Jan. 12: The Venezuelan Government Grinds to a Halt

3 MINS READJan 12, 2016 | 20:37 GMT

The Venezuelan government has fallen into institutional crisis at a time when it can ill afford to be anything but unified. On Jan. 11, the Venezuelan supreme court declared that all actions taken by the National Assembly, a body currently controlled by the opposition, would be deemed invalid. The decision came after the legislature flouted a court order by appointing three lawmakers from districts with contested election results.

The court's decision indicates that Venezuela's ruling elite, led by President Nicolas Maduro and former National Assembly speaker Diosdado Cabello, has refused to recognize the authority of the opposition-held legislature. The two men, who have been among the most powerful political figures in Venezuela since President Hugo Chavez died in 2013, are spearheading the United Socialist Party of Venezuela's (PSUV) moves to limit its rival coalition's influence in the government. Refusing to recognize the National Assembly's authority is a last-ditch effort to preserve the ruling party's power, and neither side appears willing to make even minor concessions.

But another crisis looms larger than the worsening political stalemate in Venezuela. An intractable economic crisis, which already turned the bulk of voters against the PSUV during Dec. 6 parliamentary elections, threatens the government. If left unaddressed, the country's economic deterioration could exacerbate food shortages and raise inflation, eventually spurring widespread social unrest. But Maduro and Cabello cannot undertake the disruptive measures needed to right the economy without inviting anger from voters and risking their own positions in the government. Consequently, the PSUV elite is firmly committed to its "wait-and-see" approach, delaying major economic adjustments (other than simply cutting imports) in the hope of waiting out low oil prices. But the strategy will only delay the inevitable.

In the short term, the PSUV has made the risky decision to confront the opposition to maintain its grip on power. By refusing to recognize new legislation passed by the National Assembly, PSUV leaders have made it unlikely that the opposition would tolerate or yield to the government's demands. Doing so would risk widening the divisions within the opposition's ranks, and thus the opposition's relevancy on the national stage. As the breach between the opposition-led parliament and the PSUV-appointed Supreme Court widens, the ruling party will in turn find it more difficult to take any meaningful action toward fixing the economy.

In the best-case scenario, the threat of political gridlock will grow over the next few months as the Venezuelan government and National Assembly vie for power. But at worst, major demonstrations capable of destabilizing the government could break out sometime in 2016. Street protests are a viable option for some segments of the opposition, though they would undoubtedly prompt a crackdown by security forces loyal to the government. It will be critical to watch whether a consensus forms within the opposition coalition to incite protests as a way of pressuring Caracas. If it fails to materialize, the government's actions will likely drive a wedge between the opposition's various factions, rendering the coalition less effective and mitigating one of the many threats facing the ruling PSUV.

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