Who’s in Charge in Venezuela and What May Come Next

(Bloomberg) -- Once one of Latin America’s richest countries, Venezuela has been laid low. Power, water and gasoline shortages have become an everyday occurrence across the country as hyperinflation hastens an economic collapse that’s caused a humanitarian crisis. It’s not even entirely clear anymore who’s legitimately in charge.

1. Who is running Venezuela?

President Nicolas Maduro has retained firm control of key assets including the military, police and state-run oil company Petroleos de Venezuela SA, or PDVSA. But a sizeable opposition considers his government invalid and has coalesced behind Juan Guaido, who, as president of the National Assembly, announced in January that he had assumed Maduro’s powers atop a caretaker government pending new elections. An effort by Guaido and his supporters to seize power at the end of April fizzled, however. More recently, Maduro and his loyalists attempted a takeover of the National Assembly, Venezuela’s last remaining democratic institution.

2. What happened in the National Assembly?

On Jan. 5, the day Guaido was supposed to be re-elected to a second one-year term as the legislature’s president, security forces set up barricades and blocked Guaido from entering the National Assembly building in Caracas. Inside, Luis Parra, a deputy recently ensnared in a corruption scandal, declared himself the new leader of the chamber by megaphone. A one-time ally of Guaido, Parra has been embraced by Maduro in an apparent bid to shove the opposition leader aside. Guaido led his followers to a different location, where they voted to keep him as National Assembly president.

3. So who’s running the legislature?

Parra has physical control of the National Assembly offices and is trying to solidify his position as the self-declared new head of the legislative body. State television, which rarely broadcasts events held by the opposition, offered live coverage of his swearing-in. Asked about his immediate agenda in a Jan. 10 interview, Parra said, “We’re normalizing things. We have to clean house first.” Guaido has declared Parra a “traitor” and pledged to continue working as the legislative body’s head. His efforts to reclaim the assembly’s grounds have so far resulted in a violent clash that ended with tear gas.

4. On what grounds does Guaido challenge Maduro’s presidency?

He says Maduro’s May 2018 election to a second six-year term was illegitimate. That vote was marred by the jailing and disqualification of opposition politicians -- most of whom ultimately joined a boycott of the vote -- along with the coercing of government workers to vote and reports of fraud. (The U.S., the European Union and the 14-nation Lima Group, formed to help restore democracy to Venezuela, have also called that election result illegitimate.) Guaido cites Article 233 of Venezuela’s constitution, which invests temporary presidential power in the head of the National Assembly when the presidency is otherwise vacant. In a column for the Washington Post, Guaido also cited Article 350, which says Venezuelans “shall disown any regime, legislation or authority that violates democratic values, principles and guarantees or encroaches upon human rights.”

5. Where is this headed?

All 167 members of the National Assembly are up for re-election this year, and Maduro is likely to schedule that vote as early in the year as possible to take advantage of divisions within the opposition about whether to participate. If they do, they risk looking like they endorse a process they consider rigged; if they boycott, they leave the assembly in Maduro’s control. In the meantime, the Maduro regime will continue to sideline Guaido by any mean possible, including engaging in negotiations with splinter opposition parties, putting Guaido’s leadership further into question.

6. What could tip the balance?

Guaido has sought to lure military officers to his side by offering amnesty to those who defect; if he were to gain support from rank-and-file army members, it would be a major blow to Maduro. For now that seems unlikely. Maduro is the protege and successor of Hugo Chavez, the leftist army colonel who was first elected president in 1998 after having been imprisoned for leading a failed coup in 1992. Top leaders of the military have benefited from government contracts and mining concessions during Maduro’s regime, as well as from their control of ports and PDVSA.

7. How is the world reacting?

Guaido’s claim to the presidency was recognized by the U.S., Brazil, and dozens of other countries. The U.S. also considers Guaido the legitimately re-elected head of the National Assembly. The U.S. Treasury Department sanctioned Parra and six other officials for trying to block Guaido’s re-election. Russia continues to recognize Maduro as Venezuela’s rightful leader, as does China, which has said it “opposes foreign forces from interfering into Venezuela affairs.” Maduro blamed Washington for orchestrating the effort to remove him and broke diplomatic relations with the U.S. early last year. The U.S. has slapped sanctions on PDVSA that effectively block the OPEC member from exporting crude to the U.S., its biggest customer. American companies are barred from selling Venezuela the light oil it needs to dilute its heavy crude, further hindering PDVSA’s ability to export. Venezuela’s oil reserves, the largest in the world, account for the overwhelming majority of Venezuela’s income.

The Reference Shelf

• A QuickTake explainer on Venezuela’s collapse.
• Why China should recognize Venezuela’s real leaders: Guaido’s column for Bloomberg Opinion.
• Who is Juan Guaido?
• A timeline of Venezuela’s economic rise and fall.
• The Organization of American States and the Inter-American Development Bank have recognized Guaido’s picks to the institutions.

To contact the reporter on this story: Patricia Laya in Caracas at playa2@bloomberg.net

To contact the editors responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net, Laurence Arnold, Bruce Douglas

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