Monday, May 26, 2008

The 2008 election gambles: part 1, Chavez’s angst

May first brought once again to the forefront the divided country that Venezuela has become. There were two “workers” marches convoked. One to praise Chavez, with dozens and dozens of buses coming from all around at tax payer expense, all passengers adequately uniformed in red, brandishing whatever slogan du jour. The other one was a more heteroclite affair made of actual workers, mostly from Caracas. But there was a difference this time: the opposition workers march was barred from its final outcome by an extraordinary display of police and soldiers that betrayed only one thing: chavismo is running scared.

It is clear to all that the December 2 referendum has changed the political course of the country. With Chavez aura of invincibility gone, not only his followers are less likely to put up with all of his antics, but a new type of opposition, now emboldened by its success believes that the end of the regime is not a farfetched hypothesis anymore. What the opposition is doing these days is the subject of a following post.

The pressing events of the past few months, from the pro FARC debacle, through the new wave of nationalization and to the difficulty in locking up the PSUV configuration give a clear picture of what Chavez problems are and how he would try to win the regional elections next November. But before getting into this once again the reader must be reminded what are the real objectives of Chavez and what does he disposes to reach them.

What Chavez wants

It is very simple: Chavez wants to remain in office for life. For the time being his aim is thwarted by the December 2 2007 defeat but he still has more than 4 years to find a way around this obstacle. This need is exacerbated with the debacle of the Anderson Case where, after the financial corruption, the moral corruption of the regime is for all to see: once Chavez is not anymore in office, once the judicial power is freed of his control, a boatload of chavistas, including Chavez, are going to find their sorry asses in court, on the accused benches for a welcome change. In other words, the only way that a few hundred of folks can keep enjoying their loot is for Chavez to remain in office ad perpetuum, including the Chavez family who have carved a nice little fiefdom in Barinas. Not understanding this makes it impossible to understand anything else that is going on in Venezuela these days.

What Chavez has

He has two things: the oil check book and the people that are still with him. The oil check book is something nice and handy and with a lot of reach, in particular these days where a decreased Venezuelan oil production is nicely compensated with an oil barrel flirting with 130 USD. In fact some economist think that the misiones and his foreign actions are financed directly by oil, bypassing normal budgetary procedures (and staling funds that should go to the individual states). Day to day state functions are financed by a large portion of the oil income and by the SENIAT who every day is taxing more and more as the state expenses increase more and more. The taxation burden in Venezuela is reaching unbearable proportions, not from the amount of money taxed but because the tax payers are getting less and less in return. More than ever taxing is robbing the rich to give to the crooks, and, accessorily, the poor. In democracy the rich (read, anyone paying taxes in Venezuela) do not mind that much that their taxes are used to buy social peace, but they also want pothole free roads and to be able to sleep tight at night.

But there is also another problem that chavismo is starting to feel: the stipends that they used to give to the huddled masses are not enough. When someone is used to get a certain amount of freebees after a while this amount does not seem so great anymore, the more so when the annual inflation is somewhere high above the 20% mark. That is, if instead of teaching to fish you give free food, well, people get fat and hungrier. In short, if Chavez does not hurry up to secure his permanent hold on the country, soon there will be not enough money to buy such control, no matter how high oil prices are. Social programs can reach only so far.

Of course that Chavez is surrounded by crooks able now to steal quickly millions of dollars through semi legal ways does not help him much. Corruption under Chavez has rotten the state faster and deeper than the corruption during the full 40 pre Chavez years. And yet Chavez has to work with such people: he is the one that turned a blind eye to corruption in the hope to secure a devoted base, if anything to blackmail this new caste if needed- Unfortunately, even if devoted to Chavez (often through necessity and inner chavismo scare tactics), such a base is incompetent.

The drama of Chavez is that he cannot attract good managers, or charitably put, not enough good managers. Competent people, people with good administrative skills have enough self worth that they do not need to work for Chavez, and are certainly not willing to put up with his lengthy cadenas where they must spend hours nodding so as not to fall asleep, where they cannot even get a glass of water nor a bathroom break, while hoping that they will not publicly be insulted by Chavez. To subject yourself to such public humiliation you are either a nobody that has no choice in life or you are a crook. A few years ago one could still give the benefit of the doubt to the Chavez entourage: today such benefit is not allowed anymore.

Thus Chavez is paying the price for surrounding himself with mediocrities, whose only value for him is an alleged blind loyalty. All the problems that are now associated with the regime, from potholes in the streets to crumbling hospitals, from food shortages to extraordinary import levels are due to the people in charge who are all, without exception after the departure of Vielma Mora, crooks or incompetents, or usually both.

