Chávez Must Look Homeward To Nurse His Ailing Revolution and Reinforce His Constituency
- Economic hard times eroding his constituency
- Venezuelan leader would do well to more carefully choose his shots
In 1998, Venezuelans broke with political tradition by electing a well-known and controversial populist colonel named
Hugo Chávez Frias as president. They ignored precedent because the long-established, IMF-inspired, neoliberal
prescriptions were hurting the nation and no longer credible. In the eleven years since his rise to prominence, Chávez
has changed the fabric of Venezuelan society through his self-denominated Revolución Bolivariana. Long-sought changes aimed at different sectors of Venezuelan society, such as the political system and the economy,
have come at a heavy price: crime and violence are rampant, inflation is soaring, and Chávez’s often picante rhetoric
has become an international punch line. While it is undeniable that he has brought about vast social change in his
country and region, his explosive administrative style and the alarming divisive state of the country call into question
his ability to manage his socialist revolution.
Venezuelan Leader Begets Problems
For many of the twenty-eight million Venezuelans, equality in the nation’s social, economic, and political forums is a
top priority. This basic principle is the essence of la Revolución, which provided the provenance for the promises that carried Chávez into office on a wave of popularity. Despite the
winds of change, Venezuela has shown considerable vulnerability in the current global recession, with an ailing economy,
hunger, and huge inflation rates. Furthermore, the deteriorating safety net that has protected many of his core
constituency—those who have been lifted from poverty by his social programs—has begun to exhibit signs of serious
slippage. To top it all off, there has also been a growing dissatisfaction throughout his national constituency. It is
up to Venezuelans to decide whether Chávez is honoring his own pledge to sustainably implement his promises, rather than
mishandle a golden opportunity. Chávez’s policies, both his achievements and his failures, must be examined in order to
analyze whether the principles set forth by la Revolución have been strategically advanced. Ultimately, the verdict will rest in the hands of average Venezuelans who will judge
the effectiveness of Chávez’s approach based on their long-standing aspirations for a more just society.
Venezuela before Chávez
Before Hugo Chávez was elected in 1998, Venezuela was a vastly different country than it is today. While it was still
one of the wealthiest nations in Latin America, the elite political and economic establishments systematically
mistreated and marginalized the larger segment of Venezuelan society: the poor. For four decades, only two parties
ruled—Acción Democratica (AD) and Partido Social Cristiano de Venezuela (COPEI). Both of these traditional parties were effectively blind to the masses while they faultlessly catered to the
political and economic elite. This system was a foundation for the growth of severe economic stratification prevalent
throughout the region. The poor were largely invisible to the rich, with little or no access to the country’s natural
resources and foundations of power. Millions of Venezuelans struggled to survive and lacked the political voice to
affect their circumstances. These conditions were rooted in a deeply entrenched system of neo-liberal economic
fundamentals and a corrupt bureaucracy led by a series of tough-minded presidents who were democrats only in name.
By the 1970s, when President Carlos Andrés Peréz first came to power, the Venezuelan government had an unalterable
profile of being pro-business and pro-United States. However, the debt crisis of the 1970s-80s plagued Venezuela, along
with the rest of Latin America, eventually leading to an IMF-architected free-market restructuring in 1989, which was
championed by Peréz. This directly contradicted Peréz’s “no IMF” campaign promise and stirred waves of civil unrest. The
intensification of neoliberal adjustments consisted of privatization and the elimination of oil subsidies that had been
used for social programs and domestic staples. The elimination of these subsidies sorely tested Venezuelans, and in
reaction to Peréz’s implementation of the IMF policies, people took to the streets in protest beginning on February
25th, 1989. The result was a tremendous violence that ultimately became known as el Caracazo, which took the lives of anywhere up to three thousand Venezuelans.
After the violence subsided, an air of anger swept over the nation. Venezuelans were tired of ineffective U.S.-inspired
free-market policies and a corrupt political system that underrepresented them. The resulting undercurrent boiled over
again in 1992 when two separate coup d’etats were attempted, the more famous led by Hugo Chávez, who was later pardoned
by President Rafael Caldera. In 1998, Chávez rode that very same wave of frustration and anger all the way into office,
providing a fresh face, new voice, and promises to break the suffocating status quo. He swore to transform the
government’s focus from catering to the elite to responding to the poor, leaving the neo-liberal system behind in favor
of a socialist one. Eleven years later, the socialist Venezuela of today still remains a divided country embroiled in
turmoil and engulfed by violence.
