Daily Archives: October 10, 2012

Venezuela 2012

Presidential elections were held in Venezuela on October 7, 2012. The President of Venezuela is now elected for a six-year term with no term limits.

Understanding the Context

Venezuelan politics since 1998 have revolved around the figure of President Hugo Chávez, a controversial love-or-hate figure who has left few Venezuelans and indeed many foreigners indifferent. Chávez is a former military officer, born in a lower middle-class mestizo family in a rural region of Venezuela known as los llanos. He gained national prominence in 1992, when he was the leader of an unsuccessful coup attempt against then-President Carlos Andrés Pérez. Released from prison in 1994, he used his grassroots popularity with the country’s disillusioned and socially marginalized impoverished masses to win the presidency in the 1998 election. He was reelected under a new constitution in 2000 and once again in 2006. He survived a 2002 coup attempt and a 2004 recall referendum initiated by the opposition.

Chávez is an extremely polarizing figure. His opponents argue that he is a populist autocrat who has eroded democratic institutions, stifled opposition and centralized political and economic power in his hands. His supporters view him as the hero of Venezuela’s poor, behind dramatic improvements in their standard of living and a major decline in social inequality and poverty. They admire him for standing up to “imperialist” elites who had controlled Latin America for far too long, and brand the opposition as a ragtag band of privileged selfish elites in bed with the “neoliberal” financial elites embodied by the IMF or the World Bank.

To better understand Chávez’s policies and behaviour, it is important to understand the context in which he originally came to power. Up until the 1980s, Venezuela was a political and economic model for other Latin American countries. Economically, profits from oil – the country’s top export – allowed for major state-led investment into infrastructure, natural resources and nascent social programs. The oil industry was nationalized in 1975, but governments prior to that point had already supported policies which had given the state a hefty share of profits from oil, leading to oil-induced development policies. Politically, a stable democratic systems with free elections and orderly transitions of power flourished. Two major parties, the centre-left Democratic Action (AD) and the centre-right COPEI alternated in power. The country played a major role in the regional and international arena. President Rómulo Betancourt, during his second term in power (1959-1964), sought to oppose any undemocratic regime – left or right – which had come to power by a military coup.

However, this model collapsed in the 1980s with the major fall in the price of oil which drained the country of its main source of revenue. It hardly helped, moreover, that previous oil profits had been woefully mismanaged by governments which were all too happy to spend it away. The government was forced to devalue the currency and resort to price controls, but corruption was rampant and unchecked in all echelons of power. In 1988, Carlos Andrés Pérez of the AD, who had previously served as President during the plentiful 1970s (but whose irresponsible and reckless economic policies proved disastrous and under whom corruption became ingrained), was returned to power. Pérez had campaigned on a populist and anti-“neoliberal” platform which denounced the IMF and the Washington consensus, but upon assuming power – in pure Latin American tradition – he quickly set upon doing the exact opposite of what he had promised. The poor economic outlook forced him to accept the IMF’s (in)famous structural reforms, including a liberalization of oil prices.

These neoliberal reforms came at the price of major social unrest. In 1989, a huge popular protest movement erupted in the capital (the Caracazo), a protest which was followed by a massacre in which up to 3000 may have died at the hands of the national guard. In 1992, Pérez faced two unsuccessful coup attempts, including one in February led by then-Lt. Colonel Hugo Chávez and like-minded supporters in the military. Chávez’s coup attempt failed and he was arrested and imprisoned, but he gained national prominence and for many poorer Venezuelans, he became a hero for standing up to the discredited and corrupt (Pérez would be impeached in 1993 on corruption charges) regime. He was released in 1994 when Rafael Caldera, another former President elected on a fairly left-wing platform with left-wing backers, won the presidency in 1993.

