After the victory of Hollande in France this year and with the rise of Putin in Russia, all eyes have turned to the US Presidential election due in November. However, for Latin America, it was the election in Venezuela that made news. On Sunday, October 7, Hugo Chavez was expectably reelected, defeating Henrique Capriles by nearly 1.3 million votes (a 11 per cent lead with 90 per cent votes counted) and has in the process gained another six years to press forward his crusade for socialism in Latin America.
This was Chavez’s toughest electoral battle since taking over office in 1999. Interestingly, early exit polls indicated that odds were in Capriles’ favour with a commanding 51-48 per cent lead. This is bound to raise suspicions over the fairness of the elections. The secretary-general of Capriles’ coalition portrayed it as “free, but not fair” elections. Well, he might not be too far off the mark. Chavez’s control over state resources and state media has deprived all opposition parties of a level playing field. Consider this: while Chavez could broadcast his speeches in all television channels for hours, for Capriles, the allowance was just three minutes per day!
Although Chavez is often criticised for not being able to rein in high crime rates, consolidating too much power and crushing the private sector, he has been able to reduce the level of poverty by spreading the nation’s oil wealth to the poor with public housing, healthcare and various other social programmes aimed at uplifting the poor. However, his reduced margin of victory as compared to previous elections, may prompt changes in government policies, particularly with regard to public security. Moreover, after heavy spending in the election campaign, the nation actually faces a growing pressure to devalue its currency. At the same time, Chavez’s victory means that PDVSA (Venezuela’s state oil company) will remain highly politicised and will continue to supply oil to socialist allies like Cuba, Belarus, Iran and Syria at discounted rates. In the past, Chavez has taken election wins as opportunities to bring in radical reforms; this time too we can expect reforms in the food, healthcare and banking sectors.
Interestingly, China has become a key source of funding for Venezuela with loans totalling $32 billion over the last few years; in return, Venezuela is sending 430,000 bpd of crude oil to China. Chavez aims to further boost these exports to one million bpd. However, diplomatic relations with Washington would continue to be sour. Hugo Chavez continues to be the flag bearer of ‘anti-imperialism’ and his regime is still marked with strong anti-American rhetoric. In consequence, he is likely to continue befriending the likes of Iran and Syria. And, if Romney wins in US in November, expect their diplomatic relations to deteriorate further.