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The author is vice president of the Chinese Association for Latin American Studies
As the anointed successor of late President Hugo Chavez， newly elected Venezuelan President Nicolas Maduro will likely follow in Chavez’s footsteps without making major adjustments to the South American country’s domestic and foreign policies.
In his inaugural speech on April 19， Maduro said， “Every day I wake up thinking about him， and I go to bed thinking about him， in need of his guidance.”
The legacy of Chavez
Despite a mixed reception from the outside world， Chavez’s contributions are undeniable. During his 14-year administration， Venezuela witnessed extraordinary changes in its society， politics， economy as well as diplomacy.
After Chavez took office， he swore to curb the foreign control of Venezuela’s oil industry and make the rise in oil prices benefit all Venezuelans. The Chavez administration raised royalty taxes on foreign oil companies while demanding these companies transfer part of their equities to Venezuela’s state-run oil company. His administration also implemented the nationalization policy in other economic sectors， thus enhancing the role of the state in the economic life of the nation， in sharp contrast to neo-liberalism.
The political power base of Chavez centered on low-income groups. Under his administration， the living conditions of low-income people improved. After taking power， Chavez carried out several poverty alleviation programs， such as providing more job opportunities for the unemployed， setting up thrift shops for the poor and building schools and hospitals in lowincome communities. With the assistance of Cuba， many people living in the remote and impoverished areas of Venezuela gained access to medical treatment and education， reducing the country’s infant mortality and illiteracy rates.
Chavez aided the rise of the left-wing political force in Latin America. After Chavez won his first presidential election in 1998， many left-wing politicians assumed power in Latin American countries such as Argentina， Bolivia， Brazil， Chile， Ecuador， Nicaragua and Uruguay.“Socialism of the 21st century” advocated by Chavez is conducive to the efforts of Venezuela and other Latin American countries to explore a new path of development. The concept calls for strengthening the unity of Latin American countries and enhancing the role of the state in economic development. Though Western media denounce the political term， it has played an obvious positive role in the development of South America. Moreover， the image of Chavez as an antiU.S. fighter， along with the assistance provided by Venezuela to other developing countries， brought the country greater popularity and a higher status in the international community.
Challenges for Maduro
Chavez passed down enough political assets to Maduro， but the new Venezuelan president must also meet a host of economic and social challenges left over in the current society. The oil industry is the pillar of Venezuela’s economy. The oil sector produces about 30 percent of GDP in Venezuela and 50 percent of the country’s fiscal revenue. Oil exports account for 90 percent of the country’s total export earnings， as opposed to less than 70 percent before Chavez took power. This shows that the Venezuelan economy is increasingly reliant on the oil industry， which means that once oil production drops， the country’s export earnings and fiscal revenue will suffer and its economic growth could fall as well.
Venezuela’s overdependence on oil has resulted in the so-called Dutch Disease—meaning too much reliance on one area at the expense of agriculture. As a result， the basic needs of Venezuela for food such as corn， rice， dairy， beef and chicken are simply not selfsufficient.
The defective economic structure has not only weakened the vigor of Venezuela’s economy， but also negatively affected resource allocation based on price signals. Spurred by high oil prices， public spending and wages have continued to rise while a spending boom persists. However， the supply of goods cannot meet the demand， heightening inflationary pressure and making Venezuela the country with the highest inflation rate in Latin America. High inflation， combined with the country’s capital control policy， has produced a disastrous effect on the exchange rate of Venezuela’s currency. The exchange rate of the bolivar against the U.S. dollar in the black market is four times higher than its official exchange rate.
The nationalization policy of Chavez has established the government’s dominant position in the economic field， but it also has scared off foreign investors. The lack of funds has caused the country’s oil production to plummet in recent years.
Maduro also faces the problem of how to improve relations with political opponents. After Chavez came into power， the vested interest group of oligarchy rallied strong opposition to his administration. The military coup staged by the opposition in 2002 further increased tensions between the two sides. Meanwhile， Washington viewed Chavez as a thorn in its side. With the support of the U.S. Government， the opposition conspired against the Chavez administration. Chavez then fought back using harsh measures. The fighting severely damaged the political stability of the country， resulting in the emigration of many professionals to foreign countries， which took a heavy toll on the technological innovation of Venezuela. As the mainstay of Venezuela’s national economy， the oil industry was unable to increase its output due to a lack of technicians. Whether Maduro can improve relations with the United States is another question that the international community is concerned about. It is foreseeable that Washington would send some signals for improving relations with Venezuela， but it will not give up its support for the Venezuelan opposition. Maduro may take some measures to ameliorate VenezuelanU.S. relations， but he is unlikely to abandon the stance of anti-U.S. hegemonism.
