By Andrés Serbin and Andrei Serbin Pont*

Hugo Chávez / Photo credit: ¡Que comunismo! / Foter / CC BY-NC-SA

Chávez’s legacy for Venezuela goes well beyond the Bolivarian government he left in Nicolás Maduro’s hands.  Three conflicts overshadow the country’s future and contribute to many uncertainties:

• The first, and most urgent, is the standoff between the two main factions of the ruling PSUV over how to overcome the current economic crisis, characterized by the IMF as “difficult and probably unsustainable.”  The pragmatists focus on making currency controls more flexible, and the ideologues are oriented toward increasing state control over the economy.
• The internal party conflict between President Maduro and his supporters, committed to building the “socialismo del siglo XXI,” on the one hand, and the pragmatic sector of the governmental party (pragmatic in the sense of ensuring their businesses operate without interruption) led by the President of the General Assembly, former army officer Diosdado Cabello, with the support of high ranking military and businessmen who benefited from the “revolutionary” process through legal and illegal business.
• The conflict between the PSUV, wielding the power of the government, and the opposition, which it accuses of being an “enemy of the revolution” linked to the “external enemies” (basically the United States) who want to derail the revolutionary process.

The dire state of the economy is aggravating each of these conflicts.  By the end of September, according to government data, inflation rates hit 4.4 percent per month, and rose to 38.7 percent in 2013 so far.  The opposition estimates an annual inflation rate of 49.4 percent—the highest since 1997.  According to the 2012 UN Economic Commission for Latin America and the Caribbean (ECLAC) report, an increasing number of Venezuelans are living under the poverty line – with a 29.9 percent increase in the poverty rate last year – with income no longer enough to fulfill basic needs.  Shortages of food and other necessities are severe; the depreciation of the Bolívar has accelerated in the currency black market, and the Central Bank is printing paper currency in an attempt to cope with the financial deficit.  Within this context, the struggle between the pragmatic and the ideological fronts of the PSUV only contributes to the chaos.

Caracas’s international relations are also a factor in the internal tensions and are fueling concerns within the armed forces, according to NGOs and others with good contacts in the military.  The economic crisis has affected the government’s ability to continue its “petro diplomacy” – diminishing its influence – and the opposition has continued persistent accusations of inadequate management of the relationship with Guyana and the claim over the Essequibo, contested territory along their common border.  In addition, a recent incident involving a maritime exploration ship of Panamanian flag with a U.S. crew detained by the Venezuelan Navy in waters under dispute with Guyana aggravated the current national and international political scenario.  The government usually resorts to nationalist appeals, but criticism of its handling of these problems is likely to grow.

The core issue in all of these situations continues to be the potential scenario of a social outbreak driven by the shortages, rising inflation, the broad sense of insecurity, and perceptions of blatant corruption in government.  These frustrations appear to cut across all sectors of Venezuelan society regardless of ideological identity.  Given the historical reluctance of the armed forces to intervene (particularly since the experience of the “Caracazo” of 1989), most observers still wonder when and if a social explosion will move them to action.  The economic and social crises, the internal tensions in the government, and the polarization with the opposition, along with the possibilities of an international incident, may add up to enough to move the military, perhaps with the support of several state governors, to act, but determining that breaking point – the Venezuela analyst’s greatest challenge – remains elusive.

* Andrés Serbin and Andrei Serbin Pontare members of the analysis team of the Coordinadora Regional de Investigaciones Económicas y Sociales (CRIES), a Latin-American think tank.

By Fulton Armstrong and Eric Hershberg

Memorial for Hugo Chavez | by Steve Rhodes | Flickr | Creative Commons

The death of President Hugo Chávez yesterday, as has been duly noted, marks the beginning of a new era – new opportunities and new challenges – for Venezuela.  In view of the country’s history and institutional weaknesses through the 1990s, some of the convulsions of his 13 years in power may have been inevitable, but the need is now compelling, across the political spectrum, to take a sober look at the future, set aside some of the stalemated grudge matches, and get serious about becoming something better.

It’s easy to predict at least some short-term instability, bombastic rhetoric, and jejune nationalism, such as some fringe Chavistas’ allegation that the United States was responsible for Chávez’s death.  It’s harder for Venezuelans and outsiders alike to figure out how this country, hindered by the original sins that plague all rentier economies, learns how to do politics in a transparent, inclusive manner.  For analysts like us, the key thing is to set aside wishful thinking and keep our eye on the fundamental drivers of change.  Some thoughts:

• For better or worse, Chávez had an impact that – if not as transcendental as he wished – dismantled the key institutional pillars of the sclerotic Venezuelan political system.  Beyond that, his legacy includes the profound and intentional division of Venezuelan society and politics into two camps – a tense split that did not exist (or was sublimated) 20 years ago and will take a long time to heal, as has the cleavage around Peronism in Argentina.  Like Peronism, over time chavismo need not necessarily have a standard left-right quality, and it is likely to retain a cult around Chávez’s persona, larger in death than in life.  Evita a la venezolana.

• Chávez wasn’t the regional or global threat that the Bush Administration made him out to be, but he did open space for a particular species of Latin American populism – call it radical, “socialist,” or clientelist – that coincided with a broader U.S. withdrawal from Latin America.  Few observers could have imagined that this former military colonel – a failed putschist – could capitalize on the region’s crisis of representation and development to bring about the emergence and prosperity of the ALBA coalition and the identities it fostered.  The lifeline of petro-dollars that Chavez opened, a tool that, it is often forgotten, had been deployed by previous Venezuelan governments to gain outsize presence on the international stage, explains some of his influence, but his forceful personality and the siren song of his peculiar Bolivarian ideology multiplied his impact.  His model was not replicated elsewhere, but his fervent regional pride was.

• Chavez’s successors, of any political stripe, will test Washington’s capacity to keep its hands off.  Venezuela – even the opposition – has changed, and United States policymakers will hear rhetoric and see things, such as a relationship with Cuba that’s likely both to shape and to survive both countries’ transitions, that will test their self-discipline.  Chávez is gone, and chavismo, though certain to endure, will inevitably change.  But Venezuela’s need for space – space granted by its neighbors and the United States – to grow and even make mistakes remains a constant.  Over the 15 years in which Chávez dominated the scene, from his first election in 1998, Washington sometimes resisted the temptation to play into the game, but more than occasionally took the bait.  Washington has often misread Latin America and, by endorsing the 2002 coup against Chávez and other actions, actually strengthened the Venezuelan president domestically and regionally.  Chávez’s passing presents an opportunity for a fresh start for the United States, too.