Steve Ellner's Blog on Venezuela, Latin America and Beyond: VENEZUELA’S MAY 20 ELECTIONS: WHERE DO THINGS STAND?

“NACLA: Report on the Americas” – posted May 24, 2018

by Steve Ellner

The announcement by defeated presidential candidate Henri Falcón that he would not recognize the legitimacy of Venezuela’s May 20 elections was that day’s main news item. Nicolás Maduro’s reelection was generally expected, though his 68 percent of the vote was higher than what most polls predicted. Similarly, the 52 percent abstention among registered voters came as no surprise as the main parties of the opposition grouped in the Democratic Unity coalition (MUD) called for an electoral boycott.

The refusal by Falcón and the other main presidential candidate, evangelist Javier Bertucci, to recognize the electoral results bodes poorly for Maduro’s new term as president. The consolidation of a moderate bloc within the opposition which recognizes the government’s legitimacy would have significantly cut into the strength of the more intransigent, or radical, parties on the right and provided Venezuelan politics with much needed stability.

Maduro is in need of political capital and a degree of support from outside the Chavista movement in order to tackle such pressing problems as four-digit annual inflation, an appalling deterioration in the standard of living of both popular and middle sectors, and oil industry mismanagement resulting in a decline in production. Two urgent tasks loom as major challenges: the deepening of the efforts to combat corruption that began in the latter months of 2017; and bringing the nation’s officially set prices, including foreign exchange rates, within closer reach of production costs and market prices. Products and services such as gasoline, cooking gas and Caracas’ metro fare are virtually free while the rates charged by the state telephone company CANTV are not far behind.

Given the nation’s intense polarization, bold and necessary government measures such as these, which tend to generate popular or bureaucratic resistance, will be exploited by the opposition. Contributing to the volatility is the hostile position assumed by Washington as well as Venezuela’s Latin American neighbors and the European Union. In August the Trump administration prohibited the purchase of Venezuelan state bonds and Venezuelan-owned CITGO’s remittance of profits and then banned transactions involving Venezuela’s new cryptocurrency, the Petro.

In February of this year, the parties of the MUD pulled out of negotiations with the government conducted in Santo Domingo in spite of various concessions and optimism that an agreement could be reached. According to Maduro, the decision was a response to pressure from Washington. The Trump administration’s characterization of the Maduro government as a tyrannical dictatorship and a veritable narco-state undoubtedly also influenced the MUD to call for an electoral boycott, even after Acción Democrática (AD) secretary general Henry Ramos Allup announced his presidential candidacy in January. The only important parties in the opposition camp that ended up participating on May 20 were the social-Christian COPEI (one of the nation’s main historical parties) and the Movimiento al Socialismo (MAS), both of which backed Falcón.

Venezuela’s Three-Way Split

Falcón’s refusal to recognize the electoral results on May 20 was far from inevitable. Indeed, Falcón emerged as a major national leader on October 15, 2017 when he acknowledged his defeat in his bid for reelection as governor of Lara, unlike the position assumed on that day by other opposition gubernatorial candidates. A concurrent event appeared to signal a major break-off from the “disloyal,” radical opposition, which over the previous two decades had for the most part denied the legitimacy of the Hugo Chávez and Maduro governments. Four of the opposition’s five elected governors, all belonging to AD, disobeyed party orders by agreeing to take their oath in front of the Chavista-dominated National Constituent Assembly.

Important differences and tensions between the radical opposition and Falcón arose during his presidential campaign. Chavista leader Diosdado Cabello told journalist and former leftist presidential candidate José Vicente Rangel: “The worst that has been said about Falcón has not been by us, but rather the opposition.” In an example of ugly name-calling, two renowned international journalists who sympathize with the Venezuelan radical opposition – Andrés Oppenheimer[1] and Jaime Bayly[2] of Peru – called Falcón a two-time “traitor”: first he broke with Chávez (after being elected governor of Lara) and then with former opposition presidential candidate Henrique Capriles (after serving as his campaign manager).

Behind the conflict among the anti-Chavistas, there is a glaring fact. Venezuela is divided in three, not two, camps: the radical opposition, the Chavistas, and a middle ground lacking in well-organized leadership. A sizeable percentage of the population opposed to Maduro firmly rejects the type of street protests carried out in 2014 and 2017 known as the guarimba that resulted in widespread disruption and violence. These Venezuelans are equally opposed to the U.S. economic sanctions imposed on the nation with the encouragement of the radical opposition. According to the polling firm Hinterlaces, 71 percent of the population is in disagreement with international sanctions to oust Maduro from office.[3]

The above-mentioned “middle ground” opposes the disruptive “guarimba” protests and the economic sanctions, both associated with the radical opposition. This is the space that was occupied by Falcón throughout the campaign.

