Hugo Chavez

Hugo Chavez’s rule is over after 14 years and Venezuela enters into a new chapter of its political life. It can be argued that the political transition was already underway given the low chances that Hugo Chavez could recover, but said changeover will accelerate its pace now.

The development of an internal conflict between different Hugo Chavez (or chavista groups) is a risk worth considering, but many “experts” do not expect a strong challenge to Nicolas Maduro’s position as the new leader of chavismo, given the public blessing that he received directly from Hugo Chavez and the likely chavista campaign centering around the late President’s image.

Most expect new presidential elections will take place in April and that Nicolas Maduro will be the chavista candidate and the overwhelming favorite to win the election.

At this juncture, it is hard to determine whether Nicolas Maduro will be a more moderate and pragmatic leader than Hugo Chavez. His managerial track record is scant so there is no evidence of such pragmatism.

During the transition, certain crucial policy decisions such as a complementary measure to replace the Sitme system will likely be delayed until after the election. The delays may also include debt issuance decisions.

The political transition

President Hugo Chavez passed away on Tuesday, March 5, after a two year battle against cancer. Ever since he had to travel to Cuba last December to undergo his fourth consecutive cancer-related surgery, and given his complete disappearance from the public eye in the past three months, it had become clear that his health had taken a turn for the worse.

In addition, government officials had indicated in recent weeks that his recovery suffered severe setbacks because of respiratory infections. Therefore, the news of his passing did not come as a significant surprise. After 14 years of Chavez rule, Venezuela enters into a new chapter of its political life. It can be argued that the political transition was already underway given the low chances that Hugo Chavez could recover, but said changeover will accelerate its pace now.

After winning the presidential election in October 7, Hugo Chavez departed for Cuba to undergo medical treatment and was not able to return to Venezuela on time for the inauguration ceremony of January 10. When he made it back to Caracas last week, he was too weak to be sworn in. According to Article 233 of the Constitution, Chavez should be technically considered to be permanently absent before taking possession of the presidency. Under those circumstances, the Constitution indicates that the head of the National Assembly should become interim president and call for new elections within 30 days.

Diosdado Cabello should be the new president. Yesterday, however, Foreign Affairs Minister Elias Jaua said that Vice President Nicolas Maduro will take over the presidency on an interim basis until new elections are celebrated within a month. Maduro then will be the acting president as well as the likely candidate of the chavismo in the new election.

Last year, Hugo Chavez had handpicked Maduro as his successor, and probably anticipating that his health would worsen, publicly endorsed Maduro as the right person “to carry on with the Bolivarian revolution”. The decision to leave Cabello temporarily aside, against the constitutional rule, may be signaling some fractures and/or lack of trust towards Cabello within the chavismo. It is largely believed that Cabello, a former army trooper himself, belongs to the groups of the chavismo with closer ties with the armed forces.

Maduro, on the other hand, has no military background but rather belongs to the more ideological chavista groups with closer ties to Cuba. Although it can be argued that frictions exist between both chavista leaders, they had made a concerted effort to appear united in recent weeks, showing up together in public events on occasion. Interestingly, however, Cabello was not present during Maduro’s press conferences of Tuesday, while all the cabinet ministers as well as the military top brass were there.

The development of an internal conflict between different chavista groups is a risk worth considering, as the absence of Chavez opens the door for the emergence of new leadership. Some believe that Maduro will be the leader, at least over the short and medium term, because he has two important assets on his side.

First and foremost, he received the public blessing of Chavez to become the new head of the chavismo, and in a political group in which Hugo Chavez held so much power, such move carries dramatic weight. Besides, it is likely that the chavismo will campaign for the new election using Hugo Chavez’s image prominently, so that it would be odd if the party is not represented by the candidate that Hugo Chavez selected. Second, Maduro is the highest ranked chavista in all electoral polls, with a large margin over Cabello.

New presidential elections will take place in April and that Maduro will be the chavista candidate. Given the still fresh memory of the sound chavista victories in the presidential elections of October and the state elections of December, and the emotionally charged climate after Hugo Chavez’s death, chances are good that Maduro will win the election against any of the possible opposition candidates. The opposition coalition will most likely be represented by Miranda Governor and former presidential candidate Henrique Capriles Radonski.

For all practical purposes, the new election campaign had started a few weeks ago, when it became clear that Hugo Chavez was too weak to take over the presidency. As of late, Maduro intensified his presence in the media and adopted an increasingly more belligerent tone towards the opposition. That attitude was reiterated during Tuesday’s press conferences, when he chastised the opposition and linked it to “the imperialist forces”, even suggesting
that Hugo Chavez may have been poisoned.

This leads many to expect a harsh campaign during the next few weeks. At this juncture, it is hard to determine whether Maduro will be a more moderate and pragmatic leader than Chavez. His managerial track record is scant so there is no evidence of such pragmatism. Moreover, although his stance may be affected by the electoral climate, he has been particularly aggressive against the political opposition and the US in recent weeks.

On the likelihood of temporary policy paralysis

The government announced seven days of mourning with no school and little if any activity in government offices. This means that policy decisions will most likely be delayed until after the election. In particular, crucial decisions such as a complementary measure to replace the Sitme currency system may be delayed until after the election. The delays may also include debt issuance decisions.

If the election takes place within a month as many expect, chances are good that all the focus of the government will be on Maduro’s victory so that no major policy decision will be made in the next few weeks. If the election date is pushed beyond one month, then the chavismo will have to make some decisions such as devaluation and debt issuance before the new elections take place.

Last month, the authorities announced the devaluation of the official Cadivi exchange rate to VEF6.30/USD from VEF4.30/USD. In addition, they decided to phase out the Sitme market and vowed to supply dollars previously

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