Analysis: Crisis + conflict to be the real winner in the Venezuelan Presidential election

The 2018 Venezuelan Presidential election is taking place on May 20. With the EU and Latin neighbours threatening increased sanctions, President Maduro is under pressure to loosen his grip on power - but will he? Our regional analysts explore the crisis engulfing Venezuela.
venezuela election 2018 marudo
venezuela election 2018 marudo
Andrés Gerlotti

With the 2018 Venezuelan presidential election approaching, the European Union (EU) has threatened to enact further sanctions against the Venezuelan government in light of the ongoing degradation of democracy and rule of law in the country.

The remarks by the EU’s High Representative of Foreign Affairs and Security Policy, underscore how the Venezuelan crisis has continued to develop into an international issue, provoking responses not just from typical actors such as the US but also from a large cohort of countries in the region, which have historically been far less eager to take direct action against a fellow Latin American nation over its internal affairs.

However, Venezuela’s neighbours and former allies have been pushed to take action by a number of factors, both economic and geopolitical:

  • Massive shortages of goods
  • An estimated economic contraction of 15 per cent over the last 5 months
  • Predicted Hyperinflation of 14,000 per cent by the end of 2018
  • Governmental shift into what has become tantamount to a one-party state
  • The ongoing mass exodus of Venezuelan nationals

Threats to democracy

The EU, US and a group of some 14 Latin American and Caribbean states called the “Group of Lima” have taken a relatively hard line against the regime of President Nicolas Maduro of the ruling United Socialist Party of Venezuela (PSUV), which has scheduled presidential elections for 20 May.

Most factions of the opposition Democratic Unity Roundtable (MUD) are boycotting the polls after suffering a heavy defeat in gubernatorial elections held last October in which they claimed widespread irregularities and electoral fraud.

However, at least part of the opposition’s defeat may also be explained by a fatigued electorate that has come to accept that the high likelihood of fraud renders meaningless the exercise of their right to vote, thus abstaining instead of voting for the opposition.

Who is running against Maduro?

The main contender against Maduro for the presidency is currently Henri Falcon, a dissident chavista and former governor of Lara state. Falcon has eschewed the opposition’s decision to boycott as self-defeating, though many fear that Falcon’s candidacy will give a Maduro win the veneer of legitimacy.
However, the EU, US and the Group of Lima have so far continued to assert that they will not recognise the result of the country’s presidential elections without serious procedural reforms – generally those reforms dictated by the opposition, such as the institution of a new National Electoral Council (CNE), which oversees the country’s elections, and is currently thought to be stacked with PSUV loyalists.

Who will win the 2018 Venezuelan presidential election?

Maduro is widely expected to win re-election in May, though whether outright fraud will be necessary to achieve victory is unknown, as voter abstention alone could effectively decide the contest.

Regardless of the manner in which Maduro is re-elected, little is expected to change should he achieve victory. The opposition remains hamstrung, as it has been outflanked at nearly every turn by the Maduro regime and has at times become its own worst enemy, fraught with inf-fighting over the best strategy for affecting change in government.

Maduro’s impeachment..or lack thereof

Although the opposition continues to control the National Assembly and recently voted for an impeachment trial against Maduro to begin over corruption charges, that legislative body was rendered ineffectual in mid-2017 with Maduro’s imposition of the Constituent Assembly.

The move allowed Maduro to put into place a separate legislative body after the country’s Supreme Court previously declared the National Assembly in contempt. While the National Assembly continues to meet, its laws and decrees are effectively ignored by the Venezuelan government and armed forces.

What impacts will a Maduro victory bring?

Maduro’s continued hold on power will see already dire economic conditions worsen, notably vis-a-vis ongoing hyperinflation but also from declining oil output. Venezuela relies on crude for nearly all of its export earnings and for a vital source of hard currency, but production is now at its lowest in three decades due to a combination of mismanagement, strained resources and a haemorrhaging of employees.

Over the past months, Maduro has steadily stacked state oil company PDVSA with army loyalists, often jailing those they are replacing as part of a so-called “anti-corruption campaign”; this purge has more recently grown to include even partner company employees, such as two individuals from Chevron who were recently arrested.

How is Maduro holding onto power?

While all agree that PDVSA, as well as other Venezuelan state entities, had severe corruption problems, there is serious concern that Maduro is merely using the anti-corruption drive to purge dissident chavistas and reward army officers, thereby maintaining chavismo’s alliance with the armed forces.

That alliance has been key to Maduro’s continued leadership, as there has always been some risk of the military establishment – perhaps the entity best-equipped to immediately and most effectively overthrow the regime – turning against him in light of the country’s severe economic hardship.

Instead, through Maduro’s sharing of government largesse with the military, there have been very few defections or rebellions.

How will the Venezuelan crisis end?

Ultimately, a negotiated solution to Venezuela’s crisis is likely to only come in the aftermath of an economic meltdown – in this case, an eventual massive default on debt, with Venezuela unable to borrow more from traditional lenders like Russia and China, and unable to enjoy bondholders’ patience with delayed payments. At that point, the Maduro regime may finally agree to certain concessions and a negotiated exit, but likely under conditions of amnesty.