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Will economic woes drive greater realpolitik for Venezuela's Maduro?

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Ng Han Guan/AP

(Read caption) Venezuela's President Nicolas Maduro speaks at the opening ceremony to a two-day meeting between China and Latin American and Caribbean countries held at the Great Hall of the People in Beijing, Jan. 8, 2015.

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 Michael McCarthy writes for WOLA's blog: Venezuelan Politics and Human Rights. The views expressed are the author's own.

Recent geopolitical developments in US-Cuban relations and in international oil markets pose a key question for the government of Nicolás Maduro.

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Can the Maduro government follow the lead of two strategic allies, Cuba and Saudi Arabia, and put national interests first? Or does President Maduro’s support of a “multi-polar, anti-imperialist” foreign policy leave no room for practical maneuvering and realpolitik deal-making?

One oft-discussed scenario projects Maduro following the path of Deng Xiopang who gradually consolidated a technocratic government to liberalize the economy, all in the name of carrying on Chinese communism. Under this scenario Maduro could strengthening the economy through market friendly reforms. Indeed many financial stakeholders would like Maduro to learn Deng’s “it does not matter whether a cat is black or white, so long as it catches mice” pragmatism.

But with Maduro doubling down on his discourse of an “economic war” being waged against Venezuela, it would seem significant market reforms, other than a currency devaluation or asset sales, are unlikely.

Another scenario, more popular in Left-wing circles, would see Maduro prosecuting the corrupt within his own ranks while recommitting to a program of gradually building socialism. Supporters of this path suggest that Maduro is not following former President Hugo Chávez’s lead in rooting out corruption and holding accountable the inefficient sectors of the government. Whether Mr. Chávez actually made real progress on those fronts is highly questionable. But in any case, for leftists, Maduro needs to radicalize to honor Chávez’s legacy and keep the opposition on the defensive.

There are many obstacles to this kind of radicalization. The military’s economic power is growing, a trend that seems inversely related to an effective fight against corruption. Moreover, amid highly unfavorable economic conditions, Maduro does not have the financial flexibility to further nationalize “inefficient” or uncooperative sectors of the economy.

Given Maduro’s predicament, small politics might suit him better. He could recover gradually by making pragmatic moves that will neither scare off investors nor betray leftist chavistas.

Maduro’s announcement that the government will resume collecting fares at highway toll booths and return this responsibility to regional governments may be more of a cost-cutting gesture than a genuine shift to fiscal decentralization. Regardless, the example speaks to the point: Maduro needs to be perceived as a conciliator or problem-solver. Small steps that suggest the government is interested in results, on either the domestic or international front, are potential ways for him to thread the needle of moving the agenda forward.

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At the same time, the government may not have much time to search for the right cards to play.

Given the urgent state of affairs on the economic front, and the strong possibility of re-energized street demonstrations ahead of the anniversaries of Leopoldo López’s jailing (Feb. 18) and Chávez’s death (March 5), these next few months are more likely to be about just pulling through. 

Michael McCarthy is a research fellow at American University’s Center for Latin American and Latino Studies.


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