Venezuela: Chavez's Move For More Control

Por Venezuela Real - 4 de Agosto, 2008, 21:18, Categoría: Prensa Internacional

Stratfor Today
August 04, 2008

Summary

On his weekly television show Aug. 3, Venezuelan President Hugo Chavez defended his decision to pass 26 new laws by decree — including one that will integrate his militias into the military. The move is an attempt to shore up his control over the country in the face of rising inflation, slackening national income and faltering party unity.

Analysis

Venezuelan President Hugo Chavez used the last day of his special powers to pass laws by decree to institute 26 new edicts. This move, coupled with highly aggressive rhetoric from Chavez, was designed to strengthen his hold on the country ahead of Nov. 23 state and local elections that threaten his political influence in the country.

The 26 edicts passed in the last minutes before Chavez's "enabling law" expired — which has allowed him to pass laws by decree for the last 18 months — were published by title only in the national publication Gaceta Oficial. The laws ranged from changes to the tourism industry, to the nationalization of the Bank of Venezuela to "food security and sovereignty," to the rewriting of industrial financial law. Without the publication of the full details, it is difficult to determine how far-reaching each of these edicts will be. But given the wide-ranging topics in the headlines, the changes are likely to be profound.

Venezuela

At least one of the changes — a law that will alter the name of the Venezuelan National Armed Forces to the Bolivarian Armed Forces — was thoroughly rejected in the December 2007 constitutional referendum. That Chavez chose to push the reform through anyway has generated a great deal of outrage in political circles. Reactions to these decrees — primarily from known opposition leaders — have included criticism over Chavez's failure to discuss the laws in the National Assembly or publish the details of the laws. So far the military has remained quiet.

The details on the military changes came out in Chavez's weekly Sunday night television show, Alo Presidente on Aug. 3. He explained that in addition to changing the name of the military, the law also mandates a restructuring of the military to integrate Chavez-supporting militias as a separate branch of military service called the National Bolivarian Militia.

The plan is a serious check on the military's power. Previous attempts to enact the law generated dissent from within military. The most outspoken opponent of the plan is former chavista Raul Baduel, who has been hit hard by the government — Baduel is currently under intense investigation by the Venezuelan government and recently survived a murder attempt.

Chavez established the local civilian militias in April 2005, creating training camps and equipping militiamen with Russian-made Kalashnikov assault rifles. Chavez's plan to integrate militias into the military is a twofold strategy. Not only does it allow him a level of politico-military control on the street level, but it also allows him to own an entire wing of the military in the event that any potentially unhappy generals seek to depose him (again).

Although the trigger for Chavez's decision to pass these laws was the expiration of the enabling law, the precarious political situation in Venezuela set the stage for his action. There are several factors steadily increasing the already intense pressure on Chavez: rising inflation, falling oil prices and the impending Nov. 23 elections.

First and foremost, Chavez is facing declining support in his base as a result of the deterioration of the country's economic conditions. With rising global food prices and skyrocketing inflation, Chavez has been hard-pressed to satisfy the basic needs of the poor (his support base) who have been inordinately impacted by rising prices. In response, Chavez has increased government spending in order to ameliorate the problem by nationalizing grocery chains, attempting to enforce price controls, and increasing government control over the food supply chain. These measures, however, have been unable to stem rising hardships for Venezuelans, and in some cases food shortages.

Chavez has been able to offset food supply issues to a certain degree through his populist policies, which rely on income from state-owned energy company Petroleos de Venezuela (PDVSA). But even with prices at record-high levels in 2008, PDVSA has been sinking under the weight of increasing populist demands — and has been unable to fund new oil exploration and production, resulting in declining output (and thus in income). Exacerbating this problem are falling oil prices, which will leave PDVSA — and by proxy, Chavez — with very little budgetary wiggle room.

Finally, Chavez is facing a crisis in his own political camp. The upcoming elections are "mere" local and state elections, and will not impact Chavez's control over the National Assembly. However, in the ramp-up to the elections, cracks have begun to show in Chavez's United Socialist Party of Venezuela. The party has bickered for months over who to put forward as candidates for the elections, and the infighting has allowed the opposition to make substantial gains. In fact, according to some polls, the opposition is expected to boost its current representation among state governors from 4 to 10 out of 24 total states. On a local level, Chavez is facing the loss of key mayoral positions — such as in Sucre, a poverty-stricken municipality of Caracas and a former base of support for Chavez.

With such an uncertain control over his own party, Chavez could not be sure that the 26 initiatives he passed would have made it through review at the National Assembly. This was his last chance to make reforms necessary for his survival. But the long-term viability of his reforms is in serious crisis, not the least because of the public backlash for implementing so many unpopular reforms by decree. Irrespective of any legal chicanery, Chavez is losing control of his country.





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