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Venezuela's Government Prepares for a Political Showdown

8 MINS READJan 28, 2016 | 09:15 GMT
Venezuelan President Nicolas Maduro (C) waves after presenting an annual report to the National Assembly on Jan. 15.
(JUAN BARRETO/AFP/Getty Images)

Less than a month after being sworn in, Venezuela's new National Assembly is digging in its heels for a fight. President Nicolas Maduro is set to announce new economic measures on Jan. 28, and it is possible that he will try to implement reforms the legislature has already rejected. 

On Jan. 22, a parliamentary committee overruled a decree that would have granted the president broad powers over national spending and economic planning for 60 days. Maduro has dubbed the decision unconstitutional, and the Venezuelan supreme court, which so far has been very loyal to the president, has declared his decree to be legally sound.

At the very least, Maduro will try to shift the blame for Venezuela's deteriorating economy onto the opposition. But if he announces his intention to push forward with enacting the economic measures outlined in his decree, it will mean that he and his inner circle plan to rule the country with minimal input from the opposition. It will also signal their effort to maintain as much influence over Venezuela's economic affairs as they can, for as long as they can. The opposition, for its part, will likely use whatever legal measures are at its disposal to erode the Maduro administration's clout, regardless of which approach the president takes. His rivals may even attempt to unseat him by mid-2016, when his presidency can legally be ended by a recall referendum.

However, prolonged political gridlock between the presidency and the legislature poses another threat too. As the government steadily blocks the opposition's avenues for exerting power through parliament, it risks forcing the conflict from the halls of government and into the streets. If the opposition is unsuccessful in wielding its legislative authority, some of its factions, weary of making no progress, might call for demonstrations to pressure Caracas into granting concessions. With a collapsing economy already endangering the administration's future, the increasingly unstable Maduro government would likely turn to the security forces at its disposal to contain the unrest.

Who to Watch

In the coming weeks, Stratfor will closely monitor and evaluate the actions of the actors who play an important role in Venezuelan politics:

  • National Assembly: Members of the opposition include the outspoken speaker Henry Ramos Allup, right-wing Justice First chief Julio Borges and Democratic Unity Roundtable (MUD) Secretary Jesus Chuo Torrealba. Within the wing of the MUD that is more opposed to Maduro's rule, Maria Corina Machado and Lilian Tintori will also bear watching. It will be important to monitor whether the opposition remains united in pursuing legal avenues of countering the government, or if the disputes among the MUD's various factions lead to deeper splits within the party.
  • Supreme court: Venezuela's supreme court magistrates have become the ruling party's most important line of defense because they have the power to reject or approve the National Assembly's legislation. In late December 2015, the previous legislature appointed 13 supreme court magistrates who have vehemently supported Maduro ever since. By confirming the legality of the president's actions, the judicial branch has been used to limit the new National Assembly's influence. Of the seven courts that make up the entire supreme court, it is the Constitutional Court that plays the biggest role in interpreting legislation — a power that will likely be crucial as the government and legislature spar over the legality of their actions. Therefore, Maduro will rely on the support of this court and its seven magistrates throughout 2016.
  • Armed forces: Gen. Vladimir Padrino Lopez, Venezuela's acting minister of defense, will be important to watch because according to Stratfor sources in the country, he is the third-most powerful person in Venezuela. (He trails only Maduro and former National Assembly speaker Diosdado Cabello.) His actions matter because he represents the interests of the armed forces. Since rising inflation and a lack of basic goods will probably persist for some time, it will become increasingly likely that bigger street protests will occur. If they do, the armed forces (under Lopez's leadership) may have to intervene to maintain order, making him an important arbiter whom both the ruling party and the opposition will want on their side.
  • Executive branch: The United Socialist Party of Venezuela (PSUV) controls the executive branch, represented by figures including Maduro, Cabello and Economic Minister Luis Salas. The executive branch has tried to limit the opposition's ability to push back against its preferred policies, which include populist measures such as significant subsidies for Venezuelan consumers.
  • Venezuelan citizens: The Venezuelan population, which is coming under increasing strain from high inflation, will also be critical to watch in the coming weeks. Whether in Caracas, Venezuela's center of gravity, or in the borderlands, where in early 2014 large street demonstrations began in Tachira state before spreading to Caracas, the cities will be important places to look for signs of unrest. 

The Ruling Party's Options

The PSUV has three main courses of action it could take. First, it could simply ignore the opposition, using the judicial branch to nullify any controversial legislation the National Assembly passes. Taking away the parliament's power would undoubtedly generate additional friction between the executive and legislative branches, and it is unlikely that the opposition would give up its influence without a fight. Therefore, in this scenario, it is extremely probable that certain segments of the opposition would be willing to protest, while others would prefer to negotiate a power-sharing deal with the government.

The PSUV's second option is to try to further dismantle the opposition's legislative majority by citing inconsistencies during the December 2015 elections. This would also require the support of the supreme court. Such tactics have worked before: In mid-January, the government managed to unseat three of the opposition's lawmakers in Amazonas state by raising the possibility of electoral inconsistencies. That said, any attempts to replicate the tactic may succeed only in exacerbating the stalemate between the legislature and the government. Of course, additional attempts to remove lawmakers could also worsen the divisions within the opposition coalition, particularly those between parties strongly opposed to Maduro and the more conciliatory ones.

The ruling party's final option is to expand its control over the Venezuelan economy and public finances. On Jan. 15, Maduro put forward an emergency decree that would grant the executive branch broad powers over public spending and financial planning without requiring legislative oversight. Though the opposition rejected the decree, Maduro may yet push forward with its implementation. If he does, he would essentially be dictating domestic spending policies without the input of the National Assembly. This would increase the risk of more heavy-handed attempts by the government to centralize economic power, which could take the form of continuing overvalued exchange rates and extensive subsidy programs, as well as centralizing food distribution networks through seizure or expropriation.

The Opposition's Options

The opposition also has several approaches it could take in the coming weeks. First, it could start the process of impeaching Maduro, something opposition figure Henry Ramos Allup has threatened to do since the new National Assembly was sworn in Jan. 5. However, this would not only be a slow and lengthy process, but it would also require a referendum, which the government could use the supreme court to challenge.

Its second option would be to pass a constitutional amendment that would limit Maduro's tenure, eventually forcing a new presidential election. The biggest constraint in this scenario would be the opposition's leaders: Figures more opposed to Maduro, such as Machado and Tintori, will prefer to pursue a referendum, while more moderate figures such as Allup and Torrealba will advocate the constitutional amendment.

Third, the opposition could try to use a new constitutional amendment to override the judicial branch's organic laws. According to the Venezuelan Constitution, an organic law is one that regulates the country's institutions. In this scenario, an amendment could be used to instate more magistrates who are friendly to the opposition as a way to counterbalance those who are loyal to the Maduro government. Still, the supreme court could substantially delay such a move, since it would first have to undergo legal revision and be adhered to by the executive branch. Even if executed successfully, the amendment would likely just create gridlock within the supreme court.

The final, and perhaps most extreme, step the National Assembly could take would be to write a new constitution. The legislature has the power to call for a Constitutional Assembly to rewrite the constitution, suspending the activities of the judicial and executive branches in the interim. This move would not require the approval of the supreme court. Still, it is the least plausible scenario. Replacing the constitution would spur forceful resistance from the PSUV and carry the risk of political upheaval on an unprecedented scale. Therefore, even if some of the opposition's factions find this option tempting, it is unlikely that the military — the main arbiter of power in Venezuela — would back it up. 

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