Barclays Capital, Analysis
After lengthy discussions over the past four months, the opposition parties have decided to hold a primary election to chose the candidate who will face President Chavez on February 12, 2012. The decision shows the commitment of the opposition to go into the election unified; however, in our opinion, the delay of the primary until next year represents a victory of the restorers over the renewers.
While President Chavez is receiving the benefit of an oil price increase that will allow him to boost expenditures and has already put in place his reelection campaign machine for 2012, the opposition has faced a generational battle among the new and young leaders (renewers) and the principal representatives of the traditional parties (restorers).
The renewers are, on average, 40 years old, with higher approval ratings and bigger vote intentions, but they do not control the oposicion's decision process. They represent the future, the faces of change, and likely have a better probability of winning against President Chavez. The restorers are, on average, 60 years old, and held important political positions prior to the Chavez presidency (the Fourth Republic). It would likely be much harder for them to win the 2012 presidential election, as Venezuelans basically voted for "change" when President Chavez was elected for the first time in 1998, and one of the principal slogans of the government over the past 13 years has been "they will not come back."
The discussion about the date and rules of the primary election was a clear example of the generational divide between the traditional parties and the emerging leadership. The former wanted to delay the election until 2012, while the latter wanted to hold it in the fourth quarter of 2011. The arguments for postponement were logistical and meant to prevent exposing the candidate for an excessive amount of time. Those in the other camp thought the candidate should have enough time to campaign around the country and convince the electorate of an alternative to Chavez. Although, according to Datanalisis, public opinion favored holding the primary this year, with 73% of opposition supporters, the restorers won the battle, selecting February 12, 2012, as the date for the primary. Following the announcement, both groups have supported the new date, showing the commitment of the opposition to go into the presidential election with a unified front.
In our view, the decision allows Chavez to dominate the political discussion without a clear opponent until a few months before the presidential election, which is supposed to be held at the end of 2012, although the date has not yet been confirmed. This favors Chavez's reelection objectives in a scenario in which, according to the polls (Datanalisis and Consultores 21), he has already recovered 5-7pp of his popularity since the September legislative elections, which the opposition won with a slight margin of 52% to 48%.
In previous publications, we have commented about a greater possibility of a democratic transition in Venezuela than the market has been assigning. Nonetheless, the chances of the opposition will depend on the candidate it chooses. Polls suggest that if it chooses someone who represents a renovation of leadership and promotes a message of change and hope, its chances are greater than if it chooses a candidate who represents the restoration of the old political system. So far, even if public opinion favors the renewers, the postponement of the primary election represents a victory for the restorers  The possible presidential candidates from this group are Henrique Capriles Radonsky, Governor of Miranda; Leopoldo Lopez; Henry Falcon, Governor of Lara; and Maria Corina Machado.
 The possible presidential candidates from this group are Antonio Ledezma, Mayor of Caracas; Manuel Rosales; Henry Ramos Allup; Henrique Salas Romer; Cesar Perez Vivas, Governor of Tachira; Eduardo Fernandez; and Osvaldo Alvarez Paz.
 There are two leaders that cannot be defined as renewers and/or restorers: Pablo Perez, Governor of Zulia, and Henrique Salas Feo Governor of Carabobo. They are young leaders, but with strong ties to the restorers.