Acting president Nicolás Maduro was declared the winner in Venezuela’s election on Sunday, defeating the opposition’s candidate Henrique Capriles Radonski by over 200,000 votes, according to the state’s election board.
Maduro succeeds the Latin American nation’s fiery socialist leader Hugo Chávez who died of cancer last month after fourteen years in power.
Although Capriles, who won 44 percent of the votes in last year’s election against Chávez and just under 49.1 percent on Sunday, according to the official results, accused the ruling party of fraud and demanded a recount, it is unlikely that Maduro’s victory will be reversed. “We will know what to do if someone raises their insolent voice against the people,” the socialist warned on Sunday night.
Still, Maduro’s unexpectedly narrow win — opinion polls had predicted a landslide — casts doubt on the ruling party’s ability to hold on to power without its popular leader.
Chávez’ protégé lacks the charisma that enabled the deceased former president to win four consecutive elections and influence the politics of neighboring countries, including Bolivia and Ecuador where Presidents Evo Morales and Rafael Correa, respectively, imitated his populist left-wing policies.
Risa Grais-Targow, an associate with the Eurasia Group consultancy, expects that Maduro, lacking a base of support of his own, “will struggle to manage internal disputes, especially as social discontent rises in a deteriorating economic environment.”
She writes at Quartz that the new president’s priority will likely be to reverse social discontent, “which means he is unlikely to make needed economic adjustments.”
Foreign exchange and price controls will remain in place. Maduro might pursue even more stringent state controls to “prove his revolutionary credentials,” like pushing an antitrust law through parliament.
The National Assembly is considering a law that would empower the government “to confiscate any business that it deems not acting in the public interest,” writes José R. Cárdenas at Foreign Policy. It would install a panel that decides whether a company has a “decisive domain” over the setting of prices or other market conditions in a particular industry, without stipulating what “decisive domain” means.
In other words, any successful company runs the risk of confiscation at any time by crossing the government’s arbitrary line of being “too successful.” And with the judicial sector also controlled by the government, private companies are left with no outlet to appeal adverse decisions.
Cárdenas predicts that the law will depress private-sector production and further tilt the playing field in favor of state-owned enterprises which are exempt from it.
Chávez hugely expanded the public sector and nationalized key industries, including oil. But lack of industrial development has forced Venezuela to import refined oil products even if it is the world’s tenth largest petroleum exporter.
The country has also had to cope with energy and food shortages as well as skyrocketing inflation that is projected to top 30 percent this year.
Market reforms are needed to revitalize Venezuela’s economy which the consultancy firm Ecoanalitica projects will expand less than 1 percent this year. Maduro, however, lacks the political credibility and quite probably the will to deviate from the party line and tamper with his predecessor’s legacy.
Significant changes in economic policy are unlikely in the short term even if more Venezuelans than preelection polls suggested apparently agree with Capriles that the current model is “not viable.”