Venezuela’s 2012 Presidential Election - PowerPoint Presentation

Slide1

Venezuela’s 2012 Presidential Election

David R.

Mares

Institute

of the Americas Chair for Inter-American Affairs

Director, Center for Iberian and Latin American Studies

Professor, Political Science

UCSDSlide2

Hugo ChavezSlide3
Slide4

1980s & 1990s “Lost Decades”

GDP avg annual growth rate of 1% 1985–2003

1998 real wages were less than 40% of 1980 level

Purchasing power of the minimum wage 1994 is 1/3 that of 1978

% pop below poverty line: 1984 36%, 1995 66%

% pop in extreme poverty: 1984 11%, 1995 36%

Per capita social spending 1993 60% of 1980Slide5

“Venezuela is Rich”

Economic Inequality

70% agricultural land owned by 3% of agricultural proprietors (among highest levels of land concentration in LA)

Income share poorest 40% of population

1981 19.1%

1997 14.7%

Income share top 10% of population

1981 21.8%

1997 32.8%

government’s share of oil revenue

1981 71%

2000 39%Slide6

Chavez’ Rise

18 months before 1998 election, lagging in 3

rd

place in polls; adopts pledge to call for a new constitution to end

Partidocracia

and bring “ revolutionary change”

1998 Patriotic Pole (Polo Patriótico—PP), an alliance of his own Fifth Republic Movement (Movimiento Quinta República—MVR) and two other leftist parties, Homeland for All (Patria Para Todos—PPT) and Movement Toward Socialism (Movimiento al Socialismo—MAS)

1998 Gets more votes than any other candidate in history

1999 New Constitution ratified by 72% vote

2000 Chavez elected President under new constitution with 60% vote

2001 Begins to implement the radical transformation of Venezuela’s political economySlide7

National Strikes, 2001 & 2002PDVSA led

AD/COPEI marginalized

Coup attempt April 2002

US recognize new govt

Street demonstrations raise spectre of ungovernability

Military brings back Chavez

Recall election focus by opposition

Chavez obstruct

US Democracy aidAugust 2004 Chavez gets 58%December 2005 ElectionsOpposition pulls out of Legislative elections

Chavistas win all seats

Political PolarizationSlide8

Fundamentals of Chavez’ Program

Expensive Goals

Large population with high levels of poverty that have to be reduced

Foreign policy activism against Global Liberalization

Global Liberalization severely limit pace of domestic distribution and redistribution

Program Based on Revenues generated by energy exports

Great inefficiencies increases costs of Program

Political instability at home means need to speed up program; more $ up frontSlide9

Chavez:

Domestic Political Strategy

CAUDILLO

Fear implications of institutionalization on his freedom of action

Cabinet/Agencies: Personal, not political, links to Leader

Minimal constraints mean continued policy ‘instability’

Army

Purge & Politicize

Intelligence & control within

bureaucracy

‘People’s’ Militia

People

Purge & Politicize

Vote

Demonstrate/Counter-demonstrateSlide10

Domestic Challenge

“Direct Democracy” means need to build & consolidate credibility w/people to sustain loyalty

Ideology – ‘Socialism’ ‘Bolivarian’

Influenced by International Strategy

Distribution – High Profile & Consistent

Cost to Opposition – Imposed by Chavez; incoherence of oppositionSlide11

Keys to Chavez Electoral Strength

Direct distribution of benefits

Poverty rates have fallen by 50%

Employment and foreign exchange politicized

Missions provide health, education, welfare

Opposition’s lack of legitimacy among lower middle class and the poor

Polls demonstrate that Venezuelans don’t believe in ‘socialism of the 21

st

century’ and do value democracy. Slide12

Social Missions

Robinson Mission

– Literacy

Robinson Mission II

-- Education; primary school

Ribas Mission

– Education; high school

Sucre Mission

– Education: college; UBV in former PDVSA buildingBarrio Adentro Mission – Health; low cost medical services

Mercal Mission

– Food; low cost purchases and production stimuli

Identity Mission – Citizenship; identity cardsVuelvan Caras Mission – Employment; youth job trainingGuaicaipuro Mission – Indigenous rightsSlide13

Challenge for Chavez

His health, rising crime rates, inflation and food shortages

Capital outflow rose 58% to USD 33 billion in 2011

Opposition Candidate Henrique

Capriles

Radonski

platform of inclusiveness, avoids directly attacking Chávez or his social programs

Wants to emulate former Brazilian President

Luiz

Inacio Lula da Silva’s pro-business policies and expansive social programs Capriles’ image as a youthful, serious and capable politician who will manage the country well for the benefit of all Venezuelans.VÍCTOR SALMERÓN| EL UNIVERSAL http://www.eluniversal.com/economia/120315/venezuelas-capital-outflow-climbs-to-usd-33-billion-in-2011

March 15, 2012

Slide14

Chavez Campaign Needs $$$

Oil production declining

1998 3.3mbd

2011 government claims 3mbd, a decline of 10%

OPEC says 2.37 million barrels a day in December 2011.

In 2011, the government and PDVSA floated $17 billion in bond sales and raised perhaps another $10 billion in Chinese loans in exchange for oil.

According to some analysts, these loans are short term (8 months) and carry a 7% interest rate.

For 2012, Chávez is expected to seek up to $12 billion in bond sales largely to support social programs during the electoral campaign.Slide15

FDI?

Policy changes, small but reflect this need

PDVSA subsidiary may be opened to private capital through the Hong Kong Stock Exchange

first state divestment offered in Orinoco heavy oil belt since 2008 nationalization

PDVSA will award CITIC (China) a 10% share in the

Petropiar

JV for US$1bn.

PDVSA 60% Chevron 30% CITIC 10%Slide16

Chinese Loans?

China provides those to gain preferential access to Venezuelan resources.

If Chavez is doing poorly in the electoral campaign or his health becomes a more active concern, the Chinese will likely start thinking about putting their relationship with Venezuela on a more commercial basis.

If Chávez loses the presidency, the Chinese loans that Chávez has used for political gain provide no advantage

the debt burden for the new government with disproportionately little to show for it could lead Chavez’ successor to favor non-Chinese partners in future projects.Slide17

Will Democracy Survive?

Should Chávez die or be too ill to run in the October elections, he and those partisans dedicated to the Bolivarian Revolution will have to decide how to deal with a highly likely opposition victory.

Defense Minister Rangel has said in the past that the military cannot accept an opposition victory.Slide18

Modeling electionsSlide19

Opposition wins the October 2012 Elections and Chavez/successor annuls elections

Domestic and international observers declare that the opposition candidate has won the presidential election.

Chávistas

, with or without Chávez, take to the streets, creating chaos.

Government declares that U.S. imperialism has tainted the elections

calls on the Army and Bolivarian militia to restore order

imposes order for a future election at a time to be determined by the government after the ‘sovereignty of the Venezuelan electorate’ has been restored.

Masked people threw firebombs & attempted to steal ballot boxes during the December 2011 elections for student government in the Central University, in which Chávez’ candidate was trounced.

The U.S. government will impose sanctions on Venezuela