VENEZUELAN ANALYSIS

VENEZUELAN ANALYSIS
Sunday 29, December 2002

Since the strike is going on and I have little to do, I gathered my thoughts and wrote a little assay to try to help some people that asked to understand some of the root problems that Venezuela faces today. It is a bit long but I hope interesting for those that want to know more about it. Soon I will give one of my updates, I have written enough for today.

-----------------------------------

I have observed that there is a significant difference between the information that can be found about Venezuela overseas and what we actually experience ourselves. Also some of you had interesting questions. I think it would be a good thing to try to resume briefly the roots and nature of the opposition to Chavez, which have led us to the current conflict.

From 1958 until Chavez election in 1998 Venezuela has been ruled by a democracy of sorts. That is, we pretty much elected what could be seen at times a legal dictator that ruled for 5 years. What made the system bearable was that indeed fair elections were held every 5 years and more often than not the party in office lost the election. In addition there was some sense that the judicial, for all of its imperfections, at least prevented major abuses by the government in place. Last but not least, after decades of miscellaneous strongmen, there was a feeling in the ruling class that emerged in 1958 of maintaining the appearance of a working democracy.

The failure of this system resides in several factors. The strong presidential character was of course one as presidents came to be seen as messiahs of sorts. This led to a marked populist bend since to get elected in a politically backward society you needed to promise more than the other guy. Since you were not able to provide at the end of the 5 years term your party risked loosing the election. This loss happened in 5 out of the 8 general elections held. As the population grew the money lubricant that came from oil became less and less sufficient to maintain a political class content of living on oil revenues and never seriously concerned on creating other sources of wealth, sources that would have required more work for the government.

The basic economical policies were those of a state living off the oil rent. Sets of subsidies, vain attempts at price control, and suspicious patronage deals lead to the creation of an economical “class” that depended on state contracts for its prosperity. A prosperous entrepreneurial class is less easy to control than a patronage linked economy, and thus less favored by populists of all kind. Obviously, this type of political system, with at best moderate checks and balances, is ripe for the development of corruption. This one became a serious problem in the late 70ies when the price of oil increased suddenly. With the economical downturn of the 80ies and 90ies, corruption got out of hand.

Of course, that does not mean that free economical factors did not exist, but they were not favored in the grand scheme of things and could not reach their potential. Another perverse effect of the system was that when the opposition reached power, instead of cleaning up the left over bureaucracy, it satisfied itself by adding a new layer on top of it. The effect was somehow diminished by the fact that naturally the bureaucracy was divided itself in political factors so an incoming administration needed not to replace too many people. But election workers needed to be paid off, and an administration job was the easiest way to do it. Slowly but surely a huge bureaucratic state developed.

By the 90ies the system had clearly failed. The only important reform attempted was to separate the election for governors and mayors from the general election, while giving them more power. This first step toward a decentralized system brought immediate positive results, but it was too late to reverse two decades of decline. When Chavez run for office we had a bloated, inefficient and underpaid bureaucracy. A corruption bolstered by this very inefficient state apparatus. And a totally exhausted political class unable to come to grip with its failure and thus leave the scene or undertake the painful measures that had become unavoidable to reestablish some equilibrium in the damaged economical tissue.

This was the backdrop of the 1998 general election, a “fin de regne” atmosphere, aggravated by an unfavorable conjuncture where the oil price was rock bottom. Chavez, a failed military that managed to come out of his failed 1992 coup a hero, managed to agglutinate 20 years of social resentment around him and swept to victory. His coalition was very heterogeneous. It included people that saw in him simply a military that would be able to put order into the country and deal effectively with rampant crime due to economical decline. It included leftist failures that saw in him and his populist “caring for the poor” language their chance to reach office finally. It also included some of that economical government depending class that thought that tying their fate to his campaign they would be able to make Chavez indebted to them after financing his campaign.

Chavez won office with one promise: to start the Bolivarian Revolution. This very ambiguous notion, which owes very little to Simon Bolivar, would proceed in consecutive steps. First a new constitution that would allow Chavez to sweep away the old order and give him the means for his “pacific” revolution. Second, as a consequence of the first step he would apply economical changes that would increase productivity and create a working welfare state based on solidarity. And third, the regeneration of the Venezuelan people by changing the workings of the army, the administration, education, etc… Of course many people saw the dangers there but the political class was too discredited to put forth any serious opposition.

