Fisher Investments Editorial Staff

Venezuela’s Post-Election Politics

By, 04/12/2013

Venezuela’s currently acting president may not have to act much longer. Elections are on April 14—it seems all but certain Nicolas Maduro will succeed Hugo Chavez as president.

Not for lack of trying by his opponent, Henrique Capriles. Capriles is currently the center-right governor of Miranda, an energetic champion of free-market reform and the most legitimate challenge to Chavez’s grip on power in recent years. He is also popular in his home state, where his policies have produced (somewhat) better economic gains and less violence than the rest of Venezuela.

Capriles lost the last election to Chavez by 11 percentage points—though who knows if that’s reflective of actual votes. To amplify ballot box stuffing, Chavez also deployed the intensely loyal military to further intimidate voters. The campaign itself was mostly a travesty—Chavez directed news outlets to either ignore Capriles or bash him, and thugs frequently showed up at Capriles events to threaten supporters.

But Capriles is up for another fight. Whereas he was mostly respectful to Chavez in the prior campaign, this time he’s slinging the mud right back—accusing Maduro of corruption (rightly so) and having ties to drug traffickers (also probably rightly so). In response, Maduro said Hugo Chavez visited him as a bird and they sang to one another.

Maduro was Chavez’s vice president and some campaign banners say, “A vote for Maduro is a vote for Chavez,” and indeed it likely is—there’s not much daylight between Maduro’s policies and Chavez’s. At least, one presumes—Maduro’s campaign has been light on policy, heavy on deification of Chavez. And that may be enough for Maduro to win a heavily stacked election. How effective he is at maintaining power once elected remains to be seen. Chavez was a military hero who cultivated a larger-than-life persona, whereas Maduro was a bus driver turned union boss turned government bureaucrat—he likely inspires neither Chavez’s cult of personality nor the intense military fealty.

What’s more, there are other chavistas lurking in the wings. Diosdado Cabello is President of the National Assembly, and by Venezuela’s constitution (they have one) he should have been installed as interim president—not Maduro. Maduro got that spot by dint of getting Chavez’s blessing in one of his last public speeches. Cabello himself is a popular former military leader and helped orchestrate Chavez’s return to power after a 2002 coup d’etat. (Interestingly, he was governor of Miranda before Capriles and in fact, it was Capriles who ousted him—in a democratic election, the way those things are supposed to go).

Chavez’s blessing may only get Maduro so far—particularly since Cabello can deify Chavez as well as Maduro. Yes, the court is stacked with chavistas, but they could easily switch allegiances—particularly if Maduro’s popularity starts to wane. And that seems likely—inflation is high, price controls have led to shortages of basic goods and capital controls have only been strengthened—exacerbating both the inflation and the shortages. Venezuela announced plans to allow more exchange of bolivars for dollars, but a cynic would suspect (not unreasonably) that’s being used to compile some form of list for later nefarious purposes.

Still, Maduro has it all but locked up. Maduro is polling ahead of Capriles by about 10 percentage points. Since Venezuelan media is either state-owned or mostly state-menaced, there’s not much reliable and transparent polling, but Maduro will have Chavez’s election engine working for him. Once elected, however, he’d best be vigilant of his back. And perhaps internal fighting among chavistas will provide an opening for opposition parties in the future. One can only hope.


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*The content contained in this article represents only the opinions and viewpoints of the Fisher Investments editorial staff.


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