Commodities: The map of Venezuela starts to change
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Opinion

Commodities: The map of Venezuela starts to change

A falling oil price is limiting Hugo Chávez’s economic and political options.

On Sunday, November 23, voters swarmed to the polling stations in Venezuela to cast their ballots in the mayoral elections. Even though president Hugo Chávez wasn’t on the ballot sheet, the results say a lot about the president and his future. The success of his candidates reflects not only his popularity but also considerations of the continuation of his high-spending, socialist political agenda.

Ever since last December, when the president’s referendum that would have allowed for continuous re-election was defeated, Chávez has wanted to prove that his people still support him. His supporters now say the election satisfies this wish. Chávez’s ruling party, the United Socialist Party (PSUV), claimed 17 out of 23 states. But this isn’t the whole story. The states that Chávez’s party lost convey an interesting story and explain why investors reacted positively to the election results.

The opposition took six states – Zulia, Carabobo, Nueva Esparta, Tachira, Miranda and Capital district –the most populous and economically important in the country. Strategically placed Zulia is at the heart of Venezuela’s oil industry.

Out of the five districts in Caracas, the capital of Venezuela, the opposition took four – even after Chávez disqualified the most popular opposition candidate, Leopoldo Lopez, on murky corruption charges.

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