Even if he wins re-election on Oct. 7—which most polls say he will—Venezuelan President Hugo Chávez may not outlive his third term. Weakened by cancer, the once indefatigable comandante appeared bloated and teary at a Sept. 15 rally, asking god to grant him his “last wish” to complete his plan for Venezuela.
That plan is a vision of “21st century socialism,” which has included price controls and broad nationalizations in energy, agriculture and banking, among other sectors. His 14-year presidency has coincided with a more than five-fold jump in crude prices, allowing him to funnel soaring oil income—now the source of 94% of Venezuelan exports—into neighborhood schools, subsidized grocery stores, and welfare and housing programs, giving away tens of thousands of homes. That has helped to push down the national poverty rate to 27%, the fourth-lowest in South America; while official unemployment fell to 8.2% last year, below US levels—in part thanks to a swelling public sector, which employed a reported 2.3 million, or more than 10% of the country’s working population.
Critics say that Chávez has used these costly handouts to buy support, and they’ve surely had that effect. Federal budget outlays soared more than 40% this year ahead of the presidential election, pushing Venezuela into its biggest deficit in nearly two decades, according to Fitch. And that’s not counting billions of dollars in oil earnings that flow into special off-the-books funds that allow Chávez to spend windfall income without congressional oversight.
All that cash is fueling the hemisphere’s highest official inflation rate, now at 18% a year, and averaging 23% since 2001, according to Fitch. The focus on social spending has left the country’s infrastructure crumbling, even as nationalizations and capital controls deter private investment. Blackouts, bridge collapse, prison riots and refinery explosions have followed—for example leaving Venezuela, the world’s 10th-biggest oil exporter, a net importer of refined products.
Yet much of Chávez’s strength comes not just from cash transfers, but from the force of his personality, which has won him loyalty even amid economic mismanagement. While his at times eight-hour, song-filled, anti-capitalist rants may seem outrageous, they have given millions of poor Venezuelans a new place at the center of the nation’s history and political narrative.
“One of the mistakes that opponents have made is to dismiss Chávez’s relationship with the people as clientelistic, to assume that supporters are ignorant or bought-off. It’s much more complicated,” says independent Caracas pollster Oscar Schemel. “Chavismo has become an emotional community; an important portion of the population has an almost religious relationship to him. They say, ‘Chávez, without you, we poor people are nothing.'”
Chávez’s cancer—disclosed last year with scant detail after he’d disappeared to Cuba for surgery—has only shored up that support, diverting attention from Venezuela’s soaring crime rates and flagging economy and drawing more devout followers to his defense.
But his political party, the PSUV, was only formed in 2007, and though it has an obvious ideology, it’s not clear that it has the organizational support to outlast its leader, as Argentina’s union-backed Peronist Party outlasted Juan Peron. If an ailing Chávez has the discipline to resign within the first four years of a new six-year term, the constitution permits him to name his own successor. But even that person would only serve 30 days until a new national vote could be called. Analysts expect he’d tap one of three contenders: pragmatic ex-solider and current congressional head Diosdado Cabello; leftist vice president Elias Jaua; or centrist former labor leader and current foreign minister Nicolas Maduro.
The more immediate question is whether what will probably be Chávez’s narrowest-ever win will radicalize his revolution, pushing him to consolidate changes while still in office; or if it’ll bring moderation, as a chastened president looks to broaden his base and legacy.
Yet for all the hype and bluster that have surrounded Chávez abroad, his fate in what’s likely to be his last election may have little impact beyond Venezuela. It’s true that the country is a major oil power, but it will take years to turn around a ship as big and bloated as state-run Petroleos de Venezuela; and OPEC sets the country’s output levels anyway. That means oil will for now flow at the same pace and price to the rest of us, regardless of who is president.
It’s also true that Chávez sought to influence foreign policy across Latin America, sprinkling cash and cheap crude across the region in a bid build a new power bloc. But the biggest projects, including a continental gas pipeline and a multinational bank, are still largely inoperative. Chávez’s role leading a resurgent “Latin Left” peaked in 2006, when allies won office in Bolivia, Ecuador and Nicaragua, and Chávez was himself reelected by a landslide to a second full term. Since then, though, his influence has waned as neighbors look to Brazil as a more moderate, social-democratic model instead. As US President Barack Obama told a Miami television station in July, “What Mr. Chávez has done over the past several years has not had a serious national security impact on us.”
In the end, what’s playing out in Venezuela is not a grand post-Cold-War battle for the hemisphere’s soul, then, but a very Venezuelan question, tied to its basic natural resource curse: How can an oil-reliant nation distribute its massive oil wealth fairly? “Oil income will always be at the center of debate in social conflict in Venezuela,” Schemel says—which is exactly why the country will never be the model or the threat that Chavez and his detractors have respectively predicted. Its unique oil dependence is exactly what makes Chávez’s Venezuela both inimitable and contained.
But that does not leave Chávez without a legacy. Before he took office, says Fitch Sovereign Ratings director Erich Arispe, Venezuela was “like the Saudi Arabia of Latin America”—home to great wealth and great income disparity. For millions of Venezuelans, that has now changed. “President Chávez has given these people the sense they count,” Arispe says. “If you look in cities and squares across Latin America, you mostly have statues of martyrs rather than heroes, meaning that the narrative of someone sacrificing themselves for the good of the country is very powerful, win or lose. So it’s not, ‘Oh, now Chávez’s health is bad.’ It’s, ‘He sacrificed himself because he wanted the best for the country.'”
That legacy is reflected in the fact that Chávez’s rival for the presidency, 40-year-old Henrique Capriles Radonski, has been able to pull together a divided opposition and pose the first serious challenge to the comandante partly by promising to out-Chávez Chávez himself. On the campaign trail, Capriles has vowed to continue the same lavish social programs, only without the corruption and mismanagement. But even if he wins, he would still face a Chávez-controlled congress, court, and state oil company. And even if he manages to assert his influence over them, he would be governing a country whose hopes and expectations have been indelibly shaped by chavismo.