Event

The presidential election in the wake of Hugo Chavez’ death was a much closer race than anticipated. Nicolas Maduro, candidate for the ruling PSUV (United Socialist Party of Venezuela) and Chavez’ appointed heir, was accorded a double digit lead in the polls leading up to the election, yet he  beat  Henrique Capriles, the candidate of  the unified opposition  party MUD (Democratic Unity Roundtable), by only 1,49% on 14 April. Among the opposition, the tight result has further increased anger and frustration. Protesters have taken to the streets with “cacerolazos” (beating pots and pans), and post-election confrontations with the police have left nine dead. Even though no extreme violence has been reported recently and Capriles is advocating peaceful opposition, he shows no desire to recognize Maduro as legitimate president. Capriles has demanded an investigation into more than 3000 alleged irregularities and a recount of all the votes (a demand supported, among others, by the United States). The National Election Council (CNE) has partially agreed to the request, ordering an audit of the vote, but because the opposition is questioning the audit procedure as well as the neutrality of the CNE, this is unlikely to settle the dispute. The opposition has already decided to take the matter to the Supreme Court. Within the ruling PSUV, the narrow election result is considered as a defeat and may undermine Maduro’s hold on the party. The recent reshuffling and creation of new cabinet positions can in this light be seen as an effort to satisfy different factions of the party. Another indication is that on the day after the election, PSUV number two Diosdado Cabello said that the party needs to revise itself. On 30 April, hardliner Cabello, as head of the National Assembly, has furthermore denied the right to speak in Parliament to opposition members unwilling to recognize Maduro as president. This resulted in a congressional fist fight.

Impact on country risk

The very narrow election victory for Nicolas Maduro is likely to further widen the divide in an already polarized country. Again (see our assessment in April), whether or not tensions escalate will depend largely on how the police and armed forces respond to opposition protests. It is clear however that political uncertainty remains high in Venezuela, as is already incorporated in ONDD’s political risk assessment. As for commercial risk, Venezuela remains in ONDD’s highest risk category.

Analyst: Sebastian Vanderlinden, s.vanderlinden@credendogroup.com