Maduro, who was nominated as the official government candidate by Venezuela’s late-President Hugo Chávez shortly before his death last month, won the election with 50.66 per cent of the vote, beating pro-business opposition candidate Capriles, who gathered 49.07 per cent, by just 230,000 votes.

 

Addressing a jubilant crowd outside of the presidential palace shortly after the result was announced at 11.15 pm local time yesterday, Maduro declared that his victory would unleash a “new era in the Bolivarian revolution”, before adding that Venezuela’s direction will “continue to be socialism” under his administration and reaffirming his aim to “do away with the perverse values of capitalism.”

 

With an absence of public funding for opposition parties and private sector donations for the pro-business candidate battered by successive waves of nationalisations that drove private sector investment out of the country, one senior partner who spoke to Latin Lawyer on condition of anonymity said the greatest surprise was not Maduro’s win, but the renewed strength of Capriles’ campaign in the face of a limited window for campaigning (the shortest in Latin America’s history) and the use “with no scruples and no restraint” of public funds and assets by the government candidate.

 

Pointing to “very public” use by the PSUV of government personnel and vehicles to support Maduro’s campaign, the source questions the lack of local and international condemnation behind the imbalance, echoing criticisms made by Capriles of a number of irregularities during the election period. 

 

Since October, when Capriles lost to Chávez by more than 10 per cent of the popular vote, the state governor and former lawyer has expanded his support by almost one million votes to 7.3 million against Maduro’s 7.5 million. The closeness of the result has sparked fears of exacerbated tensions within the ruling Partido Socialista Unido de Venezuela (PSUV) party, which, amid Venezuela’s already highly polarised political environment, could weaken Maduro’s ability to tackle the country’s deep-seated economic problems. 

 

Hoet Peláez Castillo & Duque partner Fernando Peláez-Pier expects the narrow margin will present problems. “Maduro in his speech should have recognised that whoever wins with such a small difference also has a duty to take into account the other party and govern by consensus, especially in our situation with all the economic and social problems we are facing,” he opines. “Based on his speech, is clear that he will not. Given the current situation…it is difficult to predict what will happen, so now we have to wait a few days, but what is clear is that with all the economic and social problems we have, unless we take different decisions to those that have been taken in recent months, very soon we will have a serious crisis.”

 

During his 14 years in power, Chávez’s pursuit of his self-conceived “Bolivarian revolution” saw the bombastic former president dramatically increase state control over Venezuela’s economy, nationalising more than 1,000 companies or their assets in strategic industries ranging from oil & gas and steel, to glass and cement. 

 

With the country’s state-owned oil company PDVSA taken under full government control in 2007, and with government coffers further bolstered by rising oil prices, the government’s ample resources allowed Chávez to implement wide-ranging social programmes, helping to slash poverty rates from 48.6 per cent to 29.5 per cent in less than a decade and boost to literacy rates.

 

Increasingly shunned on the international stage, if not within Latin America where he was still able to count on the support of left-leaning administrations in Brazil, Bolivia and Ecuador among others, for many foreign investors the extent of Venezuela’s isolation was symbolised by country’s withdrawal from the World Bank’s investment dispute centre last year in the face of a growing caseload of expropriation claims. 

 

The unpredictable economic situation in the country has led law firms slim down back-room functions as part of a push to cut costs and remain profitable in the face of a dearth of transactions. Over the last six months the growing popular support behind Capriles’ campaign contributed to a renewed optimism that led some to add to their headcount in anticipation of a more business-friendly environment, but the combination of Capriles’ defeat and the divisive election result has already caused some to predict hard times ahead.

 

With the country now hobbled by soaring inflation, crumbling infrastructure and a sky-high murder rate, Maduro will inherit a poisoned chalice of social and economic problems without the political mandate many lawyers view necessary for him to tackle them. 

 

“With the huge disproportion of resources that prevailed during the campaign in favour of Mr. Maduro, that may leave Mr. Maduro with a weak political floor,” says WDA Legal partner Hernando Diaz-Candia. “The economy is in urgent need of corrective measures that may adversely affect his popularity. I expect a standstill period for investments until the outlook becomes clearer. I do not anticipate immediate legal reforms.”

 

Capriles has refused to recognise the result until “every last vote has been counted”, although some are expecting little change in the result in light of claims by former US president Jimmy Carter, who closely monitored the Venezuelan election through non-profit human rights organisation The Carter Center, that the Venezuelan election process was the “best in the world.” Maduro says he has spoken to Capriles and will allow an audit of the election result.

 

(LatinLawyer)