NCPA - National Center for Policy Analysis


February 4, 2009

As Treasury reserves in Venezuela dwindle, electricity blackouts become commonplace, public security deteriorates and the finances of the state-owned oil monopoly, PdVSA, fall further into disarray, there is little reason to think the decline will be reversed any time soon.  If President Hugo Chávez hopes to continue governing under the guise of democracy after 2013 (when his term expires) he must get the constitution changed now, says Mary Anastasia O'Grady, of the Wall Street Journal.

So when Venezuelans cast their votes in February, they will be answering just one question: Do you approve of changing five articles in the constitution so as to allow for the indefinite reelection of the president, legislators, governors and mayors?

The problem for Chávez may be that a majority of voters have already had enough of him, and this ballot gives them a chance to say so.  Current economic and financial conditions do not favor the incumbent, says O'Grady:

  • Prices for Venezuelan crude are now below $40 per barrel, and the central bank has recently been asked to hand over $12 billion to a government development fund.
  • The bank's international reserve position is now just below $30 billion, and if reserves keep shrinking, Venezuela could have trouble paying for its food.
  • Currently, PdVSA owes its suppliers some $7.86 billion.
  • If the problem is not resolved, it could affect 25,000-30,000 jobs.

To combat this malaise, Chávez's United Socialist Party of Venezuela is campaigning frantically.  But he has added intimidation to his toolkit and in the past month, enforcers have been attacking student groups that are trying to rally Venezuelans to vote "no."

This could negatively affect voter turnout by raising doubts about whether enough opposition observers can be mobilized to guard the vote on election night. If not, and Chávez "wins," things are likely to get a whole lot scarier, says O'Grady.

Source: Mary Anastasia O'Grady, "Chávez Grabs Again for Life Tenure," Wall Street Journal, February 2, 2009.

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