Venezuela

Maduro returns

Print edition : June 22, 2018

President Nicolas Maduro at a campaign rally in Caracas on May 17. Photo: Carlos Becerra/Bloomberg via Getty Images

A supporter holding a doll of Hugo Chavez listens to Maduro's speech on May 20. Photo: Ariana Cubillos/AP

Nicolas Maduro comes to power for a second time in Venezuela in an election boycotted by most right-wing parties at the instance of the United States. He will have his hands full to end the long-running economic crisis in the country.

IN the presidential election held on May 20, incumbent Nicolas Maduro won re-election for another six-year term, defeating his main rival, Henri Falcon, by a huge margin. Most of the right-wing parties boycotted the election at the instance of the United States.

Maduro called elections more than six months ahead of schedule. The opposition had been calling for early elections until last year. Its violent protests in 2014 lasted more than three months and claimed 43 lives. But the opposition reversed its position on the issue and most of the right-wing parties refused to participate in this year’s election at the urging of their minders in Washington. That Falcon, along with a right-wing evangelical leader, Javier Bertucci, chose to contest against Maduro and the ruling United Socialist Party of Venezuela (PSUV) came as a surprise to the Donald Trump administration.

Falcon broke away from the PSUV in 2010 to join the ranks of the opposition. He has served as Governor of Lara State and was the campaign chief of the opposition coalition—the Democratic Unity Roundtable—in the presidential election of 2013. Like Hugo Chavez, he is a former army man. He defied calls from Washington to boycott the election this year.

If the entire opposition had boycotted the election, it would have bolstered the Trump administration’s argument that the election process in Venezuela was a charade. Interestingly, the opposition was on the verge of committing itself to participating in the election but withdrew at the eleventh hour at the instance of its patrons in Washington. On the campaign trail, Falcon said he was confident of scoring an upset victory, arguing that the economic difficulties the people were facing would tilt the balance in his favour.

Since the death of Chavez in 2013, the country has been in turbulence, mostly caused by external factors. Hyperinflation has gripped the country. Oil revenues have dropped by two-thirds since the time of Chavez’s death. As much as 95 per cent of the country’s revenues come from oil exports. The country has the world’s largest proven hydrocarbon reserves. Low global oil prices in the past five years have been responsible to a large extent for the deteriorating economy. Sanctions against the country by the U.S. and economic sabotage by the local elite have also played a big role in the economic downslide. Many important sectors, including the health sector, have been badly affected. But with the oil prices rising sharply since the beginning of the year, there are grounds for optimism as far as the Venezuelan economy is concerned.

The opposition, if it were united behind a single candidate, had a good chance of winning. In the elections held in December 2013, Maduro, Chavez’s chosen heir, won by only around 2 percentage points. The opposition candidate at the time, Henrique Caprilles, lost the election by a mere 1.5 per cent of the votes. In the last five years, opposition unity further disintegrated, with the more moderate among them not averse to political compromises with the ruling party.

Henri Falcon, presidential candidate for the Progressive Front Party, at a rally in Caracas on May 14. He defied calls from Washington to boycott the election.   -  Wil Riera/Bloomberg

On the campaign trail, Falcon even promised to keep some of the radical socialist reforms introduced by Chavez intact. But after the results were out, he changed his tune and said that the election was rigged and demanded a new election. Bertucci, the candidate who came third, also claimed likewise.

Falcon got only 21.1 per cent of the votes compared with the 70 per cent won by Maduro. Bertucci won around 11 per cent. The turnout this time was low compared with the earlier presidential election; only 46 per cent of the electorate turned out to cast their votes. In the 2013 election, there was an 80 per cent turnout. Maduro polled 1.5 million votes fewer than what he did in 2013. This also reflected the alienation of many traditional PSUV voters from the government.

In many upper- and middle-class areas of Caracas and other cities, very few people bothered to vote, heeding the call by the main right-wing Democratic Unity coalition for a boycott. Their votes otherwise would have gone to Falcon. He did, in passing, blame the boycott call for his defeat and said that a “historical opportunity” was lost to bring about a change in government. Only three of the major nine opposition parties campaigned for Falcon. The other parties supported the boycott.

‘Will of the people’

Tibisay Lucena, head of Venezuela’s National Election Council, called on all Venezuelans to respect the results, saying that it reflected “the will of the people”. An international observers’ mission, headed by the Council of Electoral Experts of Latin America (CEELA) comprising former election commission officials from the region, certified that the election was “free and fair”. CEELA president Nicanor Moscoso, addressing a press conference in Caracas, stressed that “these elections have to be recognised because they are the result of the will of the Venezuelan people”.

The opposition blamed the “red point” kiosks set up by the ruling party near polling booths for its massive defeat. But this is not the first time the kiosks have appeared during elections. The ruling party had set up “red points” in the previous election for purposes of data analysis and exit poll. Government supporters are encouraged to report to the “red points” after casting their votes. The opposition alleged that the “red points” were specifically set up to bribe people with food and money.

Javier Bertucci, a TV evangelist, with supporters after he voted in the presidential election in Valencia on May 20. That he and Falcon chose to contest against Maduro and the ruling United Socialist Party of Venezuela came as a surprise to the Donald Trump administration.   -  Fernando Llano/AP

After the results were out, President Maduro called on the defeated candidates to participate in a dialogue for “national reconciliation”. Jose Zapatero, former Prime Minister of Spain, who has been trying to mediate between the government and the opposition, supported the call. Zapatero said that the election was peaceful and added that the opposition should take its complaints to the Election Commission.

