Where do Venezuela's present and future political and economic institutions stand? In the aftermath of the parliamentary elections in September 2010 and the ensuing installment of the new National Assembly last week, Americas Quarterly's Editor-in-Chief Christopher Sabatini offers the following analysis.
Those who believed that the Venezuelan opposition's gains in the September 2010 midterm elections would chasten President Hugo Chávez have seen their hopes dashed in the past six weeks. Since the end of November, Chávez and his allies—Chavistas—rammed through a series of laws that consolidate his control over everything from banks and local governments to the Internet and the National Assembly.
In the waning days of the Chavista-controlled National Assembly, the legislation came fast and furious, including a long-threatened law that forbids organizations and individuals receiving international financial support from defending Venezuelans' political rights and prohibits local organizations from hosting foreigners who express opinions perceived offensive to the government. Other bills effectively established a parallel state on a local scale by creating community-level structures that report directly to the president, and granted the state unlimited discretion over economic policy.
Chávez's new laws decimated the authority and fiscal capacity of local governments by creating a vertical, separate structure for overseeing and managing social programs. The laws bypass municipal governments' fiscal and political authority (established under Chávez's own 1999 constitution) by establishing a new "commune"-level government and setting up a "popular power" chain of command that answers only to the "revolutionary leadership" in Caracas. Recent banking laws have put banks under the government's thumb by officially declaring them public utilities and requiring them to either donate five percent of their profits to a social fund or risk seizure by the state. To add an exclamation mark to the end of the Chavista-dominated legislature, on December 17, 2010, Chávez had the outgoing National Assembly grant him the authority to rule by decree for 18 months. This "enabling law" will allow him to pass laws of his choice on social and economic policy and matters of national security...
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