Claims by opposition candidate Henrique Capriles that the general election was rigged and the following violent confrontation of the supporters of the two sides showed that their antagonism will not disappear anytime soon. It will continue to threaten the stability of Venezuelan society.
In addition， crime and murder rates in Venezuela are reportedly the highest in Latin America. Maduro needs to address the country’s worsening public security problem while Chavez passed down enough political assets to Maduro， but the new Venezuelan president must also meet a host of economic and social challenges left over in the current society ensuring that the living standard of low-income groups will not decline.
Sino-Venezuelan relations
Zhang Ping， then head of the National Development and Reform Commission of China， arrived in Caracas on March 7 as special envoy of the Chinese Government to attend the funeral of Chavez. Venezuelan Foreign Minister Elias Jaua welcomed the Chinese envoy at the airport， a special arrangement that highlighted friendship between China and Venezuela.
Sino-Venezuelan relations developed rapidly following the establishment of diplomatic relations in 1974， especially during the Chavez administration. Since Chavez took office， the two countries have enjoyed frequent high-level exchanges. Bilateral economic and trade cooperation has kept growing. Cultural， scientific and educational exchanges are also rapidly increasing. Both sides have shown mutual understanding and maintained close cooperation in international affairs. The two countries established a strategic partnership in 2001. A high-level mixed committee was also set up to coordinate and map out bilateral cooperation in a variety of fields such as politics， economy and cultural exchanges. So far， the committee has held more than 10 meetings. In December 2004， Venezuela recognized China’s full market economy status.
Maduro believes the best way to salute Chavez， who devoted himself to promoting strategic cooperation between China and Venezuela， is to continue to deepen and strengthen the Sino-Venezuelan partnership. The new Venezuelan president recently said his government would send a high-level delegation to visit China.
China， for its part， stays committed to its relationship with Venezuela. At a press conference days after the passing away of Chavez， a Chinese Foreign Ministry spokeswoman said China values its traditional friendship with Venezuela， an important country in Latin America as well as a friendly country to China.“We are ready to work with the Venezuelan Government and people to constantly deepen and push forward the China-Venezuela strategic partnership of common development，” she said.
As the anointed successor of late President Hugo Chavez， newly elected Venezuelan President Nicolas Maduro will likely follow in Chavez’s footsteps without making major adjustments to the South American country’s domestic and foreign policies.
In his inaugural speech on April 19， Maduro said， “Every day I wake up thinking about him， and I go to bed thinking about him， in need of his guidance.”
The legacy of Chavez
Despite a mixed reception from the outside world， Chavez’s contributions are undeniable. During his 14-year administration， Venezuela witnessed extraordinary changes in its society， politics， economy as well as diplomacy.
After Chavez took office， he swore to curb the foreign control of Venezuela’s oil industry and make the rise in oil prices benefit all Venezuelans. The Chavez administration raised royalty taxes on foreign oil companies while demanding these companies transfer part of their equities to Venezuela’s state-run oil company. His administration also implemented the nationalization policy in other economic sectors， thus enhancing the role of the state in the economic life of the nation， in sharp contrast to neo-liberalism.
The political power base of Chavez centered on low-income groups. Under his administration， the living conditions of low-income people improved. After taking power， Chavez carried out several poverty alleviation programs， such as providing more job opportunities for the unemployed， setting up thrift shops for the poor and building schools and hospitals in lowincome communities. With the assistance of Cuba， many people living in the remote and impoverished areas of Venezuela gained access to medical treatment and education， reducing the country’s infant mortality and illiteracy rates.
Chavez aided the rise of the left-wing political force in Latin America. After Chavez won his first presidential election in 1998， many left-wing politicians assumed power in Latin American countries such as Argentina， Bolivia， Brazil， Chile， Ecuador， Nicaragua and Uruguay.“Socialism of the 21st century” advocated by Chavez is conducive to the efforts of Venezuela and other Latin American countries to explore a new path of development. The concept calls for strengthening the unity of Latin American countries and enhancing the role of the state in economic development. Though Western media denounce the political term， it has played an obvious positive role in the development of South America. Moreover， the image of Chavez as an antiU.S. fighter， along with the assistance provided by Venezuela to other developing countries， brought the country greater popularity and a higher status in the international community.
