Venezuela Smith Cove Capital

Venezuelan Opposition Needs To Unite Or It Will Be Crushed

The struggle against authoritarianism occurring in Venezuela is more than an economic story where a dictatorial regime appears to think it can break the basic rules of free market supply and demand and come out of the experience unscathed. What is happening leading up to the April 22 presidential election is a lesson in how authoritarian rule can prevail and beat back forces that prefer to live in a liberalized society when the opposition is divided.

Sitting in New York City, Barclays Emerging Markets Research analyst Alejandro Arreaza looks at Venezuela from a military perspective.

This isn’t just because the government of President Nicolas Maduro is using increasingly harsh tactics to quell street rebellion as its nation’s currency becomes essentially worthless and food remains scarce.

It has to do with the political tactics that Maduro is using: they are military tactics that have the impact of dividing and conquering. The Venezuela heat political map looks like a “pincer movement” is afoot, Arreaza observed in a February 26 report of the same name.

Currently, the opposition is divided: one camp wants to boycott the election, the other wants to challenge Maduro at the ballot box.

Venezuelan politician Henri Falcon announced on Tuesday that he was challenging Maduro, defying a call by the opposition party to boycott the election. “The government promised a paradise to millions of Venezuelans, but they gave them a hell,” Reuters reported. The opposition’s two most famous leaders, Leopoldo Lopez and Henrique Capriles, are prohibited from running, which led to the election boycott.

Barclays provides a baseline analysis, noting the nuanced performance drivers and a lack of faith in voting as a means of societal change:

So far, the government has not shown a real willingness to concede as it tries to hold onto power. While focusing efforts on only one front could be insufficient to drive political change, if the opposition can coordinate its actions on both fronts, it could encircle the government and create the amount of pressure required to achieve a political transition.

Beyond personal ambitions, divisions among the opposition have been driven by differences in views about the most effective strategy to confront a regime that has turned increasingly authoritarian. Some of the opposition leadership and their supporters seem to have lost faith in voting as an instrument of change and see a need to rely on actions by the international community to drive a power transition. Others remain focused on the electoral path,2 while some are trying to navigate between the two camps in an effort to exhaust all options of finding a negotiated solution that avoids more painful scenarios.

Regardless of the strategy choice, one component is clear to Arreaza. The opposition is headed for disaster unless it unites under one strategy.

“The worst-case scenario for the opposition would be to remain divided, trapped in a dilemma between abstention and participation in the elections,” he observed. “This would make either of the two strategies less likely to be successful, likely resulting in the re-election of President Maduro and potentially delaying a transition” to a moderate government.

Falcone is the only primary opposition candidate to register, with evangelical pastor Javier Bertucci being mostly written off as an unknown.

While polling from Dataqnalisis shows Falcone with a sizable 12.2% lead over Maduro, the opposition decision to fully back him may involve administrative logistics.

“A final decision on whether to participate in the elections will likely depend on the government’s agreeing to potential changes in electoral conditions, which could also mean a postponement of the election,” he noted. Falcone, for his part, has requested UN observers watch the election mechanics closely.

What is occurring in Venezuela is the result of authoritarian rule over not just the economy, but its social structure as well.

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