Caldera, facing a major financial crisis, was forced to rescind his vow not to accept IMF help and implement more structural reforms, including privatization and a devaluation of the currency. Out of prison, Chávez used his notoriety from 1992 to build up a strong grassroots base of support from poorer Venezuelans, who had been marginalized by the regime and disillusioned with the turno pacífico style of politics between the AD and COPEI, which had become two corrupt shells by that point. The social situation was explosive, the 1990s having resulted in dramatic increases in poverty and a decline in the per capita income. Within Chávez’s “Bolivarian” movement, the view that they should seek power through electoral rather than military means won out and Chávez ran in the 1998 elections. His support increased as the campaign went along, and he won the election with 56.2% of the vote.

Having been elected on a promise to get rid of the country’s corrupt and discredited political system, he quickly set about working for a new constitution. A constituent assembly was elected in 1999 and drafted a constitution which was then ratified by voters in a referendum. The new constitution enshrined the rights of women and indigenous groups and established the rights of the public to education, housing, healthcare and food. Institutionally, the constitution replaced the old bicameral legislature with a single, unicameral, legislature (the National Assembly) and increased the powers of the executive.

Under the new constitution, Chávez was reelected in 2000 with 59.8% of the vote. While in his first mini-term (1999-2000), Chávez had actually led fairly moderate and ‘prudent’ fiscal policies, his policies moved sharply to the left during his second term. He started major social programs (Bolivarian Missions) which aimed at alleviating poverty in the country, but at the same time he adopted a more confrontational attitude vis-a-vis the United States, private businesses and foreign investors (especially in the oil industry and the state-owned oil monopoly, PDVSA).

An opposition movement coalesced in response to Chávez’s policies, which they decried as authoritarian and populist. The opposition coalition was predominantly formed by the country’s upper middle-classes and had the strong backing of the traditional elites: the media, the employers’ federation, the business community and the old parties with the tacit support of the Bush administration in the United States. In April 2002, Chávez’s opponent attempted to depose him in a coup led by the anti-Chávez sectors of the military, but the coup collapsed within a few days. Following the failure of the coup, Chávez’s opponents attempted to destabilize his regime through a two-month management strike at PDVSA.  Chávez responded by firing striking employees, eventually succeeding in quashing the strike and placing chavistas in command of PDVSA, depriving the opposition of a key base of support.

Following the failure of the military option, the opposition tried to overthrow Chávez by using the recall mechanism embedded in the 1999 constitution. A recall referendum was held in 2004, and Chávez handily survived the recall attempt with over 70% turnout and 59% of voters against the recall. The opposition’s shenanigans in 2002 seriously damaged its credibility, giving much credence to Chávez’s claims that the opposition were the pawns of the global imperialist and “neoliberal” elites.

Chávez won a third term in office with 63% of the vote in the 2006 election, which was judged to be free and fair by international observers. In December 2007, however, he suffered his first electoral rebuke. He had proposed a series of amendments to the 1999 constitution, which included removing term limits on the President (but not any other office) but also a number of proposals aimed either at increasing executive power or, according to Chávez, implementing his socialist agenda. By a narrow margin (51% again), these changes were rejected. In 2009, however, voters approved (with 54% in favour) an amendment which removed term limits on all office holders. During his third term, Chávez clearly sought to consolidate his power, not only by changing the rules of the game to allow him another term (or terms) in office, but also by uniting his fairly fractious coalition of supporters into a single party, the PSUV.

The Incumbent

Chávez’s main achievement during his years in office have been his social programs. He launched his first social programs, which have been styled ‘Bolivarian Missions’ by his government (always keen on utilizing revolutionary or ‘Bolivarian’ rhetoric), during his first years in office, and stepped them up during his second term. Venezuela’s oil wealth – and the rise in the price of oil throughout his presidency (with the exception of a sharp dip during the 2008 economic crisis) – have financed most of Chávez’s social programs.

He can claim credit for significantly reducing poverty in Venezuela. Poverty has declined sharply from 59% of the population in 1999 to only 28% in 2008, while extreme poverty from 22% to just under 10% in the same period. The Gini index, which measures income inequality, declined during his presidency, indicating a trend towards greater income equality.

