Maduro's economic pragmatism ahead of the elections: viable in the long term?

The current economic pragmatism of Maduro is due to the electoral cycle and is not viable. Francisco Monaldi, a renowned researcher and director of the Latin American Energy Program at the Baker Institute at Rice University in Texas, has analyzed in detail the economic and political situation of Venezuela on the eve of the elections. From his academic position, Monaldi has witnessed the dramatic collapse of the Venezuelan oil sector and cautiously optimistic about the possibility of a significant change in the country's political landscape. In an exclusive interview with EL PAÍS from Houston, Monaldi points out a compelling fact: if the turnout in this Sunday's elections remains at expected levels, President Maduro will face a serious problem. His initial plan to "legitimize" himself through these elections in order to seek the lifting of the oil sanctions imposed by the United States has been affected by a miscalculation, allowing the opposition candidate to take a considerable lead in the electoral preferences. Monaldi emphasizes the importance of a possible annual investment of up to $10 billion for at least eight years to bring the Venezuelan oil sector back to its full potential. Despite the global transition to clean energy, Venezuela, holder of the world's largest oil reserves, could still find an opportunity in the market if the right conditions are met, such as legal changes, political stability, and openness to private investment. During the conversation, Monaldi conducts a thorough analysis of the Venezuelan energy sector, highlighting the recent participation of companies like Chevron in reactivating the country's oil production. However, he warns that the current economic pragmatism, marked by partial dollarization and agreements with various companies, is not sustainable in the long term. This strategy of dollarization and inflation control, while effective temporarily, will bring about future economic complications. Regarding the electoral scenario, Monaldi presents three possible scenarios for election day in Venezuela. From a victory through high abstention to a possible electoral fraud by the government, the different outcomes could have repercussions both internally and internationally. The mobilized and unified opposition poses a challenge for Maduro, whose plan for legitimization through these elections has been compromised. The expert also addresses the challenge posed by the global energy transition for Venezuela, whose historical dependence on extra-heavy oil could be disadvantageous in a scenario of penalties for carbon emissions. Despite the current demand for heavy crude being competitive, the country urgently needs to address issues such as methane emissions to avoid possible international sanctions in the future. In summary, Francisco Monaldi offers a deep and critical analysis of the current situation in Venezuela, emphasizing the need to make strategic long-term decisions to revitalize the country's economy and oil sector. Electoral uncertainty and challenges in terms of energy transition pose significant challenges that will require political leadership and long-term vision to achieve a sustainable and viable recovery for Venezuela in the years to come.