Venezuela's sudden policy change may stem from waning support for Maduro, sources say

By Mayela Armas and Vivian Sequera

CARACAS (Reuters) - Venezuela's recent abrupt reversal in its nascent rapprochement with the United States and domestic opponents is likely a response to declining support among its traditional base, according to sources close to the ruling party, voters and analysts.

After months of thawing U.S. relations, the administration of President Nicolas Maduro has done a sharp about-face in recent weeks. It shuttered the United Nations' human rights office, the attorney general ordered the arrest of an activist, and the Supreme Court upheld a public office ban levied on the leading opposition candidate in this year's election.

The change may be borne of falling support for Maduro's government, two sources close to the ruling party and several analysts said.

A survey conducted by local independent pollster Delphos in December showed just 25% of people support the ruling United Socialist Party of Venezuela (PSUV), down from 30% a year ago.

Maduro is betting intimidation of activists and political opponents will allow him to repeat the outcome of the 2018 presidential elections, which major opposition parties boycotted, the two sources told Reuters.

"If there are elections, he'll lose," said one of the sources close to the ruling party, referring to a free and fair vote.

The communications ministry did not respond to a request for comment.

Last year, Maduro inked a major prisoner swap deal with the U.S. and agreed to hold free elections in 2024, prompting Washington to relax restrictions on Venezuelan oil, mining and bonds.

But the U.S. has reimposed some curbs and said oil sanctions roll-backs will expire in April unless the opposition candidate, Maria Corina Machado, is allowed to compete.

So far, the government has ruled out Machado's participation, citing the court decision.

"The negotiations bore fruit with the lifting, for a time, of the sanctions," said analyst Ricardo Rios of Caracas consulting firm Poder y Estrategia, citing his own investigations into Maduro's party. "But internal tensions inside the ruling party, because some are closer to Russia and some to the United States, mean bridges are being blown up."

Some in Maduro's orbit prefer a more "pragmatic" relationship with the U.S., he said.

The drop in Maduro's popularity, especially among his working-class base, may have boosted the hand of others, like powerful PSUV vice-president Diosdado Cabello, who favor sticking with traditional allies such as Russia and Iran, said Rios.

The communications ministry did not respond to a request for comment on whether the party is divided in this way. Reports of such divisions have long been denied by high-ranking government officials.

The Atlantic Council's Geoff Ramsey said the harder left side of the party that sees itself as the successor to Maduro's predecessor, late President Hugo Chavez, was reasserting itself.

"We're seeing a reaction from the hard-line of Chavismo, which feels like it's survived the worst and can survive the reimposition of sanctions if that means not risking losing power in semi-competitive elections," he said.

DEMANDING RAISES

Signs of frustration among Maduro's core working-class support base have increased as Venezuela's long-running economic crisis has left many short of food, electricity and water. Millions have already fled.

There were 4,000 demonstrations last year, largely by public health and education workers demanding raises, up 28% from 2022, according to the local Social Conflict Observatory.

"My family was hopeful for the negotiations (with the opposition)," said 40-year-old teacher Maria Uzcategui in the western city of Maracaibo, adding she still hoped Machado will be able to run.

"The government is playing the fear card," she said.

"The situation is worse every day," said Carlos Cristancho, a driver in the border city of San Cristobal. "What we need is a change in government."

The government has not increased salaries for some two million public employees since 2022, part of efforts to battle inflation. Instead, it has given out bonuses.

Public sector workers earn an average of $40 a month, just a fifth of salaries in the private sector, according to data from the Venezuelan Finance Observatory.

Though the sanctions relaxation briefly increased government income, oil infrastructure has crumbled since Venezuela's boom years and production has fallen roughly 70% since the early 2000s.

One community leader appearing on a recent state broadcast used the opportunity to ask for more reliable gas supplies, an unusual show of public discontent.

Maduro and his government have long blamed U.S. sanctions for Venezuela's fiscal woes, calling the measures an "economic war".

It has promised election-year social spending, including improvements to women's healthcare. But that appears to have done little so far to boost Maduro's popularity.

The government "does not have proposals that inspire the working-class. It lacks an oil bonanza to mobilize people through patronage," said Enderson Sequera, director of Venezuelan consulting firm Espolitiks.

"What does it have left? Repression."

(Reporting by Mayela Armas and Vivian Sequera, additional reporting by Mariela Nava in Maracaibo and Anggy Polanco in San Cristobal; Writing by Julia Symmes Cobb,; Editing by Christian Plumb and Rosalba O'Brien)