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Council On Hemispheric Affairs
Monitoring Political, Economic and Diplomatic Issues Affecting the Western Hemisphere
Memorandum to the Press 04.56
Wednesday, 25 August, 2004
Venezuela’s Referendum Resolves Leadership Crisis, but Fails to Reconcile the Country’s Polarized Society
• The overwhelming turnout of Venezuelans on August 15 reaffirms the country’s democratic process, while providing
President Hugo Chávez with a reinvigorated populist mandate for his social spending programs.
• The opposition parties’ claims of fraud have seriously undermined its own credibility and democratic credentials, as
both the National Elections Council and impartial international observers have upheld Chávez’ recall victory.
• An incoherent and self-absorbed policy agenda that had failed to address lower class needs fatally weakened the
opposition’s political platform to justify the recall of Venezuela’s populist president.
• President Chávez’ referendum victory strengthens his welfare strategy that is dependent upon Venezuela’s continued
economic bonanza resulting from a booming oil market.
• Venezuela’s politicized society must overcome deep-rooted social issues, curb its current political infighting and
provide sustainable solutions for the country’s socio-economic problems.
In a reaffirmation of Latin American democracy, the Venezuelan populace turned out en masse on August 15 in a
contentious nation-wide referendum to decide whether to recall President Hugo Chávez from office. From the early hours
of the morning, people lined the streets, awaiting the opportunity to determine the fate of the country’s populist
president whose confrontational leadership style has won him both adoration and hatred within Venezuela’s polarized
society. His victory, however, has been marred by repeated calls of electoral fraud from the middle-class opposition
that sees the leftist president as an autocrat bent on molding Venezuela into a Cuban-style communist state. While
certain irregularities have been noted, both the Organization of American States (OAS) and the Carter Center have
categorically endorsed Chávez’ victory, calling upon all Venezuelans “to accept the results and work together for the
future.” By failing to accept the ruling of both the National Elections Council and international observers, Chávez’
critics have shown themselves to be a disloyal political opposition as they continue to flout Venezuela’s democratic
institutions and undermine the nation’s domestic stability. These desperate antics will considerably damage the
opposition’s prestige and standing for the foreseeable future.
After his decisive referendum victory reaffirmed his populist mandate, President Chávez must now seek to address
deep-seated concerns over his autocratic governing style, while further expanding the increasingly popular social
spending programs. In the coming months, both sides of the country’s political spectrum will be challenged to promote an
environment of cooperation and improve the welfare of the Venezuelan populace. This policy will involve the country’s
oil revenue being spent on, among other things, the diversification of the economy for the first time in the nation’s
history. Chávez has already announced that this will be his intention, while the opposition has remained
uncharacteristically silent on the subject.
The Opposition’s Defiance of Democracy
By vehemently disputing Chávez’ August 15 victory, Venezuela’s political opposition has once again refused to voice its
discontent with government policy through legal means. Such anti-social practices originated even before the
unsuccessful April 2002 opposition-led coup that dissolved the country’s congress and resulted in the deaths of
activists from both sides of the political spectrum. Despite $4 million of covert Washington aid, the opposition could
not sustain its anti-Chávez movement because its traditionally pro-business policies had catered to elite interests and
ignored the needs of the country’s impoverished majority. Due to these policies, Chávez was returned to office after
Venezuela’s lower class took to the streets brandishing machetes and calling for the reinstatement of their populist
leader.
The 2004 referendum reaffirmed this support as 58% of Venezuelan voters chose to retain President Chávez after a
bruising election campaign. This victory, however, has incited claims of electoral fraud by the opposition, an
unsubstantiated charge that has elicited international ridicule as it has not been credibly proven. “We categorically
and absolutely reject these results,” said Henry Ramos Allup, leader of the Democratic Coordinator coalition of
opposition parties. “The National Elections Council has committed a gigantic fraud.” Such claims are based upon the
results of an opposition endorsed exit poll which contends that Chávez was recalled by a 60% majority. This allegation
is contradicted by both the OAS and the Carter Center and is further undermined by the role of the civic organization
Súmate in the exit polling. This partisan group helped organize the August 15 referendum and has obtained funding from
the National Endowment for Democracy, a Washington-based organization that supports right-wing programs throughout Latin
America and receives substantial public funds from the U.S. Congress.
Washington and the Opposition
The link between opposition parties and Washington should not come as a surprise. Since Chávez took office in 1999, the
White House has consistently attempted to undermine the populist leader by claiming that his social spending programs
have increased economic and political instability within Venezuela. Even after Chávez’ August 15 landslide victory, the
State Department was slow to endorse his improved electoral mandate and has repeatedly called for Caracas to answer the
opposition’s claims of widespread electoral fraud. In an August 17 statement, Deputy State Department spokesman Adam
Ereli explained, “there are issues related to [voting] irregularities… We call on the National Electoral Council to
allow a transparent audit.” While Washington has supported a review of the voting procedures, the increasingly desperate
opposition has rejected the electoral inspection because “the results of this audit cannot be considered valid to
satisfy the opposition’s demands.” Even after such an audit was staged, and the results confirmed, the opposition has
continued to categorically deny its electoral defeat.
