In-dept report: Venezuela

December 2020: the legislative election and the "Popular Referendum"

On 6 December 2020, elections took place in Venezuela to renew the National Assembly (277 seats), the country’s main legislative body, ruled by forces opposed to Nicolás Maduro since 2015. The official bulletin released by the National Electoral Council (CNE) points out that President Maduro (‘Great Patriotic Pole’, GPPSB) obtained the majority of votes (68.43%), followed by the ‘Democratic Alliance’ (AD, 17.51%) – a “dissident coalition” refusing to acknowledge Juan Guaidó’s leadership. The ruling coalition consequently won 253 seats (i.e. 92% of parliamentary representation), while AD only got 18.

Figure 1. National Assembly layout
Figure 1. National Assembly layout

A significant drop in turnout (30.1%) was recorded in comparison to previous elections (74.17% in 2015; 66.45% in 2010). The figure was certainly determined by the ongoing Covid-19 pandemic and travel disruption due to fuel shortages. On top of this, another decisive factor the boycotting campaign by the Guaidó-led ‘Mesa de Unidad Democratica‘ (MUD) coalition, urging their voters not to take part in the election due to poor democratic guarantees. On the one hand, Maduro officially sealed the establishment of the new National Assembly, which is due to be sworn in on 5 January 2021 to assume legislative powers until 2025. On the other hand, dozens of countries failed to acknowledge the electoral outcome, precisely due to shortcomings in democratic standards compliance, as well as poor inclusion and transparency. The US, Canada, EU countries, and the members of the Organisation of American States (OSA) were among the first that immediately refused to accept the new Venezuelan legislative establishment; whereas China, Russia, Iran, Cuba and Nicaragua did recognise the election outcome.

Figure 2. Maduro's statement following the vote
Figure 2. Maduro's statement following the vote

Initially, a part of the pro-Guaidó opposition – including key political figures such as Henrique Capriles (Primero Justicia) – had stated that it would take part to legislative elections if minimal democratic standards were met. However, the MUD (except the Democratic Action Party) finally fostered a boycotting campaign, calling for an alternative non-binding referendum between 7 and 12 December that would allow voters to express their preference for a candidate through the “Voatz” platform).

Figure 3. Questions in the Popular Referendum
Figure 3. Questions in the Popular Referendum

The data released by the Organisation Board reveal a 27.9% turnout, marking a slightly lower rate in comparison to December 6 legislative elections. Although the opposition denounced a fall in Maduro’s support, the data also show a similar trend with respect to Guaidó, who reportedly won 1,933,758 votes less than 2015.

Figure 4. Guadó's statement following the election
Figure 4. Guadó's statement following the election

Globally, 42% of voters took part to no election nor referendum. The high abstention rate, previously announced on social media through a mass ‘no participation campaign’ (#NiEleccionesNiConsulta), is indicative of a widespread refusal to accept the contrast between Maduro and Guaidó. Furthermore, it seems to suggest that opposition parties will need to find new political leaders to express their demands for democracy in a more effective way.

However, the crucial aspect of December 6 election rather lies in large-scale consequences it will bring to opposition policies. In fact, Guaidó’s acknowledgement as interim President by the international community (2019) based its constitutional legitimacy on his role of Head of the National Assembly. The Venezuelan Constitution (art. 233) establishes that the President of the Assembly is entitled to lead the government in a transitional phase if the government lapses or elections are deemed irregular, as it happened with the opposition refusing to accept Maduro’s election in 2018. The Assembly’s layout arising from December 6 elections, in which Guaidó’s coalition (MUD) has lost its majority, will certainly question further the constitutional legitimacy of the interim President’s powers. Although opposition parties maintain that Guaidó’s mandate shall not fall since the legislative elections are to be considered as illegitimate, the ‘anti-Maduro’ political establishment will probably be forced to engage a new opposition strategy, which is bound to be reshaped in relation to the new US administration’s under Joe Biden.