Chávez: Social Policies and Impacts
In his decade-long tenure, Chávez unquestionably has endeavored to improve conditions for the average Venezuelan. Of his
many achievements, perhaps the most obvious is the hope and excitement he has brought to the country’s poor. Before his
presidency, millions of Venezuelans had felt deserted, neglected, and marginalized by their government to the point
where they could not envision change. Chávez reintroduced them to a hope that had previously been squelched. These
promises of hope and equality for the poor took shape through his social misiones.
Barrio Adentro is one of Chávez’s original misiones that officially began in 2003. Its goal was to provide a national single payer system of health care comprised of free
health clinics in poor Venezuelan barrios. The first clinics, which covered basic health care, dental care, and sports training, were so successful that the
government created Barrio Adentro II. This second phase introduced more advanced and comprehensive diagnostic and rehabilitation centers. Individual bodies
such as the World Health Organization (WHO) and the United Nations Children’s Fund (UNICEF) have praised these programs
for their numerous successes, such as the drop in female infant mortality rates from 1.9% to 1.7%. Approximately 30,000
individuals, including thousands of Cuban doctors, staff the Barrio Adentro network of clinics. The program’s success can also be attributed to the job opportunities it has provided for the poor
as staffers in the clinics.
Building on the success of the Barrio Adentros, Chávez implemented similarly structured missions covering such fields as nutrition (Misión Alimentacion), literacy (Misión Robinson), and eye diseases (Misión Milagro), among others. He’s also allocated US$57 million for future independent community improvement projects. Chávez has
even extended his vision of equality and support to the indigenous community through Misión Guaicaipuro, specifically working to protect indigenous peoples from land expropriation, human rights abuses, and resource
exploitation. There is still a long way to go, but under Chávez, these groups have experienced a higher degree of
attention, protection, and integration than many had thought possible.
The misiones also have served to significantly reduce the degree of extreme poverty in the country. According to a study in the
academic journal Social Medicine, between 1998 and 2007, extreme poverty drastically decreased from 20.6% to 9.41%. Overall poverty also declined during
this period, from 42% of households living in poverty in 1999, to 37.8% in 2005. The extensive network of social
programs and the lowered poverty levels are impressive examples of Chávez’s conversion of revolutionary campaign
promises into tangible social results.
Although Chávez continues to implement positive social programs, he is also seemingly attempting to cement his position,
prompting accusations of constitutional and civil rights violations. Whether or not Chávez is purposely attempting to
create division, his approaches have left many feeling alienated, vulnerable, and disenfranchised, the media being a
prime example. Much of the international community has become concerned over free speech violations as Chávez’s
adversary treatment of the media in Venezuela has become widely documented, although his critics tend to downplay the
media’s often unprofessional assaults against Chávez. While the hostilities are largely mutual, to Chávez critics, the
government has a responsibility to remain unbiased in its law enforcement. On the other hand, Chávistas see this argument as lacking substance because of the opposition’s own virulent tactics.
Chávez’s confrontation with the media partly stems from a 2005 law that prohibits the writing and airing of material
that is “deemed a danger to national security,” a violation punishable by jail time. There has been intense speculation
that by lawfully establishing a vaguely worded prejudicial atmosphere, Chávez could implicitly intimidate the press by
enforcing self-censorship, all the while avoiding accusations of doing so. In 2007, the conversation turned from
speculation to accusation when Venezuelan authorities refused to renew Radio Caracas Television Internacional’s (RCTV) license. For many, this was blatant censorship given the fact that RCTV has been Chávez’s most formidable critic
since 1998. Chávez advocates came forth with a powerful charge of their own, accusing the network of being actively
engaged in the 2002 coup and other unprofessional actions, thus completely warranting its shutdown.