Failure to Create a Viable Political Platform
This blatant denial of President Chávez’ universally acknowledged electoral victory is another alarming sign that the
opposition will use any means necessary to acquire political power and oust the populist president. After the
unsuccessful 2002 coup and the subsequent costly opposition-led national strikes designed to undermine Venezuela’s
economic base, Chávez’ critics failed through the referendum to democratically recall the populist president. This
electoral defeat stems in large part from the opposition’s class-biased policies that have not addressed the nation’s
historic welfare deficiencies. Unlike Chávez’ popular social “missions,” which include adult literacy programs,
subsidized food campaigns and low cost housing initiatives, the opposition continues to stress a return to the free
trade policies of the pre-Chávez era. Also, the opposition has had no answer to the 11,000 health workers sent by Cuba
to provide free medical services to impoverished districts. The appreciation resulting from this effort may have been
the single most important factor that guaranteed Chávez’ recall victory. The opposition’s unwavering support of the Free
Trade Area of the Americas also precluded it from galvanizing sufficient support among the lower class, which was
traditionally neglected by both the Acción Democrática and the Christian Democratic political parties which had
dominated the corrupt fourth Venezuelan Republic.
After losing the referendum, the Venezuelan opposition must recognize that its defeat was not caused by electoral
tampering, but by its own failures to produce a viable alternative political platform. Its consistent attempts to oust
the democratically-elected president have failed because Venezuela’s poor do not believe that the opposition will better
address their socio-economic needs. Until Chávez’ critics realize these policy deficiencies, Venezuela’s majority will
continue to support the country’s leader.
Chávez’ New Political Mandate
While the opposition was weakened by the August 15 referendum, President Chávez’ position has been strengthened through
the electoral process that saw an unprecedented number of Venezuelans participate in the nation-wide plebiscite. Such
backing could not have come at a better time for the populist politician who has been beset by persistent criticisms of
his leadership style since assuming office in 1999. Chávez has garnered loyal support from the nation’s lower class
through his attempts to redress the socio-economic gap that has left Venezuelan society increasingly polarized. His
populist “revolution,” however, has been criticized by those who see his redistributive policies and anti-imperialist
rhetoric as the first step towards a communist state. While Chávez’ reforms have raised eyebrows both in Venezuela and
abroad, the president’s leftist programs should be considered more as nationalist initiatives than reflections of now
obsolete communist doctrines. Chávez is seen as a beacon of hope by Venezuela’s destitute citizenry who see him as the
first politician to truly address their social needs. Vice-President Vicente Rangel recently stated that the government
“will be more audacious, more effective [in designing] programs destined to benefit the country’s poor majority.”
The Venezuelan president, however, must also continue to address concerns over his autocratic leadership style. The
Chávez-controlled congress, for example, has padded the Supreme Court with an additional 12 loyalist judges to protect
the government from dissenting voices. Although the August 15 vote has fortified Chávez’ populist position, this mandate
should not be used to weaken Venezuela’s civil society. Recent attempts to punish opposition media outlets can only
undermine Caracas’ credibility and strengthen Washington’s surly attitude toward Chávez. Opposition accusations that the
populist leader is an autocratic demagogue, however, appear to be mere adversarial rhetoric, as the August 15 referendum
illustrated that the Chávez administration was willing to participate wholeheartedly in the democratic process.
Social Programs Key to Chávez Victory
Although Chávez enjoys widespread electoral support for his social spending policies, his critics assert that these
projects have been a self-interested attempt to placate his lower class constituency which previously had become
disenchanted by the president’s failure to implement his populist campaign pledges. Such welfare programs, however, were
economically unsustainable until Venezuela was able to cash in on inflated global oil prices. As the world’s fifth
largest oil exporter, Venezuela has benefited from a financial windfall which has allowed Caracas to finally implement
almost $2 billion in social spending. Fears exist, however, that the government’s current ability to absorb the costs of
these welfare programs will prove to be temporary, enduring only as long as the current oil boom, which itself is open
to daily fluctuations. Shortly after the referendum’s result was announced, oil prices fell from their record high as
international stock exchanges reacted favorably to Chávez’ victory because the populist leader is perceived as a
stabilizing force in the socially divided, but economically significant, South American country.
To maintain his welfare agenda, Chávez must consolidate Venezuela’s economic position by attracting international
investment and strengthening domestic growth. Recent contracts with ChevronTexaco and ExxonMobil have illustrated to the
global community that Caracas is committed to improving its relationship with foreign businesses. The Venezuelan
government must continue to foster such connections if it is to overcome criticisms concerning Chávez’ redistributive
policies.
The Road Ahead
The August 15 referendum has provided Venezuela with an opportunity to transcend its polarized past and reconcile its
historically divided political factions. Through its noteworthy participation in the democratic process, the majority of
Venezuela’s populace has sent a message to both President Chávez and the opposition that political infighting must be
put aside to improve the welfare of all Venezuelans. Unfortunately, post-referendum politicking already appears to be
undermining any attempt to resolve the differences among the nation’s divided population. The opposition’s unwillingness
to accept the internationally endorsed referendum result will not only hinder its own political future, but will also
endanger Venezuela’s socio-economic development as investors become wary of the country’s continued instability. In
turn, President Chávez’ controversial policies have incorporated both much-needed social spending and overtly autocratic
leadership practices into an overall strategy that has further split the nation. The answer to Venezuela’s long-standing
problems will not be found through protracted political struggles, but instead through a concerted attempt to reconcile
the country’s polarized society.
This analysis was prepared by Mark Scott, COHA Research Associate
August 25, 2004
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