Some of his government’s most famous Bolivarian Missions have included Mission Barrio Adentro, which aims to provide local healthcare to impoverished barrios; Mission Robinson, a literacy campaign and Mission Hábitat, a project to build new housing units for the poor. Some of these projects, notably Barrio Adentro, have been developed with foreign assistance and participation, notably from Cuba – Cuban doctors staff and run the local clinics which are part of the Barrio Adentro program.

It is clear that these programs have been at least somewhat successful, and it would be tough to deny Chávez any credit for the decline in poverty. However, some of these programs have become mismanaged and inefficient; the opposition claims they are also corrupt and clientelistic. For example, the number of houses built by the government have fallen short of its target. The government has also struggled to achieve food sovereignty, originally one of Chávez’s key targets. The government has stuck to its policy of price controls and has set up discounted, subsidized supermarkets. However, the country remains dependent on imported foodstuffs and it continues facing chronic food shortages. Opponents have pointed to Chávez’s actions (including expropriations and nationalizations) against private food producers as a reason for these shortages.

While most agree that these social programs have been successful, some critics worry that these programs are not sustainable in the long term. The government has funded its programs and other activities by borrowing, in the process piling up the debt. The country’s public debt has been increasing very rapidly, from 26% of the GDP in 2008 to over 50% in 2012 (and it is projected to keep rising quickly).

Related to concerns about Venezuela’s rapidly increasing public debt, many of Chávez’s critics worry about his perceived hollowing out of the private sector in the country. Indeed, during his second term, Chávez stepped up nationalizations and expropriations, including key nationalizations of (often foreign-owned) food, steel, gold and cement companies. As part of a program of agrarian reform, his government also expropriated large landowners, who had often owned huge tracts of idle and unproductive land. While Chávez insists that he supports private property, according to The Economist (obviously not too keen on Chávez) this seems to mean that “he believes individuals should be entitled to their personal belongings, but not control of the means of production.”

Under his presidency, the size of the state has grown enormously, and a good part of the country’s oil revenues have been placed under the President’s discretion, often to fund lavish campaign promises. PDVSA has become somewhat of an all-purpose development agency under the state’s control. The main employers federation, which has long been a base of opposition strength, has said that the President’s goal is the destruction of private enterprise. This is exaggerated, because regardless of the extent of state control in the economy, the private sector has not been hollowed out entirely and it retains dominance in some sectors, such as the media – although its political activism has largely been tamed since 2002-2004.

One point on which both supporters and opponents of Chávez will agree upon is that his foreign policy has placed Venezuela as a major actor on the world stage. The agreement, however stops there. Chávez, who sometimes seems to act controversial and provocative on purpose, has led a very controversial foreign policy, tied in closely to his ideology of “socialism in the 21st century.” He has made himself into one of the most prominent critics of American foreign and economic policy, and he has allied himself with other opponents or rivals of the United States including Iran, Russia, China, Cuba, Syria and Libya (until 2011).

At the regional level, he has promoted Latin American integration. While Chávez’s election in 1998 was identified as the first victory in a series of electoral victories for the Latin American left in the late 20th and early 21st century, not all left-wing heads of states elected in his footsteps in the region have aligned with his model of socialism or adhered to his policy. Chile, but also Argentina and Brazil have tended to steer towards a more moderate brand of leftism, reminiscent of social democracy rather than chavismo. However, Chávez has found strong allies in Ecuador, Bolivia, Nicaragua and Cuba. Venezuela has used its oil wealth to promote its foreign policy and partake in development efforts in other countries, most significantly through the Petrocaribe program which offers Venezuelan oil to countries such as Cuba and Nicaragua at discounted prices.

Chávez has received extensive criticism, both at home and abroad, for his record on human rights and democracy. There is a lot of dishonesty in these arguments, both those which seek to portray him as a tyrannical monster and those who seek to paint him as a democrat who happens to go against an established norm. He is neither of those things. However, Venezuela has been dinged by several institutions – Amnesty International, the UN, Human Rights Watch, Freedom House and Reporters Without Borders for its record on human rights, civil liberties, political freedoms and press freedom. Reports have criticized his administration’s tendency to discriminate on political grounds; erode judicial independence and undercut journalistic independence.

