(Robert Campbell is a Reuters market analyst. The views expressed are his own.)
By Robert Campbell
CARACAS, June 4 (Reuters) - Hugo Chavez’s picture is everywhere in Venezuela and may remain ubiquitous for some time, despite the president’s serious illness. But soon the image may only be a Mao-like symbol of regime continuity.
Chavismo, Hugo Chavez’s unique and malleable blend of militarism, historical revisionism, command economics, and knee-jerk anti-Americanism, is a movement intimately tied to the leader and his almost messianic bond with Venezuela’s poor.
But Chavez’s cancer, which, by all accounts seems to have taken a turn for the worse, poses a dilemma for the movement.
Chavismo, which previously functioned without questioning Chavez’s oft-repeated pledge to govern until 2021 or even 2031, is now contemplating life without its charismatic founder.
The imagery of the regime already seems to stress continuity. Posters urging supporters to keep pushing ahead are all over government buildings, showing Chavez at various stages of his life.
The images range from the youthful paratrooper leading an unsuccessful coup in 1992 to the contemporary cancer-stricken leader — bald, bloated and wearing dark sunglasses,
Outside of Venezuela, a strong current of opinion assumes that if Chavez loses his battle with cancer, the current government will unravel or perhaps even be replaced by a business-friendly opposition.
Viewed from the ground, that does not seem likely. Henrique Capriles, the opposition candidate in this October’s presidential election, has so far not made significant inroads into Chavez’ political support.
The youthful Capriles, a state governor, still has plenty of time to build support. But the ruling party is formidably organized, with plenty of control over vital levers of power.
Even if Chavez becomes too sick to continue the campaign this summer — probably Chavismo’s nightmare scenario — his anointed successor could easily win power.
If so, the image and reputation of Hugo Chavez is likely to dominate the political scene for some time.
Whoever took up Chavez’ standard would have to campaign as his successor and heir.
For all the talk of infighting among Chavez’s lieutenants as they jockey for position, they all know how much they at risk if the ruling party goes down to defeat.
The opposition has more than a decade of grievances stored up against the government and would almost certainly comb through every deed and every bank account of every senior official in a post-Chavez witch-hunt.
As such the various strands of Chavismo — unreconstructed leftists, military nationalists and cynical profiteers alike — will not rock the boat as long as their fundamental interests are not threatened.
That means, at least on the surface, that Chavismo may remain unaltered even if Hugo Chavez departs the scene. The slogans, rhetoric and thrust of government domestic and foreign policy will probably stay the same.
But herein lies the fundamental dilemma of a post-Chavez Chavismo. Without Chavez, the movement needs to remain loyal to his legacy, but will need to find a new reason for voters to keep it in power.
Chavez’ opponents have always marveled at how the failings of his government —and there are many— never seem to tarnish the man himself.
His own supporters often acknowledge serious problems, but for the most part blame the president’s advisors or corrupt officials for failing to carry out his wishes.
With Chavez out of the picture, this excuse will not be accepted so readily.
While improving economic management might reduce some of Venezuela’s more pressing problems, such as its grossly over-valued currency, longer-term solutions will require more radical action, and more money.
The problem here is that Chavez has had plenty of money and has spent all of it and more, saddling state oil monopoly PDVSA with massive debts and burdensome obligations to deliver free fuel to creditors and political allies.
The solution is likely to be a renewed burst of foreign-financed overseas investment in Venezuela’s oil sector, with an eye to reversing the decline in output of recent years.
This would not even require legal changes. Many foreign oil companies are already happy to work under the current legal structure. And not just Chinese firms seeking resources, but also Western investors.
In private, executives say some of the biggest problems they face are simple government approvals, and PDVSA’s own cash shortfalls.
They can already cope with the ideological constraints, as evidenced by Chevron and Repsol employees working closely with PDVSA today.
A more responsive and flexible government could well oversee a relatively quick rise in Venezuelan oil production. The key here is the massive Orinoco heavy oil belt.
Investors increasingly view this oil, like that of Canada’s oil sands, as a proven resource, with minimal exploration and geological risk.
Proving up the commercial aspects of an oil field can often be a lengthy process. With legal certainty in Venezuela, investors say much of the commerciality of the Orinoco belt is proven.
Chavismo with Chavez already has plenty of ideological cover to enable it to work with foreign investors on its terms, and a Chavismo without Chavez would need foreign investment to boost oil output.
That is the scenario now being contemplated within the corridors of power, both in Venezuela, and at the headquarters’ of foreign companies active in the country’s oil industry.
Oil investors should start considering the same possibilities. (Editing by Lisa Von Ahn)