President Hugo Chávez revolutionised life for some of the poorest in Venezuela, but also placed a heavy burden of foreign debt on the country’s economy. How will his successor approach these issues?
The 14.7 million citizens who voted in April's presidential election in Venezuela – a country which, according to Organisation of Petroleum Exporting Countries (OPEC), contains the world’s largest deposits of crude oil – delivered a very even result. On one side, with a share of 50.66% of the vote, are the supporters of the late president Hugo Chávez, a man still known by many as 'the supreme commander', who in 14 years of constitutional rule brought in many changes.
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His successor was Nicolás Maduro, 50, a former bus driver, who assumed the presidency on April 19 with an oath on “the Constitution of 1999, Christ the Redeemer and the memory of the supreme commander” in front of heads of state and delegations from 27 countries. The loser, with 49.07% of the vote, was Henrique Capriles Radonski, 40, a successful tax lawyer.
US stance
The US government is refusing to accept the results, despite the fact that Venezuela’s electoral process is seen as impeccable by the EU and the election-monitoring Carter Centre in Atlanta. Washington has long been irritated by Mr Chávez's policies and Venezuela’s close collaboration with Cuba on matters of petroleum and general development.
Bolivia’s president, Evo Morales, has called on Unasur, the regional bloc of 12 South American countries, to reject the US Secretary of State’s imputations against the Venezuelan electoral process. Under pressure, the Venezuela’s National Electoral Council is to review some of the votes but has declared the vote is not subject to revision.
The next few years in this wealthy South American country will be testing ones, despite a record high crude oil price, which is fluctuating at about $100 a barrel. Few commentators feel that Mr Maduro’s Venezuela will escape stagflation this year, adding further pressure on the bolivar, Venezuela's currency, which is already subject to exchange control, and coinciding with a drop in domestic output. The currency, whose coins were made of solid silver within living memory, was devalued by 32% in February, the fifth time in a decade. Consumer prices rose 7.9% in the first quarter, while production indices were dropping. Even among Mr Maduro’s supporters, the view is that inflation will be more than 30% this year.
Mr Chávez came to power 14 years ago with the laudable aim of pulling that half of Venezuela's population who – amid the riches of a leading member of OPEC – were living in poverty, into the market economy. An ocean of money programmes, known as misiones, were launched to provide slum-dwellers with hundreds of thousands of cheap houses every year, improved medical care, better education for children and adults alike, and a retail network of state shops with controlled prices.
The index of poverty came down from 50% to less than 30% and that of extreme poverty fell from 23% to 8%. Infant mortality dropped appreciably. After the Chávez years, Venezuelans are healthier and better educated than ever.
Price of progress
But this and other schemes have laid a very heavy burden of foreign debt on the country’s shoulders. According to the central bank of Venezuela, the foreign debt, which in 2000 came to $26.1bn, last year totalled $108.8bn. However, the Chávez government did not find it difficult to raise foreign loans, notably $1bn from China, which is keen to establish Venezuela as a dependable long-term supplier of oil. Nevertheless, foreign reserves have fallen this year by $3.7bn to $26bn.
Non-oil exports for their part have been disappointing. The figure of $5.6bn in 2000 dropped to $3.4bn in 2008, and last year, according to the central bank, stood at $3.8bn. Officials have in recent months been active in trying to convert the new network of regional and international relations into recipients for Venezuelan exports. ALBA – the Bolivarian Alliance of the Americas, which includes Cuba, Ecuador, Nicaragua and a number of Caribbean islands – is one such target. Yet a result is unlikely to be achieved immediately.
One difficulty for the future is the fact that the new president is generally viewed as lacking the gifts of powerful rhetoric, influential character, steely determination and attractive charisma that made Mr Chávez a leader in Latin America; admired in some parts of the world, even if reviled in others.
In contrast with his mentor – Mr Maduro refers to him as his “father” – the new president’s speeches often lapse into inconsequential litanies of names delivered with great rhetoric. The world is watching to see if he will be up to dealing with his country’s problems.
