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Hugo Chavez Is in Trouble

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President Hugo Chavez Frias is in trouble. The stunning results of Sunday's National Assembly Elections shined a light on a country that has subtly shifted under Mr. Chavez's feet. Only eighteen months ago, President Chavez won a referendum on indefinite re-election by a wide, ten point margin upon a platform of radical socialism.

However problems with inflation, electricity and power shortages, and street violence have caused times to change. Consequently, President Chavez's Bolivarian Revolution has come increasingly under scrutiny by the electorate. In response, yesterday's National Assembly Election, with 66% voter turnout, saw the opposition's Table for Democratic Unity (MUD) gain 61 seats (with several more still being counted), a number that would have been significantly higher were it not for the 2009 reform of the electoral law.

These gains put the MUD above the 1/3 necessary to impede a more radicalized agenda through the passing of Organic laws (sweeping reforms), constitutional changes and the calling of constituent assemblies. It also affects Chavez's ability to appoint judges to the Supreme Court of Justice.

Yet this election's greatest impact might be that it undermines President Chavez's ability to use the country's windfall oil profits at will. Using previous legislation and the complicity of a pro-Chavez National Assembly, over the last five years Chavez has transferred approximately 25% of oil royalties directly to a discretionary account in the Presidential palace. This has allowed him to fund his far-reaching political project, dubbed "21st Century Socialism", which provides subsidies to the poor and underwrites social initiatives. Chavez has also used the funding to advance his agenda throughout the region via the Bolivarian Alliance for the Americas (ALBA) and prop up countries such as Cuba and Nicaragua - who are both in the midst of a deep financial crisis.

For President Chavez, the news only gets worse. Despite retaining slightly more than 60% of the National Assembly the Chavistas actually obtained only 48% of the popular vote, leaving the opposition MUD with 52%. This in an election that featured a radicalized Chavez at center stage, with both sides billing it as a referendum on his presidency and the Bolivarian Revolution. Yet despite voter manipulation, abuse of state resources, and the not-insignificant persona of the President on campaign, Chavez now represents a minority population in his own country. If this election was seen as a trial run for the 2012 Presidential elections -- the next national level elections -- Chavez has reason to be worried.

Mr. Chavez now has some difficult choices to make. He could attempt to soften his often bombastic rhetoric and rebuild his shattered relationship with what is now more than 50% of the country. This would require him to postpone or cancel his plans, most notably the rapid advance of 21st Century Socialism. This has not been something for which President Chavez has had significant appetite in the past. Conversely, he could radicalize, seeking to promulgate conflict within the National Assembly and thereby push through a radical agenda with only a simple majority, despite the very vocal opposition of the MUD. This would be hard to do, and would be on the margins of democratic legality. Finally, he could adopt openly extra-democratic means, such as excluding the opposition outright from the deliberations -- as happened in Bolivia in the past.

Now more than ever, the opposition cannot afford to rest. The MUD's members must now learn how to turn anti-government rhetoric into an effective parliamentary debate. This will include cooperation on projects that could prove less than palatable to their constituencies. And in a country where voter confidence in the elected assembly is very low, they must demonstrate their ability to govern "for the people", something which, for the Chavistas, has proved increasingly difficult.

For a U.S. administration keen to avoid conflict with Hugo Chavez, the opposition's victory is a blessing, because it provides the opportunity to applaud a successful electoral result and reinforce its support for peaceful, democratic resolution of conflict within Venezuela. It also provides the United States with some desperately needed "friendly faces" within Venezuela's government, which will improve the ability of the US to increase dialogue and perhaps coordination on issues of mutual interest.

In the near-term, however, Hugo Chavez will still guide Venezuela's direction. Addressing his constituency last night through his twitter account, he said, "my dear compatriots, it has been a great day and we have obtained a solid victory. Sufficient to continue to deepen Democratic, Bolivarian Socialism. We should continue to reinforce the revolution." Only time will show what this means.