reflections

Jun 28, 2011 | 04:13 GMT

4 mins read

The Perils of Succession in Venezuela

It can be difficult to separate the important from unimportant on any given day. Reflections mean to do exactly that — by thinking about what happened today, we can consider what might happen tomorrow.

Venezuelan President Hugo Chavez called a number of his closest advisers Monday from Cuba, where he is reportedly recovering from emergency surgery. Chavez was visiting Cuba on June 10 when a sudden pain in his abdomen reportedly required his immediate hospitalization and surgery. STRATFOR sources close to the Cuban medical team say Chavez has prostate cancer. Chavez has refused to delegate power even temporarily during his absence, an indication of how little he trusts his closest advisers and allies in the government. Although Chavez seems likely to hold onto power in Caracas despite the current complications, the crisis in the country raises important questions about the future of the Venezuelan state, whose government and power structure have been built around a single, iconic figure. It remains plausible that a political transition would allow Venezuela the space to reconsider and potentially realign both its political and economic positions— whether the presidency goes to a Chavez loyalist or a representative of a new faction of power brokers. A regional precedent for the current predicament can be found among Chavez's ideological brethren. Former Cuban President Fidel Castro suffered a medical complication in 2008 and was forced to step down, abdicating power to his slightly younger brother, Raul Castro. Fidel ruled Cuba for nearly 50 years and was the linchpin of the country's governing strategy. In 2008, Fidel stepped into the background, allowing Raul to pioneer changes to the economy that have begun to bring Cuba closer to finding compromise with its neighbor, the United States. Castro had the option to step down because he trusts his brother. It is not clear to whom Chavez can turn in the event he finds himself incapacitated. Although his brother Adan Chavez appears to be positioning to take over, Chavez has so thoroughly split power among all possible successors that any would-be ruler will have to fight to maintain control. Nevertheless, Castro's example shows us that even the most iconic leader must eventually hand over authority. We do not know whether Chavez will have to make this choice now. It remains plausible that a political transition would allow Venezuela the space to reconsider and potentially realign both its political and economic positions— whether the presidency goes to a Chavez loyalist or a representative of a new faction of power brokers. Venezuela must deal with a handful of fixed economic realities. Oil remains at the center of everything, from growth and investment to politics. With all capital concentrated in the oil sector, development without a redistributive model is very difficult. Venezuela's efforts to develop agricultural self-sufficiency struggle against a mountainous geography and a tropical climate. A high reliance on imports for basic foodstuffs means that inflation will always be a present danger. Some economic and political characteristics of the Chavez administration could undergo serious changes following a power transition. Since the failed 2002 coup, in which he perceived U.S. involvement, Chavez has been working hard to diversify fuel exports away from the United States and toward partners like China and Europe as a way of reducing his vulnerability to the U.S. market. However, not only is the United States the largest oil consumer in the world, it is also geographically close to Venezuela. Diverting oil exports to other markets — let alone markets on the other side of the planet — costs the Venezuelan oil industry. With oil at over $100 per barrel, there is room to maneuver, but when every dollar gained through oil exports is needed to satisfy populist demands at home, the opportunity costs of walking away from Venezuela's largest natural market become apparent.. This practice and other economic policies have left the Venezuelan economy in a fragile state. Oil production is declining, the electricity sector is failing, inflation is perennially high, and the government's debts are climbing higher. This month may not be the moment for change in Venezuela, but Chavez's sickness highlights the vulnerabilities of a country that relies so heavily on the dictates of a single leader. Ironically, the system of dividing power among competing factions guarantees Chavez's unchallenged control while he is healthy. However, it makes it exceedingly difficult for him to delegate power to a trusted second in this hour of need.

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