The Venezuelan president has faced more opposition than his predecessor, forcing him to be more collaborative and pragmatic.
Hugo Chávez’s hand-picked successor, Nicolás Maduro, completed 100 days in office this week. After eking out a narrow and still contested victory in April’s elections, the new president has faced an emboldened opposition and challenges from within his own party in a very different environment from that under Chávez. Nevertheless, the new president has managed to consolidate his hold on power, says Diego Moya Ocampos of IHS Global Insights. However, given Venezuela’s grave economic situation, that hold is tenuous, and has forced Maduro to be more collaborative and pragmatic than his predecessor to hold his position.
The Venezuelan opposition, led by Henrique Capriles, still refuses to recognize the results of April’s election, which saw Maduro triumphant by little more than 1 percent of the vote – a much smaller margin than Chávez ever won. While the earliest days of his mandate were characterized by protests and “cacerolazos,” the anger on the street has abated, and now awaits a decision by the country’s Supreme Court that many investors and the political class believe will be in Maduro’s favor. Still, “it’s definitely a weak government,” says Moya, “and the weaker the government, the more the power of the armed forces.”
Nowhere is this more true than from the military arm of his own party, led by the head of the National Assembly Diosdado Cabello. Moya says Maduro is in a “marriage of convenience” with Cabello: “Maduro can appear on top and be calling the shots, but he needs Cabello to stay in power.” Beyond Cabello, Maduro’s weak mandate forces him to be more collaborative within the Socialist Party of Venezuela as well. “While Chávez’s word was final, Maduro needs to consult the Chavistas about everything and make sure everyone is satisfied with his decisions,” says Moya.
Maduro’s biggest challenge by far is the Venezuelan economy: Maduro’s first 100 days have been characterized by shortages of food, electricity, medicines, and other basic goods. Analysts predict growth of less than 1 percent for the year, and inflation that could reach 40 percent. This has forced Maduro to take a different path than his predecessor. “On the question of the economy, Maduro has been much more pragmatic and less ideological than Chávez,” says Moya. The analyst attributes this partly to Maduro’s weaker government, but also to “paying the bill for the excesses of Chávez.”
Maduro replaced Chávez’s minister of the economy Jorge Giordani with Nelson Merentes, who is considered more pragmatic by analysts. Merentes has tried to build bridges with the private sector, says Moya, evidenced by the government’s May meeting with the head of Empresas Polar to discuss production, and its loosening of complicated exchange controls to make it easier to access dollars for imports. “Maduro’s government has an understanding that the private sector has a key role to play in the Venezuelan economy, and that it needs to work with them to control shortages and inflation,” says Moya. However he adds “the rhetoric against them hasn’t gone away. The government still accuses them of hoarding and other ills.”
But Moya doesn’t go so far as to say that Venezuela is now a better place to do business under Maduro. Operational risks remain high – the government announced last week it plans to expropriate 265,000 hectares in the coming years – and the regulatory burden is still extreme. “The government is sending signals that they are interested in improving the situation, but it’s still too soon to tell.”
Another key change of the Maduro government has been its focus on addressing corruption. Transparency International ranks Venezuela as tied with Haiti for the worst corruption in the hemisphere, and became a major issue in the elections. So far the government has charged bureaucrats for accepting bribes or charging citizens for access to social benefits. However, Moya says the lack of prosecution of any “big fish” shows this is still a superficial effort. “Things have gotten so bad that they can’t hide it anymore, but high ranking officials remain untouchable. With these middle-rung civil servants they can show they’re addressing the issue, but they’re still not doing much.”
All this points to signs that Maduro is consolidating his hold on power, but that hold is tenuous, says Moya. Moya points to the strength of the armed forces, which have characterized themselves as “defenders of Chavismo” as the biggest threat to Maduro finishing his term. “With the social polarization and the drastic economic situation, it would not take much to foment civil unrest in the country. If we begin to see protests similar to the Caracazo of 1989, expect the armed forces to step in.” In the shorter term, Moya says all parties concerned should be keeping a close eye on the December municipal elections as a referendum on Maduro’s performance so far.