By Peter Wilson
Venezuelan President Hugo Chávez had much to crow about following Sunday’s decision by voters to back his proposal to abolish term limits, enabling him to run for re-election in 2012.
Chávez, who first won election in 1998, called the vote a fresh mandate for his “socialist” revolution. The victory, which is the fourteenth he or his supporters have enjoyed in 15 elections since 1998, paid tribute to his political skills.
When he first announced plans to put a proposal to repeal constitutional term limits (an earlier effort in December 2007 failed) to a fresh vote, polls showed his request likely to be rejected. But with massive state spending, heavy saturation of the country’s air waves, and the helpful indulgence of the national election agency, he coasted to a 10 percentage point victory. Chávez was also helped by the lack of a strong strategy from the opposition.
And finally Chávez, who remains personally popular—although his government is not—made the issue into a personal referendum. He repeatedly told supporters that if he lost the vote, the opposition would then seek to recall him.
“My political future is in play today,” Chávez told supporters after casting his ballot.
Chávez, 54, is now expected to push ahead with other phases of his revolution, which many fear will include restrictions on private property and freedom of expression. He has reason to rush the proposals: congressional elections are scheduled to be held next year and parties supporting Chávez currently control almost all of the seats in the unicameral National Assembly.
But not all is lost for the opposition. Despite all of the government’s advantages, Chavez’s vote total was nearly one million less than he received in the 2006 presidential election. The shortfall occurred even as Chávez and his supporters mounted a massive get-out-the-vote campaign, ferrying many voters to the polls and providing other incentives.
Chávez received 6.3 million votes while the number of people supporting the opposition rose to 5.2 million—up from 4.3 million in 2006. (More than 16 million Venezuelans are registered to vote.)
The president’s short-term popularity is also likely to dive as the government implements an austerity program—in marked contrast to its freewheeling spending before the Feb. 15 vote.
Finance Minister Ali Rodriguez has already promised to cut government expenditures and to curtail imports of non-essential items, though he has yet to provide many details. Fresh taxes are also expected and many analysts say the government is likely to devalue the currency within weeks to make up for a shortfall in revenue due to falling oil prices. Taxes and royalties on oil sales make up about half of government revenue.
Some measures are already taking place. State oil company Petroleos de Venezuela SA, which has been a favorite parking place for newly minted pro-government employees, is already laying off workers. The company, which also funds many government programs off balance sheet, is also delaying payments to many of its providers.
The government plans to delay financing the purchases of some recently nationalized private companies. Arms purchases are on hold.
Economists are predicting that the country’s inflation rate—already the highest in South America—will surge higher than the current 30 percent, while other analysts forecast the shortages of some food staples.
The opposition could capitalize on Chávez’s future economic challenges but the question remains whether it has learned how to put pressure on the ruling government. The opposition is still hamstrung by a lack of a strong leader and rifts among the various parties that dislike each other almost as much as they dislike Chávez.
After more than a decade of face-offs with the president, the opposition still hasn’t learned that labeling him a communist or dictator won’t keep him out of office. They need to mount a clear, thoughtful campaign that offers a credible alternative, while incorporating many of Chávez’s social, education and health programs.
Until they do so, Chávez will remain in power and continue to stymie efforts by the U.S. and others to temper his influence in the region.
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Peter Wilson has lived in Venezuela since 1992. He was formerly South American team leader and Caracas bureau chief for Bloomberg News and has written about Venezuela for BusinessWeek, Time, and The Economist.