The U.S. was quick to criticise the conduct of the elections and proceeded to impose additional unilateral sanctions on Venezuela, including a ban on transactions involving debts owed to Venezuela. This adversely impacts Venezuela’s capacity to raise loans in the international market. The U.S. has already prohibited its citizens and banks from buying Venezuelan government debts or bonds issued by the state-owned oil company, PDVSA. Most of Venezuela’s oil is exported to the U.S. PDVSA runs its own petrol service outlets in major American cities.

Plotting a coup?

As soon as the Venezuelan government announced the election dates for February, the U.S. declared that it would not recognise the results of the election. The government in Caracas even advanced the election dates by more than a month and gave guarantees for holding a fair and free election to accommodate some of the concerns expressed by the opposition. When the results were announced, U.S. Vice President Mike Pence issued a statement describing the election as a “sham” but declined to give any specific instances of fraud. Significantly, the Trump administration was quick to recognise the legitimacy of the general election held in Honduras a few months ago despite international observers, including those from the Organisation of American States, deeming it a “stolen” election.

Many observers of the region are convinced that the U.S. is aiming at a total overhaul of the Venezuelan political system through a military coup. Former U.S. Secretary of State Rex Tillerson once even said the Monroe doctrine formulated in the early 19th century, which viewed the whole of Latin America as America’s backyard, was “as relevant today, as the day it was written”. Marco Rubio, Republican Senator from Florida who plays a leading role in framing the Trump administration’s policies on Latin America, recently claimed that the world would support the armed forces in Venezuela “if they decide to protect the people and restore democracy by removing a dictator”.

Rubio was echoing Tillerson who earlier in the year had said that in the history of Venezuela and Latin America “it is often times that the military is the agent of change when things are so bad, and the leadership can no longer serve the people”.

The U.S. and its regional right-wing allies want the current Venezuelan Constitution, which espouses socialism and a transparent system of democracy, to be replaced by a more pliant constitutional order that will be submissive to the diktats of big corporations and local oligarchs.

Even many of Venezuela’s critics acknowledge that the voting system in the country is among the most secure in the world. It is a system in which paper ballots and electronic votes are cast at the same time and compared against each other. The entire process, from the casting of votes to the counting, is strictly audited by representatives from both ruling and opposition parties. Jimmy Carter, the former U.S. President, has described the Venezuelan election process as among the best in the world.

The U.S. position on the elections in Venezuela was supported by the “Lima” group consisting of the right-leaning governments of Brazil, Peru, Argentina, Canada, Paraguay, Costa Rica, Guatemala, Honduras, Guyana, Panama and Santa Lucia. Venezuela’s allies in the region such as Cuba, Bolivia, El Salvador and Nicaragua wasted no time in recognising the results. Russia, China, Turkey and Iran followed suit.

“The parties involved must respect the decision of the Venezuelan people,” a statement from the Chinese Foreign Ministry said. The head of the Latin America division of the Russian Foreign Ministry, Alexander Schetenin, criticised the U.S. and its allies in the region that had called for a boycott of the election. He said the results “are irreversible”. The Russian Foreign Ministry also criticised the U.S. and the other governments in the region that had called for a boycott of the elections.

China and Russia have been important pillars of support for the Venezuelan government in its hour of need. China has doubled its share in the Venezuelan oil market. Rosneft, the Russian petroleum giant, has become an important partner of PDVSA. Both countries have provided much-needed loans and favourable debt restructuring to Venezuela in exchange for guaranteed oil exports.

Cryptocurrency for trade

Earlier this year, the Venezuelan government launched a new cryptocurrency, the Petro, that is backed by the country’s vast oil and mineral reserves. India has been offered oil at 30 per cent discount if it does business with Venezuela using the Petro. If India accepts the offer, it will help bring down the skyrocketing fuel prices in the country. Dealing in cryptocurrency will help Venezuela to evade the draconian U.S. sanctions. It will also allow Venezuela to contract new debt.

Maduro at the event launching the new cryptocurrency, the Petro, in Caracas on February 20. Dealing in crypto currency will help Venezuela to evade U.S. sanctions. It will also allow Venezuela to contract new debt.   -  Marco Bello/Reuters

One of the first actions taken by President Maduro after the elections was to order the expulsion of the two top U.S. diplomats currently stationed in Caracas. The Venezuelan government has accused the U.S. charge d’affaires Todd Robinson and his deputy, Brian Naranjo, of being involved in a “military conspiracy”. Maduro stressed that neither the conspiracies hatched by the U.S. nor the sanctions would divert Venezuela from its chosen path.

At the same time, the Venezuelan leader once again indicated that he was not averse to a negotiated settlement to end the long-running political and economic crisis in the country. “If the empire or the right-wing governments of the region want, someday, to talk in peace and respect, I’m always open to dialogue,” Maduro said in his victory speech. “To the empire, I say understand that Venezuela is the warranty of social and political stability in our country and the region. It’s a sin to try and destabilise Venezuela.”

Goodwill gesture

As a goodwill gesture, the Venezuelan government released a U.S. citizen, Joshua Holt, from prison in the last week of May. Holt was arrested two years ago on terrorism charges after he was found in possession of a cache of arms. The government has also started releasing prisoners who had been sentenced for indulging in violence during protests.

Venezuelans who voted for Maduro now expect more decisive actions from the government. Many believe that the economic crisis can be solved if the government finds the courage to expropriate the wealth of the capitalists and the landowners instead of keeping on requesting them to cooperate.

The government is still giving private businesses and bankers access to scarce foreign exchange while its attempts to convince them to invest in Venezuela were in vain. The government, at the same time, accuses them of waging an “economic war” against the people of Venezuela. In his victory speech, Maduro once again held out an olive branch to Venezuelan big business and the Trump administration, which is considering more punitive oil sanctions on the country.

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