Outright hostilities grew when approximately 200 radio stations across the country were shut down in August of 2009,
most of which were very small, local opposition stations. Here, government officials responded by warding off charges of
censorship through an insistence that these stations were being closed because of license requirement violations, and
not their political convictions. Chávez’s critics maintain that rather than talk, he is attempting to aggressively
silence them and that his failure to negotiate a compromise has brought justified criticism upon his administration.
Regional specialists also found that, like many of his other controversial policy moves, Chávez took a divisive
approach, which has resulted in a propaganda war. This on-going confrontation alone runs the risk of escalating into an
irresolvable conflict, which many fear could lead to civil war.
On a different front, Chávez is currently attempting to pass a law that would subject labor union elections to state
scrutiny, which would be a clear violation of constitutional self-determination provisions. However, government
officials make a good case that the notoriety of union leaders and their alleged penchant for corruption warrant the
close government oversight of the current legislation. There also have been reports of pro-Chávez officials arbitrarily
charging labor protesters with subversion because of protests in close proximity to designated security zones, i.e. the
factories where they work. Chávez’s opponents insist that in trying to undermine the main unions, he has antagonized one
of the most powerful allies of leftist governments, a mistake that could come back to haunt him. On the other hand,
Chávistas cite the unions’ involvement in the 2002 failed coup as justification for the president’s wariness.
With his administration already embroiled in warfare along any number of sectors, Chávez’s choice to continue performing
a constitutional tight rope act seems unwise. On February 15, 2009, President Chávez oversaw the passage of a
constitutional amendment that eliminated term limits, allowing him and other elected officials, to run for re-election
indefinitely. Despite international opposition, the referendum was carried out legally, but with troubling implications.
Chávez pursued a change in one fundamental aspect of democracy—legally-mandated self-succession, making long-term abuses
of power more possible. In addition, by eliminating presidential term limits, Chávez has made the revolution almost
entirely synonymous with himself. This is a risky move because once Chávez is replaced, the revolution may have no
chance of surviving without the guidance of its iconic leader.
With no term limits and with a discretionary eighteen-month period of rule by decree, accusations of a virtual Chávez
dictatorship are not surprising. It seems that President Chávez, instead of subscribing to a philosophy that unifies his
country by bringing differing elements of the population together, has chosen a different path. He continues to pursue
ex parte measures to accomplish his goals, such as twice attempting to pursue elimination of term limits instead of
finding more conciliatory means to maintain his influence after his initial referendum was rejected by the electorate.
The results of such choices are obvious when looking at the violence, deep political polarization, and biting rhetoric,
which has threatened the long-term viability of the revolution.
A Faltering Economic Transformation?
Some of President Chávez’s most progressive feats have been in the economic arena. Here, he has experienced two
particular triumphs: restructuring the banking system and protecting Venezuela’s main sources of wealth. Chávez enforced
stepped-up measures of banking regulatory provisions in order to prevent institutional misconduct. By implementing
comprehensive regulations, Chávez has ensured the curbing of future banking abuses, saving Venezuela from a possible
Wall Street-like debacle that could profoundly damage the national economy.
Secondly, while certainly controversial, Chávez’s nationalization campaign of large private industries has translated
into a number of real benefits for the country. Instead of Venezuelan resources being exploited by profiteering foreign
corporations, Chávez has made sure that the nation is the primary beneficiary of its national resources. The profits
from oil and other minerals’ extraction and refinement, as well as the resources themselves, are now in the hands of
their real owners—the Venezuelan people. This gives the government enhanced revenue for a greater number of social
programs, as well as the raw materials needed to sustain its industrial sector. With the extra funds coming from the
growing state-owned sector, Chávez’s social programs have helped Venezuela better weather the recent economic
tribulations than other nations. For instance, according to the IMF, Venezuela’s predicted 2009 GDP growth is -1.9%,
while countries like the Czech Republic and Germany are suffering through -4.3% and -5.2% contractions, respectively.
While Venezuela is certainly not immune to outside trade and investment permutations, especially due to its dependency
on oil revenues, the government’s social programs have been able to mitigate some of the immediate negative consequences
impacting average Venezuelans.
It is certainly important to acknowledge the government’s aforementioned accomplishments, it is also important to
address the massive setbacks that have developed under the Chávez administration. While a number of Venezuela’s current
economic quandaries are in reality out of his control, many either have been poorly handled by the Venezuelan leader.
