What's Going On In Venezuela (In A Nutshell)

Tyler Durden's picture

Protests in Venezuela continue (despite President Maduro's proclamation that the nation is in "absolute calm"), with both the government and the opposition holding rallies, leaving several streets and subway stations in Caracas closed. 10 students who were arrested amid violent protests last week have been released, though 6 students remain in custody. Demonstrators do not yet have the numbers or support base to unseat President Nicolas Maduro's administration, but as Stratfor notes, these protests could mark a turning point as the economic situation deteriorates there is a chance that protests like this could begin to generate additional social momentum in rejection of the status quo.

What's going in Venezuela (in a nutshell)

And as Stratfor notes, things could be changing for Maduro...

Relatively large student-led opposition protests convened in Caracas, Valencia, Maracaibo and many other cities throughout the country. Rough Stratfor estimates put the crowd in Caracas at between 15,000-20,000 people based on aerial photos posted on social media. Venezuela's students are very politically active and protests are frequent. However, the relatively large turnout and widespread geographic distribution of this week's protests indicate that the movement may be gaining traction.

The challenge that the student movement will face is in finding a way to include Venezuela's laboring class, which for the most part still supports the government, and relies on its redistributive policies. Their inability to rouse broad support across Venezuela's social and economic classes was in part why previous student uprisings, including significant protests in 2007, failed to generate enough momentum to trigger a significant political shift.

But the situation has changed in Venezuela, and as the economic situation deteriorates there is a chance that protests like this could begin to generate additional social momentum in rejection of the status quo. President Nicolas Maduro has been in office for less than a year, and in that time the inflation rate has surged to over 50 percent and food shortages are a daily problem. Though firmly in power, the Chavista government is still struggling to address massive social and economic challenges. Massive government spending, years of nationalization and an overreliance on imports for basic consumer goods have radically deteriorated inflation levels, and undermined industrial production.

How the government responds will play a key role in the development of these protests going forward. The government cannot afford to crack down too hard without risking even worse unrest in the future. For its part, the mainstream opposition must walk a careful line between supporting the sentiment behind open unrest and being seen as destabilizing the country. Maduro retains the power to punish opposition politicians, and reaffirmed that Feb. 11 when he stated on national television that he intends to renew the law allowing him to outlaw political candidates who threaten the peace of the country. The statement was a clear shot over the bow of opposition leaders, and may foreshadow a more aggressive government policy designed to limit political opposition.

 

Venezuela certainly does not appear the "absolute calm" the President described it as...