LVL: Three-Handed Economist

Is Venezuela headed for gridlock, cohabitation or violence? In DC this week, Luis Vicente León of Datanalisis laid out his scenarios.

Photo: Ben Raderstorf, the Inter-American Dialogue.

“Give me a one-handed economist! All my economists say, ‘On the one hand, on the other…'”

-Harry S. Truman

What political scenarios could arise as chavismo and the MUD try to adapt to an unfamiliar new “cohabitation” next year?  Perhaps the MUD’s attempts at economic and political reform will be once again thwarted by chavista dirty tricks, causing a stalemate between the two parties until the next gubernatorial elections. Or maybe the conflict between the two parties will escalate into a clash between the legislative and the executive, leading to violence and disorder. Or maybe, as Dorothy K. suggested, the stage for a high stakes negotiation has already been set.

Those are the three scenarios Luis Vicente León laid out speaking at an Inter-American Dialogue event in Washington on Tuesday. Harry Truman, it’s fair to surmise, would not have been amused. 

He opened his presentation saying “it’s absolutely impossible to foresee things in Venezuela for more than 3 months”,  a somber reminder of the volatility that surrounds politics in our country. More importantly, the comment is telling of León’s hesitance to place a bet on what Chavismo will do next.

I still found his overall framework useful as a way of organizing our thoughts as we head into…whatever it is that’s around the corner.

Scenario #1: Temporary Stalemate

In LVL’s first scenario, the government blocks the opposition’s attempts at legislation, through a series of TSJ rulings or otherwise. Though the MUD tries to get around these restrictions, it is unable to enact the reforms it has thus far proposed. By mid-2016, a tired and weary MUD ends up channelling all of its energy into governors’ elections.

According to the Venezuelan constitution, the National Assembly needs the input of the Citizen’s Branch of the government in order to pre-select justices for the TSJ. One can imagine a scenario in which with the National Assembly’s qualified majority attempts to add or remove more justices, but is unable to coordinate the pre-selection process with the Chavista-controlled Citizen’s Branch. Given that the current Comptroller General and the Public Defender will, in all likelihood, be aligned with Chavismo until 2021, the opposition will need to overcome this obstacle in order to reform the courts.

A similar scenario could also occur if a recall referendum is called on Maduro. An uncooperative CNE or TSJ could potentially delay the recall process until January, 2017, nullifying the call for a new election. Instead, VP Jorge Arreaza would be calling the shots as Presidente de la República.


Scenario #2: Negotiations

The best possible #post6d scenario for the country, according to León, is for the MUD and the PSUV to get serious about negotiating. I know what you might be thinking: Chavismo? Negotiating? No way. Yet, as León noted the other night, there have been larger conflicts in history that were settled through political negotiations.

It’s important to remember that despite Maduro’s increasingly authoritarian rhetoric, despite all of the dirty political tricks implemented in the past 17 years, and despite the communicational hegemony established by Godgiven & Co., the PSUV is still, to this day, an organized political party. Political parties, like individual actors, have incentives that shape their behavior.

Never before has Chavismo faced such influential and united opposition. This is the first time since 1998 that Chavismo doesn’t control all five branches of the state. Before 6D, there was no need for PSUV to negotiate in order gain or maintain political influence.

Pero el país cambió.

In this case, the political cost of partisan deadlock is accentuated by the grave economic conditions which most Venezuelans are living through at the moment. For these negotiations to occur, the cost of further alienating pragmatic Chavistas would have to outweigh that of negotiating with escualidos.

Scenario #3: Conflict

While political incentives could lead to Chavismo’s survival and the PSUV’s reform, they could ultimately lead to more conflict as well. Maduro has allowed radical Chavistas to shape his violent rhetoric. Why would he stop now? The third scenario is based on this premise.

In this alternate timeline, the MUD-controlled National Assembly is once again constrained by Chavista institutional hegemony, and, given the castration of a government branch established in the constitution,  a protest movement could be able to question Maduro’s legitimacy with more efficacy than #LaSalida. Similarly, if the MUD decides to call for a recall referendum without sufficient public support, it will find itself facing a cornered, desperate PSUV beast, sin bozal.

LVL’s view is that a conflict scenario would likely benefit Chavismo more than the opposition in the short term. Maduro’s control over the military and informal militias gives him the upper hand when it comes to brute force. The international community, which has been on the opposition’s side recently, provides a strong counterbalance to violent Chavista threats. But diplomats take a lot longer to make up their minds than colectivos y motorizados.

So which one is it?

All three scenarios are plausible. And that’s the problem. They’re so general they don’t really yield any concrete predictions. What’s the point of going to the doctor if you end up diagnosed with cancer OR mumps OR the flu? Is this the diagnosis that Venezuelans have been waiting in cola to hear?

Look, I get it, as a pollster LVL must think like a scientist. Part of this means being conscious of the limitations of your field of inquiry. However, the closest thing to a prediction that León gave us in this presentation was advocating that the private sector pressure the opposition into enacting economic reform. The MUD will only be willing to share the political cost of macroeconomic reform with Chavismo if it has the push and investment of the private sector behind it, it makes sense.

But how is the private sector not going to pressure the opposition for economic reform when Venezuela is going through the worst economic period in its history?  

The central dilemma in LVL’s framework is that of figuring out how to provide the right incentives for negotiations to occur between the MUD and the PSUV. As usual, the actions of the opposition will be easier to predict than those of Chavismo.

The MUD knows what to do: maintain party unity at all costs and attempt to negotiate, or at least legislate, with Chavismo. If either fails, then we may see conflict and demonstrations arise from the party.

If we want to forecast anything, we should be watching the PSUV.

It will be the PSUV’s internal dynamics that will determine the outcome, as its radical sectors lobby for absolutist measures and its moderates call for party reform or defect to other parties. Negotiating may be the only scenario in which the opposition comes out on top; by doing so it can mitigate the risk of violent conflict and enact the necessary reforms to ensure the economy doesn’t go to shit in 2016. If it succeeds in courting certain sectors of Chavismo, it might even have a real shot at a recall referendum.

That’s not to say that the MUD should stop trying to mobilize the streets. The opposition must strike a balance between making the negotiations palatable for the PSUV and demonstrating that it is too strong to continue to be oppressed by la bota. A government with a weaker perception of itself is going to be, for better or worse, a lot less confianzudo

If the opposition succeeds and strikes a bargain, it may tip the scales in favor of unity and peace.