One example that combines both outside circumstances and Chávez’s personal missteps can be found in specific corners of
the Venezuelan economy. Despite nationalizing profitable industries, the economy is ailing due to high rates of
inflation, an over-reliance on falling oil revenues, and a shortage of foreign direct investment. Inflation rates are
astronomical, reaching 30% in recent months. Even though the rates of poverty have improved in recent years, that
improvement is now unraveling.
Presently, inflation is so high that the average member of the lower class cannot afford basic amenities on their real
wage salaries, and as a result, are sliding back into poverty. Inflation has not only affected the lifestyles of
individuals: even discount food stores have suffered greatly. Many of these stores are closing down around the country
because people cannot afford basic food items, even with the forty to fifty percent price cuts called for by the
government. Although poverty rates have been steadily falling for a decade, today, around 40% of the population still
can be found below the poverty line, a number that is inching upwards.
Chávez could have taken measures to ensure the structural integrity and sustainability of la Revolución Bolivariana. Instead, he at times miscalculated and now leads a country that still relies on oil for 90% of its export revenue and
50% of its federal budget. This has made for an asymmetrical economy with a devastating lack of FDI. Even though much of
this plight pre-dates Chávez, his system of allowing Venezuela to rely almost entirely on oil for its revenue has put
the country at the mercy of volatile international markets. In good economic times, oil prices are high and the country
flourishes. However, when oil prices drop, Chávez’s misguided policies allow the economy to falter. Unfortunately,
diversifying the country’s economy has not been the top priority for the Venezuelan leader and little progress has been
made in this area.
As poverty continues to increase, people have been counting on the social programs which are also massively suffering.
Not only have a number of Barrio Adentro clinic projects been abandoned, (only 3,000 of the planned 8,000 were actually constructed), budgetary cuts have also
meant the scaling back on many of the services they once provided. Chávez has been forced to reduce expenditures and
subsidies for hospitals, food, energy, and education. In 2009 alone, funding of social programs by Petroleos de Venezuela (PDVSA) dropped from US$7.1 billion to US$2.7 billion. Today, the programs are in a precarious position due to Chávez’s
miscalculated over-reliance on oil proceeds for program funding which has placed the entire network in jeopardy.
Consequently, even though the president has gone ahead with building the social safety net he promised, mistakes in the
planning process may significantly reduce his ability to provide for a soft landing.
Venezuelans must now live with the financial repercussions of having no easy economic recourse in the event of low oil
prices. Millions of Venezuelans are now hoping that the recession will pass quietly and without serious collateral
damage to the country’s social structure. To make a bad situation worse, Chávez’s hostility towards foreign investors
has scared off money from overseas, despite historical grounds for Chávez’s justified fears of private sector abuses.
Nationalizing major industries has helped to keep the wealth at home, but it also has discouraged a number of potential
investors and much needed foreign capital. As The Economist points out, state run and private corporations alike are
apprehensive over investing in Venezuela. Chávez’s proposed contracts for oil extracting ventures are today demanding “a
60% share and operational control in each block while not putting up any money. On top of that the government will take
a 33% royalty and a windfall tax.” Many corporations are wary of investing in Venezuela under such harsh terms with no
assurances that Chávez will not expropriate their installations down the road. This fear has resulted in the country
witnessing capital flight without any economic remedies to offset the dire transitional effects of such a rush.
While Chávez has made miscalculations when dealing with the national economy, on the international economic front, he
has fared far better. Due to his differences with the U.S. government, Chávez has tended to steer away from the
historically dependent relationship with Washington in favor of building financial ties with other nations such as Cuba,
Iran, Russia, and most recently, China. Russia has agreed to begin joint oil drilling ventures, Venezuela and Iran are
exploring the country’s uranium deposits, and China has invested in Venezuelan oil fields, all providing sizable sums of
investment. While these relationships are largely considered controversial, they could provide Venezuela with a
much-needed alternative to the narrowly structured U.S.-Venezuela trade relation. More important than even the symbolic
rebellion over the unprecedented nature of these ties are their portentous economic implications. While oil revenues can
cover much of the governmental costs for Venezuela’s expensive social programs, no nation can have a robust economy
without a stable FDI structure. Given Venezuela’s tense relationship with Washington, Chávez has found a natural
substitution with trade alternatives presented by Russia and China.