Clearly, with that motley crew Chavez will not solve the problems of the country and yet he must rely on them to spread the oil manna. And win elections.

The problems at hand

Moral corruption. After the Isaias Rodriguez fiasco with the Anderson case, as the cover up cannot be hidden anymore, you have to be a really hard core chavista to pretend that everything is fine. True, there are plenty of those around left, but not enough to win a large election without cheating.

Financial corruption. That one cannot be hidden anymore. Paradoxically it is not too much of a problem for chavismo since too many people just want to plug in and see what they can get. Besides, the primitive political culture of too many Venezuelans lead them to think such silly things as “well, it is our side who is stealing, so what is the problem?”. Yet, the problem is slowly but surely eroding chavismo more moderate base. That Chavez is not really hanging anyone for corruption will eventually accelerate the demise of the regime, just as it sped up the demise of the pre Chavez years. There is only so much that people can put up with and that these days Venezuelans are particularly lax in morals do not mean that they have no moral.

Food and other shortages. The coupling of increased purchasing power of the masses with the failure of production to increase from the late 90ies levels have resulted in a catastrophic chronic food shortage in Venezuela that can only be palliated through massive, and increasingly expensive, imports. That is, the oil money is spent on food and eventually find its way to the sewers, instead of, say, new roads or new jobs. Regrettably for Chavez with the incompetents that surround him, it does not matter how much he will increase imports, he will not be able to solve the problem on even a medium term prospect. Once upon a time the solution would have simply been to allow the private sector to work without much harassment, but now even that would not enough. For ten years there has been a major neglect in the upkeep of the Venezuelan infrastructure and this now is reaching dramatic proportions. The increased volume of cars and trucks, and motor traffic, courtesy of oil at 100 USD is just overwhelming the road system. Now any truck carrying food spends twice as much time as it used to do 3 years ago to reach its destination. The railroad system is years form been completed and collapsing roads are ensuring that the problem of efficient food distribution is going to get worse before it gets better. Amen of any increase in food production which depends in large part on the circulation of crops and their needed supplies.

Insecurity. The crime wave is not abating no matter how much the government twists statistics. The back pages of the newspapers tell a tale: Iraq risks being favorably compared to Venezuela. The only solution to this problem is short term repression and long term plans and prosperity and real job creation. The government has demonstrated that it can only repress opposition and is devoid of any long term plans. These anyway probably would be useless since the ministry revolving doors make any new appointee come up with his own plan superseding any previous effort. Expect an upward trend in the murder rate. Besides, high crime is a way for the government to control the opposition. After all the big wigs of chavismo have several body guards paid at tax payer expense. Why should they worry about their own security? How can the relate with the masses? Why should they care? The more crime there is, the more scared the populace is and the less it will think about protesting Chavez policies.

Real jobs are not coming. Real jobs are only created when there is a real economic growth in production ventures. Imports, distribution and banking redistribution of populist supplies do not ensure a permanent growth in economic output. In other words as long as Chavez economic policies do not allow the private sector to grow, there will be no creation of real jobs and only the public sector and some services will be the ones creating a few jobs, with the fragility that this implies. Yet the problem is dramatic for the state. The first promotions of the new chavista universities (UBV, for example) are coming to graduation and the work training plans are churning out “graduates” by the thousands. They all have pretty much useless skills and too much political baggage for the private sector to hire any of them, assuming it were hiring. Legions of chronic jobless are starting to hit the streets of Venezuela, and they have been promised jobs. How will Chavez deliver?

The enemy within. The newly formed PSUV is already having all sorts of problems. The delay in its formation was apparently due to the near impossibility to put up a veneer of democratic hues over the need for Chavez to have a transmission vehicle totally reliable, military style. Starting for the claimed 5 million plus sing up in 2006 we ended up one year later to about 20% of the original claimed number voting in the PSUV internal “elections”. Of course, that was in part a consequence of an indirect tiered voting procedure which was designed to have Chavez favorites to win. Still, many did not, delaying further the final installation of the PSUV. As the candidates are been selected for November, the PSUV is showing considerable strain due to this deficient birthing.

And there are many more problems that could be listed, something normal for any regime that has already run for ten years and who is now devoid of ideas and who never was very creative to begin with. The question is what Chavez will make of this and how will he run a campaign which is crucial for his future. Any result where the opposition carries 8 or more states will be considered as a major defeat and cannot be spun as a democratic face-lift for the regime. Any result where the opposition gets 10 or more states will even question the chances for Chavez to reach the end of his term. Such a defeat will almost automatically trigger a recall election on the National Assembly and the loss of the chavista majority there. There is one thing I can vouch for: Chavez knows this very, very well.


-The end-

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