There is no proof, however, that Chávez rigged the polls in recent elections. The 2007 (obviously!) and 2009 referendums, 2006 presidential election and 2010 legislative elections were accepted by almost all players as being free, if not entirely fair. Through tight control of the media and state institutions, Chávez has been able to create a political playing field which is biased towards him and works against the opposition. For example, the opposition and the PSUV ended up roughly tied in the popular vote in the 2010 legislative election, but the PSUV retained a comfortable majority thanks to gerrymandering. Opposition access to the media is tightly controlled and limited, while the government and Chávez have free access to the media.

After Chávez’s close call in the 2010 elections, he stepped up his plan to reorganize local government institutions in the country through the creation of “socialist communes”, presenting them as a grassroots way of devolving more power to the people (and curbing the power of municipal governments, some of which are controlled by the opposition).

One of Chávez’s main weaknesses in his third term has been criminality. The homicide rate in Venezuela has increased at a dizzying pace since the 1990s, making it one of the most violent countries in the world. The homicide rate increased from 25 in 1999 to 67 in 2011, and many have been critical of Chávez’s record in reducing crime, some accusing him of sliding his feet on the issue. Drug trafficking and cross border activity with Colombia seems to be one of the main causes of the recent jump in crime in the country. It would be fair to identify crime as one of the main reason for the dip(s) in Chávez’ popularity since 2006.

Hugo Chávez was diagnosed with cancer in June 2011, and since then he has been in and out of the country receiving treatment and subsequent convalescence in Cuba. Few details have been leaked about his cancer or its gravity, which has allowed for a whole slew of rumours on Chávez’s actual health.

By all measures, Chávez entered this fight for a fourth term in office in a more precarious position than in his past reelection campaigns. His popularity took hits under accusations of corruption and mismanagement while frustration over food shortages, housing policy, rising inflation and criminality, deteriorating infrastructure and power outages have also hurt Chávez’s popularity. However, even a fragilized and frailer Chávez remains a truly formidable campaigner, a master communicator and a talented politician. He is very charismatic, with a remarkable ability to draw huge crowds and an ability to connect with poorer Venezuelans.

The Opponent

As in most countries where recent politics have been dominated by one man, the opposition in Venezuela has taken the form of a fractious and heterogeneous coalition of politicians and parties of all stripes who oppose Chávez. The opposition has been united under the umbrella of the Mesa de la Unidad Democrática (MUD) since 2009. The MUD is a very heterogeneous bunch, uniting centrist reformers, more liberal right-wingers, former leftist allies of Chávez and the remnants of the old decrepit parties (AD and COPEI). The main forces in the MUD are the centre-right Primero Justicia (PJ), the more centre-left Un Nuevo Tiempo (UNT) and whatever remains of the two old behemoths – AD and COPEI – which is to say, not much. It also includes some more clearly left-wing oriented parties, some of which are former Chávez allies, such as the MAS and the Radical Causa (La Causa R).

The MUD held an open primary election to nominate its presidential candidate in February 2012. There were five candidates in the MUD’s primary, but the top two contenders were Henrique Capriles Radonski (HCR), the governor of the state of Miranda (in suburban Caracas) and Pablo Pérez, the governor of the state of Zulia in the far-west. The ideological differences between the two candidates were fairly thin, though Pérez – a member of the UNT party – was judged as being slightly more to the left of Capriles, more centrist and linked to PJ. Pablo Pérez was notably supported by the two old parties, AD and COPEI, something which allowed Capriles to depict himself as being outside Venezuela’s old party machine politics. The MUD primary was a phenomenal success for the opposition, attracting over 3 million voters (roughly 17% of the total electorate). Capriles won easily with 64%.

Capriles proved to be a strong candidate, even up against Chávez, and certainly a much more capable opponent that Chávez’s 2006 opponent, the hapless Manuel Rosales. Capriles is charismatic, energetic and young and while his family background might indicate a middle-class upbringing and style, he was fairly successful in broadening his appeal. He crisscrossed the country, even campaigning in chavista bastions.

