It’s a measure of the passions Hugo Chávez inspires that news of his cancer affected both the markets and his opponents so strongly. The belief that a weakened Chávez could lose in elections next year, and that a new regime might reverse economic policies that have fueled the fastest inflation rate in the Americas, touched off rallies in Venezuelan bonds in midsummer, when his illness was first revealed, and September, when rumors started anew about Chávez’s health. The post-Chávez era, however, could also mean political instability.
In late September, Chávez threw a baseball around with some of his ministers in a bid to counteract reports in a Miami newspaper that he had been hospitalized again. In mid-October he danced to hip-hop to celebrate a new political alliance. The 57-year-old former paratrooper says he’s on the mend after the removal of a “baseball-sized tumor” from his pelvic area. The fact that he refuses to reveal a diagnosis or prognosis continues to generate speculation.
In theory, not much would change if Chávez died or became too ill to rule. Elections would still take place as scheduled on Oct. 7, 2012, and Vice-President Elías Jaua—not considered a likely successor—would hold power until the new President was sworn in, in January 2013. If Chávez were to win the election and die either before starting his new administration or in the first four years of a six-year term, then an election would be called within 30 days.
Chavismo—the left-wing ideology that stresses heavy subsidies for the poor and the state’s gradual acquisition of the country’s most productive assets—has transformed Venezuela since Chávez took power in 1999. “Venezuela is accustomed to having Chávez at the center of political dynamics,” says Diego Moya-Ocampos, a political risk analyst at IHS Global Insight in London. “President Chávez sets the agenda not only for the government but also for the opposition. His death would lead to a vacuum of power, more political instability … and a political crisis.”
Chávez has deliberately stymied the emergence of other leaders in his movement. The most likely successor is Foreign Minister Nicolás Maduro, a former bus driver and eloquent union leader considered loyal to Chávez. Maduro is seen as someone who can bridge the gap between the military, which supports a less radical version of chavismo, and Chávez’s more ideological civilian backers.
Chávez ignored calls to name Jaua as interim President when he received treatment, instead signing laws electronically from Cuba. While gross domestic product grew only 2.5 percent in the second quarter despite oil prices of over $100 a barrel, Chávez still plans on more radical policies, including a law to regulate prices across the economy.
Though the opposition’s odds of gaining power would increase in Chávez’s absence, the united front it has built could splinter as individuals spot a chance of victory, says Boris Segura, Latin American strategist at Nomura Securities International. Radical supporters of Chávez, including high-ranking military officers, have said they would not accept their enemies’ ascension to power. In that case, says Segura, street violence between chavistas and the opposition can’t be ruled out.