The Devil's Excrement

I have been pondering about the new foreign exchange auction system SICAD since it was first discussed. Besides all of its weirdness, what I have had the toughest time dealing with is very simple:

Why?

Why the rush? Why the second price for the US dollar even if it is a State secret? Why before the election? Why take the risk? Why devote so much time to it?

It can’t be to get more Bolivars. It can’t be to lower the black rate. It can’t be to reduce shortages.

And now that one auction has taken place and Bolivars reportedly assigned to a range between Bs. 12.5 and Bs. 18 per US$, I am left with only one theory:

Someone sat down with Maduro and explained to him that what Giordani wanted was a sure path to self destruction and convinced Maduro to change the whole system and manage the economy differently. And this someone convinced him  to start the process ASAP for the good of the economy he will have to manage if he wins. And he decided to be his own man, even if Giordani is still around.

Thus, I think we are in the face of a radical change on how the Government plans to manage the economy. Maduro may remain radical in his political speech, but the moves suggest he will be more pragmatic on economic matters. And the changes in CADIVI seem to confirm this, he switched two Chavez/Giordani guys for two 100% Merentes buddies. And we all know Merentes is more pragmatic and has been losing battle after battle with Giordani since 2010.

Which suggests that Giordani will be gone if Maduro wins, and hopefully someone better comes in.

I have to say this is a step in the right direction, maybe in a month the foreign exchange system will be unrecognizable.

Let’s hope I am right, it is the only explanation I can find for all the SICAD nuttiness and noise

El Mundo and financial sources are reporting that in the first SICAD auction, the average price at which the Government will sell foreign currency is over Bs. 10. Different sources say different numbers, but in the end they all say it is above Bs. 10. (EL Mundo says Bs. 12 to Bs. 15, I heave heard the average was Bs. 11)

I find this whole thing really puzzling. If I never understood why the Government wanted to make an issue of this, I now don’t understand why they rushed the whole thing to the point of holding the first auction today and announcing the results tomorrow. Chavismo has never been dumb about when to do things, so what is the rush?

I mean, when I left Caracas on Friday banks did not know how the whole thing would work and by Monday they had sufficient offers to hold the first auction?

Call me dumb, or call me puzzled.

If it is shortages, not one dollar assigned tomorrow will help anything arrive in Venezuela or be produced in Venezuela before the April 14th. election.

But, a second devaluation with a value of the currency above Bs. 10, essentially implying an almost doubling of the previous official exchange rate, simply makes no sense three weeks before the election.

Last week, El Mundo published an article quoting Datanalisis saying that the first devaluation on Feb. 8th. reduced the Government’s popularity by 20 percentage points by the beginning of March before Chávez died. Then, the popularity reportedly jumped back up when Chávez died, making things almost even. What this shows is that the topic of a devaluation is a sensitive one and now Capriles can charge Maduro with devaluing twice in 100 days and by a huge percentage.

The Government clearly gains nothing from giving this ammunition to the opposition. Economically, three weeks, including dead Easter week is such a short time, that waiting would have made no difference.

The only possible argument is that this is the result of some sort of internal struggle for control over economic policy, if true, I would hate to see what happens after April 14th. if Maduro wins, if these are the salvos, I don’t want to be around when they start shooting each other.

But in the end, this is very puzzling to me, I see no reason for this new devaluation at this time, it seems senseless, illogical, simply a puzzle…

Yesterday, students went to the Electoral Board to present their demands for more transparency on the day of the Presidential elections on April 14th. They were met with violent Chavista groups aided by none other than the Venezuelan National Guard. The march had to be cancelled as it was not only met by the violent groups, but there were more surrounding the building of the Electoral Board. Moreover, the National Guard used tear gas on the marchers. A total of seven students were injured.

There was barely any police to protect the marching students.

To add to the fascism, students coming to Caracas to the march were stopped before arriving in the city and their buses were not allowed to go through.

