for Chávez.  Both Chávez’s national government and Pérez’s UNT regional government have spent large sums on social programs in the state, and a win for the PSUV would be quite a staggering victory for chavismo.

If Capriles falters in Miranda, Pérez, who lies politically to the left of Capriles, could well become the next consensus opposition presidential candidate.

Continue reading With Chávez’s health in doubt, regional Venezuelan elections assume greater importance

Chávez officially names Maduro as anointed successor

Venezuelan president Hugo Chávez, only two months after winning reelection against his strongest opponent in 13 years in office, appears to have taken a turn for the worse in his ongoing struggle with cancer, has returned to Cuba for surgery. 

Before leaving, however, he indicated his express preference for his successor — for the first time — in the event that his health declines terminally.  That’s as close as any indication that Venezuelans have received from Chávez that he is battling terminal cancer, in a hasty address to the nation late Saturday night:

Unfortunately, comprehensive tests (performed in Cuba) found the presence, in the same area (previously) affected, of malignant (cancerous) cells. It has been decided that it is absolutely necessary and essential to undergo further surgery. This should happen in the coming days. Doctors even recommended performing the surgery yesterday (Friday) or this weekend at the latest.

Not surprisingly, Chávez anointed Nicolás Maduro (pictured above, left, with Chávez) as his favored successor, expressing openly what he had indicated implicitly in October when he elevated Maduro, formerly foreign minister, to become Venezuela’s new vice president.

Maduro, a former bus driver and trade unionist, has been part of Chávez’s ruling Partido Socialista Unido de Venezuela (PSUV, or United Socialist Party of Venezuela) since its foundation, and he was by Chávez’s side in 1998 when the PSUV first won power.  He was a member of Venezuela’s parliament until 2006, serving as speaker from 2005 to 2006, when he was named as Chávez’s foreign minister.  As such, he’s a fairly well-known figure to Venezuela’s key allies and opponents alike, including China, the United States and Cuba, although observers are cautiously optimistic he would be a more moderate leader, more in the mould of former Brazilian president Luiz Inácio Lula da Silva than Chávez.

Chávez is set to be inaugurated for his fourth term on January 10 — if he were to die during his third term, Maduro would take over as president until January 10.  If Chávez dies after reelection, Diosdado Cabello, the speaker of the National Assembly, would take over temporarily while new elections are organized.  Under Venezuelan law, a new presidential election would be required within 30 days of Chávez’s death or resignation during the first four years of his term (which is set to run for six years, through 2019).  Chávez’s announcement on Saturday makes it very likely that, despite Cabello’s presidential ambitions, Maduro would likely lead the PSUV in any such presidential election in the near future.

Venezuelans return to the polls on December 16 to vote for regional governments, including in Miranda state, where Chávez’s one-time challenger Henrique Capriles is facing a strong challenge from Maduro’s predecessor as vice president, Elías Jaua.

Capriles won 45% of the vote nationally against Chávez in October as the leader of the opposition coalition, Mesa de la Unidad Democrática (MUD).  If Capriles wins on Sunday in Miranda state, he will be well placed to compete in any future presidential election against Maduro.

Chávez headed for apparent narrow reelection in Venezuela

According to Venezuela’s election commission, Venezuelan president Hugo Chávez has won reelection with 54.42% of the vote in today’s election, apparently, with just 44.97% for Henrique Capriles, his most effective challenger since Chávez was elected as president for the first time in 1998.  Capriles has conceded victory to Chávez. 

The top-notch Caracas Chronicles blog is also reporting that Chávez has won, despite early exit polls that suggested Capriles may have pulled off an upset against Chávez — there’s been no indication as to whether there’s been fraud in the election results, but the election was conducted without international observers.

While the vote may turn out to have been free, it is more difficult to know whether the vote was fair, with many government employees allegedly scared to vote against Chávez, lest they lose their jobs in retribution.

After he is re-inaugurated in January, Chávez’s term will run until 2019.  In power for 14 years, he has brought a uniquely personal brand of ‘Bolivarian’ revolution to Venezuela, and he has now survived an incredibly effective and energetic challenge from the governor of Miranda state, who was supported by a highly unified opposition in the form of the umbrella group Mesa de la Unidad Democrática (MUD).  Capriles, however, it could signal the resurgence of a true opposition and the emergence of a more normal politics in the South American country of nearly 30 million people after Chávez won reelection with 61% six years ago.

Serious questions remain about the future of chavismo, however, starting with the health of the president himself, who underwent treatment abroad earlier this year and last year for an unspecified form of cancer.  Beyond questions of Chávez’s health and issues of transition within his party, the Partido Socialista Unido de Venezuela (PSUV, or United Socialist Party of Venezuela), there remains the question of a stagnant economy propped up solely by Venezuelan oil, murder rates and violent crime that’s some of the worst in the world, and government institutions rife with corruption, abuse and waste and a lack of commitment to freedom of speech and expression in many regards.

Chávez’s support for communist regimes in Latin America, such as Cuba and Nicaragua, and pariah states throughout the world, such as Belarus and Iran, and his wider campaign to oppose and irritate the United States, has left the government isolated.

While Chávez has effected a massive redistribution of wealth to the poorest citizens of Venezuela, Capriles accused his government of squandering the country’s oil wealth both at home and abroad through subsidizes for other socialist regimes.  Capriles ran on a program of liberalizing an economy that Chávez has consolidated under state control.  With Chávez’s reelection, however, it seems likely that Chávez will want to consolidate the socialist nature of Venezuela’s government.

No, but really: Can Henrique Capriles defeat Chavismo?

I asked that question — Can Henrique Capriles defeat Chavismo? — back in February.

Today, the Toque de Diana blared at 3 a.m. throughout the country, signaling that Venezuelans will go to the polls to decide whether to reelect Hugo Chávez (pictured above, top) for another term in office after 14 years or to elect Capriles (pictured above, below), the 40-year-old governor of Miranda state, to the presidency, but I think the answer is just as unclear right now, hours away from the close of polls, as it was in February.

There have been so many pieces out there this week that describe the state of the race, and an excellent blog that can give you more detailed analysis of the Venezuelan presidential race.  There’s no doubt that Capriles has run a very smart and energetic campaign, and that the race is essentially the first truly contested presidential election since Chávez took power.

But as we get word of results tonight, there are three sets of questions to keep in mind — first, about the election itself; second, about Venezuela if Capriles wins; and finally, about Venezuela if Chávez wins.

First, the election:

What to make of Venezuelan polling? Polls have been all over the place, some showing Chávez locked in a tight race and others showing him winning in a landslide.  Given that Venezuela’s democratic institutions are a standard deviation lower in quality than, say, Peru or other countries in South America, to say nothing as compared to the United States or the European Union, it’s safe to say that we can’t rely much on polls or exit polls to show us too many insights on the Venezuelan result.

How will we even know that the result is accurate? There are no international observers, and Chávez’s Partido Socialista Unido de Venezuela (PSUV, or United Socialist Party of Venezuela) controls many of the levers of government.  If Chávez wins by just a small margin, there’s really no way to know whether the result will have been valid or whether.

As Lara state goes, so goes Venezuela?

If Chávez wins: Continue reading No, but really: Can Henrique Capriles defeat Chavismo?