July 12 (Bloomberg) -- President Hugo Chavez greeted Venezuelans in a video this month reading from Friedrich Nietzsche on the attributes of a superman. The days when Chavez played that role himself with six-hour speeches and midnight meetings are gone for now, a casualty of cancer.
Compatriots once accustomed to hours-long appearances on state television now get Chavez in 30-minute doses since he had a malignant tumor removed in Cuba. That may make it harder for him to hang onto power, said Christopher Sabatini, senior director of policy at the Council of the Americas.
Being forced to cut his schedule and spend less time on the airwaves could hurt his chances of re-election next year as annual inflation at 23.6 percent in June, waning oil production, a devalued currency and shortages sap his popularity, said Sabatini, whose New York-based organization is supported by businesses with operations in Latin America.
“This is a blow to his image,” Sabatini said. “As he starts to look frailer and is less present in the public eye, it will irreparably damage his omnipotent aura.”
An official at the Information Ministry said that Minister Andres Izarra wasn’t available to comment.
Venezuela’s bonds have rallied since the announcement of his surgery on speculation that he may not be able to run for re-election, which could pave the way for someone to reverse his socialist policies.
The yield on the 9.25 percent benchmark bonds due in 2027 has fallen 77 basis points, or 0.77 percentage points, to 13.03 percent since June 13, according to data compiled by Bloomberg. That still makes it the highest among all emerging markets. The price has risen 3.96 cents on the dollar to 74.75 cents.
The cost of protecting Venezuelan debt against non-payment for five years with credit-default swaps has fallen 128 basis points to 1,001 today in that same period, according to data compiled by CMA in New York.
Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a government or company fail to adhere to its debt agreements.
In the short term, there is no clear successor to Chavez within his circle, and no indication he will accede to opposition demands that he relinquish authority as he recovers, said Alberto Barrera Tyszka, co-author of the Spanish-language biography “Hugo Chavez Out of Uniform.”
‘Stay in Power’
Chavez’s “most important project” up to now has been “to stay in power,” he said in an e-mailed response to questions. Voluntarily yielding it isn’t likely unless he is incapacitated, he said.
“The opposition and the counterrevolution are going around claiming Chavez is finished, that he’s dying, that a transition is coming before the elections,” Chavez told students at a state-run university today in a phone call broadcast by state television. “The only transition that’s going on here is the transition from capitalism, which is ruining the world, to the socialism, which is humanity’s salvation.”
Chavez spoke for about 10 minutes, ending the call by saying it was time for a five-minute snack prior to “physical rehabilitation and treatment.”
And even if Chavez did step down, or is forced to abandon his re-election bid, it may not reduce the appeal of his movement, UBS AG said in a July 5 note to clients.
“Irrespective of Chavez’s fate, Chavism is highly unlikely to go away,” Zurich-based UBS said in the note. “Even in post-Chavez Venezuela, we think a large enough cadre of supporters would vote for Chavista candidates no matter what, just as Argentina has continued to vote for Peronist candidates after their leader passed away more than 35 years ago.”
Return From Cuba
Chavez, 56, who has held power since 1999, surprised compatriots by returning from Cuba on July 4 after a month convalescing and revealing that he was in intensive care for four days after a six-hour operation. The government hasn’t said what kind of cancer Chavez has, his prognosis or the expected length of treatment.
While in Cuba, Chavez said he’d taken up Nietzsche’s writings. He was filmed reading passages to his two daughters from “Thus Spoke Zarathustra,” in which the 19th-century German philosopher broached the concept of the “ubermensch,” or superman, who is able to transcend normal human attributes.
Citing Nietzsche helps Chavez cultivate an image of strength, said Ana Teresa Torres, author of “The Inheritance of the Tribe,” a Spanish-language historical account of Venezuelan military strongmen.
“He has to transmit the message to his followers that he is strong, that he will recover and overcome his difficulties,” Torres said in a phone interview from Caracas.
Before his health crisis, the president hosted his own television show most Sundays that lasted up to seven hours without commercial breaks and sometimes featured spontaneous expropriations of businesses after followers complained of exploitation. The former army paratrooper’s improvised speeches have ranged over philosophy, baseball and diatribes against the U.S. “empire.”
Chavez also appears in billboards across the country lauding his social programs and in the international airport’s immigration wing. His speeches are often broadcast on all television and radio channels.
His penchant for working late has seen him holding Cabinet meetings at midnight and sending messages on his Twitter account at 3 a.m., including one describing the exhumation of his hero Simon Bolivar, the liberator of Venezuela. Now Chavez says he has to undergo physical therapy daily, reduce his coffee intake and go to bed early.
‘In the Rearguard’
“Now I need to be a patient -- I’m in the rearguard,” Chavez said July 9 in comments broadcast on state television. “Bolivar sometimes used to direct battles from up on a hill.”
While economic growth accelerated in the first quarter as higher oil prices allowed Chavez to boost spending on the poor, the country’s inflation rate last month was still the fastest among 78 economies tracked by Bloomberg.
Rising prices and a 40 percent devaluation of the bolivar in January have eroded the buying power of Chavez’s working-class base. The country has also been plagued by a surge in murders and power outages that have persisted more than a year after Chavez declared a national emergency to fix the aging electricity grid.
Even before his illness, Chavez’s electoral punch was waning. In congressional elections in September, his party won less than half of the popular vote and lost its two-thirds majority needed to pass some legislation unilaterally.
Chavez fits into a long line of political strongmen, or caudillos, who have governed Venezuela for much of its 200 years as an independent nation. He has added an extra element: a powerful, Messianic connection with the poor who believe he is the only politician who cares about their plight, Torres said.
“We want him to recover as soon as possible because without him all the ministers will do whatever they want,” said Ana Maria Gonzalez, 39, who works at a toy store in Caracas.
Still, a physically weakened Chavez, whose approval rating was already near its lowest in eight years, may have trouble fueling the class conflict that has been at the heart of his mass appeal, said Saul Cabrera, vice president of Caracas-based pollster Consultores 21.
“Keeping Venezuela polarized requires a president who is very active and confrontational,” Cabrera said. “This has worked for him, but now that he’s sick people are going to turn their attentions to the country’s problems instead.”
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