'Officer coups are often unsuccessful and bloody': Wall Street weighs in on a military coup taking out Venezuela's Maduro

  • Venezuelan President Nicolas Maduro secured another term last weekend in what was widely seen as a fraudulent election.
  • One research firm thinks Maduro could be overthrown by the military before the end of 2018.
  • But some think the military lacks the leverage, credibility and motivation.

Hours before Venezuelan leader Nicolas Maduro declared another six years as president on Sunday, military commanders took to state television to defend the legitimacy of an election widely seen as fraudulent.

“The entire electoral process, the whole Operation Republic has been developing in complete normality, without any disturbance that would prevent the electorate from exercising their right to freedom of suffrage,” Venezuelan Defence Minister Vladimir Padrino said.

Meanwhile, government officials dangled food benefits in front of the handful of starved Venezuelans with enough energy to make it to the polls. Socialist activists awaited voters, who had been promised a “big prize” for casting a ballot, ready to scan state-issued cards that track food benefits in the country.

Few were surprised by behaviour of top defence officials amid election irregularities. The military has long been seen as the very force propping up the presidency of Maduro, who led the unorthodox economic policies that drove Venezuela into the ground and continues to refuse direct international aid for the collapsing country.

“Maduro is there because he’s militarised the government,” Helima Croft, a former CIA analyst who is now head of global commodity research at RBC, told Business Insider. “He has essentially made the military his copilot.”

Members of the National Bolivarian Armed Forces of Venezuela hold top cabinet positions and run state energy operations. And in turn for these positions, which come with access to food and supplies that have all but vanished from the crisis-ridden country, members pledge political allegiance to Maduro.

But as the crisis spirals, some think loyalty among military members could wane. While still noting a “high degree of uncertainty” around Venezuelan politics, analysts from Fitch’s BMI Research predict the United Socialist Party of Venezuela will be “removed from power by a military coup before the end of 2018.”

“We believe that the country’s economic collapse will eventually leave the government completely unable to pay its bills, causing the patronage structures that have ensured the loyalty of the military to this point to fail,” they wrote in a note to clients.

The theory isn’t new within the international community. Sen. Marco Rubio, a harsh critic of Maduro, wrote an op-ed in the Miami Herald earlier this year that seemed to be encouraging a military coup. (Rubio was notably the subject of a possible assassination plot crafted by socialist party boss Diosdado Cabello last year.)

“The most stable and peaceful path forward for Venezuela is for a united front of disaffected government insiders and military personnel, with popular support from the Venezuelan people, to remove Maduro and his inner circle from power,” he wrote.

And in neighbouring Colombia, a top place of refuge for those fleeing the Maduro regime, President Juan Manuel Santos earlier this month said he predicted there would be a “regime change” in Venezuela, without elaborating on how that might take place.

But civilians who have watched the reach of the Maduro regime unfurl firsthand aren’t convinced a coup is possible.

“Our institutions are so destoyed – the armed forces and PDVSA, where negative mentality is most profoundly entrenched – that it’s hard to see someone coming from there that has the moral, intellectual and technical capacity to come up with and drive the significant change we need,” a Caracas-based doctor, who requested anonymity for security reasons, told Business Insider.

Days after the election, 15 military officials were arrested for “political reasons,” according to local rights group Penal Forum. And that was just the latest in a string of incidences that seem to signal military dissent. Internal military documents recently obtained by Reuters show the number of soldiers detained for “treason, rebellion and desertion” more than tripled to 172 in the first four months of 2018.

Croft said it’s clear that discontent is rising in the ranks of the Venezuelan military, but remains sceptical a successful coup could take place since most perceived discontent seems to be among junior officers.

“The senior officers will want to preserve the system of spoils they have in place,” Croft said. “So, the question is, could you have another branch of the military effectively take control? Officer coups are often unsuccessful and bloody.”

Alejandro Velasco – a Venezuelan historian at New York University and author of Barrio Rising: Urban Popular Politics and the Making of Modern Venezuela – noted the military lacks credibility abroad as a transitional or democratic agent.

He said the calls for a military coup come from a small portion of the international community who understand democracy in “a very narrow way.”

“They see democracy as a policy and not a process,” Velasco said.

Even if the military were able to overthrow Maduro, it’s unclear what that would mean for the crumbling country. A university study last year found that about 90% of civilians were living in poverty and most lost an average of 25 pounds in body weight. And things have only gotten worse since then as sanctions pile on and as operations at state-run oil company PDVSA, formerly lifeblood of the country, fall apart.

“It has the human development indicators of a country that’s actually suffered a war,” Croft said. “Someone is going to have to come in and save Venezuela. It’s not enough for Maduro to be gone.”

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.