- - Tuesday, February 16, 2016

CARACAS — Two months after he suffered a massive electoral reverse — and with his leftist allies under pressure across South America — President Nicolas Maduro isn’t backing down but doubling down, defiantly rejecting all attempts to limit his power or lead Venezuela away from the populist, anti-market policies of his late mentor, Hugo Chavez.

And despite its Dec. 6 landslide victory and its massive majority in the National Assembly, the country’s centrist opposition has turned out to be largely defenseless against a public administration and Supreme Court stacked with Maduro loyalists.

Little more than two months after the landmark vote, high expectations for immediate action have already turned into resignation and put a dent in predictions that Venezuela might take a cue from bold changes in Argentina, where new President Mauricio Macri won praise from investors when he quickly rolled back key populist and protectionist policies championed by his predecessor, Cristina Fernandez.

But Mr. Maduro — who shares with Ms. Fernandez a penchant for autocratic governance and an unyielding admiration for Chavez, the founder of Venezuela’s “Bolivarian revolution” — has so far refused to make even minor concessions, such as allowing his Cabinet members to testify before lawmakers.

Last week, the president instead reiterated his disdain for the opposition’s mandate and vowed to hold off any challenge to his ruling Patriotic Pole bloc, “one way or another.”

“The people will not allow the oligarchy — which won the National Assembly because of a confusion of a sector of our people — to take the political power at Miraflores,” the Venezuelan White House, Mr. Maduro said at a Feb. 4 rally, urging supporters to counter the “parasitical oligarchy in the streets.”

Opposition leader and National Assembly Speaker Henry Ramos Allup quickly shot back by telling the Spanish newspaper ABC that a recall referendum to remove Mr. Maduro from office would be held before the end of the year. He also warned that the Supreme Court was capable of a “coup” against his legislative body.

In the midst of the bickering between Mr. Maduro and his detractors, though, falling oil prices moved Venezuela even closer to economic meltdown and increased pressure on the government to act.

In perhaps the first sign of desperation, Mr. Maduro on Tuesday abruptly fired Luis Salas, the doctrinaire leftist economics minister who had been in the post just five weeks, for “family reasons.” His replacement, Commerce Minister Miguel Perez, has far better relations with the country’s beleaguered business sector and has talked in the past about overhauling the government’s chaotic currency policy.

Mr. Maduro’s defiance comes at a time when the economy is rated perhaps the worst performing in the world.

According to data from independent think tanks and universities, the country now has a 76 percent poverty rate — the highest in its history — while its annual inflation rate approaches 400 percent. One-fourth of Venezuelans live in cities that are considered among the world’s deadliest by the Mexico-based Citizen Council for Public Safety and Criminal Justice.


But between the hubris and impunity of government hard-liners and the thirst for vengeance among opposition leaders now pushing for an amnesty law to free their imprisoned peers, even an agreement to hold talks to tackle the crisis has proved elusive.

“Maduro’s advisers are probably the ones impeding that dialogue,” though “there are extremists on both sides,” said Carlos Pena Perra, director of the Institute of Economical and Social Studies at the prestigious Central University of Venezuela.

The stalemate is costing Venezuelans dearly, said Barclays’ Alejandro Grisanti, noting that a joint effort between the president and opposition lawmakers would be well-received by investors hungry for any good news out of Venezuela.

“Depolarizing Venezuela could be an important step” to help desperately needed dollars flow into the local economy, said Mr. Grisanti, whose focus is on Latin American markets. But, he acknowledged, it would not be nearly enough.

The incumbent has broken one too many promises to bring Venezuela’s financial house in order, the broker said, and the sentiment is growing that only Mr. Maduro’s exit could mark a definite turning point for the country.

Whether a new leader would eventually take cues from Mr. Macri’s 180-degree economic turnaround in Argentina is doubtful, though, given that Venezuela’s “distortions are much larger than Argentina’s,” Mr. Grisanti said.

But beyond concrete measures such as the end of currency and import controls, the big question is whether investors can trust the person at the helm, Mr. Grisanti said.

“President Maduro will have a very hard time to try to win credibility in the market,” he said. “He will not gain the needed confidence” to attract sizable investments.

What could ultimately end Mr. Maduro’s reign in Miraflores — and with it, potentially, Chavez’s “socialism of the 21st century” — is not so much the recall effort as the gubernatorial elections this year, Mr. Pena Perra said.

While the opposition now dominates the legislature in Caracas, the president’s Great Patriotic Pole alliance still controls close to 90 percent of the country’s town halls and governor’s mansions, an imbalance voters are likely to turn around. “That will radically change the political scenario,” Mr. Pena Perra. “If there are gubernatorial elections, I believe Mr. Chavez’s movement will disappear.”

No date has been set for the regional vote, however, further stirring concerns that Mr. Maduro and the ruling elite are unlikely to retreat quietly after 17 years in power. A peaceful transfer of power also will require at least the tacit consent of a powerful — and highly politicized — military.

Chavez and Mr. Maduro have shown no qualms about using security and paramilitary forces to go after protesters, and a compliant judiciary last year banished opposition leader Leopoldo Lopez to the infamous Ramo Verde military prison. Members of the National Bolivarian Armed Forces, meanwhile, greet one another to cries of “Chavez lives” as they pass barracks entrances marked “Socialism or death.”

“Our public administration is completely militarized. [And] it is very difficult to politically engage an adversary who is armed,” said Morelba Brito, a political scientist at the University of Zulia. “Truthfully, Venezuelans are afraid.”

Given that the majority of senior brass is now made up of political appointees, even high-ranking officers find it difficult to predict how the military would react if voters decide to further limit Mr. Maduro’s power — or even recall the president.

“In the armed forces, nobody can express themselves publicly; today, they cannot even do so in the officer’s club,” said a retired Army brigadier general with close ties to military leadership who spoke on the condition that he not be identified by name. “There is a lot of fear. Nobody trusts either his comrade or his superior,” he added.

In the meantime, the likelihood of Mr. Maduro deferring to popular opinion and stepping aside peacefully is disturbingly low, Ms. Brito said.

“We have a political actor who does not believe in democracy,” she said, “who does not believe in the division of powers, but who does believe in settling scores.”

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