Chavez and Latin America (Agenda)
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Editor’s Note: Transcripts are generated using speech-recognition technology. Therefore, Stratfor cannot guarantee their complete accuracy.
Video Transcript:
Colin Chapman: The mercurial Hugo Chavez, elected for a fourth term as Venezuela’s president, is due to be inaugurated next Thursday. But he's not been seen in public since a Dec. 11 operation for an undisclosed type of cancer. An official bulletin described his condition as delicate. Should he die between now and next Thursday, the chairman of the National Assembly would take over but will have to call new elections. If he survives, there are also complications. So for instance, if the vice president then takes over, he also will have to call an election. As the Washington Post puts it, the suspense is killing Venezuela.
Welcome to Agenda. I’m Colin Chapman and with me is Latin America analyst Karen Hooper. Karen, first, what’s the position with Chavez’s health?
Karen Hooper: Well, the official reports are relatively unclear. According to Vice President Nicolas Maduro, Chavez is in a stable but delicate condition at this point. Of course the rumor mills in Venezuela are roiling with other news that he is on the edge of death -- that he could die imminently and that he's on life support. The rumor mill tends to be fairly accurate and given the fact that we haven't seen Chavez out of surgery for over three weeks now, it seems like it's possible that he's going to be departing soon.
Colin: They described his condition as delicate. But what about the economic health of the country itself?
Karen: Well, Venezuela is also in a fairly delicate position. Venezuela's economy is fairly strained after years of the socialist system that Chavez put in place. There's a fairly widespread distribution system that has benefited the poor and kept Chavez very, very popular. But it has also put a strain on government finances, and we've seen that although the national oil company is transferring more than $90 billion, just in the past year to the government, there may be a cash flow problem in terms of managing the country's currency, managing its debt acquisition and managing all of the different payments that it has to make on a regular basis. So for the next government coming in, be it Chavez, his successor or any potential opposition candidate, we're really looking at a situation where fiscal cutbacks are going to be necessary or they are going to have to devalue their currency. And both of those things will be fairly politically unpopular and potentially could cause unrest.
Colin: Chavez's popular image has extended far beyond Venezuela. He's been a major actor. If he's offstage, so to speak, what does that mean?
Karen: Well, there are some tangible ways that Venezuela is a leader in Latin America. Primarily through the provision of subsidized oil to a number of countries in Latin America but primarily Cuba. In a situation where Venezuela is increasingly economically unstable, it may be to the benefit of the government to eventually pull back on those. Now outside of the tangible things, outside of oil provision, there are other ways in which Venezuela has been a pretty notable leader in the region. For leftist governments in Latin America, each has their own very idiosyncratic situation and their own way of managing. Chavez has been at the forefront of articulating a post-Cold War leftism. And if the situation in Venezuela deteriorates as a result of Chavez's departure and because of the loss of strong leadership, we might see some discrediting of that system. And it might reinvigorate a conversation in Latin America about what does it mean to be on the leftist end of the political spectrum, how do these countries deal with the distribution of relatively scarce resources and how do they approach questions of development in an area where they have very, very difficult geography to deal with. And so these are the questions that have been plaguing Latin America for centuries and will continue to be discussed, and I think that as Venezuela evolves during this situation the fate of Venezuela will weigh in on those conversations.
Colin: One of those countries, of course, is Cuba.
Karen: Cuba is particularly dependent on Venezuela. As a result of the subsidized oil transfers to Cuba, Cuba is dependent on Venezuela for billions of dollars of imports per year. It's unclear, it's unlikely that Venezuela would cut those off immediately, but if there's a situation where Cuba had those oil shipments threatened, Cuba would have to seek another outside sponsor or try to make shifts in its economy.
Colin: Chavez has been a thorn in the side of the United States. How will Washington view his departure?
Karen: Despite relatively high levels of vitriol in the international realm, Venezuela and the United States don't actually have that terrible of relations. The United States is still one of Venezuela's largest trade partners, the U.S. imports a great deal of oil from Venezuela and the U.S. really hasn't done anything substantial to get back at Venezuela for any kind of perceived international offensives against U.S. policy. There were limited sanctions levied against the national oil company, but those were not very harmful in nature. For the United States, Venezuela is a slight irritant but not really a major threat and so, although there may be opportunities should a new government come to power, the departure of Chavez himself is largely symbolic.
Colin: Karen Hooper, Stratfor's Latin America analyst. Thanks for being with Agenda. See you next time.