Capriles presented himself as a “modern” social democrat, in the style of Brazil’s Lula – though unfortunately for him, Lula endorsed Chávez wholeheartedly. He vowed to maintain (and expand) Chávez’s main social programs, while targeting mismanagement, clientelism and corruption in them. Otherwise, Capriles also focused his message on some of Chávez’s core weaknesses: deteriorating infrastructure, crime or power outages.

However, Capriles was very much the underdog throughout the campaign. While Venezuelan pollsters are notoriously partisan (and hence often inaccurate), most established pollsters had him trailing Chávez by some 10 points, though Capriles’ team held out hope that the high level of undecided voters and Chávez’s standing below 50% would give them a shot.

Turnout was 80.72%, a record high turnout – likely the highest in a presidential election since 1988. The results are as follows, with the CNE stuck at 98.4% reporting:

Hugo Chávez (PSUV) 55.25%
Henrique Capriles Radonski (MUD) 44.14%
Reina Sequera (Poder Laboral) 0.47%
Luis Reyes Castillo (ORA) 0.05%
María Bolívar (PDUP) 0.04%
Orlando Chirino (PSL) 0.02%

The above map was drawn by Shilly, on the US Election Atlas Forum.

Chávez won by 11 points, a solid margin. His victory was never really in doubt, I would say, even though some flawed pollsters with an “hidden agenda” led us to believe that Capriles was ahead of Chávez. Capriles likely had the momentum in the final stretch, though given the wide differences between each pollsters’, it is hard to quantify.

However, Chávez certainly was the main benefactor of the unexpectedly high turnout. High turnout usually favours the chavistas, who have traditionally been very efficient at driving out their voters and maximizing support from their core constituencies (the poor, the working-class and the public sector) in such circumstances. It is true that Chávez was probably unfairly advantaged by his control of institutions – the opposition has often decried during this campaign his tendency to plunge into the country’s oil wealth to finance his campaign and his pre-electoral “spending sprees” – but it is clear that Chávez remains the choice of a majority of Venezuelans, and he remains a formidable candidate.

Though Chávez’s margin of victory this year is much less impressive than his 20+ point squashing of the hapless Manuel Rosales in 2006, this is still a significant and comfortable victory after a six-year term which was fairly difficult. Regardless of what Chávez might have failed to deliver on (crime, food sovereignty, housing, infrastructure, allegations of corruption), his electoral base still trust him and are willing to forgive him for his “imperfections”. He has a great ability to connect with low-income voters, who see in him somebody who has their best interests at heart and their first leader who uses the state apparatus for the country’s benefit rather than personal gain. Fears of an uncertain future if Capriles had won – the army had made some fairly ambiguous (and contradictory) statements as to what they would do if Capriles won and Chávez repeatedly said civil war would ensue if the opposition won – likely played a role in moving undecided voters.

Chávez also benefited from his “lock” on the vote of public sector employees. While the opposition claimed it had a hidden vote with public sector employees, the government had a lock on this vote. There were rumours of intimidation, with public sector employees allegedly threatened to be fired if they voted against and others compelled to sign a pledge that they would vote for Chávez. However, even if Chávez probably have an unfair advantage in the campaign and the process, the vote was free. The new electronic voting system was regarded by almost all actors as being tamper-proof.

The opposition was graceful in defeat, it did not cry fraud as Chávez claimed they would. Capriles quickly conceded defeat and congratulated Chávez on his victory, while noting the importance of the 6 million votes he had won and the need for Chávez to heed the opinion of those 44% who voted against him. The opposition’s result is not excellent, but it is a rather good result. It would have profited more from lower turnout, as in 2007 or 2010, but with nearly 6.5 million votes, it has won the most raw votes in any Chávez-era electoral event. Holding the MUD together for some time might prove difficult, but it can be pleased by its relatively strong performance, even if ultimately insufficient and slightly underwhelming.