But the fascist statement of the day came from Chavez’ son in law and now Vice President Jorge Arreaza who actually justified the violence by saying ” The tone in which the march was convoked, was not the most correct one”.

Fascist is, fascist does…

In his attempt to be like Hugo, Maduro is showing he ain’t Chávez as in this TV scene in which he starts reading Tweets to his new Twitter account and reads one which was essentially telling him that people are not paying attention to him:

Nicolás Maduro: No te estamos parando bolas pana, estamos viendo el programa… (Maduro, brother,  we don’t give a damn about what you are saying, we are watching such and such a program)

Chávez would have been quick enough to ignore the comment…He recovered fast by saying maybe the guy is watching two TV’s at once, but too late.

So today, the Minister of Planning and Finance, Jorge Giordani, the Minister for Energy and OIl Rafael Ramirez and the President of the Venezuelan Central Bank, announced the new “Complementary System For Foreign Currency”. If you ask me, the system is still not completely well defined and as the President of the Centarl Bank roughly said when he answered a question: “The point is not that we will all get A’s when asked how the system works, but we will learn about it as we go along”. My translation: “This is all still being worked out, please don’t ask so many details, as we are improvising as we go along.

Clearly, there were and are differences between the various members of Government. The radicals, which includes Vice-President Arreaza and Jorge Giordani, go under the Pol Potean theory that they know how much the country needs to live on in terms of imports (US$ 40 billion) and that should be it. On the other side are the pragmatists with the President of the Central Bank Nelson Merentes and the Minister of Energy and Oil, Rafael Ramirez, who want to be more pragmatic and the latter wants PDVSA to get more Bolivars for its foreign currency.

Only yesterday, Giordani was saying he was opposed to an alternative system to SITME, during the baptism of his latest book, the only Minister of Finance in the world, who has time to write books, because the economy of Venezuela does not require his constant attention, because it is doing so peachy. Today, he oversees the compliance of the system.

Somewhere in the middle is interim President Maduro, who seems to be trying not to take sides until it matters.

Well, it seems as if the pragmatists won for today. They went from no alternate system, to a system with a Vietnamese auction (previous post) which meant having a reference price, to a modified Vickrey auction, which if you put together all of the answers given today during the press conference, implies the following:

The Government will hold non-daily auctions of cash dollars. The Superior Entity for Foreign Currency (SEFC) will decide when these auctions take place and how much will be sold at each auction.

For now, to participate in the auction, you have to be registered in RUSAD, the same organism that you needed to be registered for for SITME or CADIVI if you were a company. (No individuals may apply for now)

The main difference is that for CADIVI, CADIVI looked up if what you are asking for is in the list of approved items. In the new and “improved” SICAD system, you can ask for anything you want, attach a quote and someone will decide if your request can go to the auction. You will make the request for XX US Dollars via your favorite bank and specify at what price you are willing to buy the dollars.

Once the auction is called, the SEFC will decide how much it wants to sell. The top bidders for the amount available will be able to buy the foreign currency, but rather than at the price they bid for, at the average price of all the bidders that qualify. This is what apparently means by a “modified” Vickrey auction, it is not the second best price, but the average price of all the bids accepted. (It is unclear if the average is weighted or not)

Now, when asked at what price, the President of the Venezuelan Central Bank said quite clearly: “At the price of the best bids”, implying and suggesting that there will be no cap to the price set by each auction. While we find this hard to believe, this seems to be the understanding of most analysts.

What we can gather from this, is that this is nothing but a disguised or veiled devaluation, whereby the Government introduces a “new” system where it will sell as many dollars as it wants (or not), becoming a de facto large devaluation, where it may decide to sell as few or as many dollars as it wants.

And where do the dollars come form? Easy, there are no new dollars in this equation. As Ramirez said, there is a finite number of dollars from PDVSA and from Fonden. The Government will assign cash to CADIVI requests or cash to SICAD requests, deciding to prefer one over the other, at its convenience.