The crux of the matter is that like many revolutions, the Bolivarian Revolution has its roots in a reaction to modern times. The discourse of Chavez is anti globalization (which has brought him wide international notoriety and support) while applying actually some very strong monetarist policies that have resulted in a major economical crisis. Chavez has been helped by nostalgia that can be found in his chosen help. For example the majority of his cabinet comes from the oldest university in Venezuela (UCV) whose professors over the years have managed to make it into a little empire of privileges. It is amazing to observe that some of the reforms that they promote leave intact their alma mater, when not actually strengthening its benefits. The warmed up leftist rhetoric is outdated and clearly looks back to the good old days of business bad, workers good, without realizing the deep economical connections that have come to decide policies in modern socialist or business oriented government. The language of some chavista sectors does reflect that simplistic duality. This “reactionary” outlook can be seen even in the economical sectors that supported him, hankering for a protectionist past that was threatened by globalization. They saw in Chavez’s nationalism an assurance of maintained trade barriers, if not their return into the fold of patronage. As it is painful to watch today, these false premises were the harbingers of the disintegration that we observe now, where extremes on each side try to remove the political clutter on their side.

Thus started the “Peaceful Bolivarian Revolution”. In its initial stages Chavez scored a series of successes. He won the general election of 1998; the referendum of 1999 (by 90%); the constituent assembly where a changed electoral system gave him 95% delegates with less than 60% vote (not a very auspicious way to create consensus, a good thing for constitutions); the constitution referendum of December 1999 (with 70% and first suspicions as to the validity of the vote); the 2000 general election (where he got a majority of governorships and city halls); and the December trade union referendum (which he won but with an astounding 70% abstention and all sorts of voting problems). This string of victories obviously gave the impression of a very popular leader with a clear mandate to do whatever it takes to get the country out of the crisis. Yet this image is misleading. All the electoral contests had 50% or more of abstention. The constitutional referendum was actually rushed and no national debate could take place seriously to discuss the contents of the document elaborated by the constitutional assembly. This one even cut two months of its scheduled time and as a consequence did not have time to consider the transition period arrangements adequately (this major error came back to haunt Chavez administration sooner than soon). In other words, for two years Chavez scored big but not solid victories. People trusted him more than his constitution or the people that hung on his coattails. And a flawed constitution that had to be implemented by opportunists and other hanger-on was promised trouble, as some observers pointed out as early as fall 1999.

Trouble came in three steps. One, the failed attempt at gaining control over the historical largest trade union (CTV) by the referendum of December 2000. This led to a forced series of elections within the CTV. Chavez cronies tried to grab control but workers trusted more the tested leaders of the past. After all, you know your union man better than your country president. A renewed CTV became the first political force to say no to Chavez in spite of his feeble attempts to create a parallel union. The second factor was that after the renewal of the political personnel in the 2000 July elections, Chavez had the Supreme Court and some of the important judicial functionaries named with his supporters or even cronies. The outcry was considerable as people that did not shared Chavez vision of things realized that courts will offer little protection in case of constitutional conflict. And this has already come to pass. For Chavez and his folks democracy is just elections. Concepts such as protection of minorities are alien to majority rule. Inasmuch as the new constitution has important rights included, these are only so good as the people that will apply them.

The third failure came from the need to adapt many laws to the new constitution. The personalist style of Chavez and his confusion about his electoral score and the reality of his support made him believe that he could get away with any law he wanted. He got a fast track law that allowed him to publish 49 (!) new or refurbished economic laws without much consulting of the affected sectors. The reaction was immediate and on December 10 2001 the first “paro” or work stoppage that united classical trade unions and business took place. Since then Chavez was ousted briefly in April 2002; and in December 2002 a soon to be a one month old “paro” started demonstrating the rapid unraveling of the country structures.

But what lies below all macro factors? Which is the real situation in the Venezuelan social sectors? What is behind the myths widely spread? The first comment that one comes across, in simplistic approaches to the Venezuelan situation is poverty. The number of 80% of people in deep poverty is actually misleading. As is the case, statistics can yield all sorts of information. True, levels of poverty in Venezuela are higher today than 20 years ago. True, there is too much poverty and it can be seen in Caracas as the slum areas are precarious shanties clinging to the hills that surround Caracas. However, look at the consumption numbers in Venezuela and you will see for example that Venezuelans are the highest per capita consumers of personal hygiene products. Or the biggest consumer per capita of energy in South America. You will see that many of these shanties have TV, and sometimes even satellite TV. You can also read that the life expectancy is significantly higher than the South American average, as is alphabetization levels. And the birth rate, still high, has been decreasing steadily in the last two decades. So? 80% poverty? Did this include the huge informal sector of the Venezuelan economy? How do you define poverty? Is this definition the same as in Bolivia, the poorest country in South America? The truth is that the hopes for an economical improvement of the population have been dashed in the 80ies and the situation has clearly degraded. Yet, we are still way above most of South America, and there is recovery potential. The Venezuelan feels poorer than what he really is, and definitely poorer than yesterday. This realization is used by politicians to garner votes.

