Venezuela Votes: Chavez Opposition Makes Inroads
Election results set the stage for more tensions as lower oil prices and soaring inflation increase the pressure on Venezuela's President
By Peter Wilson
Venezuela's opposition cut into President Hugo Chávez's majority during local elections on Nov. 23, setting the stage for increased political tensions as the South American country struggles with a free fall in oil revenue and soaring inflation.
The opposition, a fractious coalition of more than a dozen political parties united only by their dislike of Chávez, won five of the country's 22 contested governorships, including those for the country's three most populous states, as well as the Caracas mayor's office. Candidates of Chávez's new United Socialist Party of Venezuela won the remaining 17, largely in the country's less populated rural areas. Before the vote, the opposition held only two statehouses.
Both sides claimed victory.
"With these results, the people have reaffirmed our road to socialism," Chávez told cheering red-clad supporters after the national election board released preliminary results in the early morning. "No one can say there is a dictatorship here."
"What is important is that the map of Venezuela is starting to change," said Manuel Rosales, the opposition leader who ran against Chávez in the 2006 Presidential elections and whom the President has repeatedly threatened to jail for alleged corruption.
Oil Troubles
Venezuela, the fourth-largest oil supplier to the U.S., is facing a difficult 2009, especially in the face of falling oil prices. Revenue from oil makes up more than 90% of the country's exports and provides the government with 50% of its money. Prices for Venezuelan crude, which is tilted toward less costly heavy oils, have fallen more than 70% since they topped $132 a barrel in July. Last week, the price closed at $40.68.
Analysts have estimated that Chávez needs oil at a price of at least $80 a barrel to cover current expenditures.
Fears of a worsening economic picture have sent the black market rate of the country's currency soaring, while braking corporate investment and hammering the price of the country's bonds. Analysts predict that Chávez, who has served as President since 1999, will either have to cut expenditures or devalue the currency to make ends meet next year.
Both steps could erode "El Commandante's" popularity. Cuts in social spending could alienate the country's poor, who are Chávez's main supporters. But a devaluation would lead to higher prices and spur inflation, especially as the country imports about 70% of its food.
The country's inflation rate was 36% for the 12-month period ended in September, the highest in the region.
"With Chávez, economic decisions are taken on a short-term, ad hoc, and pragmatic basis," says Julia Buxton, a political science professor at Britain's University of Bradford who follows Venezuelan politics. "The worry is that the economic situation is going to get worse."
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