Now, given that this system will not produce results before the election. That it was not an electoral priority, I can’t help but believe that this is a veiled devaluation, whereby the Government will assign more dollars at the much higher rate (in the teens?) as needed, in order to help the economy function and ease PDVSA’s cash flow problems by having it receive more Bs. per dollars than Bs. 6.3. In fact, PDVSA will receive many more Bolívars. Like over two times more.

In fact, if my interpretation is correct, more and more requests will come via SICAD and companies will wise up to the fact that they have a better chance of going to SICAD than CADIVI. In some sense this may even open the doors to removal of the exchange controls, but at a much higher rate of exchange, keeping only a few items at the lower rate of Bs. 6.3 per US$.

This is in fact, just another dual exchange rate system, common in our history, in which the discretion of the Government will determine how much is sold at the lower rate and how much at the higher rate, at its convenience. This convenience implies heavily subsidizing basic staples and allowing inflation rates to be very high temporarily on non-essential items.

The presentation was confusing, not clear, and vague, but in the end it creates a more realistic system. It suggests that the pragmatic wing has taken over and if Maduro were to be elected, the system may be made even more pragmatic than described here, despite its political costs.

So instead of SITME, the Government will implement a Chavista style cuộc bán đấu giá (Vietnamese Auction, see Note below with clarification)*, whereby there will be a reference price for the currency and it could vary by as much as 1% either way. Of course, the Government will set this reference price and it will be way below the unmentionable parallel rate, so that almost everyone will bid for the reference price plus 1%.

Reportedly, the dollars sold in this market will have to be requested to strengthen the national production capacity and the foreign currency will have to go to dollar accounts in Venezuela so that the Government can exercise control over what the foreign currency is used for. The system will likely be run by the banks and the Venezuelan Central Bank and the banking system, so that no laws will have to be changed. Payment will be made directly to the provider and there will be checks that the materials and machinery arrive in Venezuela.

According to interim President Maduro, the new system will ” fill with happiness all of those that have production needs for their companies and other activities”. I guess the only one that will not be happy, will be the interim President when the system fails to have much impact on shortages and that other price that can not be mentioned.

The system will be supervised and controlled by none other than Minister of Planning and Finance Giordani, who the day before stated that he was against any new such system. Go figure…

Here is a diagram of the new simple system, taken form a TV screen from Giordani’s presentation:

So, call it SITME II or CADIVI II, new rules, a 1% band and no information where the foreign currency is going to come from to supply the new, new, improved, more confusing Chavista-style cuộc bán đấu giá system.

Note added: The Vietnamese auction was reported by El Mundo this morning as obtained by various reporters yesterday form the Venezuelan Central Bank. Today, Minister Giordani said it would be a Vickrey auction, In the end, the “auction” mechanism is just another layer of confusion to what sounds like a devaluation of the currency by the creation of a new CADIVI at a higher rate. This means the BCV will benefit and not PDVSA as Minister Ramirez was trying to do. In the end, this new system sounds complex and confusing.

*Thanks JG for the inspiration

Got you with the title, no?

But now that I have your attention, let me tell you, I have no clue…

Because I think it is hard to predict even the next month, barely thirty days, leading up to the April 14th. election. Yes, logic says Maduro should win, sentimentality and all. But…

Maduro has turned out to be such a lightweight, that despite the short time, anything might happen. In fact, if he is dumb enough (he is!) to accept a debate, he may lose, simply for the fact that all TV stations will carry it and Capriles will say:

“Nicolas, you are no Chávez”

Beyond that, I am getting a little bit sick and tired of the Peron-Chavez analogy. Everyone seems to argue that Chavismo without Chávez will be like Peronismo after Perón.

Sorry, Perón is to Chávez like Salazar is to Chávez.