Key moments in the Venezuelan political crisis:

  • April 2013: ‘United Socialist Party of Venezuela’ (PSUV) leader Nicolás Maduro is sworn as President of the Bolivarian Republic of Venezuela after Hugo Chávez Frias.
  • December 2015: the MUD opposition coalitions wins the legislative elections.
  • July 2017: Maduro founds a Constitutional Assembly to counterbalance the opposition-led National Assembly.
  • May 2018: incumbent President Maduro is reelected Head of the Bolivarian Republic of Venezuela.
  • January 2019: National Assembly President Guaidó self-proclaims Interim President.
  • January 2020: Luis Parra is designated as the new head of the National Assembly, while Guaidó is also confirmed as Head of the National Assembly in a parallel voting session.
  • December 2020: The pro-Maduro coalition (GPPSB) wins the legislative elections and regains the majority in the National Assembly. Maduro dissolves the Constitutional Assembly.
  • January 2021: The new National Assembly is sworn in.
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National economic framework and Russia and China's role

The national economy mainly relies on oil production and export, with approximately 303 billion barrels, as Venezuela is the country with largest oil fields and – to a lesser extent – gas fields in the world. Oil exploration, production, refining and export are entrusted to the state-owned company Petróleos de Venezuela, S.A. (PDVSA).

Figure 5. OPEC oil fields. Source: OPEC
Figure 5. OPEC oil fields. Source: OPEC

However, the US blockade on Venezuelan oil ordered on 2019 by the Trump administration, along with sanctions imposed against tankers trading Venezuelan oil, have led to a significant reduction in oil production, with a record-low rate of 400,000 barrels per day in 2020 (2.65 million barrels in 2015). Despite Russia’s efforts (joined more recently also by Cuba and Iran) to help Venezuela bypass US sanctions, the latter – together with the ongoing fall in hydrocarbon price since 2014 – has determined a serious deterioration of the national economic situation, marked by a GDP drop by 18% in 2018, 35% in 2019, and a -15% outlook for 2020 (International Monetary Fund).

Figure 6. Economic sanctions against Venezuela. Source: CSIS
Figure 6. Economic sanctions against Venezuela. Source: CSIS

The government’s macro-economic policies have also resulted in inflation spikes in recent years, accompanied by a drastic reduction in international reserves (the Central Bank of Venezuela highlights a drop from 42 billion dollars in 2004 to 6.3 billion dollars in 2020). Not only has this paved the way to a large-scale monetary expansion, it has also significantly raised state bureaucracy on the economy – posing one more deterrent factor, among others, to private investment – and led people to increasingly question the Venezuelan public institutions’ credibility, including with respect to those in charge of compiling financial statistics, such as the Instituto Nacional de Estadística (INE).

In such context, travel hardships related to fuel shortages, along with skyrocketing inflation rates (the Central Bank of Venezuela points out a 9.585% rise in 2019, a figure far below IMF estimates), have led to an escalation in social and political instability. Additionally, the situation has been further exacerbated by the Covid-19 containment measures implemented under Maduro’s government.

Despite Venezuela’s mounting isolation at international level and foreign sanctions imposed against the state-owned PDVSA Oil Company and key figures in the local socialist regime and military élite, Maduro can count on support by a number of countries, namely Russia, China, Cuba, Nicaragua, Turkey and Iran. In particular, China and Russia’s support will be vital for Maduro’s leadership, as the two countries are major stakeholders in Venezuelan front-line industries.

Figure 9. International support to Maduro
Figure 9. International support to Maduro

 

China and Russia’s ‘key player role’ is proof of Venezuela’s strategic significance. In a context where the US struggles not to lose its own hegemony in global governance, China and Russia see in Venezuela another chance to undermine the wavering US leadership.

The long-standing contrast with the US is a crucial aspect to understand Russia’s stance with respect to the Venezuelan crisis. The east-ward enlargement of NATO over the last few decades has stirred a growing fear of encirclement in Russia, which culminated with the Ukrainian crisis outbreak in 2014. The most desirable geo-political solution for Moscow is that the US has more and more enemies in its own sphere of influence, which adds to the crucial geo-strategic importance of Venezuela (and Cuba) as Russia’s overseas outposts.

