Venezuela Election 2013: Will Venezuela Choose Capitalism, Or More Chavez?

Venezuelans are returning to the polls for yet another presidential election. On April 14, Nicolas Maduro, Chavez's handpicked successor, will go head-to-head with Henrique Capriles, the man Chavez beat in Venezuela’s most recent elections.

Maduro is a long-time member of the United Socialist Party of Venezuela (PSUV) and represents the party's civilian wing. If he can retain the party's hold on the presidency, Venezuelans can expect a continuation of Chavez-era economic policy a decidedly bad thing for the country's future.

During Chavez's tenure, the PSUV succeeded in gutting most of the private sector. It's true Chavez was kinder to the nation's poorest, but in his material kindness, he was cutting pieces from a rapidly shrinking pie.

Venezuela is nearly incapable of producing anything on its own. Oil accounts for 94% of its export earnings and as a nationalized industry the government has managed to mismanage it as well. Ironically, the nationalizations which have been the mainstay of the Chavistas' "anti-imperialist" program have rendered Venezuela utterly dependent on the West.

Venezuela sends 40% of its oil directly to U.S. markets, making the U.S. its single biggest customer for just about the only product it has to export. Further, in order to meet short-term financing needs, the Chavista government has been issuing bonds for which it pays as much as 621% to the likes of Goldman Sachs. Fearing market discipline, the Chavistas have never missed a payment.

This is the government Maduro stands to inherit, and the government he will likely try to perpetuate as long as possible, because it benefits the ruling class within the PSUV.

Capriles stands not in stark, but at least some, contrast to Maduro. He's quoted as favoring the "Brazilian model" of governance. For Venezuela, this would mean some market reforms, privatization, and a devillainization of foreign investment.

The biggest breaks might be in the area of foreign policy. A Capriles victory would almost certainly put Venezuela farther into Brazil's center-left orbit; if Maduro gains office, Venezuela stays firmly in the camp of harder-core leftist countries like Bolivia, Ecuador, Argentina, and Cuba. Importantly, many of these traditional allies have relied on Venezuelan largess to stay solvent, something Capriles has publicly stated he would withdraw.

Venezuelans will have to decide if they want more of the same or to make a break from Chavez's legacy. One road represents a status quo that can’t go on forever. So sooner or later, it won't. The other represents not the guarantee, but the possibility of change. Capriles faces another uphill electoral battle. Even if he were to win, there's no telling how far elements of the PSUV might go to obstruct reform or to what extent Capriles can be taken at face value. He may not be a Chavista, but he's still a politician, after all.

Either way come Sunday, the political circus is far from over. The system is still re-calibrating following Chavez's demise and the election of a new chief executive is the next step in settling the questions of Venezuela's political order, and subsequently its economic reality, out of the dysfunction Chavez left behind.

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Jeff Fong

Jeff covers the intersection of politics, economics, and technology. He currently lives in the SF Bay Area where he works at a start up focused on urban transportation.

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