Really, because the Peronismo analogy is simply a terrible one. First of all, Perón had Evita, Chávez did not. Second, and more importantly, Perón was overthrown, Chávez was not. The Government after Perón persecuted Peronistas, which only helped the legend grow. By the time sixteen years had gone by, Perón was a legend, a mystical figure. When he came back , over 3 million people were there to meet him.

Chávez died and his followers will not be persecuted and his successor has turned out to be a light weight, that were it not for the short time, could be defeated.

Unlikely, yes, but if Capriles convinces the 6.7 million that voted for him to go back and vote and Chavsimo abstains, it could happen.

But let’s assume Capriles loses and Maduro wins. Maduro ain´t Chávez. Look at history. Tell me one successor of an autocrat that managed to hold on to power by maintaining the status quo. So, either Maduro shakes up the boat, or he is toast.

And by shaking up the boat, I mean to change course and try to fix what is wrong with Venezuela’s economy. Unless he changes his attitude after being elected, but it simply does not look like he will.

Which implies that Maduro will be in trouble in a very short time. Let me give you some examples of what bother me:

–Corruption: Maduro is likely to get rid of Jorge Giordani in the Ministry of Planning and Finance and indications are that this will happen. (Like Giordani nowhere to be seen in all these announcements)

Well, this is a case of good news, bad news. The good news is any reasonable rational economist will be better than Giordani. The bad news is that Giordani managed to stop some of the corruption or “guisos” by detecting them (which he wasn’t too sharp at) and going to the big boss and stopping them.

Except that the big boss is gone and so will Jorgito the way it looks today.

Which means anything goes. Think arbitrage on steroids. Think raping and pillaging of whatever is left. You will be right whatever your guess may be. The only two “checks” and “balances” left, Hugo and Giordani will now be gone.

Anything goes…

-Stability: So, Maduro is elected, but everyone will be going after him. Maduro is trapped. If he becomes more moderate, he may find resistance form the true revolutionaries like his new Vice-President, Chávez’ Marxist son in law. Or Diosdado Cabello, who is likely to prefer to stay at the National Assembly, so that he can set his own course.

So, Maduro is in a tough position, he is not popular or even simpatico, but he better get results, or else..

He is also not very competent, as  to when he said that April 14th. was resurrection day, except it isn’t and you would not want to have an election on that day that everyone is traveling in Venezuela. And the resurrection analogy is a bad one, it could be Venezuela that will rise from the ashes.

So, be careful what you wish for.

And in contrast with Argentina,  Maduro’s problem is that he can stay in power forever, which means he will have no friends among likely contenders. I mean, Maduro could aspire to repeat in 2018 and why not? 2024

Which does not please his buddies.

And why you may be thinking of the obvious candidates, many aspire to replace Maduro and they will not skip a beat if Maduro fails them.

And when I say that, I think a very left wing military may try something, or a more moderate one could try something to, what Chavismo will call “right wing” and may also try something. But neither will survive long. Because I don’t think any of the sides in Venezuela is ready to accept any form of a military Government.

So, we may have lots of instability. Lots of changes between here and 2018.

Anything goes…

So, can Maduro survive six years if he wins?

Well, I doubt it. I don’t think the various Chavista factions will allow it. Each and everyone of them is likely to undermine Maduro. Each and everyone of them is likely to challenge any attempt by Maduro to change the course.

Including the Cubans.

So, things look bleak, even if you think you know what will happen at every turn.

Which in the end is bad for the future of Venezuela, because the path is likely to be full of instability and unpredictability.

In fact, I contend that we will not be able to recognize Venezuela’s political landscape in 2018. For Chavismo, the best likely outcome is to have Capriles deal with the economy. For Capriles, the best likely outcome is to have Maduro beat him, which may be the best outcome for the opposition, but not necessarily for Capriles.

Which only goes to show how uncertain the future is for Venezuela.

Unless oil goes to US$ 200 per barrel, which is possible, but unlikely.

