Photographer: Wilfredo Riera/Bloomberg

Chavez's Supporters Face Rare Defeat in Venezuelan Elections

  • But few expect quick change even if the socialists lose
  • Instability possible as Maduro vows to continue the revolution

Plagued by rampant crime, unbridled corruption and unprecedented economic contraction, Venezuela elects a new legislature on Sunday, with the opposition on the verge of a decisive victory for the first time in 16 years. But rather than propel the country onto a stabler path, the vote seems just as likely to bog it down into further dysfunction.

The gross domestic product of oil-rich Venezuela will shrink 10 percent this year -- more than that of any country in the world -- according to forecasts by the International Monetary Fund.

“In other words, we have performance so negative it’s comparable to a country at war during a time of peace,” said Jose Manuel Puente, an economist at Caracas’ Institute of Advanced Studies in Administration.

Smuggled goods for sale in Caracas

Photographer: Carlos Becerra/Bloomberg

The result is that many Venezuelans, faced with chronic shortages and triple-digit inflation, are wondering how their country, an OPEC member with more oil than Saudi Arabia, has made them feel so poor. And they are vowing to vote their anger.

Suddenly Vegetarian

“I’ve been forced to become a vegetarian," asserted construction worker Nelson Velazquez, 51, while searching for regulated foods in western Caracas. "I haven’t seen chicken in months and beef is far too expensive. What began as a revolution has turned into a betrayal.”

A loss to the ruling party would strike a second significant blow to South America’s bloc of leftist populist leaders following the upset in Argentina’s presidential election last month. The price collapse of oil and other commodities is endangering governments across the continent.

While a decisive opposition victory in Venezuela could lead to a presidential recall referendum, most analysts caution against expectations of sweeping change. Opposition control of congress, with every other branch of government, including the military, stacked against it, is more likely to cause a headache for the government than immediately alter the status quo.

The Venezuelan opposition is hamstrung by many things -- fierce internal divisions, shrinking access to the airwaves and at times violent crackdowns on dissent. Anti-government protests last year failed to achieve tangible gains, landing some of the opposition’s most vocal critics in jail.

“Every option has a high political cost and a lot of confrontation,” said Dmitris Pantoulas, a Caracas-based political consultant. “There’s no smooth transition.”

Socialist Revolution

President Nicolas Maduro, who took office in 2013, has doubled down on a tangled system of controls initiated by his mentor, Hugo Chavez, who said he was leading a socialist revolution. Venezuela’s financial woes, Maduro says, are not the result of ill-advised policies but of an economic war waged by political foes. Those claims, long accepted by the party faithful in Venezuela, seem to be increasingly falling on deaf ears.

Shoppers wait outside of a pharmacy

Photographer: Meridith Kohut/Bloomberg

“Lines, lines and lines, everyday it’s lines,” grumbled Elena Pena, a 48-year-old homemaker lining up for eggs and flour outside a supermarket in western Caracas. “We’re stuck running around like chickens, trying to find whatever’s available.”

Venezuela’s benchmark dollar bonds are yielding more than 20 percent as investors worry that years of economic distress could lead to default.

After years of crime, soaring prices and empty store shelves, nearly 90% of Venezuelans now have a negative view of the country, according to Datanalisis, a Caracas polling firm. Maduro is polling in the low 30s, Datanalisis said this week, with his party’s candidates trailing the opposition by almost 20 points.

It remains unclear what such a lead will produce on Sunday partly because Venezuelan data are so unreliable, partly because many voters remain undecided and also because the election system places a thumb on the scale to favor the rural poor, the bedrock of government support.

Recall Referendum

A blowout at the ballot box on Sunday could produce the kind of recall referendum that failed to unseat Chavez in 2004. A smaller margin may lead to political gridlock and a painful process of trying to extract concessions from the president.

Maduro has, on occasion, said he could accept an opposition-controlled congress. But far more often he has vowed to "win by any means" and "never surrender the revolution.”

Those statements have exacerbated anxieties of an election campaign marred by violence. Last week, an opposition official was slain at a campaign rally in the center of the country. The death drew widespread condemnation of the government under fire for its resistance to international observers and accusations of gerrymandering.

Meanwhile, the opposition hardly inspires devotion among voters. Many are left wondering about the prospect of a congress controlled by a contentious amalgam of more than a dozen parties -- from Marxist to the center-right -- that have long had difficulty agreeing among themselves, let alone connect with the government faithful. Their central plank is amnesty for political prisoners, the most famous of whom is Leopoldo Lopez, an opposition leader and top government critic.

Wide Margin?

“What proposals do they have?" asked Ingrid Martinez, a 47-year-old statistician at a government campaign event in Caracas’s western slums, of the opposition. "They’re too busy fighting one another to ever come here. Their only interest is taking down the government.”

Still, if the government loses by a wide margin, something could begin to shake.

“It’s not that the opposition will win the machinery for political change in the short term -- it’s a gradual process, but there exists the possibility for change,” says John Magdaleno, head of the Polity consulting firm in Caracas.

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