The last classic caudillo in power after
Here are five issues facing Venezuelans and their neighbors in the absence of the powerful leftist who was beloved by the region's poor and resented by the elites whose power and affluence eroded under his tenure:
Although Chavez built a loyal following and boosted his United Socialist Party of
On Chavez’s watch, the oil industry was nationalized and put at the service of his populist missions. Oil earnings, which account for half of Venezuela's revenue, were funneled to programs aimed at providing low-cost groceries, higher education, free healthcare and new housing. The largess was shared with leftist allies such as Cuba and Bolivia through his PetroCaribe program, which traded subsidized oil for services, like 20,000 Cuban doctors who staff the free clinics. But the national oil conglomerate, Petroleos de Venezuela, or PDVSA, now faces billions in unpaid compensation claims by foreign oil giants whose assets were seized.
Chavez wielded power over the impoverished masses by casting himself as their protector against an aggressive and rapacious "empire," his reference to the United States, also Venezuela's biggest oil customer. Relations between Washington and Caracas went from bad to worse under Chavez as he shifted allegiances to leftist regimes in the region. With his demise and looming economic reckonings ahead, the next leadership -- especially if the opposition gains power -- may rethink the ideologically driven oil giveaways. Any retreat from the PetroCaribe program could reconfigure diplomatic relations throughout the region and open prospects for closer ties with capitalist states, the U.S. first among them.
Government spending rose 40% in 2012, an election year for Chavez and his fellow socialists. The inflation rate is nearly 20%, overtaking national wage increases meant to soften the blow of rising food and consumer goods costs. Though one of the world's biggest oil producers, the country's internal and external debts have been mounting while productivity and income from the vital oil trade have declined. Manufacturing and food production also have declined, forcing a fivefold increase in food imports over the last decade that last year cost the government $52 billion. The next leader is likely to have to devalue the national currency, the bolivar, cutting even deeper into the spending power of most households.