As President Hugo Chavez binds Venezuela ever tighter to every international enemy of the USA, at home he confronts high inflation, dropping oil revenue, a falling GDP, and a National Assembly election just a few weeks way. That said he has a very good chance of retaining control of the legislative body, the National Assembly.
According to Wikipedia, on September 26th Venezuela will have the National Assembly election for 167 deputies, including 110 constituency representatives elected on a first-past-the-post system (in 87 districts), 52 on a party list system (2 or 3 deputies per state of Venezuela), and 3 seats for indigenous peoples and 12 representatives chosen by the Latin American Parliament. About 17.5 million, age 16 and over, of Venezuela’s 28.5 million population are eligible to vote. Chavez’s PSUV (Partido Socialista Unido Venezolano) party has about 7 million members and is the largest political party. Currently President Chavez and his PSUV have absolute control of the National Assembly because in the last election the opposition boycotted the election. Polls indicate Chavez, who daily is on television, radio, and print media, has a solid one-third of the voters. The government is the largest employer and he has support from government workers. The poor also are captivated by his popularistic rhetoric. Chavez has structured the number of representatives not by population. Chavez’s goal will be to try to win at least 50% of the seats, which is possible with the current state representation not according to popular vote. He will try to present an international image of being a democratically supported political leader. The opposition objective is to have a massive anti-Chavez popular vote and deny Chavez gaining effective absolute two-thirds control of the National Assembly. That will send a message international that democracy in Venezuela has been destroyed by a demagogue. Such a protest vote will set the stage for the late, 2012 Presidential elections.
Hugo Chavez was first elected president in 1998 and re elected in 2000 and 2006. He has taken effective control of the secret police, the military, the legislative (National Assembly), the Judiciary, the Attorney General, and the Finance Ministry. A few years ago he tried to pass a totally socialist constitution (Napoleonic Code), but the effort was defeated. Since that failure he has gotten the National Assembly under his control to pass many of his socialist laws. The opposition feels Hugo Chavez has become a dictator. Chavez backers have called again to change the Constitution to allow Chavez to be elected for life like his mentor Fidel Castro.
In April, 2010, there was an effort to create an umbrella MUD opposition party with 50 opposition political parties, of which 16 are national. The greatly divided opposition does not have one charismatic leader. Chavez this August had the SEBIN (secret police) arrest the opposition political leader Alejandro Pena Esclusa. Chavez has embraced all anti-US regimes, including the Castro regime in Cuba and the Ahmadinejad regime in Iran. As part of the on going economic war, he is courting investors from China, Russia, North Korea, etc. He is funding an unprecedented military build up with jet planes, tanks, an AK 47 factory, etc. Colombia has documented Chavez’s support of guerrilla groups based in Venezuela attacking within Colombia. As part of the ideological war in Latin America, Chavez openly describes his Bolivarian goals of hegemony over Colombia, Panama, Trinidad, and Ecuador.
Chavez in Latin America has close ties with leftish regimes in Cuba, Nicaragua, Bolivia, and Ecuador. This August the Roman Catholic Cardinal Urosa Sabino strongly warned Venezuelans of the Chavez socialist direction. Chavez went on national television and personally attacked the Cardinal. Yet when Fidel Castro was asked about the Chavez “Socialism of the 21 St Century,” he said the Chavez program was actually communism. In 2010 Chavez proclaimed he is a Trotskyite, following the ideas of the former Soviet communist Leon Trotsky, who was assassinated by orders from Stalin in August, 1940 in Mexico City, after being forced by Stalin in exile from the USSR.
Chavez in his march to socialism has begun a massive state expropriation program. He has nationalized the steel industry (SIDOR); La Electricidad de Caracas; the national telephone company (CANTV); the largest bank (Banco de Venezuela); the cement companies (CEMEX and Lafarge); a major supermarket chain; a rice mill; a flour mill; many sugar mills; farms (5 million acres); oil concessions; suppliers to the oil industry; and many more industries. The opposition notes these expropriations are strangling the economy. The expropriations will destroy jobs and discourage future capital investments in Venezuela. The opposition claims it has increased corruption markedly. The immediate impact will be to help destroy the tax base in Venezuela.
He has imported thousands of Cubans for his personal military guard; control of all passport documentation; control notary public services; and support intelligence operations. The estimated number of Cubans in Venezuela varies, but they could be from 40,000 to 60,000. Whatever the correct estimate, the number is considerable.
Oil production in falling and revenue is falling. In 2002 employees at PDVSA, the state owned oil company, went on strike, and Chavez fired 18,000 experienced employees. The experienced employees have been replaced by several thousand Chavez supporters, many of whom are inexperienced oil industry workers. Oil production statistics vary according to sources. In 2005 the production was 3.2 million bbl/day and 1.5 million bbl/d were exported to the US. In 2007 according to one source Venezuelan oil production including condensate fell to 2.64 million bbl/d. In May PDVSA exported 1.01 million bbl/d to the US and in June 850,000 bbl/d. In June they exported about 500,000 bbl/d to China. PDVSA’s US subsidiary CITGO owns five US based refineries and a large service station retail distribution system. The IEA reported PDVSA in 2007 lost $7.9 billion dollars. One estimate is that in 2008 PDVSA profits fell 35%. In 2010 profits will fall because crude oil prices fell from 2009 $145 bbl to the current $70s bbl area. Also PDVSA has sold at deep discount on extended credit for several years at least 100,000 bbl/d to Cuba and is selling at discount to several other nations crude oil and heating oil.
Economically Venezuela is the only OPEC nation to have its GNP fall in 2009 and 2010. The official inflation rate is 30.5%. The official exchange rate is 4.3; the rate for imported food is 2.6, and other imports is 5.3; but the black market rate is 8.5. That is after Chavez two years ago removed three zeros from the currency. So the current 100 bank note equals the old 100,000 bank note. There are strict currency controls prohibiting taking assets abroad.
Crime and violent deaths have increased markedly in Venezuela. In fact there are more violent deaths in Venezuela than in Iraq. There are allegations that Venezuela is a major traffic route for drugs coming from Colombia.
There is adequate food, with increasing shortages, for the masses. But in 2007 Venezuela imported $1.7 billion food and 2009 imported $8 billion food. The 2010 food imports will again be massive.
Venezuela owes Colombia over $800 million for unpaid imports; consequently, trade with Colombia has fallen markedly. Recently Chavez went to Colombia to meet with President Santos, new president of Colombia, to attempt to resolve their problems. Chavez agreed to pay Colombia $200 million to resume Colombian-Venezuelan trade
Watch the September 26 elections closely.