GO
Loading...

Venezuela Stalemate Shows Shaky Future for Chavismo

Sebastian Martinez, Special to CNBC.com
Monday, 15 Apr 2013 | 12:24 PM ET
Venezuelan Opposition Extremely Relevant: Expert
Kathryn Rooney Vera, director of macroeconomic research at Bulltick Capital Markets, tells CNBC that the opposition's good result in the Venezuelan election opens the door for real economic changes in the country.

After Hugo Chavez's anointed heir secured a razor-thin victor in Venezuela's presidential election on Sunday, one analyst questioned how much longer the socialist policies associated with the Chavez regime will survive.

Chavez's former vice-president and foreign minister, Nicolas Maduro, secured 50.66 percent of the vote with a 200,000 vote margin, while center-right opposition candidate Henrique Capriles won 49.07 percent. Capriles vowed not to recognize Maduro's victory and called for a recount on Sunday night, alleging irregularities at some polling stations.

Kathryn Rooney Vera, senior market strategist at Bulltick Capital, told CNBC the result boded ill for the future of Chavismo.

"The Chavista candidate had basically the unlimited resources of the state and the media and he still was only able to squeak out a win," said Vera. "The opposition really, I think, won in the sense that they remained extremely relevant. I think this opens up the door for real change in economic policy in Venezuela down the line."

Many attribute Chavez's success in implementing radical reforms and economic policies to his overwhelming charisma. James Lockhart-Smith, head of Latin America at independent research firm said Maduro, a former bus driver and bodyguard, lacks Chavez's appeal.

(View More: No Vote Recount in Venezuela: Analyst)

"His appeal to the people consists mostly of that he was very close to Chavez and he was a good foreign minister. He is seen a solid pair of hands, but there is no way he has the same charisma. He's been trying to sort of replicate that through all sorts of tricks, but if anything that's emphasized the difference," Lockhart-Smith told CNBC.

Even if Maduro wins in a vote recount, he faces an uphill battle to combat Venezuela's economic woes. Inflation runs at 20 percent - the highest in Latin America – and the government's currency devaluation in February failed to fix a shortage of U.S. dollars needed to pay for imports, in a country that is heavily import-dependent. This has led to food shortages across Venezuela, with the country's farms struggling to make up the difference. Meanwhile, oil production has stagnated to around 3 million barrels per day.

"The situation in Venezuela is dire and something must change. Maduro is going to have to move pragmatically, just for his own survivability," Rooney Vera said.

Featured

Contact Business

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More