Massive anti-government protests have erupted across Venezuela in what President Nicolas Maduro has called an “evolving coup.” Maduro’s comment might become a self-fulfilling prophecy if protesters and the political opposition continue to gain strength.
The day following Maduro’s comment, the situation between demonstrators and security forces intensified and deadly violence ensued, killing three people. The situation in Caracas has increasingly resembled Kiev, Ukraine over the past few months. Marches by both pro-government and anti-government demonstrators are planned to continue in the following days, while Maduro has addressed security forces, telling them to ramp up security efforts. The social dynamics of the Venezuelan protests have been fleshed out extensively by the international press.
The political situation in Venezuela poses great challenges to investment. Investment has increased dramatically in the Caribbean region of South America, with Venezuela being the exception. S&P recently upgraded Colombia’s investment status to BBB, while an increasingly liberalized Suriname has attracted significant investment in the agro-development and extractive sectors.
Maduro’s government is managing a country with 1.5 percent growth, rampant hyperinflation and capital flight. It is clear why the Venezuelan people are protesting in such large numbers — things are not adding up. The wealth from oil revenues has not translated into better public goods, and what used to be one of the more forward-looking countries in the region now has to deal with dire shortages of basic supplies in supermarkets across the country.
Despite the large demonstrations, marches and general anti-government sentiment, it is too early to tell if there will be a coup. Maduro is naturally worried about it—even popular Chavez was almost ousted by a coup in 2002.
Venezuelans have a worse standard of living than in the Chavez years. Essential goods such as toilet paper are scarce throughout the country and Caracas is one of the most violent capitals in the world. Criminality and homicides in particular have increased exponentially since the late 2000’s, with over 24,000 murders last year alone. Maduro has so far failed to bring peace to the streets of Venezuela.
Yet, these problems have persisted for a prolonged period and the government is still winning provincial and national elections, although with the smallest margins of victory since the socialists came to power.
Despite Maduro’s seemingly fragile hold on power, he still has the military on his side. The Venezuelan General in Chief, Vladimir Padrino Lopez, has publicly stated that a coup is not an option in post-2002 Venezuela. Padrino Lopez is self-described as a Bolivarian soldier, convinced to construct a socialist state. It seems that a coup is unlikely to come from the military, as Chavez himself was a soldier and instituted a military system that is ideologically in line with the government.
Those that say that the protests can work in favour of Maduro have overlooked a simple fact: The government is actively restricting free speech in an already tumultuous environment. Government inaction towards excessive macroeconomic woes coupled with a clamping down on civil liberties will only result in further radicalized political fracturing.
Whether he accepts it, Maduro lives beneath the shadow of Hugo Chavez. The ruling party has won 18 elections, but even cabinet ministers, such as the Finance Minister, have acknowledged the uncertainty that lies ahead if the economy is not urgently restored. Even United Socialist insiders acknowledge their perilous political situation and that their survival depends on getting the economy back on track. But to do so they might have to abandon their party’s fiscal platform.
Michelle Bachelet, the beloved Chilean leader and expert in handling an export-driven economy, warned Maduro: “I repudiate repression in all its forms. Venezuela must hold a plebiscite. My greatest rejection of (President) Nicolas Maduro. You do not attack the people.” If the Venezuelan government intends to stabilise, it should heed her warning.
