Capriles Radonski and the New Venezuelan Opposition

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Leopoldo Lopez, left, with presidential candidate Henrique Capriles Radonski. (Jorge Silva / Courtesy Reuters)

In October, Venezuelans will head to the polls for the fourth presidential vote since Hugo Chávez took power in 1999. With the announcement earlier this week by Leopoldo Lopez that he is ending his candidacy and throwing his support to Henrique Capriles Radonski, the young and charismatic governor whom many expect to be Chávez's main contender, the opposition is gradually consolidating its power. It is slowly becoming a more serious challenge to the regime in Caracas, which remains electorally competitive itself.

The stakes are higher than at any point in the last decade, for both the government and the opposition. A Chávez defeat would signal the end of a leftist revolution that has radically transformed Venezuela and, some argue, Latin America in the twenty-first century. A Chávez victory, however, would inflict a fatal blow to a renewed opposition that has struggled, and now seems to be succeeding, to gain some traction in a socially polarized country.

To be sure, Chávez will not give up easily. He has framed the election as a confrontation that leaves no room for political negotiation. Although the president enjoys robust popular support, he faces three obstacles besides Capriles Radonski: dysfunction in the economy, a weak administration that is unable to cope with high crime rates, and his alleged battle with cancer.

For now, high oil prices serve as an ongoing life raft for Chávez, and a massive expansion of public expenditures has spurred growth in domestic consumption. Meanwhile, Caracas has doubled down on its control of the economy, tightening regulations, exacting price controls, and expropriating businesses. Previously, Chávez used such controls as finely tuned instruments for preempting the politically charged private sector. But now he has taken direct control of major national and foreign businesses to advance his agenda.

In the past few years, Chávez targeted Sidor, the giant steelworks company owned by Techint, a huge Italian and Argentinian steel conglomerate; EDC, a local subsidiary of the Virginia-based AES Corporation and the major electric company for metropolitan Caracas; Casino, a French retailer; CANTV, the national telecommunications company controlled by Verizon; and large foreign oil companies such as Conoco and Exxon Mobil. Beyond formal protests from business organizations and international arbitrators, however, the government's seizure of these companies has been met with a shrug from Venezuelans because the oil boom has continued to finance high private consumption.

Still, Caracas' finances are unsustainable. External debt has increased 160 percent in the last five years. Most of the outlay was to pay for a growing public sector and large social programs. As it stands, the state-owned petroleum company PDVSA and the state-owned financial institutions BANDES and FONDEN issue most of the debt. But they cannot do so forever, and, in the medium term, their activities are giving them outsized economic and political power. Meanwhile, China has handed Venezuela a $30 billion line of credit, which is guaranteed by Venezuelan promises of discounted oil in the future -- a workable fix for now but one that stands to benefit Beijing more than Caracas in the long term.

As Chávez continues to spend, Venezuela's inflation remains the highest in Latin America. Chávez's social policies, then, are counterproductive: higher prices, due to inflation, diminish the impact of such programs as the misiones, which directly transfer resources to low-income groups in urban and rural areas to help alleviate poverty. With money worth less and less, these handouts are may no longer be enough to appease the poor. In addition, clientelism, corruption, and weak administration have eroded their trust in the government further.  

Withering rule of law is taking its toll on Venezuelan society as well. Judges lack autonomy -- they run the risk of being jailed for making decisions that are inconsistent with Chavismo's revolutionary aims. In a notable case from 2009, a Caracas judge, María Lourdes Afiuni Mora, was arrested on charges of corruption after she ordered the conditional release on bail of a former crony banker accused of bribery. The case gained the attention of international human rights groups and left-wing intellectuals, including Noam Chomsky, who appealed to Chávez personally to free Afiuni. She was released from prison in 2011 but remains under house arrest. Narcotrafficking-related violence is also up. The country's per capita murder rate is one of the top five in the world. Violent crimes rarely come to court and a sense of impunity pervades the country; accordingly, quality of life has suffered across every income sector.

All this leaves Venezuelans with a mixed view of their president. Chávez's approval rating remains high, at around 55 percent, but that is far below its historic peak. His commitment to the discourse of social inclusion and reducing poverty has certainly won him a base of loyal support, especially among the poor. Still, he will not be able to coast on that support to an easy victory. Polls continue to show that Venezuelans are deeply divided over him and his statist project.