Published by Minyanville

Venezuelan President Hugo Chávez will today fly to Cuba for another round of cancer treatment early next week to treat a lesion found on his pelvis, the same site as last year’s “baseball-sized” tumor.


For the first time in his 13-year presidency, Chávez has admitted his own mortality and has said that the Bolivarian Revolution he has steered Venezuela through can continue without his leadership.


“I’m not going to be able to continue with the same rhythm,” said the indefatigable socialist. “I’m a human being. I’m not immortal… Independent of my personal destiny, this revolution already has its own momentum and will not be stopped by anybody or anything.”


The rhetoric is a far cry from Chávez’s traditionally belligerent and boisterous tone. The timing could not be worse for the president. The news comes less than two weeks after the opposition picked their candidate to stand against Chávez in October’s presidential election. More than 3 million people came out to overwhelmingly vote for Henrique Capriles Radonski.


Capriles’ task—though he would never admit it, preferring to steer clear of the topic—appears now much simpler, especially as the charismatic 39-year-old has ensured never to directly confront the president, allowing him now to soak up those who support Chávez but are unsure whether to vote for a man who may not survive another term in power.


“While a healthy President Chávez is still the favorite to win next October’s elections, a not-fully-recovered candidate might turn away undecided voters who fear for a physically unfit leader staying in office,” wrote Boris Segura of Nomura in New York in a note to investors. “Also, a less-than-fit President Chávez would be unable to run his now legendary 24-7 campaigns, where he has excelled in the past.”


Bonds rallied on the news, as investors look forward to a more market-friendly government in Venezuela. Yields relative to US Treasuries dropped to their lowest in 21 months, falling 30 basis points on Wednesday.


“The recent news refocused the idea that [Chávez] might not be around and the market’s conventional wisdom is that a Venezuela post-Chávez could be a much better credit,” Alfredo Viegas, managing director of emerging markets at Knight Capital in Greenwich, Connecticut, told Bloomberg.


Evidence that the news has excited investors was demonstrated in Barclays Capital’s report issued to investors last night entitled: “The beginning of the end.”


“We maintain our view that if Chávez is out of the race, the chance for the opposition to win the election increases considerably,” wrote Alejandro Arreaza, Alejandro Grisanti, and Donato Guarino in the bank’s note. “The increased possibility of a democratic transition should be supportive for Venezuelan assets and, even if uncertainty could create some volatility, we would expect the transition effect to prevail.”


Chávez has styled himself over the two decades he has spent in Venezuela’s public eye as the man of the revolution. He is the face of the government rather than the leader of his party, and while this has undoubtedly done him public relations favors during his presidency, it is clear that there is now no Plan B to fall back on.


“Chavismo without Chavez would be a substantially diminished force,” said Michael Shifter, President of the Inter-American Dialogue think tank. “Much of his support derives from an emotional connection with Venezuelans that no other political figure can match.”


Successors from his own socialist government are scarce. Analysts are suggesting Diosdado Cabello, recently chosen as the president of Venezuela’s National Assembly. Vice-President Elias Juaua is also in the running as is Chávez’s brother Adán, who Hugo once jokingly described as the “Marxist in the family.”


None of these has the charisma and personality to take the mantle. Rather, all eyes are even more firmly fixed on Capriles. “I wish my rival a successful operation, a prompt recovery and a long life,” Capriles said.


The electoral calendar may even be disturbed. “[The news could postpone] the presidential election… particularly considering that it has not been formally called by the National Electoral Council (CNE),” wrote Arreaza and Grisanti in another note to investors.


The election campaign has taken a fascinating turn and investors and analysts will be watching Venezuela closely over the next few months, their ears already pricked up by Chávez’s uncharacteristically blunt admissions.