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Venezuela’s Petro Saga Set to Continue as Maduro Is Re-Elected in Controversial Election

Last Updated March 4, 2021 5:07 PM
Francisco Memoria
Last Updated March 4, 2021 5:07 PM

Venezuelan president Nicolás Maduro has been re-elected this Sunday, which means he’s staying in power for another six years. The electoral process was embroiled in controversy, as his mains rivals claim it was filled with irregularities. Maduro’s new term presumably means the country’s oil-backed cryptocurrency, the Petro, will keep on growing.

According to Reuters , the 55-year-old won the election with 67.7% of the votes, while his closest challenger, Henri Falcon, had 21.2%. This means 5.8 million people voted in Nicolás Maduro, while only 1.8 million voted in Falcon.

Referring to his overwhelming victory, Maduro claimed his opponents “underestimated” him. The election had a 46.1% turnout, a number the opposition claims is inflated. According to them, the turnout was of about 30%. Falcon, a 56-year-old former state governor, notably stated:

“The process undoubtedly lacks legitimacy and as such we do not recognize it.”

Behind Falcon’s words was a tactic allegedly used by Maduro. The Venezuelan leader is said to have asked poor Venezuelans to scan state-issued “fatherland cards” after voting, in hope of receiving a “prize” from Maduro. These cards are reportedly required to receive benefits such as food boxes and money transfers. According to the opposition, this is akin to vote-buying.

A third presidential candidate, Javier Bertucci, echoed Falcon’s concerns and called for a new election. Meanwhile, Venezuelans are seemingly losing hope, as the country’s fiat currency dropped 99% against the dollar last year, and inflation got to an annual 14,000%.

Raul Sanchez, a Venezuelan resident whose community hasn’t had running water for 26 days, stated:

“I’m not voting – what’s the point if we already know the result? I prefer to come here to get water rather than waste my time.”

oil bitcoin
Maduro’s re-election will continue to keep petro, a cryptocurrency backed by Venezuela’s oil reserves, under the spotlight.

With Maduro in power, Venezuela may face a new round of western sanctions, which dubbed the electoral process an “insult to democracy .” Per various reports, US President Donald Trump’s administration has already threatened to move against Venezuela’s oil industry, which saw the government innovate with the launch of its own cryptocurrency, the Petro.

The cryptocurrency is believed by most to be a way for the country to bypass sanctions and draw in foreign capital. Its pre-sale, according to Maduro, raked in $5 billion, and it has been growing thanks to a little-known Russian bank, partly owned by Maduro.

Controversy Surround the Petro

As covered, Trump banned US citizens and residents from investing in the Petro, a move Venezuela claimed was “free publicity,” that doubled the number of interested investors. Last month, the country claimed the Petro is set to positively affect the country’s economy in three to six months

Reportedly, Venezuela may charge for exports in Petros, presumably to create demand for its cryptocurrency. Maduro has ordered various state-owned companies to accept it, and even offered India a 30% discount on crude oil purchases if paid for in the cryptocurrency.

Those who oppose the oil-backed cryptocurrency claim it’s a way for the government to illegally mortgage the country’s oil reserves, and that its sale won’t do anything to help Venezuela’s economy or its citizens.

Some of the Petro’s opponents include the century-old think tank Brookings Institute, which claimed it undermines legitimate cryptocurrencies, and the country’s own National Assembly, which declared it unconstitutional.

Featured image from Shutterstock.