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The Consequences of Venezuela’s December 8th Municipal Elections

Venezuela's President Nicolas Maduro talks to supporters during a meeting at Plaza Bolivar in Caracas (REUTERS/Carlos Garcia Rawlins).

Venezuela held nationwide municipal elections on December 8, 2013. Initial official tallies indicated that candidates associated with the governing party received over 49 percent of the vote, while candidates for the main opposition coalition, Mesa de la Unidad Democrática (MUD), received approximately 43 percent of the vote.[1] These elections were the first test of voter support for the ruling party since President Nicolás Maduro came to power in highly contested elections last April. Normally, municipal elections would not draw much international attention, but because of Venezuela’s deepening economic crisis, they were widely portrayed as a referendum on Maduro’s performance in office. President Maduro has claimed victory based on his candidates’ strong performance in rural municipalities and small towns, yet the opposition has pointed out that its candidates won in nearly all major cities.

Both the government and the opposition hoped these local elections would yield national consequences. The (now) unified national opposition wished for a significant victory so it could use the results to build momentum towards a recall referendum on President Maduro. The initial numbers from the December 8 election though are more indicative of an opposition that has held onto its traditional base rather than attracted new voters. President Maduro wishes to erase questions over his leadership of the Chavista movement, which were raised after his narrow victory in the presidential elections in April 2013. He has been quick to note his political movement’s lead, both in the number of votes and municipalities won. Still, this is not a fully reassuring outcome for Maduro as the 6 percent margin with the opposition is still significantly below those achieved by his predecessor, Hugo Chávez.

Regardless of who claims victory, these municipal elections do not provide a particularly clear indicator for Venezuelans’ support for their president or the opposition for two reasons. First, despite the framing of these elections as a referendum, there were a large number of local issues – particularly growing crime, failing infrastructure, and poor municipal government performance – for voters to focus on in individual races. Second, the massive use of state resources to favor government candidates, harass opposition organizing and campaigning, and increase limits on media freedom mean that elections in Venezuela are not truly fair or free.

These election results are also unlikely to produce a change of course in the Maduro administration’s policies to address Venezuela’s deepening economic crisis. Venezuela’s economy is experiencing accelerating inflation, scarcity and a balance of payments problem. It imports almost all of its food and most of its consumer goods, and the black-market rate for dollars, used to pay for many imports, now exceeds the official rate by nearly 1000 percent. The money supply has ballooned as the central bank has resorted to simply printing money to address government revenue shortfalls. Many consumer staples have become increasingly scarce as a consequence, and the combination of too much local currency chasing too few goods and dollars has resulted in the highest inflation rate in the world.

Unlike past Venezuelan governments, the Maduro administration has not been able to use oil revenues to spend its way out of the crisis. Oil accounts for 95 percent of Venezuela’s exports, and Venezuela’s oil revenues have been dropping. This is due to declining production and the fact that a substantial proportion of its output is sold at discounted rates to Cuba, China, its allies in the Americas and its own citizens. The Maduro administration has sought out new international investment in its oil fields, but given Venezuela’s erratic government policies in this area, potential partners are demanding tougher terms. Even if the deals do pan out, it will take time for new production to come online. Venezuela’s balance of payments problems are compounded by increasing domestic demand for refined oil products, which now exceeds local production capacity and has to be acquired from the United States.

The Maduro administration has instead chosen to double down on authoritarian measures to counter inflation and scarcity. The National Assembly recently authorized President Maduro to rule by decree on a broad range of issues after pro-government legislators engineered the required supermajority through selective investigations and impeachments of opposition lawmakers. Maduro has wasted no time in using these powers: in the past two months, he has established government control over additional sectors of the economy, mandated reductions of 50-70 percent in the prices for goods sold by private business, and intervened in the commercial real estate market to drastically lower rents. Maduro has promised that imported goods will continue to be available at the newly decreed prices, and has created two government agencies to manage this process. Yet given the government’s poor management record in sectors it already controls, this is hardly reassuring.

The combination of economic crisis and deepening authoritarianism portend a grim 2014 for Venezuelans. There are at least two more years until the next instance when Venezuelans can once again attempt to influence the government through elections. Moreover, the ability of newly elected opposition municipal authorities to carry out their programs is limited. Much of their budget is provided by the central government, and as occurred following past elections, the Maduro administration is likely to defund opposition municipalities and route resources instead to parallel institutions that it controls. This combination means that once the true extent of scarcity sets in after January, there is a risk that there will be no institutionalized mechanisms for Venezuelans to influence the course of government policy, and the probability of social and political unrest will begin to rise.

Given the troubling prospects for Venezuela’s future, it is incumbent on other actors in the Americas to work towards positive change and prepare for the possibility of negative outcomes. Yet even here, the choices are limited. The states in the Americas that sympathize with the ideology of Venezuela’s Bolivarian Revolution are likely to look the other way. The Organization of American States, which has previously acted as a stabilizing force in Venezuela, faces internal disagreements among its members. Under these conditions, the hemispheric mechanisms designed to defend democracy, such as the Inter-American Democratic Charter, will have difficulty functioning effectively. Relations between the United States and Venezuela remain very poor, and the U.S. government lacks the diplomatic tools, such as democracy assistance, to support positive change in this case.

There is still an opportunity for leading democracies in the hemisphere, particularly Brazil, to speak up and counsel a change in course in Venezuela. Brazil has both economic and political influence in Venezuela, and its credibility is bolstered by its own record on social and economic progress within a democratic context. It would have to overcome its own preference for non-intervention and a history of sympathy for Chavismo, a stretch for President Rousseff in an election year. This means that it may also be time for key countries in the hemisphere to begin a quiet discussion on what is to be done in the case of a possible breakdown of political and economic order in Venezuela. While the probability may still be low, exploring the outlines of a consensus now might forestall a repetition of the rancorous debate that surrounded the 2009 coup in Honduras.

[1] “El Chavismo amplía su ventaja sobre la oposición en Venezuela,” El Pais (Madrid), December 9th, 2013.