Venezuela: An election to be remembered
FRIDAY JUNE 14, 2013
Venezuela’s April presidential election proved to be a historic moment for a country in transition. It showed that while Chavismo could successfully outlive its creator, the revolution has a fragility that makes its immortality uncertain. Since Chavez’s rise to power in 1999, he ruled with legitimacy born from the feeble but undeniable progress that most characteristically summarizes his idealogy, Chavismo.
This progress bears itself out in a number of ways. Venezuela reports one of the highest literacy rates in the region. Gross Domestic Product (GDP) as Purchasing Power Parity (PPP) rose dramatically since 2005 as the country used the profits from its largest export, oil, to expand its social programs. Inflation spiked twice in the last decade and stayed high but manageable. This rocky but significant economic growth of the last decade stands in sharp contrast to periods in the 1980s and 1990s in which Venezuelan incomes were low, inflation was over three times the current rate, and GDP was two-thirds of what it is now. Chavismo is a reaction against the perceived western and especially American culpability in these earlier economic disasters.
The elections, however, showed that this reaction is not invincible to the same forces that expelled western influences in 1999. Economic uncertainty and high violence likely contributed to the near dead heat between Chavez’s United Socialist Party of Venezuela (PSUV) and the collected opposition.
After Chavez’s passing, Nicolas Maduro became the new standard-bearer for the PSUV. Upon the announcement of his victory in the presidential elections on April 14 all sides took to the street in an international spectacle as the Venezuelan opposition called into question the legitimacy of the results. Henrique Capriles, the opposition leader, continued holding rallies in which he condemned Maduro as a “coward” and “illegitimate”. Violent clashes left at least nine dead and 78 injured in following days, leading to a condemnation and call for investigation by the Organization of American States. In the days following the election, the United States joined the opposition in calling for a recount. Diosdado Cabello, a prominent PSUV politician who lost his governorship to Capriles in 2008, responded to the calls for a recount by commenting to Al Jazeera, “There is no chance, no chance there will be a vote recount. The votes were counted on Sunday. What Capriles wants is absurd, because elections here are held electronically.”
The elections, however, have since been checked and certified by the National Electoral Council of Venezuela (CNE), an independent branch of the Venezuelan government that supervises elections. Over half of the votes were randomly compared to paper ballots and showed a consistency of 99.98 percent. This cannot, of course, answer some of the allegations – for example threats by poll-workers or votes by deceased citizens. Voting stations in Venezuela are described by a Jimmy Carter Center report as “some of the most automated in the world.” A government ID and fingerprint scanner are necessary in order to cast a ballot. Capriles has since called for a more thorough checking of fingerprints and the voting registry itself. It appears, however, that the recount will proceed no further.
Questions about the accuracy of the voter registry are not new. The same Jimmy Carter Center report done on the October 2012 elections of Chavez cited this as an issue, although qualified by citing two studies that indicated no systematic unfairness or excess of errors above and beyond those found in nearby countries. The Union of South American Nations immediately backed the elections as legitimate, and the US has since tacitly backed away from its earlier skeptical position.
Electoral unrest was not contained to the streets. A brawl broke out on April 30th on the floor of parliament that left legislators cut and bruised. Opposition candidates who refused to recognize Maduro as president were censured and not allowed to speak. They responded by bringing airhorns and banners in protest. As the disruption got louder the two sides came to blows, leaving some on either side bruised and bleeding. No serious injury or hospitalization occurred. A video was taken of the outburst and circulated around the web.
With victory comes responsibility
Maduro now faces serious challenges as the leader of a country with an uncertain future. Chief among his concerns will be considerations of violence and economic problems that threaten the country.
Venezuela’s economic situation is a complex one. The country uses a fixed exchange rate, in which the government decides at what constant rate the Bolivar trades with the dollar. Venezuela primarily uses this as a way to prevent capital flight and to control which groups have access to foreign currencies and therefore the ability to buy and distribute foreign goods. This restriction has caused a black market for dollars to spring up among those who are willing to pay more to avoid government control. The official rate of the Bolivar shows it to be overpriced compared to the black market by more then five times. With an overvalued currency it becomes easy to import commodities and difficult to export all commodities apart from oil (which is priced in dollars). The government has a limited amount of US dollars, and since demand for them is so great it must limit for what purposes and to whom the dollars are given. This is the cause of the demand that drives the black market.
In February the currency was devalued from 4.3 to 6.3 bolivars per dollar to bring it closer in line with market forces. Devaluation results in the creation of money and therefore inflation because the government credits itself with additional Bolivars every time a barrel of oil is bought in dollars. This is done so the government can meet its obligations, but harms those in Venezuela who have their wealth stored in Bolivars.
Venezuela recently altered the mechanism in which it exchanges currency in order to avoid the unpopularity associated with revaluing money. The old system was a simple exchange, in which those who wished to participate listed the goods they wished to purchase and how many Bolivars they wished to trade for US dollars. If the government decided to allow the exchange the individual or corporation could change Bolivars for US dollars at the favorable rate – much cheaper than the black market. The new system, installed in March, is an auction. Like before, exchangers submit what they wish to purchase. Now, however, they also report the price they would be willing to pay for the US dollars. In this way the government can sell US dollars for a higher price, devaluing the currency, while simultaneously avoiding the publicity and political repercussions associated with overt devaluations. The April inflation rate brought the yearly rate up to 29.4 percent, with the first few months of 2013 reporting double the inflation of the same period in 2012.
Apart from the precarious economy, Venezuela is dealing with one of the worst violent crime rates in the region. According to official government statistics, deaths were reported to be around 16,000 in 2012. The United States experienced fewer deaths over the same time period with a population ten times the size. According to a UN Report on Homicide, Venezuela’s death rate has remained fairly constant since 2006 at 45-50 deaths per 100,000 people. While one of the worst in the world, it is not the worst in the region – Honduras reports 85 deaths per 100,000 individuals.
Off to a shaky start
With such grave problems facing the country, Venezuela’s new government must try to find a way to pull the country together to form a united front. Partisan bickering continues. Capriles continues to not recognize the validity of the vote a month and a half after the elections and is regularly holding demonstrations in protest. On Wednesday, May 29, Capriles was received in an official visit by the Colombian government. Diosdado Cabello publicly declared that “[Colombian President Juan Manuel] Santos has put a bomb in the relations between Colombia and Venezuela.” He also referred to Capriles as a “murderous fascist” three times in the three minute statement. Maduro, likewise, pulled no punches saying “[Santos] has stabbed Venezuela.” In somewhat of a non-sequiter, he accused Colombia in the same speech of plotting to kill him with poison and kill Venezuelan soldiers.
With such distractions and heightened tensions, the problems of Venezuela loom larger. The April elections signal that the public is clearly divided, and that unless substantial progress is made the people of Venezuela will choose a different type of leader and send Hugo Chavez’s fourteen year revolution following him shortly to the grave.
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