Energy Markets

Venezuelan Elections Bring More Disarray and Uncertainty

As Venezuelans ready themselves for the upcoming election on May 20th, there continues to be uncertainty about the outcome. Jose Chalhoub Naffah provides insights into the political situation within the country ahead of the elections.

BY: JOSE LUIS CHALHOUB NAFFAH

Venezuela will face what could be one of its most crucial presidential elections on May 20, 2018, with current President Nicolas Maduro of the Bolivarian Revolution running for reelection. Maduro will be running on behalf of the Partido Socialista Unido de Venezuela (PSUV), the largest political party, alongside other minor political players including the Communist Party of Venezuela, which continues to clash with the government on many administrative issues. His main opponent is Henri Falcon, backed by the Avanzada Progresista party. At the same time, both the largest right and ultra-right parties have denounced election deeming it rigged. Opponents continue to argue that the Electoral Council as well as the Supreme Court are controlled by the government, disguised as democratic by Maduro in order to reinforce his control and to secure his reelection.

Other candidates include evangelical pastor Javier Bertucci, who has been accused of corruption is coming in third in the polls. Unlike other contenders, he has refused to stop campaigning to support Falcon; according to some polls, Falcon has a very slight chance of a surprise upset against President Maduro. Luis Ratti, another presidential nominee, ended his campaign and threw his support behind Falcon just a few days ago.

So far, the electoral campaigns have suffered from a massive lack of enthusiasm from the Venezuelan population as the Venezuelan people continue to express their discontent over the current administration and its tactics. At the same time, a growing number of people also don’t think that Falcon is the solution to their problems. Falcon has himself been a tough proponent of the adoption of the US dollar as the official currency in Venezuela in order to combat the hyperinflation and loss of value of the current currency, the Bolivar. Falcon’s run continues to be contentious as many view his move as self-serving after he jumped ship from the Mesa de la Unidad Democrática (MUD) to run against Maduro. In 2010, Falcon broke from the Chavez regime earning him the ire of the socialists. His history with the socialist regime coupled with the opposition’s widespread boycott of the elections make his Falcon’s chances less than favorable this election cycle.

The slew of factors combined could crush the hopes for any electoral change of the government and the current regime amidst a non-stop spiral of hyperinflation, the diminishing value of the currency and a worsening economy. Venezuela continues to grapple with a myriad of problems including power shortages, oil production downturn, mass migration of workers out of the country with the government seemingly losing control in various arenas. The socialist handouts grandfathered from the time of Chavez continue to shrink as the needs of the Venezuelan people increase. Under growing international sanctions and pressure especially from the United States and the European Union, the majority of South America nations stand against the regime, which is counting on Russia and China for financial backing.Importantly, the growing unrest and nervousness over the uncertainty surrounding Venezuela’s future has the potential to make Russia and China reconsider their positions.

More generally speaking, Maduro’s reelection is nearly guaranteed as he controls the government apparatus. Additionally, with a large number of hard votes against him now outside of Venezuela, much of his opposition is living overseas without the right to vote. As the profound divisions between the main opposition parties and leaders become more apparent, many are now betting on the international pressure against the government to prompt a regime change. However, even in the face of regime change, the opposition faces giant hurdles given the prolonged discontent and distrust of the people. Without any credible alternative program or emergency proposal to help Venezuela recover from the downward spiral it currently faces, a regime change doesn’t offer much hope. On the other hand, if Maduro gets reelected, he is likely to double down on his policies that have yielded no results to a large majority of the population, in particular the most impoverished.

In the midst of this seemingly hopeless moment in Venezuelan electoral history, Henri Falcon has the potential to capitalize on the current situation. With a large percentage of the Venezuelan population discontent with the current administration, some may look to Falcon as a punishment vote. A massive number of votes against Maduro could keep the possibility of electoral fraud at bay prompting a regime change recognized by the international community.

As the impending election looms, rumors are circulating that the elections might be suspended or delayed until the end of 2018. The opposition has been arguing that no adequate conditions or safeguards exist in this election to guarantee a transparent electoral process. Yet it seems that the possibility of the elections being postponed is slim to none even as regional organizations like the Lima Group call for a suspension of the elections. Given the backing of the military, and specifically the top military commanders, the Maduro government enjoys some semblance of security even though there is buzz of some discontent in the lower rungs of the military. Political and financial analysts alike argue that the biggest moment of truth will follow the election. In the event of a much anticipated win for Nicolas Maduro, Venezuela could face additional sanctions and possible ban of up to 500,000 barrels of Venezuelan crude exports. As the resources at the disposal of the Maduro government continue to dwindle, it is apparent that the elections will be followed by a period of turmoil, both international and domestic.


Jose L. Chalhoub Naffah is an oil and political risk analyst based in Venezuela. He has over 13 years of experience in the Venezuelan oil and gas industry and now works as a freelance consultant and advisor on oil and political risks for businesses and investors. Mr. Chalhoub is a political scientist and with a Masters in International Politics and Oil Trading. He is also proficient in Russian, English, French and Arabic, along with Spanish as his mother tongue.

Photo Credit: Reuters

Please note that opinions expressed in this article are solely those of our contributors, not of Political Insights, which takes no institutional positions.

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