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June 17, 2020

VENEZUELA: Successive strikes against opposition sign of economic unease

BY Nicholas Watson

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( 3 mins)

The regime is advancing its campaign to sideline genuine political adversaries and build a made-to-measure, cosmetic opposition in time for sham legislative elections before the end of 2020. The regime’s goal is to secure domestic political hegemony. The opposition led by Juan Guaido is on the backfoot and will likely struggle to regain impetus on its own. However, the speed with which President Nicolas Maduro is moving against the opposition is likely to reflect increasing regime nervousness over the state of the economy.

On 15-16 June, the regime-controlled Supreme Court (TSJ) followed up its recent manipulation of the National Electoral Council (CNE) by intervening in two major opposition parties: Democratic Action (AD) and Justice First (PJ). The TSJ effectively removed the parties’ leadership and appointed new leaders who will do the regime’s bidding; the new leader of AD, Bernabe Gutierrez, has already confirmed that the reconstituted party intends to participate in the legislative vote.

The regime wants to:

a) convey the impression that opposition support is shifting inexorably away from Guaido to new groups represented by the likes of Luis Parra and the evangelical leader Javier Bertucci, as well as the new AD and PJ, from now on existing as “shell” parties effectively following regime orders.

b) disincentivize opposition voters by making their cause look futile, eventually causing the Guaido threat to wither and die away.

c) simulate a competitive election in an effort to boost the regime’s legitimacy and reduce international pressure.

Opposition response

Guaido’s capacity to respond is limited. Henry Ramos Allup, the ousted AD party leader, is refusing to accept the TSJ ruling and will attempt to continue to run a “real” version of the party, in what would be another example of the opposition and regime operating rival institutions. The reality is that the Guaido-led opposition appears increasingly marginalized, while its main strength – strong US backing – is also a political liability that the regime exploits whenever it can. It is not clear how the opposition can avoid the electoral trap that lies ahead; nor is it clear what plan Guaido has should the new CNE decide to bring forward the legislative vote.

The big chink

The regime’s decisive action against the opposition over the last fortnight is almost certainly aimed at preventing Guaido from capitalizing on the dire economic situation. Oil production is likely to have dropped to around 500,000 bpd in May, down from 1mn bpd during 2019. Reports indicate that crude exports in the first half of June may have dwindled to as low as 325,000 bpd, levels not seen since the 1940s. A combination of the tightening US sanctions squeeze against shipping, a lack of storage capacity, and shortages of diluents mainly explains the export drop.

With crude production and exports virtually in freefall, cashflow remains under extreme pressure, which is why Maduro has been forced to tinker with longstanding fuel subsidies while desperate efforts are made to bring decrepit domestic refining facilities back to life. The Covid-19 situation is a further concern for Maduro even if he has now started intermittent easing of social distancing restrictions. Official statistics (3,150 confirmed cases and just 27 deaths) appear improbable. The economic damage caused by a serious and/or extended Covid-19 outbreak would be severe, giving Maduro an added imperative to subdue political opposition.

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