Maduro Wins Venezuelan Election, Risking Harsh Oil Sanctions

(Bloomberg) -- President Nicolas Maduro won another six-year term as millions of Venezuelans boycotted the widely derided election, a victory that hands him sole ownership of the nation’s crushing economic crisis.
Ignoring calls from the U.S. and regional leaders to suspend the elections, the socialist regime proceeded with the presidential contest despite the threat of further isolation and sanctions on the crisis-stricken nation’s all-important oil industry.

“How many times have they underestimated me?” Maduro, 55, called out to crowd of supporters outside the Miraflores presidential palace in Caracas. “You have believed in me, and I’m going to respond to this infinite confidence, this lovely confidence.”

“They say you were forced to vote, that you were coerced into voting -- it’s an insult to the people!"

The result continues two decades of rule by the late socialist president Hugo Chavez and Maduro, his hand-picked successor. Over that time, what had been one of Latin America’s wealthiest democracies has fallen into strongman rule. The economy has deteriorated to the point that electricity and running water are luxuries and malnutrition is rampant. Neighbor countries and international aid agencies are struggling to care for thousands of Venezuelans who have fled the nation.

Venezuela’s electoral authority said that Maduro won almost 68 percent of the 8.6 million votes cast, while his main challenger, former governor Henri Falcon, took about 21 percent. The most important figure, however was turnout.

Voter participation was about 48 percent, according to the head of the electoral authority. That would be the lowest for a presidential election since Chavez upended Venezuelan politics in 1998.

Three hours after the expected 6 p.m. close of voting centers, many remained open and smiling officials of Maduro’s regime went on state television to encourage people to cast ballots. Critics said the government was promising economic benefits to push listless voters to increase the participation rate.

Bitter Ending

Just before 10 p.m., Falcon said the results of the election were suspect and illegitimate. In a late-night press conference, Falcon told reporters the vote was “neither transparent or clean.”

“For us, there were no elections,” he said. “There need to be new elections.”

Desidelio Hildago, a 65-year-old retired clothing salesman, said he had planned to vote, but when he saw sparse crowds at his polling station in the El Paraiso neighborhood of Caracas he abruptly decided against it and spent the afternoon playing dominoes with neighbors.

“A Maduro victory was decided months ago,” he said, sipping a beer. Asked whether he thought Maduro would remedy the country’s crisis, Hidalgo laughed.

Maduro, a former bus driver and foreign minister, has given little indication of his plans to remedy inflation that may hit 13,000 percent this year and an economic contraction that could hit 9.2 percent, according to a Bloomberg survey of economists. Maduro’s promise of an “economic revolution” is complicated by threats from U.S. to punish Venezuela’s oil industry. Four years ago, oil was trading at over $100 a barrel, which gave the ruling socialists leeway. Now, oil is about $70 a barrel and the state producer’s creditors are already seizing its assets.

Tainted Candidacy

The country’s main opposition alliance shunned the elections after the government refused to satisfy demands including restaffing a compliant electoral authority and providing additional time for primaries. While many polls had given a commanding lead to Falcon, a former soldier and governor, he struggled to gain widespread support as many Maduro opponents accused him of legitimizing a sham vote.

The U.S. has no plans to recognize Sunday election in Venezuela, and sanctions against the nation’s oil industry are under “active review,” Deputy Secretary of State John Sullivan told reporters in Buenos Aires on Sunday. Previous sanctions have been leveled against individuals, but punishing the nation’s lifeline industry could have devastating effects on a population already suffering.

U.S. Senator Marco Rubio, a Florida Republican who serves on the Foreign Relations Committee, said on Twitter that the regime is a dictatorship. “Tomorrow the U.S. & international community will respond as necessary,” he said.

Decayed Democracy

Maduro has effectively disassembled the organs of democracy in a nation that emerged from military leadership in 1958 -- among the first in the region to do. After the opposition took control of the national assembly, Maduro bypassed it by creating an all-powerful body filled with his loyalists. When the assembly named supreme court justices, he threatened to prosecute them and they fled into exile. His most potent opponents are imprisoned or banned from civic life. Maduro dealt out large and profitable sectors of the economy to the armed forces. And the political police continue to hold scores of prisoners who opposed him.

On Sunday, the government seemed most concerned with inflating participation to prove its legitimacy to its own followers. There was little question about who would actually be declared the winner.

“Who was the big loser today? Abstention,” said Delcy Rodriguez, head of the Maduro-created constituent assembly that rules supremely over all other government bodies.

©2018 Bloomberg L.P.

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