Venezuela’s Maduro Faces His Biggest Test in December 6 Vote

Venezuela’s opposition is set to gain control of congress for the first time in 16 years in a Dec. 6 vote seen as the biggest test yet for the Socialist government of President Nicolas Maduro.

Official campaigning to choose all 167 members of the National Assembly will take place from Nov. 13 to Dec. 3, the head of national electoral council Tibisay Lucena said in a televised speech Monday.

Opposition candidates would get 56.2 percent of the vote, compared to 29.8 percent for the ruling United Socialist Party of Venezuela currently in charge of the Assembly, according to the latest Datanalisis survey of 1,000 people. The May 18-30 poll had a 3 percentage-point margin of error.

“We will be in a situation with an already weak president weakened further by a defeat in the election,” Barclays Plc analyst Alejandro Arreaza said in a telephone interview from New York. “We cannot discard a possibility of a non-constitutional exit” of Maduro, he said.

The president will prepare for elections by channeling more scarce dollars to public importers, concentrating supply of food and medicine to sensitive electoral districts and potentially expropriating more companies, according to Washington-based consultancy Eurasia Group.

“It will be a date with history and we cannot fail,” Maduro said at an event for ruling party congressional candidates on state television. The vote will take place in a “complex” context, he said.

The opposition is likely to win the majority in the Assembly but not the two-thirds of the seats required to appoint court and electoral officials and unilaterally pass some laws, said Eurasia analyst Risa Grais-Targow.

Referendum Confidence

“The elections won’t necessarily do much in terms of changing the regime or the policies” in the short-run, Grais-Targow said by telephone Monday. “If the opposition does well, I think the government will either tweak the results or shift power away from the National Assembly.”

This will further destabilize Latin America’s biggest oil producer, which was rattled by four months of deadly anti-government protests last year, Grais-Targow said.

Since Maduro replaced his late mentor, Hugo Chavez, in April 2013, the country’s currency lost 95 percent against the dollar on the black market. Basic products ranging from deodorant to rice have disappeared from shops as imports collapsed.

The country is plagued by the world’s fastest annual inflation rate, estimated at 108.1 percent by Bank of America, and widespread shortages.

A victory in the Assembly may give the opposition the confidence to begin a recall referendum next year to unseat Maduro, whose term runs out in 2019, according to Bank of America Corp.’s senior Andean economist Francisco Rodriguez.

“This could very much be the beginning of Maduro leaving office,” Rodriguez said.

Hunger Strike

Maduro’s approval rating fell to 25 percent in May, near a record low, according to the Datanalisis poll. As the economy worsens, his popularity will likely to tumble further, the polling company’s director Luis Vicente Leon said at an event in Caracas last week.

Venezuela’s benchmark dollar bond due in 2027 rose 4.65 percent to 44 cents on the dollar on Monday. The price of Brent crude rose 0.43 percent.

An election date was one of the three demands made by jailed opposition leaders Leopoldo Lopez and Daniel Ceballos when they went on hunger strike last month. Monday’s announcement gives them an opportunity to end the strike and focus on the campaign without losing face, said Grais-Targow.

“It’s a potential out for them. That’s what they were looking for,” she said.

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