Even Chávez, who had styled his opponent as a “mediocrity” at best or a “pig” and “fascist” at worst, was quite conciliatory in victory. While reaffirming his commitment to his platform of “socialism in the 21st century”, he gave signs of reaching out to the opposition. He has an historic opportunity at this point to bridge the gap between the government and its opponents and put an end to the bitter and acrimonious politics which have marked the country since 2002.

This election shows that while Chávez remains strong, he is not as unassailable as he was in the past. Rising concerns about crime, inflation, infrastructure, food, housing and corruption have damaged his standing, but as long as Chávez is able to maintain his standing and credibility with his base of lower-income voters, he will remain in a strong position – after all, he wants to remain in power until 2031.

However, Chávez’s new four-year term is very uncertain. There is, to begin with, the fundamental question of his health. He has gone through a few operations for his cancer since last June, and while he insists that he is better now, some noted that he was slower and slightly less energetic on the campaign trail. Some have asked, legitimately, if he will survive the entirety of his six-year term.

There would be much uncertainty, likely chaos, if he died in office. The law seems to requires a new election within 30 days (!) if he dies in the next four years, and in the meantime the Vice President – appointed by the President – would take power. But the current Vice President, Elías Jaua, seems on his way out and he is not a high-profile figure within chavista circles. In the pre-electoral talk about the eventuality of Chávez not surviving until the election, the names of Diosdado Cabello (the president of the National Assembly) and foreign minister Nicolás Maduro (apparently favoured by Cuba) were mentioned – but the probability of the army moving in to fill the void or even Chávez’s relatives (his brother, governor of Barinas, and his two eldest daughters) making their moves should not be discarded.

Questions may also be asked about the survival of chavismo without Chávez. There is no natural heir to Chávez, certainly not one with his charisma and formidable ability to connect to poorer Venezuelans.

Regardless, he also faces growing economic problems. While Venezuela’s oil wealth remains solid, rising inflation and the ever-increasing debt are causes for concern. Economists seem to predict that the country will inevitably need to devalue its currency soon. Others naturally worry about the government’s dependence on a single source of income (oil), one which is particularly prone to wild fluctuations and volatility (though the future for the country seems bright with oil prices remaining high).

The map was a blowout for Chávez, Capriles won only two states (and not the ones you would have expected) – Táchira and Mérida. Capriles won 56.3% in Táchira and 51.1% in Mérida, he came close in his homestate of Miranda (49.5% against 50%) and Lara (48.5% against 51%). Most surprising was Zulia, where Chávez won 53.3% against 44.1% for Capriles, which is better than what he had won there in 2006 (51%), and he had lost the state in 2000. It is understandable in part given that Chávez’s 2000 and 2006 opponents were both former governors of Zulia, but the state has generally tended to be an opposition stronghold even in the absence of a local favourite son (such as the 2009 referendum).

Táchira and Mérida have also been traditional bastions of opposition strength, Chávez had already won them by tight margins in 2006 and both states had voted No in 2009 (with Zulia, Miranda and Nueva Esparta). In these states, Capriles and the opposition found their core strength in the respective state capitals (64% in Libertador, the city of Mérida; 68% in San Cristobal in Táchira). These cities specifically have very low levels of poverty and they have an economy apparently based around small and medium businesses, the state of Táchira seems notably reliant on cross-border business with Colombia. Affluence is of course a major factor, for example, in Miranda, most of the opposition’s strength revolves around the wealthy suburban communities of Caracas, notably Chacao (81.3% for Capriles).

A surprising underperformance for Chávez is Amazonas, usually one of his strongest states, but he won only 53.5% in the remote jungle state this year. Otherwise, however, Chávez found strong support in rural regions (including los llanos) and lower-income areas in major cities – Chávez won 54.9% in the capital district after all. The opposition needs to break into these chavista citadels if they are to win.

Chavismo, for good or bad and for better or worse, remains dominant in Venezuelan politics, but it is no longer the unshakable force it used to be. The opposition found itself a strong candidate this year, who led a strong campaign, and while they fell short by quite a bit, they seem to have entrenched themselves as a solid and, for many, credible, opposition to Chávez. With Chávez’s health problems and other factors, however, the country’s political future is uncertain.