Chávez’s initiatives have not been limited to other continents alone. In fact, his most newly established involvements
have been very close to home. Under his guidance, Venezuela has grown into a regional power player with deep investment
in South American integration and development. In 2007, Venezuela and Brazil started a joint financial venture called
BancoSur. This organization is meant to be a friendlier, Latin American-equivalent of the IMF, and is designed to
provide financial aid in continental development projects, such as roads, pipelines, and railways. Chávez, along with
other regional leaders, also launched TeleSur, a Latin American regional TV network that according to its chairman
Andrés Izarra, has a “[common] aim to present Latin America’s vision of itself to the world.” In addition to these
ventures, Chávez has been instrumental in founding PetroSur and PetroCaribe, organizations that facilitate the financing
of subsidized oil purchases for Latin American nations and other parties.
Perhaps most importantly, Chávez has initiated a new concentration on continental trade. Countries can exchange
subsidized Venezuelan oil for non-traditional products from otherwise underutilized industries as a way of boosting
regional integration and development. One example is the 2006 trade deal between Venezuela and Bolivia where, according
to the Council on Foreign Relations, Bolivia agreed to exchange goods and services for discounted Venezuelan oil and a
US$1.5 billion investment.
Latin American integration and growing economic independence from the United States is becoming more of a reality
everyday. In this regard, Chávez has done an innovative job of navigating regional politics and economic arrangements.
Chávez and the Venezuelan economy have managed to make progress in weakening U.S. influence in the region while
promoting Venezuelan interests and projecting its power, no small accomplishment in a region historically dominated by
the United States.
A Tarnished Image
Since appearing on the world stage in 1998, Hugo Chávez has become an international figure with his erratic personal
behavior, legendary incorrect commentary, and often offensive evaluations of other leaders. Rather than comporting
himself as a decorous world leader and sober national representative, he has at times behaved as what some have
described as “a petulant child.” After calling former President Bush “the devil” at the UN General Meeting in 2006,
leaders across the globe have cited the incidence as evidence of his “clownish” behavior and lacking political gravitas.
Chávez’s raffish style is further exemplified by his behavior at an Ibero-American Conference in 2007 in which he
repeatedly interrupted the Spanish Prime Minister José Luis Rodriguez Zapatero, causing a rare outburst from the Spanish
King Juan Carlos I, who told Chávez “que te calles.” Of course, to many, Chávez scored a winning response when he
addressed the Spanish monarch as “Mr. King”, reminding him that he did not achieve office via election. Chávez admirers
would further argue that Chávez’s derelictions are mainly a matter of style, that the Venezuelan leader is a preeminent
democrat, and that his multiple shortcomings are trivial in nature.
Where is la Revolución Bolivariana Going?
Although now in diminishing numbers, clearly a majority of Venezuelans still feel confidence in their leader. They have
elected him three times by wide margins, reinstated him after an attempted coup, and eventually passed a referendum to
end term limits on his presidency. Despite the continued confidence in him, there is a growing sense of doubt and
disaffection over the direction in which Chávez is taking the country. For those who lived during the second term of
Carlos Andrés Peréz, Venezuela looks much like it did then—a country of deep political divisions, an economy in trouble,
and the resumption of widespread poverty. These similarities to the 1980s show that, like Peréz, most of Chávez’s major
promises of a systemic overhaul of the country’s institutions remain largely unfulfilled.
Yet, it is undeniable that Chávez has brought fundamental change to Venezuela. The poor have been given a political
voice with an attentive audience and hope for a better future, something Peréz could never boast accomplishing.
Nonetheless, Chávez’s unique opportunity for equalizing Venezuelan society may be slipping through his fingers; instead
of reorganizing his priorities and devoting himself to the careful management of his revolution, he continues to choose
making unsubstantiated grand-standing speeches. If Chávez is to make progress in achieving his 21st century Socialist
Revolution, he may want to go after more bunt singles than home runs that turn out to be strikeouts.
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This analysis was prepared by COHA Research Associate Monique Blanco
ENDS