Venezuelan election: Will continuity beat change?

2024 will see presidential elections in six Latin American countries, the results of which will leave an indelible mark on the region for years to come. Each election has the capacity to transform the regional dynamic, but none more than the contest in Venezuela.

July 28th will see up to twenty-one million voters choose between two candidates, González Urrutia, and President Nicolás Maduro. For his part, Urrutia has substantially lower recognition and only began his formal campaign in late May. Voters have little idea of where he stands on most policy issues; a former diplomat, González Urrutia is not recognised as a political figure or strategist.

Compare this to a man who has garnered swathes of recognition on social media, more specifically TikTok. President Maduro has put himself in the enviable position of becoming a consistently viral figure on one of the key platforms for the younger demographic. The future of Venezuela is engaged with his image and campaign, whether passively or otherwise.

Moreover, the President still retains the support of low-income segments of the population who receive subsidies and benefits from the social programs he established. In 2013, he established the Vice Ministry of Supreme Happiness in line with the socialistic policy of spending billions on social programmes, from benefits for single mothers to the provision to the poor of apartments and household appliances.

He also carried on the legacy of ‘missions’ which leverage profits from Venezuela’s oil and gas sectors to fund over thirty programs helping the most disadvantaged in society. Indeed, the UCAB noted in 2022 that an estimated 50% of households saw an improvement in their incomes.

These policy victories have married with Maduro’s recent success battling inflation. By December 2023, the inflation index fell to 3.9%, the lowest figure since 2013. This downward trend has continued. In June 2024, the country’s monthly inflation index slowed to 1%. This change, secured in spite of the US’s persistent sanctioning of the Venezuelan economy, has come to the relief of consumers and businesses alike.

By comparison, Urrutia must share the limelight with Maria Corina Machado, a vocal critic of the President’s approach to the economy, despite her not running in the election. This unorthodox dynamic has left the population confused by what the opposition plans to do in government. It’s little wonder therefore that they seem to be behind in a suite of respected opinion polls.

With the largest oil reserves in the world, the importance of Venezuela to not just Latin America’s economy but also the global energy markets cannot be overstated.

Foreign investment in the country will rely on the intensification of ties between Venezuela's state-owned industries and international investors, working towards the mutually beneficial goal of maximising the utility of the South American nation’s prodigious natural resources.

Indeed, major oil companies such as Repsol, Chevron, ENI and Maurel et Prom are waiting for Venezuela’s political future to be settled before expanding their in-country operations. If the appropriate agreements are reached, stakeholders are hoping for a future of stable energy exports and less strained relations with the US and and its allies.

If Maduro is returned to government, as expected, one of his most urgent missions will be finally convincing the US to execute the permanent removal of sanctions on the US economy. These measures have had a destructive impact on the Venezuelan economy despite its recent return to growth.

American administrations are fully aware that it is ordinary citizens that have suffered most from sanctions. If Maduro is re-elected, then he will have a mandate to come to terms with the US. As the bilateral relationship warms up – admittedly from the cold freeze – then Venezuela will unlock the virtuous circle of foreign investment improving domestic living standards and productivity, and repeat.

From a regional perspective, Latin America’s stability and prosperity hinges on pro-growth policies, multilateralism, and strong ties with the US, the region’s preeminent economic and diplomatic partner. There is hope on the US side that a re-elected Maduro will work with them to secure progress on all three fronts.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes