The National Electoral Council of Venezuela (CNE) declared Nicolás Maduro Moros the winner of Venezuela’s presidential race with 51% of the vote. He was followed by the opposition candidate from the Plataforma Unitaria Democrática (PUD), Edmundo Gonzalez Urrutia, who received 44% of the total vote. Voter turnout was 59% of the voting-age population, though between 6 to 8 million Venezuelans outside the country were prevented from voting by electoral authorities.
What we know:
During the announcement of the electoral results at the CNE headquarters, discrepancies were observed: the percentages reported for all candidates combined exceeded 100%, totaling 109%. Additionally, the state-controlled national TV channel, Telesur, displayed vote distributions per candidate that, when added together, surpassed 127%. These inconsistencies raised concerns about the transparency of the election process.
The CNE (National Electoral Council) of Venezuela, where 4 out of 5 members are affiliated with Maduro’s party, the Partido Socialista Unido de Venezuela (PSUV), claimed international intervention without providing concrete evidence. Public data from polling stations indicated a landslide victory for Edmundo González, with over 70% of support, compared to Maduro’s 25%.
Maria Corina Machado, leader of the opposition party PUD and the original presidential candidate, rejected the CNE’s announcement and declared Edmundo González the winner. PUD claimed limited access to voting acts, which they asserted was only 30%. Opposition observers in several locations, including Zulia and Táchira, were obstructed by armed civilians, army personnel, and police officers from accessing voting records. Anti-riot police and armed groups called ‘colectivos’ were deployed to disperse protests in Caracas, particularly near CNE facilities. Machado decided against calling for protests, opting instead to challenge the results legally.
According to Venezuelan law, the CNE must publicly release the tally sheets from each polling station to officially declare a presidential winner. The fact that the CNE has not yet provided these tally sheets raises significant legal concerns and calls into question the legitimacy of Maduro’s election.
Argentina, Chile, the Dominican Republic, Ecuador, Guatemala, Paraguay, Panama, Peru, and Uruguay have openly rejected the electoral results, citing concerns over potential irregularities. Meanwhile, US and the EU have called for transparency in the release of voting data to ensure the credibility of the process. Brazil, Colombia, and Mexico have refrained from taking a definitive stance. On the other hand, Bolivia, China, Cuba, Honduras, Iran, Nicaragua, and Russia have accepted the electoral results as published by the CNE.
Attorney General Tarek Saab, a member of the PSUV, announced an investigation into Maria Corina Machado and other opposition leaders, accusing them of election tampering. At least 75 protests have erupted across the country, with massive gatherings in Caracas near the Miraflores presidential palace, where people are demanding President Maduro’s resignation.
On July 29, Machado announced that MUD had obtained access to tally sheets from 73.2% of polling stations, which she claimed demonstrated a clear victory for Edmundo Gonzalez. Machado called for a general strike starting at noon on July 30, as a means to apply pressure for the official recognition of the ballot results.
Our view:
Our base case scenario is that Maduro will retain power through fraudulent means. However, we also consider the possibility, though less likely, that popular protests could lead to his removal. Our base case macro view anticipates another political and supply crisis for the regime following the re-imposition of sanctions, which could result in increased migration to other Latin American countries, Spain, and the United States.
The re-imposition of sanctions could reverse Venezuela’s recent growth in the oil industry, currently at a capacity of 856,000 barrels per day (bpd). The termination of ongoing projects by Repsol and Exxon could lead to a 5% YOY in production capacity, reducing it to below 809,000 bpd. No further increases in production capacity are expected.
Another wave of migration could undermine Venezuela’s economic growth, which is currently forecasted at 3.3% YOY for 2024 and 2.6% for 2025. The re-imposition of sanctions, coupled with mass migration and a lack of political legitimacy, could result in stagnant or even negative growth, similar to the situation experienced from 2014 to 2017.
If the opposition successfully demonstrates fraud, removes Maduro from power, and establishes a transitional government, limited private investments may begin cautiously returning by 2025. However, without significant institutional reforms, Venezuela’s economy is likely to remain fragile compared to its Latin American peers. The PUD’s short-term priorities will focus on ensuring the separation of powers within the government branches and calling elections to establish a new National Assembly.
To stabilize the macroeconomic outlook, the PUD proposes a broad program of privatizing public enterprises and assets, including parts of Venezuela’s state oil company, PDVSA. Emergency spending will prioritize healthcare, electricity, and transportation. To control inflation, the PUD plans to reduce the size of the state, implement a contractionary monetary policy with inflation targets, and establish fiscal rules. Additionally, the PUD proposes renegotiating debt terms and seeking an emergency loan from the IMF to support public spending.
Finally, if regular channels of power transfer are maintained, Edmundo Gonzalez would only assume the presidency of Venezuela on January 29 of 2025.
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