After sixteen years of Chavismo, a symbolic new phase in Venezuelan politics began this week: members of the opposition Democratic Unity Roundtable (MUD) took their seats in the National Assembly as part of a new two-thirds supermajority.
Prior to last month’s surprisingly peaceful parliamentary election, the governing United Socialist Party of Venezuela (PSUV) had a majority of 96 out of 167 seats.
Because of the dire straits the country finds itself in, and in spite of considerable obstacles, the MUD has managed to increase their 63 seats to an overwhelming 112. Although an opposition victory was no surprise, the scale of the triumph has sent an unequivocal message of dissatisfaction with the “Bolivarian Revolution” in its current form.
The Venezuelan economy seems to be at a precipice, with circumstances unlikely to improve in the foreseeable future.
There is no quick fix.
A petroleum-dependent economy has been decimated by oil prices at a low of $38 per barrel.
Inflation is at 120 percent and expected in some quarters to reach 200 percent by year’s end.
With debt repayment prioritized over imports, shortages of everyday basic goods have led to inordinately long queues. Families are spending, on average, five hours per week to obtain rudimentary but necessary products, including cooking oil, milk and toilet paper.
In the last two years, poverty levels have risen from 27 to 73 percent.
Economic mismanagement, corruption and political unaccountability inspired as many as 2,800 anti-government demonstrations in 2015.
These factors, coupled with record levels of violence, are the reasons behind an electoral success for a traditionally dysfunctional opposition.
President Nicolás Maduro’s support of the labor unions at the expense of grassroots supporters has also led to a sizeable yet tentative switch in allegiance for many who, after years of loyalty to the left-wing regime, have had enough.
Block on legislative power
This is the MUD’s opportunity to prove themselves but the path ahead is far from straightforward.
Maduro still has supporters running the executive, judiciary and military. They have taken several steps to handicap legislative power in the immediate aftermath of the election. Most recently, the president removed the need for parliamentary approval of budget allocations and central bank appointments as well as the publishing of central bank data.
Three opposition lawmakers have already been suspended following unspecified legal challenges presented by the PSUV only days before their inauguration. The opposition called this a “judicial coup,” robbing it of its supermajority and declared that those suspended would be sworn in regardless. This has yet to happen.
In the final days of 2015, the PSUV majority also forced through the appointments of thirteen Supreme Court judges and 21 substitute judges. A supermajority would give the MUD the power to recall the Supreme Court judges, remove cabinet members, make constitutional amendments and call a recall referendum on the president himself.
Both parties await the court’s ruling.
The MUD, a coalition of 27 parties, must tread carefully. There is no guarantee of fundamental change. Both sides are fragmented, with few able to speak with authority. Should pragmatists be marginalized, there is undoubtedly scope for escalation and political paralysis will almost certainly ensue.
The opposition is giving Maduro six months to rescue the economy. Should the MUD move too fast in reversing failed economic policies, including reducing subsidies, it could cause social unrest. If they seek to impeach Maduro and release political prisoners too soon, it could appear self-serving.
But move too slowly and the opposition can be neutered by a compliant Supreme Court, thus demonstrating an impotence and sharing the blame for the government’s shortcomings.
For real reform, regional support from smaller parties will be key to uniting the police and putting an end to excessive and incoherent deinstitutionalization and corruption.
Exchange rates should be unified and an audit of state finances needs to be undertaken. (Government data has not been released since December 2014.)
A recall referendum for President Maduro could, at the earliest, take place in 2017 and would, for him, likely prove fatal. Only a sudden increase in oil prices, an American overreach or MUD disintegration could halt his slide, with the latter the most feasible.
A recall referendum would require a presidential candidate from the MUD, something that could split the opposition between the centrist Henrique Capriles and the more outspoken, currently imprisoned Leopoldo Lopez, who is further to his right.
Maduro, too, should take a more measured line if he is to survive. While Chavismo wasn’t built to compromise and Maduro himself has said that “the struggle for a new society is just beginning,” any further use of extraordinary executive powers could do damage to his credibility.
External factors dictate that Venezuela’s economy will go on struggling before it gets better. In the meantime, the National Assembly has two options: confrontation or conciliation. Although there may be a track record of domestic conflict, and the current instability makes for a bleak outlook, only compromise can take Venezuela forward in the long run.