Summary: Venezuela's government and opposition are currently engaged in a standoff centered around President Nicolás Maduro. While economic disarray and social unrest make it appear that power is up for grabs, the government and opposition each have their own strategic approach for gaining and maintaining power.
Venezuela is constantly discussed but the serious issues facing the country are insufficiently addressed. The country is fragmenting due to its strong political divides - each with their own subgroups - and myriad economic and social problems. In our 2016 forecast, we indicated that Venezuela's crisis will continue throughout the year and that gridlock will prevail in the government. Therefore, it is useful to examine how this forecast is progressing by evaluating the current situation in Venezuela. The main political challenge for the country is the fight to remove the president from power. Despite several attempts by the opposition, nothing has worked so far and Venezuela has seen serious economic and social implications arise from this gridlock.
Legal Options to Oust Maduro
After an opposition coalition won a majority of National Assembly seats in the elections on Dec. 6, it spent its first months in office seeking a legal means for removing President Nicolás Maduro. Three potential paths have been seriously pursued by the coalition, which does not control the other branches of government. First, the opposition sought to amend the constitution to shorten terms in office, including the president's term from six to four years. These changes would mean Maduro's presidency would end in early 2017, rather than 2019. However, the Supreme Court ruled on April 25 that any such amendment could not be applied to current terms. As a result, this path to removing Maduro has been taken out of play for the time being.
Impeachment by the National Assembly is the second legal option for ousting Maduro. To successfully carry this out, the opposition requires a two-thirds supermajority in the legislature. Although the opposition achieved this threshold in preliminary election results, three opposition candidates from Amazonas have been prevented from assuming office due to alleged election irregularities in the state. Without these three legislators, the opposition does not have the necessary supermajority to impeach the president. The opposition is currently in the midst of legal battles with the National Electoral Council (CNE) and Supreme Court in an attempt to get these legislators admitted into the National Assembly.
The third option is to hold a national referendum calling for a new president. This process has been drawn out for over two months, as the opposition has asked the CNE for the technical procedures for a petition process that would initiate a revocation referendum. On April 26, the CNE finally released official guidelines for holding the petition. The opposition is under pressure to hold the referendum this year to ensure an election is held and the government can be removed. If it is held next year, the government would remain in power, even if people vote with the opposition, and Maduro would simply be replaced by the vice president.
Thus far, the National Assembly's legal efforts to remove Maduro from office have been thwarted by the other branches of government. This is not terribly surprising given that the opposition controls only one of five branches of government in Venezuela. The remaining branches - executive, judicial, electoral and citizen - are in the control of or allegiance to the current government. This scenario makes it very difficult for the opposition to successfully remove Maduro from office by constitutional means.
Turning to External Means
An emerging alternative option for the opposition involves the Organization of American States (OAS), Mercosur and the United States. In the case of OAS and Mercosur, the opposition could use the democratic clauses contained in Article 20 of the OAS Charter and Mercosur's Ushuaia II protocol. Opposition members have been working with OAS to apply the democratic clause, arguing that the current government's behavior qualifies as an unconstitutional alteration of the constitutional regime that seriously impairs the democratic order. The organization is expected to meet on April 28 with members of the Venezuelan National Assembly opposing Maduro. However, even if the clause is applied to Venezuela, the motion lacks force as the charter calls for diplomatic measures to help restore democracy. And in studying geopolitics, we know that diplomatic measures often do not produce tangible results.
As for Mercosur, Venezuelans protested the Maduro government during an April 25 meeting of the group's foreign ministers. In addition, Mercosur's Ushuaia II protocol could be applied to Venezuela. This protocol stipulates that, in the event of a rupture in democracy, Mercosur can suspend a country from the bloc. Additionally, depending on the severity of the situation, Mercosur can also cut trade ties, close borders, and restrict air and maritime traffic, communication, provision of energy, services or supplies. In other words, its consequences are more grave and tangible than the OAS Charter's. No calls have been made to use the clause this year, though Argentine President Mauricio Macri threatened to apply it against Venezuela prior to the National Assembly elections last year. The updated protocol was first applied to Paraguay in 2012. Mercosur suspended the country from the bloc, but no other punishments were applied. Paraguay simply rejoined the bloc after new elections were held. It should be noted that these clauses are also institutional means for the opposition to remove Maduro from power. Doing so otherwise would make the post-Maduro government susceptible to being judged as undemocratic and illegitimate.
The United States' behavior deserves special attention because of its geopolitical dominance in the region, strong desire to prevent an anti-American government from holding office in Venezuela and constant accusations by Caracas that Washington is meddling in its internal affairs. In the past month or two, as political activity rises in Venezuela, U.S. rhetoric against Venezuela has begun to escalate. U.S. Secretary of State John Kerry denounced the lack of judiciary independence in Venezuela. He also criticized the use of street justice, limited freedom of the press and corruption at all levels of the government. In addition, he said that the U.S. didn't want to place labels on the Venezuelan government but that in principle the U.S. supports the use of the OAS democratic clause. The U.S. has also taken some more subtle steps to express its opposition to the Venezuelan government. The U.S. State Department website for Venezuela announced that it no longer had interview times available for those seeking business visas for the first time and that it is continuing to post consular fees in U.S. dollars, despite the Venezuelan Central Bank order to post prices in local currency according to official exchange rates. Not so coincidentally, Jesus Barrios, the director of the Venezuelan military's School of Intelligence and Counterintelligence, will lead a forum on April 28 titled "The Risks of U.S. Foreign Policy Towards Latin America."
Economic and Social Ramifications
The country's economic and business environment is precarious at best. Venezuela's economy contracted 10 percent last year and saw inflation rates at 180 percent. Prolonged low oil prices have eliminated any hope of an economic recovery in the short term. Additionally, since 97 percent of its foreign currency inflow comes from oil, lower prices mean that the government has fewer U.S. dollars to pay for imports - both finished products and input materials. While the government and state-run oil company PDVSA have managed to make all their debt payments so far this year, there still exists the possibility of default before 2016 ends. The government has been making efforts to ensure it can meet its financial obligations. These include negotiations with China for the restructuring of loans, finalizing a gold swap with Deutsche Bank and developing the mining sector.