At this moment, Maduro’s priority task is to minimize the effects of both of these threats. The day after the elections Trump, as expected, issued an executive order tightening the financial sanctions, but the real source of alarm is the possibility of an oil embargo currently under study by the State and Treasury Departments and the National Security Council. Also on May 21, street disturbances against the elections broke out in various cities, signaling the possibility of a reenactment of the guarimba at the national level at a time when Venezuela is even more isolated than a year ago.

The “Economic War”

The issue of foreign-imposed sanctions has the potential to unify much of the nation while isolating the radical opposition, which supports the measures. But for this to happen, the government needs to improve its communication strategy by documenting the concrete ways that the sanctions are affecting the economy. Government rhetoric too often harps on the “economic war” against Venezuela in the abstract without going beyond slogans and pointing to the specifics.

Radical opposition leaders flatly deny that the economic sanctions are at all related to Venezuela’s economic difficulties, which they attribute exclusively to Maduro’s mistaken policies and corruption. Others recognize that the sanctions complicate matters for the Venezuelan government but claim they have had “limited”[4] effect, a position which often serves to place the lion’s share of the blame for the nation’s economic problems on Maduro. Government errors and politically motivated economic disruption, however, are not mutually exclusive.

There is much evidence to debunk the radical opposition’s claim that the sanctions and the “economic war” in general have had a negligible effect. In an article in Foreign Policy, Falcón’s chief economic advisor Francisco Rodríguez argues that the sanctions have inflicted considerable harm on the Venezuelan economy. He points out that Venezuelan companies such as CITGO have been unable “to get U.S. financial institutions to issue routine trade credit since sanctions were imposed” and that the measures risk “turning the country’s current humanitarian crisis into a full-blown humanitarian catastrophe.”[5]

Equally or more important than the sanctions per se is the message that the executive orders issued by Obama and Trump sends to private capital. No U.S. company can ignore the seriousness of a statement by its nation’s president that a foreign government represents an “extraordinary threat to national security” (in the words of Obama) or that it is involved in drug trafficking and money laundering.

In a similar vein, Miami’s El Nuevo Herald revealed that National Assembly president and leader of the radical opposition Julio Borges systematically contacted banks throughout the world in order to enhance the effectiveness of the U.S. imposed sanctions. Borges warned financial institutions that “doing business with a dictatorship that violates human rights” would convert them into “accomplices” and would endanger their “image.”[6] Needless to say, Borges’ words amounted to a veiled threat.

One of the multiple effects of Washington’s campaign against the Venezuelan government is the corporate exodus of recent years, which includes Clorox, Kimberly-Clark, Ford, Colgate Palmolive, General Mills and General Motors. Although the companies blamed the Maduro administration for their decision, political and economic motives in situations like these are always mixed and difficult, if not impossible, to untangle.[7] The Chavistas view the exodus as an expression of the “economic war.” When Kellogg’s shut down operations on the eve of the May 20 elections, Maduro remarked that company executives “believe people are going to get scared”[8] and thus refrain from voting for him.

Acknowledging the problem of inefficiency, corruption and mismanagement should not detract from the recognition that Washington’s hostile actions have impacted the Venezuelan economy in major ways. The oil industry is a case in point. Unethical practices in the industry have been well documented by Attorney General Tarek William Saab, who was appointed in August 2017 and immediately denounced corrupt dealings resulting in numerous arrests of top executives of the state oil company PDVSA. But the company has also been a victim of the sanctions which have affected its relationship with major oil service providers such as Baker Hughes, Halliburton, and Schlumberger. In order to avoid a direct relationship with PDVSA, these U.S. companies now work through an intermediary firm which rent their equipment and hire their personnel while taking a fair cut of the profits. At the same time, Chevron, which is the only U.S. oil company with a major presence in Venezuela, has refrained from making significant investments over the recent past.

The Moderate versus Radical Opposition

Following the May 20 elections, various opposition spokespeople called for unity among the anti-Chavistas. AD’s Laidy Gómez, governor of the state of Táchira, declared: “This is not the moment for us to lay blame on one another. We have a common enemy to confront.” Achieving such unity, however, will not be easy given the profundity of the differences separating those who called for an electoral boycott and those favoring participation.

A look at the differences sheds light not only on the chasm between opposition “moderates” and radicals, but also the different ways ordinary Venezuelans view key political issues. The contrast between the two camps also suggests the feasibility of an understanding or convergence involving the Chavistas in power and the opposition moderates, at least on certain issues.