I am a little dizzy from the torrent of dazzling Chavista wisdom coming out of the Government and its cohorts in the last forty eight hours or so. So many times during that period, I have asked myself: Did he really say that? or Holy S…! But it is all true, the ability of Chavismo to innovate and say the darndest things is truly incredible. But rather than kill myself writing posts about them, here is one with all the highlights:

–The Supernatural I: Former Attorney General and current Venezuelan Ambassador to Italy Isaias Rodriguez, said he talked to Chávez “mentally”, he said it was a two way conversation, a “mystical” experience. I have no doubt about it Isaias, sort of when you looked at that fake witness in the eye and knew he was telling the truth.

Gives a new meaning to the word “mental”, No?

–The Supernatural II: None other than Nico himself, told us that Hugo Chávez had an influence from heaven so that the Pope would be South American. (Does Nico know the new Pope is a staunch Kirchner opponent? But in the end Nico, this is not soccer, this is serious religious stuff) Nico said that Chávez was with Christ and that soon there might be a Constituent Assembly in Heaven.

You can´t make this stuff up, this atheists believe in so little, that they even dare suggest that you know who is in Heaven, rather than in the antipodes of Heaven, let alone anywhere near those that they don´t believe in. That must be why they can invoke all these names in vain.

It does not get more Bananai Republici than this.

–The Scientists I: And then, of course there is the formal Government investigation into how the cancer that killed Chávez was induced. Never mind that we don’t even know what type of cancer it was, no Doctor has ever told us about what Chávez was diagnosed with, but Nico has the gall to tell us, that it was a very particular type of cancer, making it sound ominous. Of course, the only type of cancer that can be induced would require a radiation source placed very close to the victim for a long time, so Nico better watch out and start searching and looking, because otherwise he is done with in a very short time too.

And then the president of PDVSA Rafael Ramirez comes and tells us that it is not a matter of belief, but that he is “convinced” that Chávez was assassinated, just like Arafat. The latter will be news to the Palestinians who have been unable to prove that. And they have tried.

But more importantly, here is the President of Venezuela’s most important company, which is supposed to need science and technology to compete and lead the country with its oil production, but he expresses urban legend types of beliefs and essentially, absolute ignorance about what he is taking about. No wonder they destroyed its science and technology institute.

But I have to wonder why the US did not kill Fidel? Just as an example. I guess those Americans really hate the Cubans.

By this time we are more and more into banana brain mentality.

–Let me make a point: And then Bloomberg reports that Russia’s Lukoil has been temporarily suspended from participating in the Faja Heavy oil projects until the company explains statements by the Vice-President of Lukoil to the effect that Venezuela could increase significantly its oil output, but:

“But you need a quiet situation, stability in contracts and a good situation for investment”

What is the answer to that? Well Lukoil, remember your contract? We are temporarily suspending it, until you explain why you said what you said and if you mean to say it.

A Mathematician would say “Quod Erat Demonstrandum” (QED):

Thank you for making my point Mr. Ramirez.

–Improvisation: And remember that Chávez was going to be embalmed forever and ever and placed in a glass casket so that everyone could see him?

Well, it turns out that despite having all the time in the world to plan it, nobody followed up on it and it apparently can’t be done now. It’s too late. The Venezuelan Government brought “scientists (???)”* from Russia and Germany and these rocket scientists on mummification say the process should have started sooner after Chávez death. So, the same guys that sent Chávez to Cuba to be taken care of, now brought “experts” from Russia to see how you do a process known for centuries. They don’t call them mommies for nothing. But Chavsimo calls it science. I guess making an arepa must be science to good old Nico, el chico.

This is making Isaias look good by now.

– Respect and Lies: And then we get Chávez’ daughter asking for “respect”. Her father was very sick for two years and we don’t yet know what we had. We don’t know what he was operated for. Two weeks ago, he was “fine”, spending hours on running the country and then all of a sudden he was worse and died.

