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Pressures may prompt leftist backlash in Venezuela

Wednesday, February 18, 2015

Subject

The outlook for political stability.

Significance

Arrests in an alleged coup plot, deepening tensions with the United States and street skirmishes marked the first anniversary of the February 12, 2014 riots. Nevertheless, there appears to be no recurrence of last year's upheavals, and the government has laid the ground for modest economic adjustments. The announcement of pending changes to the domestic fuel subsidy did not galvanise popular protest while the introduction of a free-floating exchange rate was well received by markets and bondholders.

Impacts

  • The muted response to renewed calls for regime change underscores negligible popular enthusiasm for violent exit solutions.
  • US statements critical of the Maduro government further isolate Washington from regional sentiment.
  • Although angered by recent US pronouncements, the Maduro government will persist with informal diplomatic overtures.
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