Another interesting development is the perception in the foreign media that the Venezuelan media has ceased to be objective and has become the main opposition party. This is partly true at best. In the halcyon days of Chavez, when he benefited of approval ratings reaching 80% in some polls, the collapsed political parties could not offer anything. Some newscasters and opinion journalists did offer some constructive and substantial criticism. Chavez those days did not bother in refuting them. When the first evidence of governmental ineptitude, and of major corruption cases, came forward, these criticisms became stronger and more journalists joined the fray. Still Chavez was unmoved. And then things started not going too smoothly for Chavez. By mid 2000 after some clear questions on the electoral validity of the recent elections Chavez started attacking the media accusing them of liars. However, he had made a major mistake in dealing with the media. At the height of his popularity he simply did not take the opportunity to limit the projection of the audiovisual media, thinking perhaps that his popularity would stay high forever. He had a way to curtail some of contents of TV as the new constitution included a “true information” clause. This classical piece of hubris came back to haunt him. If he thought that he could limit the liberty of the media by the time he got around it was too late: the perception of censorship would have been too obvious. So he did the next best thing, send constant personal attacks to some journalists and media groups. His followers, hardened by his words and what has become a shameful impunity due to the complacent judicial have started harassing the press. Today dozens of journalists have been attacked, injured, robbed of their material or see it destroyed, and even one died in April 11. This is a country where journalist go to cover public rallies from the government followers wearing helmets and bullet proof vests, as if they were covering a war zone. This is a country where the president and some officials only declare to the state owned media, where the president has abused of his right to force transmission of his messages through all audio media, simultaneously, at prime time. And where the opposition has no way to reply on the state owned media.

Needless to say that this has affected the mood and nature of the nightly news and talk shows. Indeed, objectivity does not seem to be present for the casual foreign observer, but this casual foreign observer should also see a few things: the way the media, all the media, has been attacked; that still the private media opens its channel to Chavez supporters to come and talk, whereas the state owned tax payer supported TV has become a simple propaganda tool where rarely an important opposition figure is invited; that newspapers have kept most of their pro Chavez columnist, including El Universal, the only paper to oppose Chavez from the very start, that still lets Chavez’s brother publish his weekly column.

Another interesting approach is to defend the legality of Chavez rule. Many foreign observers say that Chavez has been duly elected and why can’t people just wait for the end of the term. I even read serious US writers say that the Venezuelan constitution did not allow for early elections so the claims of the opposition lacked validity. US reporters have of course a very legalistic point of view. Well, to begin with Venezuela is obviously in crisis. How else can one understand that hundred of thousand of people take to the street more than once a week? How else can one understand that the oil industry is able to have stopped production of oil and derivatives to no more than 10% of the November production, and this with the nationalist government using imported foreign workers, publicly paying huge bonuses to those that will cross the picket lines. This for a government that claims to be socialist and pro poor and pro worker rights. Early elections not legal? What about the 1999 referendum for a new constitution when the 1961 constitution did not include the referendum figure? The point is that Chavez does not want to run in elections where he will not have a clear advantage and this is to see for whomever scratches deeper than the surface.

But the most nefarious comment, seen in some European press, is the race card. According to many European commentators, Chavez, himself a mix of black, white and native, stands for the downtrodden masses that happen to be black. Consequently the white rich and powerful opposition do not want to lose its privileges and has been trying to sabotage any of Chavez initiatives. This view is particularly cherished by the anti globalization people. They have found in Chavez a supporter and a financier as the Venezuelan government has spent significant amounts of money to organize symposiums here and abroad. As usual things are not what they seem to be. To begin with, Chavez own cabinet is whiter than blacker. If it is true that the lower economical groups can find some identification with him, you can find that the million people marches include everyday more and more blacks. And what does black mean in Venezuela? This country is perhaps the one where race mixing has advanced the most in the Americas, with the possible exception of Brazil. If indeed the darker your skin the likelier you are to be on the bottom of the economical ladder, it remains that two mayors of Caracas have been black, one presidential candidate has been black and made it second in the election of 1993. More than one president was not “really” white. Congress was never lily white. But for some reason Chavez use of the racial card seems to hit somewhere. Again, if Venezuela had a reasonable social mobility in the 60ies and 70ies, this was stopped not as much by racism but rather by economical misfortunes. After all, did not Chavez get elected by 56% of the vote? Or are 56% of Venezuelan black?

The truth is that in Venezuela with the application of the new constitution and the actions of Chavez, the perceptions of people have changed. Where they saw a strong reformer now they see a friend of Fidel Castro, the carrier of an ideology thought gone for good. What is taking place now is a fight for the type of society we want. The choice is on one side to deepen decentralization, modernize the economic rules of the game, make the government less powerful, not the regulator of all activity. On the other side there is a return to a failed past where the only private enterprise is the small enterprise, with all the big business in either state control or controlled by multinationals who do not care about local politics (the new look of the left such as seen in Cuba that has opened its tourism industry to big hotel chains), where the government controls most policies, at all levels of government, where even private education will be closely supervised by the government. In other words Venezuelans realize that this is not what they had in mind when they voted for Chavez. We are facing a change of society that is imposed on us and we do not want it.

I hope that this will give enough information to allow the interested reader to make up his or her own mind about what is really going on here, how we came to such a difficult situation.