(Bloomberg) -- A nearly year-long push by Venezuela’s opposition to gather support for a referendum recall against President Nicolas Maduro hit a wall late Thursday after the National Electoral Council suspended the next phase of the process, cementing the ruling party’s hold on power.
The opposition was preparing to gather signatures of 20 percent of registered voters next week to try and trigger a recall vote before year-end which could have prompted fresh elections that polls show Maduro would lose. If the referendum is held next year, a loss at the polls for the president would mean that his vice president takes over until 2019.
Even after losing power of Congress 10 months ago, Maduro has managed to stifle constitutional attempts at removing him through increased control over the electoral body, the Supreme Court, intelligence agencies and the military. Since briefly removing former President Hugo Chavez from power in a coup in 2002, the opposition has struggled to gather supporters in the street and sustain protests against the socialist regime.
“This likely spells the end of the presidential recall referendum process, although we never expected it to culminate before the deadline for calling a fresh presidential election,” Credit Suisse analysts led by Casey Reckman wrote in a report. “Those who are frustrated with living conditions under the Maduro administration could become more angered that a key democratic channel for their discontent has effectively been blocked.”
Speculation has increased in recent weeks around who could replace Maduro within the ruling party if he’s ousted in a vote next year. A spiking of the recall process could also produce more public infighting in the ruling PSUV party on disappointment among factions over the chance at gaining the presidency, according to political risk analysis firm Maplecroft.
“The court’s decision will alienate factions of the ruling party, including the military, which had been pushing for a negotiated political transition, contingent on the president’s resignation,” Maplecroft’s Latin America analyst Grant Sunderland wrote in a report. “Like the opposition, they now have few options left and the internal power struggle may lead to public confrontation between factions.”
In coordinated actions, courts in five pro-government states suspended signature collections on Thursday, prompting the national electoral council to halt the process nationwide.
Even with near-record low approval ratings as a result of an economic crisis marked by runaway inflation, shortages of basic goods, declining oil output and a near paralysis of industrial output, Maduro is holding on to power. The 53-year-old former leader left Thursday for a four-day trip to Iran, Saudi Arabia, Azerbaijan and Qatar where he said he plans to discuss global oil prices.
Venezuela is becoming increasingly alienated in the region after former allied governments in Argentina to Brazil have given way to new leaders loudly voicing concerns over democracy and human rights violations in the oil producing nation.
The political turmoil comes at a time when state-oil company Petroleos de Venezuela SA, which oversees the world’s largest crude reserves, tries to stave off a default by swapping about $5.3 billion of bonds due over the next year for longer-maturity notes. PDVSA, as the company is known, has already extended the deadline for investors to participate in an exchange three times on low participation.
Government and PDVSA bond prices were largely unchanged at opening showing how many investors had already expected the recall process to be stunted before year-end. Still, on the back of a rebound of oil prices and yields above 20 percent, government bonds have returned 46 percent this year, the most among emerging market nations, according to data compiled by JPMorgan Chase & Co.
The legislature and executive remain at loggerheads, paralyzing the democratic process. Maduro even approved his 2017 budget through the supreme court, bypassing legislators.
Opposition Governor Henrique Capriles, writing on Twitter, responded to the CNE decision saying the opposition coalition will speak to the nation about a move that “pushes toward a dangerous scenario and aggravates the crisis.” Capriles also posted a court document ordering a travel ban for the main opposition leaders who have pushed for the recall vote.