Venezuela: The regime could fall after a violent campaign

Emotions were running high in Venezuela in the countdown to Sunday's watershed election. Chavismo, the socialist experiment launched by Hugo Chavez in a decade of high oil prices, could lose, according to polls. An addiction to power amongst the military, mishandling of the economy and widespread corruption and violence could award the victory to the opposition for the first time in 17 years.

An opposition supporter tapes her mouth with the colours of Venezuela flag during a campaign rally with candidates for the National Assembly from the Venezuelan coalition of opposition parties (MUD) in Caracas December 3, 2015. REUTERS/Nacho Doce

Put on the ropes by polls that give the incumbent 20% in the best case scenario, President Nicolas Maduro's regime has everything to lose. Last but not least, the fragile standing of some high-ranking military involved in international drug trafficking and money-laundering, who have been identified by the US Justice Department,  and a collapse a vast system of influence peddling and patronage across Venezuelan institutions. Maduro's statement that he was "ready to take to the streets with the people" if his candidates lost in Sunday's elections came therefore to no surprise.

As feared, the opposition was under fire during the campaign, and this is not just a figure of speech. Opposition leader Luis Manuel Diaz of Acción Democrática was murdered in a rally sabotaged by a stone throwing. He was hit by bullets fired from a car.

Another target has been Lilian Tintori, the young wife of another opposition leader, Leopoldo López, sentenced to 16 years in prison. The secretary general of the Spanish Socialist Party wrote: "If something happens to Lilian we will hold the high-level ranks of Maduro's regime, and  Maduro himself, responsible."

Neither the harassment by gangs, or asabotaged plane, or the humiliation of having to undress and get on all fours when she visits her husband in prison, have silenced Tintori nor the opposition press, but life was made very difficult for them, and physically risky.

The PSUV used government resources at large for its official election campaign — and the heavy hand in the unofficial one. This included tricks such as assigning to an own coalition the same name of an opposition grouping or placing a similar logo next to one of the opposition, as well as threats and obstacles for the press and broadcasting channels, such as not renewing licenses.

John Kerry's spokesman, the UN's High Commissioner for Human Rights, the Organization of American States, 27 former presidents belonging to all sides of the political spectrum and 150 MPs from Canada to Argentina called on Nicolás Maduro for a fair electoral process.

 His government, however, refused to accept the application of some foreign observers, like  that of the Organization of American States, accepting only UNASUR's, believed to be more favorable to the incumbent.

"We are all Chavez", read a slogan at the government's closing event in Plaza Cristal in Caracas, in a feedback to Maduro's call to stand up for Chavismo's achievements. People who support it have been scared of the risk that another government would change the policies for the poor, including subsidies and gifts. However, according to many observers, including the editor of El Nacional, Miguel Henrique Otero, "even the poorest people oppose now the regime, because it forces them to stand in lines [four hours to buy food, WN]."

Maduro gets also the blame for widespread violence, and not just that associated to the political game. Venezuela is now the 2nd most violent country in the world. Its best known writer, Leonardo Padrón, said in an interview with El País: "Chavismo managed a school of hatred and resentment by cultivating the worst elements of class struggle. It is quite a feat to have turned a nation as rich as Venezuela in the poorest one in the region."

Inflation soared to surreal levels, but no official data has been released since December 2014. Using Venezuela's Central Bank methodology, economic research firm Ecoanalitica in Caracas calculated it to be 190%. However, discounting from the calculation a number of distortions, such as three different dollar valuations, capped-prices for certain products and their resale on the black market, inflation came shy of 365%. Considering that the last months of the year usually record a higher inflation, 2015 could top 410 to 430%," said speaking to East Carlos Miguel Alvarez, chief economist at Ecoanalitica.

If there are no "surprises", such as those announced by Maduro on Thursday, fixing the economy will be one of the next government of Venezuela's most difficult task. It includes addressing the concern of a default. To meet its obligations, "the government managed to save an average of $ 500 million a month," said Alvarez, by reducing imports by another 11%, selling off assets and writing off debt with the government.

The budget, however, was licensed with oil at $ 40 a barrel. If its price declines to 35, as happened in recent days, everything changes. Venezuela "has a liquidity problem, not a solvency one," said Alvarez. "I do not see a default in the first six months of the year, but this means that the government will have to sit down with bond holders globally and renegotiate maturities".

China will be critical: it buys daily 700,000 barrels of Venezuelan oil. "Of these, 400,000 pay debt. The rest goes to a somewhat opaque fundin China", which supposedly pays off debt as well, Alvarez explained. Caracas is desperately trying to hammer out a 20 billion dollar loan with Beijing, but it will probably get only 5. This is very important because China's loans do not have as many conditionalities attached as, say, the IMFones,the economist said.

In Sunday's pollsVenezuelans are likely to be as disciplined as they are when they stand the lines to buy food. And if no one knows what will happen after the results are known, everybody agrees that 6 December will go down in history.

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