Planned Reforms May Determine Survival of Venezuela’s Bolivarian Project

From 1999 to 2012 the Bolivarian government was able to win and maintain mass support in the oil-rich South American nation, most of all from among the least well-off sectors of the population. This was due to several factors, including the promise of an inclusive, participatory political system and development model that could diversify the country’s economy from dependence on oil income, the improvement in living standards through the social investment of oil wealth and sustained economic growth, and the singularly powerful connection created between the leadership of Hugo Chavez and a substantial portion of the population.

As a result of the successes of this project, including notable gains from social policies, Chavismo reached an almost unchallenged state of political hegemony in the mid 2000s, and has won almost every national election since December 1998. While the political opposition slowly regained electoral ground from 2006, until recently it had been unable to pose a serious national challenge to Chavismo. However from late 2012, coinciding with Chavez’s death and Nicolas Maduro’s narrow election in April last year, a worsening economic situation coupled with the accumulation of persistent long-term problems threaten to reverse this balance of power. In this context, it is important to examine changing public opinion toward the government and the factors which may be influencing this.

Economic troubles hit Maduro’s popularity

Following the waning of hard-line opposition unrest earlier this year, the wobbling state of the economy has become the central focus of attention for the country’s citizens. Problems seem to be centred around the complex system of fixed-rate currency exchange controls, which came under pressure last year when the value of the bolivar plummeted on the black market against the dollar, creating a large gap between the official and “black market” values of the currency. The economic distortions generated by this process, and the government’s effort to cut back on access to foreign currency as a result, have helped to create product shortages across the economy, including of essential consumer goods and some medicines. At the same time annual inflation has shot from 20% at the end of 2012 to over 60% currently, hitting the value of wages. Authorities meanwhile accuse business groups of helping create or worsen these problems, and say that around 40% of the country’s food supply is being smuggled into Colombia in order to escape Venezuelan price controls and make a higher profit.

The situation with food scarcity should also not be exaggerated. Generally, supermarket shelves appear full and the majority of essential consumer items can be bought most of the time. Nevertheless several basic products, including milk, toilet paper and corn flour, are often absent, meaning that shoppers must visit more than one store or wait in long queues when scarce goods arrive in order to get all their weekly groceries. The effect for consumers is irritation and anxiety, as well as extra expense if they must resort to buying scarce goods at a speculative street price.

Other developments add to the sense that the economy is not operating in a state of normality. Citing their inability to repatriate profits in bolivars through currency controls, international airlines have reduced flight capacity to Venezuela by 36% over the past year, and flight prices have skyrocketed. Meanwhile car assembly has plummeted by 83% compared with the same period last year. Companies attribute the situation to difficulties importing parts through currency controls. Such problems, in addition to conflicts over wages and conditions, often with the management of nationalised industries, have led to a wave of industrial unrest in several sectors recently including steel, electricity and car assembly.

Further, surveys by Venezuelan consultancy firms Hinterlaces, Consultores 21 and Datanalisis show that between two thirds  and fourth fifths of the public feel the country is “heading in a bad direction”, and that the overall negative perception of the state of the country’s affairs permeates down to the lowest income groups. This is a relatively recent phenomenon. The Hinterlaces organisation measures that less than two years ago these numbers were reversed, with two thirds of citizens expressing a positive outlook on the country’s affairs.

There are other factors which contribute to growing dissatisfaction, such as high crime rates and perceptions of corruption and inefficiency in state administration. Yet these do not affect presidential approval as strongly as the economy, as citizens distribute responsibility for problems such as crime among a wider range of actors.

There is also discontent among the dissident left wing of Chavismo in response to what they see as the reduction of spaces for criticism and debate within the government and the ruling United Socialist Party of Venezuela (PSUV), a complex issue covered in a recent article by author Federico Fuentes.

A deeper process which works against the government is longevity in office. Chavismo has been in power since 1999, and by the next presidential election the Bolivarian government will have been running the country for almost two decades. This makes calls for “change” more attractive, especially to younger voters who have no first-hand experience of the pre-Bolivarian era with which to make a comparison.

Nevertheless the available evidence suggests that the state of the economy is the determining factor behind a fall in presidential approval since Maduro was elected. Economic troubles, understood as food shortages and the rising cost of living, have overtaken crime as the country’s main problem in the eyes of citizens in a number of surveys. The majority of the blame for economic problems is being placed on the government’s shoulders: in a recent survey by Consultores 21, almost 63% of respondents felt the government was “at fault” for the economic situation. Parallel to this, approval ratings for Maduro’s performance have fallen to between 41- 47 percent.[i] Thus while approval for Maduro continues to be quite strong, polls suggest that his popularity has been reduced by around ten percentage points over the past twelve months.

The worry for the government is that if this trend continues it may not be able to count on an absolute majority of votes at the next national election. This could have disastrous implications for the PSUV in the National Assembly elections toward the end of next year, where if the opposition were to win a majority of seats, it would essentially be able to hold a veto over new government legislation and the national budget. In such a situation, it is also possible that the opposition would try to subject Maduro to a recall referendum in 2016, putting the survival of the Bolivarian project to the test earlier than the December 2018 presidential elections.

A closer look at public opinion

Despite this challenging outlook, there are several factors which could contribute to the Maduro administration maintaining or recovering its level of support in the coming period.

