This short but insightful article from the Financial Times covers another electoral process that Americans should be watching with great interest this year: the effort by the opposition parties in Venezuela to recall President Hugo Chavez. Venezuela is the US's second largest foreign oil supplier--ignoring our NAFTA partners--and only a little over a year ago provided a vivid reminder of the impact of political instability on oil markets. A similar crisis today would send oil prices to the stratosphere.
Last week, it appeared that the efforts of the opposition to hold a national referendum on President Chavez had failed. The FT points out the hazards facing the opposition if they abandon their goal of a democratic solution to the current problem. President Chavez is popular with the poorer segments of the country and has a firm grip on the military.
Of equal concern is how he might react to any pressure the US might seek to apply, if the electoral process were derailed. Chavez is famous for his volatility and anti-American rhetoric, even as he relies on US and other international oil firms to grow his country's sagging oil production. Those companies will need to manage this relationship with particular care and sensitivity, while prudently managing their risks.