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Chavez’ Decrees: What Now?

What impact will Hugo Chavez' latest decrees have on Venezuela's political and economic outlook? Three experts share their views.

Inter-American Dialogue 

At the end of July, Venezuelan President Hugo Chavez issued 26 last-minute decrees allowing him greater control over the economy, including the power to take over food production and extend price controls. What is the significance of the decrees for Venezuela's economic and political outlook? Will they boost the prospects for Chavez’s supporters in local and regional elections in November?

Javier Corrales, Associate Professor of Political Science at Amherst College: With these laws, Chavez is trying to achieve by decree what he failed to achieve electorally—expand further the powers of the executive branch. Many of these laws are similar to some of the measures that were defeated in the 2007 referendum to change the Constitution, such as legalizing presidential militias and granting the state unlimited power to expropriate. Initially, many observers expected Chavez to respond to his 2007 defeat by turning a bit more democratic. Some people thought that the president would finally get the idea that the majority of the electorate rejects further state encroachments. These 26 laws prove otherwise. The notion of consultation—even among close allies—has pretty much disappeared from the president's to-do list. These laws, incidentally, are part of an avalanche of measures designed to further restrict the economic and political systems, including imposing restrictions on the financial system, nationalizing Banco de Venezuela, expanding the military budget by more than 400 percent since 2006, and banning more than 200 citizens from running for office in the upcoming midterm elections. All these measures serve as proof that Chavez is getting politically weaker—with declining approval rates—but institutionally stronger, as he manages to obtain more formal powers to govern unilaterally.

Julia Buxton, Senior Research Fellow at the Center for International Cooperation and Security in the Department of Peace Studies at Bradford University in the United Kingdom: The opposition and the US State Department claim that the laws represent a violation of popular sovereignty by introducing changes that were rejected by voters in the December 2007 constitutional reform referendum. I see very little of the 2007 proposals in these new laws, which are more moderate and limited in scope than the changes proposed in the referendum. The new laws are largely technical and relate principally to clarifying authorities, strategic approaches, and national competencies. They do not impact on multiple interests as previous packages of enabling laws did and as a result they are unlikely to galvanize opposition protests. Their impact on the political outlook, in terms of stability and the prospects for the opposition in November, will likely be minimal. As for support for the government, the key issue is whether these measures can significantly improve on policy delivery and government performance in the areas to which they relate—banking, credit, consumer rights, public administration, food supply—before November and in the longer term. This is doubtful. It will take months for legislation to feed through into policy and political change 'on the ground,' and as a result the new laws will likely have as minimal impact on the performance of pro-government candidates in November as they will on the opposition. For the economy, I expect little change induced by these laws. It is macroeconomic policy direction more generally that will be the driver of economic growth or downturn.

Michael Shifter, Vice President for Policy at the Inter-American Dialogue: Chavez's last-minute decrees were hardly surprising. Despite some flashes of moderation and restraint recently displayed by the Venezuelan president—particularly on the international front—there is no indication that Chavez intends to do anything but continue to push hard on his political and economic agenda. In essence, that means tightening his grip on an increasingly controlled economy and insuring that institutions concerned with political and security questions are utterly loyal to him. Chavez's decree formally establishing Bolivarian militias, parallel to the country's armed forces, is especially ominous, not only undermining any claim to adherence to democratic norms on civil-military relations, but also potentially risking the country's social peace. Although some argue that Chavez's plan to forge ahead with such measures will throw the opposition off balance and prevent an alternative platform from being advanced, it is more likely that the latest package of decrees will be viewed by many Venezuelans as another example of overreaching by Chavez and will dim his prospects in November's local and regional elections. Basic governance will become more problematic, probably exacerbating problems of high inflation, food shortages, and widespread insecurity. The reaction of many Venezuelans may be to try and contain Chavez's unrestrained appetite for power, as they did in last December's referendum defeat. Still, Chavez seems determined to do what he can to be able to claim victory in November, and to prepare the ground for another referendum to eliminate presidential term limits.

Republished with permission from the Inter-American Dialogue's daily Latin America Advisor newsletter. 


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