Funny, that is what the opposition has been saying all along, that he was ill and was going to die.

But neither Chávez, nor his daughter had any “respect” for Chavistas who believed the tale that he was better and he kept running for President and made them go and vote for him, even as he knew he was dying. Many people knew in May 2011 that he was sick, even your humble Devil wrote about it. And Chavez lied. And he was operated on. And he lied. And he got cancer again. And he lied. And he ran for President knowing he was going to die. And he lied.

You don’t believe me? Here is Hugo himself:

lying and accusing the opposition about inventing his illness and the fact that he is going to die. That he had the backing of more than 60% of Venezuela (lost 5% before the election?) and above all, he kept running and cheating on his supporters and disrespecting them. Betraying them in the end. Just choosing Nico, may be the biggest betrayal of all.

Some respect…

And by now, there is a lot of more betraying going on. Today the Minister for Energy and Oil also announced that the price of the non-existent fx market will be brought down.Funny, the Minister of Finance was nowhere to be seen. Nor were the details of how they would do it.

They say they will create SITME 2, new rules, new friends, new arbitrages, but all smoke and mirrors in the end.

Single question: Who will supply foreign currency to the system. Who? Just tell me. Who?

Just asking…

But they talk about respect.

*Journal For Modern Embalming Science anyone?

A forceful Henrique Capriles went on TV last night and accepted the challenge to run against Venezuela’s interim President Nicolas Maduro, in a speech that quickly proved what I suggested on Saturday: Politics is back in Venezuela now that Chavez is absent.

Capriles was extraordinary in a very strong speech, which was carefully thought out. At all times, Capriles was very respectful of Hugo Chavez and fairly dismissive of Nicolas Maduro, whom he referred to as Nicolas or “Nicolas, chico” all the time. In one of his best lines, Capriles said, “Nicolas is not Chavez and you all know it, even Chavez complained about those that surrounded him and those are the people that want to govern you”

He noted that the Government and Nicolas had been lying to the people and he was very inclusive, saying he was not running for himself or to get power, but because he wanted Venezuela to do better. He offered a Government for all.

On the lying, he suggested that Chavez had been dead a while, asking how come all of the t-shirt and flags were ready for the funeral and support for Nicolas.

He blasted the Minister of Defense, not only for his illegal support of Nicola’s candidacy, but also he told him he was a disgrace, finishing next to last in his military class.

He had very unkind words for the Head of the Electoral Board, who wore a revolutionary arm band at Chavez’ funeral an asked her for respect, not for him, but for the Venezuelans who are not Chavistas and for the law.

By being forceful and confrontational, Capriles was not only re-energizing the voters, was clearly choosing a different campaign strategy than the one against Chavez. He knew then he had to be respectful of Chavez and he is ever more respectful now, but now he is completely critical of Nicolas and his cohorts. Capriles also seems to recognize that politics changed in Venezuela when Hugo Chavez passed away on March 5th.

And that this is the case was proven immediately, when Nicolas could not wait and had to respond to Capriles within the hour, something Chavez would have never done. Nicolas came and tried to blast Capriles, but his speech was too forced. And in a clear sign that Chavismo is worried about participation in the upcoming election, Nicolas announced that on the same day there will be a referendum to change the Constitution so that Chavez can be buried in the Panteon Nacional immediately. This was clearly a ploy to have the Chavista rank and file more involved in the upcoming election, but Capriles and the opposition can simply bypass the issue by backing the referendum and saying that if the people want it, it should be done.

But more importantly, Nicolas’ speech demonstrated what a weak candidate and poor politician he is. The campaign is too short for Capriles to overcome the abuse of power of Chavismo and the sympathy vote, but it seems as if Capriles had given the whole thing a lot of thought. And in the opening moments of the campaign, score one for the challenger.