Challenges for Maduro
Chavez passed down enough political assets to Maduro， but the new Venezuelan president must also meet a host of economic and social challenges left over in the current society. The oil industry is the pillar of Venezuela’s economy. The oil sector produces about 30 percent of GDP in Venezuela and 50 percent of the country’s fiscal revenue. Oil exports account for 90 percent of the country’s total export earnings， as opposed to less than 70 percent before Chavez took power. This shows that the Venezuelan economy is increasingly reliant on the oil industry， which means that once oil production drops， the country’s export earnings and fiscal revenue will suffer and its economic growth could fall as well.
Venezuela’s overdependence on oil has resulted in the so-called Dutch Disease—meaning too much reliance on one area at the expense of agriculture. As a result， the basic needs of Venezuela for food such as corn， rice， dairy， beef and chicken are simply not selfsufficient.
The defective economic structure has not only weakened the vigor of Venezuela’s economy， but also negatively affected resource allocation based on price signals. Spurred by high oil prices， public spending and wages have continued to rise while a spending boom persists. However， the supply of goods cannot meet the demand， heightening inflationary pressure and making Venezuela the country with the highest inflation rate in Latin America. High inflation， combined with the country’s capital control policy， has produced a disastrous effect on the exchange rate of Venezuela’s currency. The exchange rate of the bolivar against the U.S. dollar in the black market is four times higher than its official exchange rate.
The nationalization policy of Chavez has established the government’s dominant position in the economic field， but it also has scared off foreign investors. The lack of funds has caused the country’s oil production to plummet in recent years.
Maduro also faces the problem of how to improve relations with political opponents. After Chavez came into power， the vested interest group of oligarchy rallied strong opposition to his administration. The military coup staged by the opposition in 2002 further increased tensions between the two sides. Meanwhile， Washington viewed Chavez as a thorn in its side. With the support of the U.S. Government， the opposition conspired against the Chavez administration. Chavez then fought back using harsh measures. The fighting severely damaged the political stability of the country， resulting in the emigration of many professionals to foreign countries， which took a heavy toll on the technological innovation of Venezuela. As the mainstay of Venezuela’s national economy， the oil industry was unable to increase its output due to a lack of technicians. Whether Maduro can improve relations with the United States is another question that the international community is concerned about. It is foreseeable that Washington would send some signals for improving relations with Venezuela， but it will not give up its support for the Venezuelan opposition. Maduro may take some measures to ameliorate VenezuelanU.S. relations， but he is unlikely to abandon the stance of anti-U.S. hegemonism.
Claims by opposition candidate Henrique Capriles that the general election was rigged and the following violent confrontation of the supporters of the two sides showed that their antagonism will not disappear anytime soon. It will continue to threaten the stability of Venezuelan society.
In addition， crime and murder rates in Venezuela are reportedly the highest in Latin America. Maduro needs to address the country’s worsening public security problem while Chavez passed down enough political assets to Maduro， but the new Venezuelan president must also meet a host of economic and social challenges left over in the current society ensuring that the living standard of low-income groups will not decline.
Sino-Venezuelan relations
Zhang Ping， then head of the National Development and Reform Commission of China， arrived in Caracas on March 7 as special envoy of the Chinese Government to attend the funeral of Chavez. Venezuelan Foreign Minister Elias Jaua welcomed the Chinese envoy at the airport， a special arrangement that highlighted friendship between China and Venezuela.
Sino-Venezuelan relations developed rapidly following the establishment of diplomatic relations in 1974， especially during the Chavez administration. Since Chavez took office， the two countries have enjoyed frequent high-level exchanges. Bilateral economic and trade cooperation has kept growing. Cultural， scientific and educational exchanges are also rapidly increasing. Both sides have shown mutual understanding and maintained close cooperation in international affairs. The two countries established a strategic partnership in 2001. A high-level mixed committee was also set up to coordinate and map out bilateral cooperation in a variety of fields such as politics， economy and cultural exchanges. So far， the committee has held more than 10 meetings. In December 2004， Venezuela recognized China’s full market economy status.
Maduro believes the best way to salute Chavez， who devoted himself to promoting strategic cooperation between China and Venezuela， is to continue to deepen and strengthen the Sino-Venezuelan partnership. The new Venezuelan president recently said his government would send a high-level delegation to visit China.
China， for its part， stays committed to its relationship with Venezuela. At a press conference days after the passing away of Chavez， a Chinese Foreign Ministry spokeswoman said China values its traditional friendship with Venezuela， an important country in Latin America as well as a friendly country to China.“We are ready to work with the Venezuelan Government and people to constantly deepen and push forward the China-Venezuela strategic partnership of common development，” she said.