The key considerations for coming 6 months are as follows:
- Will Chavez be fit enough to complete his current term in office and lead his party, El Partido Socialista Unida de Venezuela (PSUV) until the December 2012 elections? Although his precise medical condition is unknown, and has been closely guarded, Chavez has obviously been physically weakened. Despite his public assurances that he will overcome the cancer, aggressive post-operative treatment continues.
- Even if Chavez does recover and over the next six months appears capable of completing his current term, uncertainty remains as to whether he will have the political and physical might required to re-contest the presidency in 18 months’ time.
- If Chavez cannot re-contest, the obvious question is who else could assume his role within the PSUV, as leader of the Bolivarian revolution? The two most likely candidates are his brother Adan, and former military colleague Diosdado Cabello. However both lack the political experience, public recognition and charismatic appeal of Chavez.
- It is plausible that the uncertainty of Chavez’s and the PSUV’s future open the door to the main opposition coalition, the Mesa de la Unidad Democrática (MUD) to secure victory in December 2012. Even prior to his illness, Chavez and the PSUV faced increasing pressure from MUD who made gains in both the 2008 state elections and the 2010 national elections. These gains were made as a consequence of Venezuela’s continued energy shortages, ongoing social divisions, rising crime (Caracas is now one of the most dangerous cities in the World) and high levels of inflation.
- Conversely however, MUD’s decision to defer the election of its presidential candidate until February 2012 means that the party currently lacks the political cohesion to demonstrate a real alternative to the PSUV. Furthermore, the two front runners for the MUD leadership, Henrique Capriles Radonski and Leopoldo López, have both faced legal proceedings in relation to corruption and political violence and neither have yet presented a clear political alternative to the PSUV.
- In terms of the implications on foreign investment in Venezuela, Chavez is likely to continue with his strategies of excessive spending (on 2 September he promised pay increases to members of the armed forces) and increased nationalisation of sectors such as gold, which are likely unsettle investors at least until the 2012 elections. However as the opposition has suggested, these are temporary measures that distort a weak and unstable economy and an eventual change of regime in Venezuela could lead to a significant increase in foreign investment.
A change in regime, precipitated by Chavez’s medical condition, could certainly lead to both economic and political advancement in Venezuela. However the uncertainty both within the PSUV and the opposition, combined with Chavez’s last ditch economic measures to secure re-election as long as his health will allow it, mean that in the short term we are likely to see significant instability in the political, economic and security environments.