Thursday, October 6, 2022

Uncertain Future for Venezuela

By on December 17, 2015


As all the excitement begins to wind down about the opposition’s win last week in Venezuela’s parliamentary elections, several political and economic power players are now trying to anticipate what the future will bring to this South American country, but all seem to agree that “uncertainty” is the word that best describes it.

The election results had an immediate effect on international markets. Despite a sharp drop in oil prices last week, bonds from both Venezuela and state-owned oil company Petróleos de Venezuela S.A. (PDVSA) appreciated close to five percentage points in the same period. Nevertheless, most investment firms are cautious about the country’s future and all tend to concur about the need for some sort of agreement between President Nicolás Maduro and the National Assembly, now dominated by the opposition, to design a new set of economic policies that both can work with without further stifling the economy.

The JPMorgan investment firm anticipates there won’t be any economic changes in the near future because both parties have openly stated their intentions to stand their ground.

Since conceding the Partido Socialista Unido de Venezuela’s (PSUV) defeat in last week’s election, Maduro has blamed the “economic war” waged by rich national economic elites for the outcome.

“This tone suggests the government will continue its discourse on economic policy rather than undertake any changes,” according to JPMorgan.

On the other hand, the opposition, organized around the Mesa de Unidad Democrática (MUD) coalition, has announced they will push the government to assume responsibility and put into eff ect economic measures such as standardizing the currency exchange.

“We have the qualified majority and will enforce it responsibly, without arrogance, without trampling on anyone,” said Jesús Torrealba, MUD’s secretary general.

However, while considering such measures as “necessary” to stabilize Venezuela’s economy— by shifting responsibility for their enactment to Maduro’s administration— MUD will try to avoid being blamed for supporting any of the neoliberal policies that had been vilified by “Chavismo.”

But Maduro is already regrouping his troops. Last week, he started having meetings with state governors and ministers, PSUV’s national leadership and other political allies to identify the reasons for the defeat and to design a new action plan “to save the Bolivarian Revolution.”

Who’s to be blamed for the defeat depends on who’s doing the blaming, and the reasons go from an inability to mobilize voters, to neglecting the needs of the people. Likewise, countermeasures to off set the effects of the election range from reorganizing community councils to enacting drastic economic reforms. There are already three workgroups at the Palacio de Miraflores that are responsible for designing new strategic plans to deal with a hostile National Assembly.

The group in charge of designing the new phase of the economic plan is presided by Jorge Arreaza, while Elías Jaua presides over the group in charge of “the plan for a new policy.” The third is presided by Gilberto Pinto Blanco, Tania Díaz and Darío Vivas, and is charged with conceiving a plan for the National Assembly.

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