Venezuela’s Hugo Chavez named a new vice president yesterday, putting his longtime foreign minister, Nicolas Maduro, in line to succeed him as the socialist leader begins another six-year term while battling cancer.
Maduro, a former bus driver with close ties to Cuba, will replace outgoing Vice President Elias Jaua, Chavez said at an event in Caracas declaring him the winner in Oct. 7 presidential elections.
Maduro’s appointment so soon after the vote is a sign that Chavez may be grooming him as a successor, seeing him as “safe bet” who can keep together a coalition of military and civilian supporters, said Gregory Weeks, a professor in Latin American politics at the University of North Carolina in Charlotte.
“Chavez doesn’t want confusion about what direction the revolution might take after he’s gone,” said Weeks, who has followed Venezuelan politics for years and frequently writes about the country on his blog.
In the wake of Chavez’s 11 percentage point victory over opponent Henrique Capriles Radonski, investors are following closely the president’s health and his choosing of a potential heir. While Chavez said in June that he was completely recovered after three surgeries for an undisclosed type of cancer, he limited his public appearances during the recent campaign, leading Barclays Plc and Goldman Sachs & Co. to speculate that his health may not hold up for another six years.
Venezuela’s bonds have rebounded after posting initial post-election losses. JPMorgan Chase & Co. yesterday raised its recommendation on Venezuelan debt to overweight due to Chavez’s more conciliatory tone in the wake of his victory, the lack of social unrest and opposition candidate Capriles’ strengthened leadership role.
The yield on Venezuela’s bonds due in 2027 fell 23 basis points, or 0.23 percentage point, to 10.83 percent, at 9:52 a.m. today in Caracas, according to data compiled by Bloomberg. The bond’s price rose 1.54 cents on the dollar to 88.44 cents.
“The market is interpreting this as moving closer to regime change while the risk environment today is positive worldwide,” Boris Segura, a Latin America strategist at Nomura Securities International Inc., said in a phone interview.
Chavez frequently shuffles his cabinet to surround himself with loyalists, having gone through seven vice presidents since taking office in 1999.
Maduro, 49, is one of his longest-serving aides, having been the president of the National Assembly before becoming Venezuela’s top diplomat in 2006. Earlier this year Chavez asked Maduro to resign in order to run for the governorship of Carabobo state, though in August he changed his mind and said he was staying in his post defending Chavez’s anti-American alliance with countries including Iran, Cuba and Nicaragua.
Maduro replaces Vice President Elias Jaua, who previously announced he was stepping down to run in December for governor of Miranda. He’ll face off against Capriles, who said yesterday that he is seeking to regain the job he held before running for the presidency.
“Putting up with me isn’t easy,” Chavez joked yesterday at a ceremony announcing Maduro’s appointment. “I don’t recommend being my vice president.”
Under Venezuelan law, if Chavez is too ill to serve during the first four years of his term, the vice president assumes the presidency for 30 days while elections are held. If he can’t serve the final two years, the vice president can finish out the term.
The large margin of victory may encourage Chavez to try and amend the constitution to allow a successor to serve a full term should he be compelled to step down, said Michael Shifter, president of the Washington-based Inter-American Dialogue.
“This has been the Chavez formula, changing the rules of the game but doing so through the institutional framework which he controls,” Shifter said by telephone from Washington. “He knows better than anybody that if something were to happen to him within four years and then there were new elections, the opposition would probably win. That would be the end of his revolution, and obviously he wants to prevent that.”
While Chavez was evidently limited by his health during the election campaign, Segura cautioned from interpreting Maduro’s appointment as a sign of imminent change since his prognosis has been treated as a state secret.
“This is more of a medium term development,’ he said. “Is this going to happen in the next six months? Not really.”