The first is that the 55 – 60% of the population that is expressing dissatisfaction with the government is not uniformly pro-opposition. The president of Datanalisis, Luis Vicente Leon, explained recently that in terms of political affiliation the country is divided into three roughly equal self-identifying groups comprised of chavistas, independents and opposition supporters. From these, the government can concretely count on the electoral support of around 40% of the population in a presidential election, while the opposition can also count on up to 40%, leaving around 20% of independents who could swing toward either pole during a given moment.

In this context, a second advantage for the government is that since the end of last year the opposition has been unable to present a united voice or alternative project to the country. The prominent role played by the right-wing of the opposition compounds this as such groups promote a national vision that stands at odds with the values and demands of the country’s majority. This was evidenced earlier in the year when the hard-line opposition’s strategy of pressuring the government through protests and violent street barricades was rejected by a majority of citizens and left the opposition openly divided. With the recent resignation of the coordinator of the opposition MUD coalition, Ramon Guillermo Aveledo, and the holding of closed door meetings between opposition parties to try and sort through differences, the opposition has not managed to take advantage of the uncertainty and discontent affecting the population. However Luis Vicente Leon warned that if conditions remain as they are, an effective opposition could manage to draw together an anti-government majority in the future. “At some point a leader in the opposition will emerge, known or not, that capitalises on the energy against Chavismo,” the pollster predicted in a June interview.

A third factor in the government’s favour is that a large majority of the population identifies with the ideals and values of Chavismo more than any other political movement. This includes young voters, a key group for evaluating shifting public opinion. In a national youth survey (15 – 29 yrs) conducted September – October last year by the Andres Bello Catholic University (UCAB), 78% of respondents felt that the state, rather than the private sector, has the main responsibility for creating employment. Meanwhile 81% felt the state has the main responsibility to ensure citizens’ wellbeing, and 84% felt the state should be the main provider of healthcare and education.[ii] These and other survey responses reflect a broad consensus, shared even by some opposition supporters, around the desirability of the state to play a leading role in a mixed economy, with the state also delivering key public services and policies to create employment and reduce inequality.

However in the same youth survey there was not one majority positive evaluation for the Maduro administration’s performance in a range of areas measured. For example only 30% felt the government was managing the economy well, 34% felt the government was combating corruption, and 48% felt the government was acting to reduce poverty. It therefore seems that falling approval for the Maduro administration is not based on an outright rejection of the existing model or the ideals of the Bolivarian project, but stems from dissatisfaction with the government’s performance and the accumulation of specific problems.  

In addition, it is worth noting that the continued pursuit of social progress and attempts to protect living standards may have helped maintain presidential approval at a moderately positive level. Despite the aforementioned economic difficulties, social spending and other policies have so far managed to conserve gains in poverty reduction, while unemployment is at a record low.

As such, Hinterlaces director Oscar Schemel argued in late July that Venezuelans “aren’t looking for people to blame, they’re demanding solutions. They are demanding a leader that executes decisions, that announces the new course…That is the task of the new leader of the revolution [Maduro], of the new stage of the revolution”.

Reforms in the pipeline

The government will likely be aware of these trends in public opinion. Nicolas Maduro’s response has been to propose a series of major reforms to the economy, state and party in the hope of setting the country on a course that can guarantee his administration majority support into the future.

Regarding the economy, the executive cabinet appears to be planning some market orientated adjustments to reduce current distortions without relinquishing state control over the main levers of the economy. This strategy will possibly involve unifying the multiple official exchange rates, which would effectively devalue the currency closer to the “black market” value. Authorities are also looking to boost international reserves and internal revenue by renewing debt, centralising off-budget funds, reducing subsidies on domestic gasoline, and increasing tax intake. With this, the government hopes that a more stable model can lead to increased national production and the reduced use of foreign earnings for imports.

On state administration, Maduro has announced he is looking to reduce corruption and bureaucracy, and improve efficiency, by conducting a review of the budgets and operation of each of the 30 government ministries and other state entities.

In terms of the PSUV, pledges were made at the recent national congress to renew party authorities by January 2015, limit the use of “cooption” where party leaders unilaterally name electoral candidates and other positions, and to reorganise grassroots party structures. A conference is to be held later this year to analyse strategies for an “economic transition to socialism”.

Conclusion

Despite the relative calm on the streets of Venezuela after the defeat of the radical opposition’s uprising earlier this year, the Maduro administration finds itself at a critical juncture, with the loss of majority support before the next national election emerging as one possible outcome. It is a situation where the potential consequences of acting, or not acting, to reform the Chavez-era economic model are being weighed.  

Beyond the government’s policies and their results, there are a myriad of actors in Venezuelan politics that may influence public opinion over the coming period. Within the opposition these include various political parties, opposition-aligned NGO’s and pro-opposition student groups. In the Bolivarian movement they include the other parties of the Great Patriotic Pole (GPP) alliance, as well as dissident left groups within the PSUV and social movements such as the communes. External forces will also play a role, as China’s announcement of fresh loans for Venezuela and the U.S.’s on-going financing of opposition groups and recent sanctions exemplify.

However the evidence from opinion polls suggests that it is the economic situation which is the determining factor behind decreasing approval ratings for the government, and as such, the impact of planned economic reforms may prove decisive for the country’s political future and developmental path.