April 17 (Bloomberg) -- Venezuelan opposition leader Henrique Capriles Radonski took a step back from the brink of a mounting confrontation with the government by calling off a march planned for today to protest the results of the April 14 presidential election.
Capriles acted after Nicolas Maduro, proclaimed the winner by the national electoral council, vowed to come down with a “firm hand” on opposition supporters and eight people died in political violence, according to the public prosecutor. Caracas was flooded with music, fireworks and the sound of pots and pans being banged last night for more than an hour as supporters from both sides showed loyalty to their leaders.
“We know that your agenda in the government is to try to get the country into a situation of confrontation and violence,” Capriles, 40, told reporters yesterday in Caracas. “Tomorrow we won’t mobilize.”
Tensions have escalated in Venezuela after a close result in an emergency election following the death of President Hugo Chavez March 5. While Capriles’ gesture averts the likelihood of bloodshed for now, Maduro’s response points to a protracted conflict, said Gregory Weeks, head of the department of political science at the University of North Carolina in Charlotte.
“This eases the tension, but I don’t know for how long,” Weeks, former director of Latin American studies at the university, said in a phone interview. Maduro’s response “is in many ways a provocation.”
Venezuela’s dollar-denominated bonds fell the most in almost 15 years yesterday as traders anticipated political instability will undermine the economy. Inflation accelerated to 25 percent in March, the fastest official rate in the region. The central bank’s scarcity index, which measures the amount of goods that are out of stock in the market, rose to a record high of 20.4 percent in January.
Maduro will be sworn in on April 19 even as the opposition insists irregularities affected about 300,000 votes, enough to overturn the result. Capriles said he believed he had won the election and is ready to concede defeat if a recount confirms Maduro’s victory.
Maduro said he would accept any decision the electoral council makes with regard to the election, just hours after Supreme Court Justice Luisa Morales said the type of recount the opposition is demanding doesn’t exist in Venezuela.
The U.S. government supports a recount and has no plans to send an envoy to the April 19 presidential inauguration in Venezuela, Secretary of State John Kerry said in a Congressional hearing today.
“Take your eyes off Venezuela, John Kerry,” Maduro said today. “Get out of here. Enough with intervention.”
Maduro said he didn’t recognize Capriles as the governor of Miranda state. Capriles, who the electoral council said took 49 percent of the votes, temporarily stepped down as governor to run for president. Maduro won the race with 50.8 percent of the votes, the council said.
“I’m going to take legal measures, because you have violated the constitution and assassinated the people,” Maduro said, referring to the opposition leader, after the march was called off.
Leopoldo Lopez, an ally of Capriles and former mayor of the Caracas municipality of Chacao, said on his Twitter page that he has information of an arrest order issued against himself and Capriles, without giving more details.
Jorge Galindo, a spokesman for the Interior Ministry, said by phone he couldn’t comment and arrest warrants are out of his jurisdiction. A press officer at the Public Ministry said there was no one available to comment. Calls to the ministry spokesman’s mobile phone and an e-mail were unanswered. Information Minister Ernesto Villegas didn’t respond to a telephone call and text message seeking comment.
Venezuela’s National Assembly today issued a resolution calling on the public prosecutor to investigate “violent and anti-democratic actions” by a small “fascist” group it said is led by Capriles and his campaign team. The resolution urged the public prosecutor to confiscate assets and freeze bank accounts belonging to members of the group to compensate for damages against the state and individuals.
The nationwide protests also left 61 injured and led to the arrest of 135 people, Public Prosecutor Luisa Ortega Diaz said. Opposition protesters have attacked health centers and local offices of the ruling socialist party, Maduro said.
“You won’t go to downtown Caracas to fill it with blood and death,” Maduro, 50, said yesterday in comments broadcast on state television. “This is a chronicle of a coup foretold.”
Capriles, in an interview with CNN’s Spanish-language channel yesterday, said “the government wants violence. We are calling for peace.”
In 2002, Chavez was overthrown for two days after opposition street protests in Caracas turned violent. A decade earlier, Chavez became a national figure by leading military rebels in a failed coup against President Carlos Andres Perez.
Protests should die down in the coming days or weeks after the march was canceled, said Francisco Rodriguez, senior Andean economist at Bank of America Corp. Rodriguez said he thinks Capriles doesn’t have enough evidence to overturn the result.
The country’s bonds due in 2027 rebounded 2.4 cents on the dollar to 93.59 cents today. The yield fell 34 basis points, or 0.34 percentage point, to 10.10 percent. The price dropped 6.89 cents yesterday, the biggest decline since August 1998.
Bonds will continue to fall as the future of Venezuela remains unclear amid the political dispute and the potential of violence remains high, said Russell Dallen, the head trader at Caracas Capital Markets.
Chavez, who tapped the world’s biggest oil reserves to reduce poverty, left the country polarized as he nationalized more than 1,000 companies or their assets and implemented currency and price controls that created food shortages and fueled inflation.
Canceling the march “was a responsible thing to do because you cannot win the battle when Maduro has all the guns and tanks,” Dallen said in a phone interview from Caracas. “But this is not the end of it at all.”
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