How a Great Power Falls Apart
Decline Is Invisible From the Inside
Venezuelan presidential candidate Nicolás Maduro in front of an image of Hugo Chávez. (Jorge Silva / Courtesy Reuters)
After Venezuelan President Hugo Chávez died last week, his supporters gathered in cities and small towns throughout the country to mourn the man who led the nation for the last 14 years and championed the plight of the poor. Chávez's unique leadership style and one-man rule will be difficult for any Venezuelan politician to replicate: his magnetic personality and aggressive style allowed him to make state decisions unilaterally without having to share his electoral power. The next president will not be able to rely on such traits as he faces the polarized country, dysfunctional economy, and high crime rates that Chávez left behind. And if the next leader comes from the ruling Chavista camp, as is expected, he will need to address the party's internal divisions as well.
In his last televised address on December 8, 2012, before going to Havana for his fourth and final cancer-related surgery, Chávez named his vice president, Nicolás Maduro, as his successor. Thanks to public sympathy for Chávez and, by extension, his anointed heir, Maduro is the favorite to win the presidential elections, which will be held on April 14. But that is not to say he has an easy path ahead. Maduro lacks his predecessor's charisma. He is a talented politician, able to strike deals among competing factions, but he does not have Chávez's popular appeal. Chávez was a superb communicator, employing mass media and new technologies, such as Twitter, to reach millions of followers. Maduro, by contrast, seems less concerned about gaining popular support and will likely rely on state patronage networks and social programs to shore up his position.
To be sure, these institutions will benefit him in the race against opposition candidate Henrique Capriles Radonski, who unsuccessfully ran against Chávez in the last presidential election, especially because a 20-day electoral campaign leaves little time for the non-Chavistas to organize.
For now, the Chavistas are working together, realizing that, given their favorable electoral prospects and influence in all branches of government, they will retain more power if they act in concert. If Maduro wins the presidential election, as expected, Chávez's political ideology, known as Chavismo, will remain the dominant guiding force in Venezuela, albeit with new twists. Two prominent Chavistas, Diosdado Cabello, the president of the national assembly who has substantial influence over the military, and Rafael Ramirez, president of the state-owned oil company, have declared loyalty to Maduro. In fact, Cabello, Ramirez, and Maduro have been jointly ruling the country since mid-January. And so far, the public seems to back the troika.
Cuba, Venezuela's closest ally, and Colombia, a close trading partner, have also thrown their weight behind Maduro and have helped stabilize the transition. In fact, Fidel and Raúl Castro helped Chávez select Maduro as successor, in part because, when he served as foreign minister from 2006 to 2012, he showed unconditional loyalty to Havana and was committed to anti-Americanism. Cuba also calculates that Maduro's appointment guarantees the continuation of Venezuela's generous oil subsidies for the island. For Colombia, a stable succession under Maduro is important because the Venezuelan government is currently overseeing peace talks between Bogotá and the Revolutionary Armed Forces (FARC). Brazil, a booming regional powerhouse, has also expressed sympathy for Chavismo and has backed the Supreme Court's handling of the transition. And even non-allies, such as the United States, have accepted the constitutional and electoral terms of the succession.
Once in power, however, Maduro will have to innovate and enact reforms to avert a political crisis. Thanks to Chávez's dismantling of all government checks and balances and elimination of term limits, the executive branch has a monopoly of power. Asking any president to shed power is a hard sell -- even if he is only asked to share it with his own party. However, if Maduro is aware of his weaknesses, namely that he lacks Chávez's authority and popular support, he might be more willing to do so.
Divisions within the ruling party run deep and, although most Chavistas were loyal to the late leader, they will not tolerate having another president for life. Thus, it is likely that another Chavista will eventually challenge the new president. By striking deals with different party factions now and reinstating term limits once he is in office, Maduro could calm potential rivals and earn the trust of his own party before a fight breaks out. His political survival will depend on his ability to both develop informal alliances and institutionalize power-sharing mechanisms between competing factions.
The economy, too, needs restructuring in order for Venezuela to remain stable. Even if oil prices remain high, the Venezuelan economy is too weak to prop up Maduro's presidency indefinitely. Chávez could rest easy with a surplus of oil wealth, which he alone controlled and distributed. But that won't continue. In 1999, public spending represented close to 26 percent of gross domestic product. By 2012, it had almost doubled and the central government was running a double-digit fiscal deficit. This means that the central government can no longer finance its largess.
Venezuela's central bank is also facing liquidity problems and cannot accommodate the growing demand for imports and capital flight. As a result, the unofficial exchange rate is 400 percent higher than the official one and, in the last three months, the inflation rate increased ten percent. The government recently devalued the currency, which improved the exchange rate, but strong regulatory burdens, frequent violation of property rights, and strict price controls continue to stifle the economy. Local production and private investment have stalled and, to make matters worse, the country's nearly 2,000 state-owned businesses are experiencing labor unrest as profits and productivity continue to decline.
In dealing with Venezuela's political and economic problems, Maduro may adopt an abrasive and unchecked leadership style, leading the country to further polarization and political instability. Alternatively, Maduro could move away from radicalization in favor of strengthening party institutions and encouraging economic stability. The first path is consistent with Chávez's heroic vision and aggressive style. The second is less dramatic or glorious but is essential to Venezuela's survival. So far, Maduro has oscillated between a conciliatory attitude and firebrand revolutionary rhetoric. Soon, however, he will have to make a choice.