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Internationalised Power Struggle in Venezuela

Source: Getty Images

On January 10th, Nicolás Maduro commenced his third term as Venezuelan President. At that time, the oppositional president of the parliament, Juan Guaidó called on the military forces to stage a coup d’etat.  A few days later, he declared himself to be the president. Within less than half an hour, he was recognised by the USA. This fits well into the classical patterns of right wing coup d’etats in Latin America.

With this step, the power struggle has reached a new phase of escalation. Since 2015, a political stalemate and a form of dual power has reigned in the South American country. In the parliamentary elections of 2015, the right wing forces, which had used a wide range of political strategies from staging a failed coup, paralysing production to electoral politics, had gained ground for the first time an election since Hugo Chávez had won the presidential elections on a left platform in 1998. In a politically extremely polarised society, they tried to use this institutional position in order to get hold over the executive power as well. The different institutions of the state – the left-wing president and government on the one hand, the parliament with its right-wing majority, on the other – increasingly blocked each other. The government reacted by calling for an election of a new constitutional assembly. The opposition boycotted this election. And the government endowed this constitutional assembly with the key powers and, thus, disempowered the elected parliament. In this way, the Chavista camp contributed to the delegitimisation of the electoral process.

Most of the opposition forces boycotted the presidential elections in 2018 though, after international mediation, they had initially agreed to participate. Nicolás Maduro won with 67.8% of the votes, but the participation reached only 46.1%.

In the power struggle, Venezuelan business groups and the middle class are the main support base of the right-wing opposition. These groups resented from the very beginning the pro-poor social policies. Racist sentiments are rather strong in this white middle class opposition forces. In spite of the deep economic and social crisis, the opposition has not been able to enlarge its social base.

It is the weakening of the Chavista project and of the ruling Partido Socialista Unido de Venezuela (PSUV), which has made the opposition stronger. Nicolás Maduro can still count on the support of the army which has increasingly being involved in business. The social base of Chavism has, however, been massively eroded. In its first years in office, the government of Hugo Chávez had massively improved the social services for the poor and created some novel forms of participation. Poverty and income inequality were reduced significantly. The expansion of the social programmes was financed by oil revenue that increased strongly because of the buoyant oil prices. The Chavista government took stricter control over the strategic oil sector. The government initially acknowledged that the reliance on the oil sector implies significant risks because the oil prices are highly unstable. It undertook some initiatives to diversify the economy and exports. These efforts failed. The initiatives were not strategically developed. Priorities changed often. The Chavista government was not able to change the short-term mentality of the state apparatus. In addition, policies became increasingly contradictory. On the one hand, the government tried to build agriculture and industry, on the hand, it abandoned its policies of regular devaluations after some years. The overvalued currency made imports cheap and undermined the already weak local production. With this policy, the Chavista government succumbed to the deeply entrenched consumption culture based on imported goods. Nor did it break with the tradition of relying on oil revenue in order to finance the budget.

The steep fall of the oil price led to the collapse of the economy – as had already happened in the past. The government took some well-intentioned but badly designed and even worse implemented,  anti-crisis measures, particularly in the realm of foreign exchange controls. For example, foreign exchange controls enabled some privileged groups to import cheaply and sell the commodities dearly in Venezuela. It has been in particular the poor who have been hit by the economically disastrous situation.

The right-wing opposition has no recipe against the crisis either. It wants to open the door to privatizing the oil sector. It enjoys the support of the USA, the EU, and right-wing government in Latin America. As the Spanish Ministry of External Affairs admitted, both the US and the EU had prepared their steps already before the Guaidó’s self-proclamation as interim president. The US government had been in close contact with Guiadó in the days before his self-proclamation as President. Elliot Abrams who was put in charge of the Venezuela dossier had been deeply involved in the US support for far-right wing forces in the civil wars in Latin America, including the financing of the contra forces in Nicaragua in the 1980s. The US government is imposing sanctions on the Venezuelan oil sector, in particular on Citgo, the US subsidiary of the Venezuelan state enterprise PDVSA. Gaining a more direct access to Venezuelan oil resources and gaining influence on its oil price policies seems to be one of the main motivations behind Washington’s consistent support for right-wing opposition parties and the current attempt to unseat Nicolás Maduro. Though the EU did not immediately recognise Guaidó, the key EU government of Germany, France, the UK and Spain declared to recognise him if Maduro does not call fresh elections within 8 days. The governments of Greece and Italy disagree with this ultimatum.

Maduro does have external support, too. The Chinese and Russian government support him as the legitimate president and warned against external, i.e. US, interference. Latin American countries such as Bolivia, Cuba, Mexico and Uruguay have positioned themselves against the Guaidó as well.

A further escalation of the conflict seems to be likely. The US government seems to favor toppling Maduro and is increasing the economic and political pressure. A military US intervention via Colombia cannot be excluded. The Venezuelan judiciary has started to take first measures – confiscation of passport and freezing of accounts – against Guaidó. Not all sectors of the opposition are enthusiastic about Guaidós self-proclamation. Some opposition parliamentarians still address him as president of the parliament, not the state. Presently, the country is in a political stalemate, the economic and social situation is catastrophic. Therefore, renowned progressive intellectuals from the USA and Latin America, called in an open letter for negotiations between the government and its opponents. Unfortunately, the external context is adverse to a political solution.


Joachim Becker is a Professor of Economics and Business at WU Vienna University of Economics and Business and deputy head of the Institute for International Economics and Development.