Boycott versus participation. The radical opposition, the Trump administration and much of the corporate media label the Venezuelan electoral process “fraudulent,” which refers to manipulation in the counting of votes. Over the years, the opposition has used the term loosely. Nevertheless, the nation’s voting system is based on simultaneous manual and electronic procedures as well as auditing in over 50 percent of the voting centers. Furthermore, on May 20, as in past elections, opposition representatives at all voting centers signed documents validating the process. Falcón’s supporters, fearful that the use of the term “fraud” would discourage voting, limited their concerns to irregularities and the lack of a level playing field. Falcón’s objections on May 20 included the one-sided coverage of the state-run media, the claim that assisted voting conducted for the elderly lent itself to voter manipulation, and the location of Chavista stands known as “puntos rojos” within the 200-meter parameter of voting centers in violation of electoral norms. Falcón’s one accusation of a practice that appeared to have had a potential to influence significantly results was the effort to sway voters with the prospect that they would receive a bonus if they went to the polls (though the secrecy of the voting process was never seriously questioned).

No to impunity. The opposition radicals openly call for the purging of the state apparatus in order to eradicate corruption at all levels. In contrast, Falcón’s strategy was clearly designed to win over discontent Chavistas. Falcón pledged he would decree a moratorium on layoffs in the public administration while his Avanzada Progresista party indicated that if elected its candidate would consider retaining Maduro’s Defense Minister Vladimir Padrino López, a Chavista stalwart, in his post.

The road to power. The decision of the opposition radicals to boycott the elections reflects their skepticism regarding the feasibility of achieving their objectives, including neoliberal structural reforms, through electoral means. In early 2016 when a campaign was underway to collect signatures for a presidential recall, the radical Voluntad Popular party led by jailed Leopoldo López advocated the calling of a constitutional assembly. Its argument was that removing the president and electing a new one would not ensure the achievement of the thoroughgoing changes that the nation needed.

Underlying the radicals’ hard-line position on elections was the strategy for the complete undoing of the changes implemented by Chávez and their replacement with neoliberalism, shock-treatment style. Among the changes was the privatization of strategic sectors of the economy which the current constitution of 1999 prohibits. The approach of the opposition radicals, which implied a major shakeup possibly by forceful means, contrasted with that of the Falcón candidacy, which emphasized peaceful change and associated the electoral boycott promoted by the opposition with the likelihood of violence.

International “solidarity.” Falcón and his supporters questioned, albeit timidly, the radicals’ emphasis on foreign support for their cause and adamantly ruled out foreign military intervention, while insinuating that those boycotting the elections left open the option. In the words of Copei’s historical leader Eduardo Fernández, we welcome the “solidarity of the international community but… in the end the solution to the problems of Venezuela correspond to us.”[9]

Maduro’s limited options.

José Vicente Rangel, who occupied various top positions under Chávez including the vice-presidency, has long been the foremost advocate of promoting dialogue with sectors of the opposition. The issue manifests itself in internal rivalry within the governing United Socialist Party (PSUV) between the two main long-standing factions headed by Maduro and hard-liner Diosdado Cabello. At one point, the Cabello faction had hoped that he would be the party’s presidential candidate, a proposition publicly expressed by national leader Francisco Ameliach. But in recent months, Cabello’s faction as well as others outside of the Maduro circle have seen their influence somewhat diminished, partly because of the anti-corruption campaign spearheaded by Tarek William Saab.

The national dialogue that Maduro called for on May 22 is nothing new. In fact the proposal dates back to the months of the guarimba protests in 2014. But the emergence of a new, more moderate reference point within the opposition camp as a result of the Falcón candidacy enhances the plan’s chances of success. Throughout the campaign Falcón performed a balancing act between demonstrating to the opposition that he was not soft on the government and trying to attract discontent Chavistas. The future of his movement is very much up in the air.

The neoliberal formulas put forward by Falcón including mass privatization, agreements with the IMF and the dollarization of the economy are not common denominators for the Chavista government to build on. But there is one key issue that can bring the two sides together. If Maduro attempts to link the nation’s price structure to market conditions in order to combat rampant inflation, he will need political support and such an effort would be perfectly compatible with the Falcón camp’s economic positions.

Politics is all about knowing when to act, and this is especially applicable to leftists in power. Maduro’s options are limited given Venezuela’s isolation on the international stage, the direness of the economic situation and the level of discontent in the nation. But Maduro has just won a victory and thus needs to take advantage of the moment; solutions to the nation’s pressing problems require bold moves. In the past, Maduro has failed to take advantage of favorable moments, but after five years as president he may have learned the importance of timing. Whether this is the case will be evident in the coming days.

Steve Ellner has been a NACLA contributor since the late 1980s. His most recent article, “Implications of Marxist State Theory and How They Play Out in Venezuela” appeared in the journal Historical Materialism. He is the editor of the Latin American Perspectives issue “Latin America’s Progressive Governments: Separating Socio-Economic Breakthroughs and Shortcomings,” slated for January 2019.