Venezuela: after Hugo Chávez

For the second time in eight months, a Latin American leader’s health has sent his country’s bonds soaring. Though coldly calculating yanqui capitalist hearts leapt at Hugo Chávez’s cancer diagnosis, much as they did after the death of former Argentine president Néstor Kirchner, some perspective is warranted.

For those who have lent Venezuela money, had their assets there seized, or hope to tap its vast mineral wealth, the possible demise of the Bolivarian Revolution seems a good thing. Even by developing country standards, the level of mismanagement under Mr Chávez has been epic since he came to power in 1999. He took over one of the world’s top petroleum exporters at the nadir of the oil market; last year Venezuela had the world’s 11th slowest and most inflationary economy. Food and electricity shortages are endemic. Caracas has the highest murder rate in the world.

Squandered opportunities have been a hallmark of both left and right in Venezuela. What is new is the weakness and politicisation of its few remaining decent institutions – particularly the judiciary and oil monopoly Petroleos de Venezuela. Yet Mr Chávez has gone from being wildly popular to being merely moderately so, particularly with the poor masses. Moreover, even opponents concede that, while his cronies may have enriched themselves in the manner typical of Latin American caudillos, the president himself has been more restrained.

While any successor may be able to curtail some of the financial support for sympathetic regimes, he cannot do much to change redistributive policies within the country itself. A more important consideration than who takes over is the avoidance of a power vacuum. An important barometer of progress would be improved relations with the US. Mr Chávez once called George W. Bush a “devil”. As investors know, however, the devil you know is sometimes better than the one you don’t.