Feb 20, 2014 | 14:31 GMT

6 mins read

Venezuela Continues to Struggle After Chavez

Venezuela Continues to Struggle After Chavez
As protests continue in Venezuela, the country's ruling elite has yet to settle leadership issues that emerged when Hugo Chavez died in March 2013.
The Venezuelan government seems to have been run essentially by committee since Chavez's death. President Nicolas Maduro lacks Chavez's institutional heft and popular backing, and he has not exercised the same level of control that his predecessor enjoyed. Meanwhile, National Assembly President Diosdado Cabello has taken a high-profile political role. Cabello has made a series of moves befitting a president, suggesting the potential for political competition within the ruling clique.
Cabello participated in the 1992 coup that marked Chavez's emergence on the national stage, and he has served in a number of positions in government since Chavez was first elected in 1998. During the Chavez era, Cabello was widely viewed as one of the most powerful people in Venezuela, a reputation built through long-standing links with the military and an extensive career in government.
While ill in November 2012, Chavez made it clear that he wanted Maduro to succeed him as president by appointing Maduro, who was foreign minister at the time, to the vice presidency, replacing Elias Jaua. Speculation of a serious divide between Maduro, the anointed heir, and Cabello, the powerful political player, was rampant enough that the two were pushed to publicly say they had sworn an oath of unity in front of Chavez in January 2013. So far, the pact seems to have held. Maduro ascended to the presidency, and Cabello resumed his role as president of the National Assembly. Since then, both have maintained a visible public presence.

A New Dynamic in Venezuelan Politics

The presence of multiple prominent, powerful politicians makes any analogy between the Maduro administration and the Chavez government obsolete. Chavez was firmly in command during his presidency. Maduro seems to be ruling through consensus with the other members of Chavez's inner circle.
A key example can be found in Maduro's economic policy, which initially promised limited pragmatism and change but was hamstrung late in 2013. In April, Maduro appointed the pragmatic technocrat Nelson Merentes as finance minister. In doing so, Maduro pushed aside Jorge Giordani, the architect of chavista bolivarian socialism. Merentes proceeded to meet with business leaders in Venezuela and abroad and crafted a plan to open up the foreign exchange market. The plan, which would have entailed a steep currency devaluation, represented a practical approach to challenges resulting from Venezuela's sharply overvalued bolivar. But the introduction of the new exchange system was repeatedly delayed.
When Merentes was ousted from his ministerial position on Oct. 8, 2013, his approach to economic policy went with him. Chavez's policies were once more championed at every turn, and a sense that the government would be unable to break out of the status quo took hold. Energy Minister Rafael Ramirez, who is also the president of Petroleos de Venezuela S.A. and a longtime Chavez loyalist, replaced Merentes as the leading economic voice in Maduro's inner circle.  
Maduro turned to other means in an attempt to consolidate power. Even as his handpicked finance minister was replaced, Maduro was in negotiations with the National Assembly to pass an enabling law — a piece of legislation that gives the president the ability to pass law by decree. On the same day that Merentes' replacement was announced, Maduro made a public appearance at the National Assembly — Cabello's stronghold of influence — to petition for the enabling law. The National Assembly granted Maduro's request on Nov. 19. The period that elapsed between Maduro's request and the assembly's approval was auspiciously long, and this seemed designed by Cabello to politically hobble Maduro. Since then, Maduro has used the enabling law several times to make tactical adjustments to economic policies.
In the past month, several events have raised questions about the coherence of Venezuela's ruling inner circle. In the first place, the leaders of both Venezuela's military counterintelligence unit and its national intelligence agency, the Bolivarian National Intelligence Service, were replaced in late January by men who had most recently served in Maduro's palace guard
Around the same time, Cabello himself traveled to the border state of Zulia and announced the retirement of military personnel he implied were involved in smuggling goods to Colombia. The move was akin to a presidential act — one taken by the equivalent of the U.S. Senate majority leader. Cabello also started his own weekly TV show to talk about national political issues, highly reminiscent of the show that Chavez hosted every Sunday night during his presidency. This week, Cabello met opposition leader Leopoldo Lopez at the Palacio de Justicia following Lopez's decision to surrender to authorities.

Cabello's Growing Pre-Eminence

What emerges from all of these events is a vision of an administration that relies on coordinating policy among powerful actors — and Cabello stands out as chief among them. Cabello is undertaking many actions that might be expected of a president. At the same time, the government appears uncertain about the reliability of its intelligence agencies. While the leadership replacements may have been a response to early signs that the unrest of the past two weeks would erupt, it is also possible that they reflect insecurity within the regime. This does not necessarily mean that Venezuela will destabilize in the near future, but it does raise serious questions about whether there is a greater struggle for power beneath the surface.
The political situation in Venezuela is in flux. The government continues to hold Lopez in some form of custody, and his fate remains uncertain. Lopez is only the latest figure to rally Venezuela's opposition — prior to the arrest warrant issued for Lopez following the Feb. 12 protests, he was not a key figure. Depending on how he handles his incarceration and detainment, he could quickly lose any newfound credibility. There are no indications that the mass protests of the past weeks will subside, and they continued to gain momentum Feb. 19 after Lopez surrendered.
No matter who is ultimately making the decisions at Miraflores Palace, government actions are tightly constrained. Inflation will continue to be tough to manage, and a shortage of foreign reserves is making it hard to provide basic consumer goods. Without a significant recovery in the energy sector, the ability of the government to patch over these challenges with spending is limited. Many difficult decisions lie ahead, including the increasing likelihood that the government will have to raise gasoline prices — a highly sensitive move in Venezuelan politics, and one Caracas will likely have to make in the next year. Though the government may manage to avoid widespread unrest while it implements a price hike, Maduro's administration will have to be careful not to alienate its base of support among Venezuela's poor.

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