Yesterday, Miranda Governor and former opposition candidate Henrique Capriles gave a press conference in which he articulated very well some important positions about what is happening in Venezuela, among them:

-Nobody voted for Nicolas Maduro to be President. Nobody named Nicolas Maduro Vice-President for this term

-He asked Nicolas: “Do you need abuse of power and the power of the State to go to elections?…What are you afraid of?

-The Supreme Court is not the “people” and they took advantage of Chavez’ funeral yesterday to release their decision that Maduro can be interim President and run for President at the same time, contradicting their 2006 sentence in which they basically said the opposite.

-He noted that the opposition asked to go to Chavez’ funeral and was told in no uncertain terms “You better not”

-He called Maduro a liar, referring to the lies about Chavez’ health, something which should be noted in the campaign, as many Chavistas do feel that they were lied to.

-And in a very significant remark, he stated: “The Cuban Government will not rule in Venezuela”

Unfortunately, in the so called “democratic” Venezuela, this press conference was covered by only one TV station in Venezuela (And dozens abroad), as private stations were told not to cover it.

Now, if Capriles’ intent was to re-energize his candidacy and campaign, this was a great press conference, emotional, clear, in your face and making the important points. I think he only forgot to mention directly the intervention of Venezuela’s military in the campaign.

But if this was just a preamble to his withdrawal from the upcoming campaign, it was a terrible appearance.

I say this for a very simple reason: It was clear that this was going to happen. Chavismo has spent the last two months trying to find a way for Maduro to become the President as a way of having him be candidate and President at the same time. Even bringing Chávez back from Cuba was done only to try to find a way to have him be sworn in, so that Maduro could be ratified as Vice-President. And if this failed, it was clear that the Supreme Court would use its silly putty justice to make it so.

Nothing is a surprise. And there is no question that Maduro is the likely winner, but this is no excuse for the opposition to hand over the country to Chavismo. And Capriles would be doing that, because the person that could mount the best campaign against Nicolas Maduro at this time is Henrique Capriles. In some sense, he has been running for President all these months ever since Chávez went to Cuba. If he thought there were scenarios under which he would think of quitting, he should have done so and let someone else get the spotlight.

And yes, Maduro as Candidate and President is a formidable contender only because of Chávez’ legacy. It is unlikely that Capriles can beat him and I hope he does not, because Chavismo should deal with the economic mess they created.

However, let me start by noting that Nicolas Maduro, sympathy and endorsement included, ain’t Hugo Chávez. Far form it. Maduro has proven to be more light weight than I thought. He does not articulate well, he mispronounces, he loses track of ideas, he rambles on, he has no sense of humor, no charisma and he does not have the fervor of the people that Chávez had.

And yes, I think Maduro will win at this time. But you have to remember that Chávez’ passing means that politics is back in Venezuela. For the first time in fourteen years, one man will not dominate political discussion like Chávez did. This is a new political game and Maduro has to prove that he is good at it.

The first thing he needs, is to achieve a strong victory that will give him a mandate over other Chavistas, by saying I am almost as popular as Hugo

And that I don’t think he will get.

Chavismo wants to use all the stops, all the abuses, all of the Government’s power for the simple reason that they know Maduro is not adored (for that matter he is not even known) as much as Chávez was. Chavismo also understands that it is next to impossible to achieve the levels of low abstention seen on October 7th. Even with the effect of Chávez recent passing, it will be difficult to spend as much as last year and be as effective as last year. Shift abstention by a few percent and Maduro can score a narrow victory that would make his Presidency weak to start with.

Of course, Capriles has to re-energize his supporters. And that is why I say if that was the objective, that as a very good start.

Chavismo has a tough road ahead. They lost a charismatic leader who avoided at all costs allowing anyone to compete with him. They have an economy that is so distorted that it requires tough policies to improve things. And they have politicians not used to playing the game of politics among themselves.

Let’s not help them overcome this, but not being there to occupy the space that almost half of Venezuela rightfully occupies today.