Nothing more has been heard from President Hugo Chávez since his surprise return to Venezuela early on 18 February, fuelling speculation that plans are afoot for him to swear in privately before the supreme court and then step aside, triggering snap elections in which Vice-President Nicolás Maduro would bid to replace him. Senior ministers continue to insist that the president remains in full control of his faculties and continues to run the country, now from a hospital bed in Caracas, rather than Havana, Cuba.
Chávez’s return after two long months in Cuba in almost total silence (because he literally could not talk, it has now transpired), will help restore some stability, even in the absence of any proper details of his medical condition.
The photos released of the president prior to his return evidenced that he is not at all a well man. Officials from the ruling Partido Socialista Unido de Venezuela (PSUV) were clear that the president’s immediate priorities remained medical, not political. In response to opposition calls for a resolution to what it says is the extra constitutional state of affairs in the country since Chávez’s failure (on 10 January) to swear in for the new term to which he was elected in October 2012, the state governor of Anzoátegui, Aristóbulo Istúriz, who sits on the PSUV leadership, said that Chávez would swear in “when he is well and healthy”, noting that the PSUV-controlled national assembly had given the president an indefinite period to get better. In a similar vein, Rodrigo Cabezas, a Venezuelan delegate to the Andean Parliament and also on the PSUV leadership, on 19 February stated, “The president has returned to continue his medical treatment, he has a time that is not political. His time now is not political”.
‘Sources’ from the supreme court (TSJ) quoted by the opposition daily El Universal on 19 February made clear that “there has been no change in the exceptional circumstances that motivated the constitutional chamber’s 9 January ruling, thanks to which the head of state and his ministers remain in their functions, despite the fact that the former could not meet the requirement to take office on 10 January”.
The opposition is on tenterhooks, knowing that the government has the element of surprise on its side. In the event that the president resigns or is declared permanently absent by the supreme court, snap elections should take place within 30 days. The Mesa de la Unidad Democrática (MUD) has said that it would forego primaries in favour of declaring Henrique Capriles Radonski, Chávez’s defeated rival in 2012, its consensus candidate.
A poll of 1,230 people between 30 January – 9 February by Hinterlaces indicated voter support of 50% for Maduro compared with 36% for Capriles. Capriles has previously accused the head of Hinterlaces, Oscar Schemel, of pro-government bias but there is little doubt that Maduro would defeat Capriles on the back of a surge of emotional support for Chávez’s nominated heir.
- The Bolívar – strong in name only
On 8 February the government announced another devaluation, the fifth since currency controls were introduced in 2003, taking the official exchange rate to BF6.3/US$, from BF4.3/US$ previously. Government coffers will be replenished to the tune of US$13bn (almost 4.0% of GDP), helping plug a fiscal deficit estimated to be running at anywhere between 12% and 15% of GDP. The dollar value of domestic debt will also fall to about US$29bn, from US$43bn. Likewise state oil company, Petróleos de Venezuela (Pdvsa), which accounts for nine of every 10 dollars entering the country, will be able to pay down some of its debt (est. at US$40bn in 2012, up 15% annually) and free up funds for productive investment. Venezuelans will have to endure another inflation spike in coming months and salaries will be eroded by 8.0% in real inflation-adjusted terms until the government adjusts the minimum wage.
- Dollar demand soars
The black market currency rate was BF22.87/US$ on 19 February, as dollar demand continued to soar in the wake of the devaluation. Vice-President Nicolás Maduro signalled fresh measures against “speculators” the same day, without elaborating, but tighter controls on imports are expected. Venezuela imports about 80% of its food. On the same day the national assembly approved changes to the oil royalty framework so as to assign more oil export windfall earnings directly to the central bank, which controls the supply of dollars to the local market.
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