Venezuela: Politics

Background:

President Hugo Chavez’s left-wing administration runs a highly centralized state, with the government controlling several major companies, including the state oil company Petroleos de Venezuela S.A. (PdVSA) and all its revenues. In contrast to its immediate predecessor, the Chavez regime has enjoyed high oil prices, the revenues from which it has used to finance high-profile state welfare programs. Venezuelan opinion on Chavez’s rule is deeply divided, with his supporters celebrating the allocation of state money to the poor and Venezuela’s extended influence in Latin America. Opponents, meanwhile, criticize the state’s heavy intervention in the economy, its lack of transparency and its seeming disregard for the human rights of those who criticize the government.

Chavez’s overall popularity appears to have weakened somewhat in the context of an increasingly bleak economic outlook for Venezuela (see: Is Venezuela Heading Toward a Deep Recession?). Government candidates performed relatively badly in the 2008 regional elections, while, in 2007, a government-backed referendum, which would have consolidated the centralization of power, was rejected by the electorate. The next big test for Chavez’s hold on power is likely to be the September 2010 National Assembly elections, in which the government may lose its overall majority in the country’s single-chamber legislative body.