Apart from geo-political interests, the financial side is also essential. At present, Russia is allegedly one of Maduro’s biggest creditors, with a 20 billion dollar loan in 2006. Nevertheless, ties between Moscow and Caracas only partially rely on Russian loans aimed at protecting Venezuela from default risk amid Trump’s economic-financial sanctions. An equally important factor is represented by mutual bonds in the power industry – in 2017, Russia’s giant state-owned Oil Company Rosfnet officially took hold of 49.9% of PDVSA’s US-based Citgo, essential for crude-oil refining (its assets were confiscated by the US in August 2018) – and the war industry: Venezuela is Latin America’s first importer of weapons made in Russia, with multi-billion dollar supply contracts ranging from Kalashnikov to more sophisticated air defense systems.

On the other hand, China granted a 62.2 dollar loan to the Chavista regime from 2007 to 2019, becoming Caracas’ biggest creditor. This should be placed in a context in which Venezuela’s oil remains a pillar of China’s growth and development strategy (Beijing is the world’s major crude-oil importer after US and India). This makes it easier to understand why China’s support to Maduro will not affect its willingness to keep strong relations with all political players. As part of its traditional non-interference policy over foreign countries’ inner affaires, one day China (with Russia following suit) might give up its support to Maduro in favour of a more comprehensive strategy if it were sure that a change in the Venezuelan government would bring no harm whatsoever to Beijing’s interests.

The role of the military élite and the Biden administration

The Mauduro regime’s capability to survive is strictly bound to the stance of the army, whose role has become to tip the balance amid ongoing domestic political fights. Despite a few cases of military desertion over low salaries and the ongoing economic crisis, the army – especially high-ranking figures – seems to remain faithful to the socialist leader.

Figure 10. Key players in the Venezuelan military élite
Figure 10. Key players in the Venezuelan military élite

This fact is mainly linked with Maduro’s financial grants to military key players to help them face US individual sanctions. US intelligence sources also suggest that military high ranks are allowed to have access to illicit resources on a regular basis in exchange for loyalty to Maduro’s government. The socialist leader allegedly pretends to overlook high-ranking military officers engaged in businesses such as drug trafficking, illegal mining and fuel smuggling only for unconditional support.

So far, this has only resulted in insubstantial expressions of discontent by the grassroots military, who are unable to engage in well-organized insurgencies due to a lack of communication and coordination, as well as a lack of adequate weaponry. However, a further exacerbation of the economic and social crisis could alter the current conditions: additional US sanctions on the Venezuelan economy and, in particular, on the oil sector, could substantially limit the sources of legal income for the military elite who remain loyal to Maduro, prompting them to reconsider the support they give to the government. This hypothesis could be even more concrete if a transitional government were to grant them satisfactory conditions in terms of amnesty.

In such context, the new Biden administration’s attitude towards Venezuela will play a crucial role. This view seems to be shared by Maduro himself, who stated the following in a press conference on 8 December 2020: “Venezuela awaits Joe Biden’s government to be sworn in, which will hopefully pave the way for new chances to talk with the US”.

The most likely scenario involves Biden not immediately lifting all sanctions against Venezuela but proceeding towards a gradual de-escalation of hostilities throughout his mandate. According to local sources, the Venezuelan opposition would not exclude the possibility of reconsidering Guaidó’s role, which is considered a failure and is more appreciated abroad than within Venezuela’s borders. The same sources would point to the local elections, scheduled for December 2021, as the basis on which a united and inclusive front could be built to represent the various elements of a traditionally fragmented opposition. Although Biden has released no official statement on this matter, his own regional policies engaged as Vicepresident under the Obama administration (2009-2017) suggest that such an electoral solution might be welcomed, possibly accompanied by a relaxation of those sanctions that – as pointed out by the UN High Commissioner for Human Rights, Michelle Bachelet (March 2020) – directly affect the Venezuelan population. This scenario seems even more concrete in light of the statements made in November 2020 by Leopoldo Martinez, Biden’s campaign strategist, according to whom the new administration will not aim “to dismantle the sanctions policy, but to apply sanctions in a clever way, with a multilateral effort and specific targets to be achieved– mainly free, fair and trustworthy elections”.

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