[OPE-L] Wilpert on Venezuela

From: glevy@PRATT.EDU
Date: Thu Jun 16 2005 - 07:49:27 EDT

A lengthy article on Venezuela by Gregory Wilpert for the journal
_Socialism and Democracy_ (#37) follows.  In related news, Chavez
announced yesterday that there had been an assasination plot -- a
foreign conspiracy in which the Venezuelan military allegedly
played no role -- and that he would be making fewer public appearances.

In solidarity, Jerry

PS: while the article is not online, the same issue of _Socialism
and Democracy_ has a review article by Amy Wendling comparing the two
editions of the collected works of Marx and Engels.

    Venezuela: Participatory Democracy or Government as

There is a strong progressive, redistributive,
and participatory democratic impulse in the Chávez
government, which is, at heart, the reason for Chávez's
success. However, Chávez's emotive leadership style and
personality cult, a burgeoning in-group culture, and
external resistance threaten to derail the project.

  By: Gregory Wilpert - Socialism and Democracy

Published: 15/06/05


Venezuela is a complex country that tends to confound the
casual observer. As a result, everyone, especially the
media and those who want to support and those who want to
oppose the current government, tend to oversimplify the
situation. It is all too easy, especially because of Hugo
Chávez's military background, to portray his government as
just another instance of Latin American caudillismo. It is
not much of a stretch to add, considering his discourse and
his friendship with Fidel Castro, that he is moving the
country towards authoritarian (or even totalitarian)
“Castro-communism.” On the other hand, outside observers of
the left (if they haven’t already bought into the opposition
argument, which some have) easily fall into the
oversimplification that Chávez represents the downtrodden,
the “wretched of the earth,” and a solid victory of the
poor in their perpetual battle against the world’s rich.
Both views must be qualified, however, if we want to make
sense of what is happening in Venezuela today.
In what follows I try make sense of recent developments,
particularly with regard to why Chávez came to power, what
he has done, why his opposition is so fierce, and how and
why he has been able to maintain his hold on power,
especially in light of the recent recall referendum that he
My basic view of Chávez's movement, which is known in
Venezuela as the “Bolivarian Project” (after Andean
independence hero Simon Bolivar), is that there is a strong
progressive, redistributive, and participatory democratic
impulse in the Chávez government, which is, at heart, the
reason for Chávez's recent success in the referendum.
However, Chávez's emotive leadership style and personality
cult, a burgeoning in-group culture, and external
resistance threaten to derail the project. For the Chávez
government to succeed in carrying out its participatory
democratic vision of social justice, it must find a way to
overcome these three problems.
Venezuela in a Nutshell
If there were only one thing to know about Venezuela, it
would have to be that oil production is the dominant
industry. From this fact alone one can explain a whole
array of trends, occurrences, social patterns and cultural
preferences in Venezuela. Oil was discovered in Venezuela
quite early in the industrialized world’s transition to an
oil-based energy system, in the early 20th century, well
before it was discovered in the Middle East. As a result,
Venezuela quickly became the world’s largest oil exporting
nation during the first half of the century. However, it
was not until the mid 1970s, when Venezuela's relative
importance as an oil exporter had already declined, that
oil began having a noticeable impact on the country’s
social structures and collective psyche.
Between 1974 and 1976 the country’s oil industry, which had
been controlled by several transnational corporations, such
as Exxon, Mobil, Shell, and Chevron, was gradually
nationalized. Also, and more importantly, the oil price
shocks provoked by OPEC in the 1970s caused the price of
oil to quadruple in very little time, which in turn led to
a quadrupling of state revenues over the period of just two
years. It was this sudden rush of income which would
eventually turn the country upside-down.
One can trace the effect of the relatively sudden dominance
of oil on the country along two dimensions, the economic and
the cultural. In economic terms the dominance of oil meant
first of all the emergence of a problem known as the “Dutch
disease.”[1] A country catches this economic disease
whenever a commodity brings an increase of income in one
sector of the economy, which is not matched by increased
revenues in other sectors of the economy. What happens is
that the increase in income rapidly raises the demand for
imports, since domestic production cannot meet demand
quickly enough, and also raises the demand for services,
which the domestic market has to supply because services
cannot be imported as easily as tradables can. That is, the
oil income causes a distorted growth in services and other
non-tradables, while discouraging the production of
tradables, such as industrial and agricultural products.
The increased demand for imported goods and domestic
services, in turn, causes an increase in prices, which
ought to cause domestic production to increase, but doesn’t
because the flow of foreign exchange into the economy has
caused a general inflation of wages and prices.
One can observe the symptoms of the Dutch disease in the
Venezuelan economy quite clearly when one looks at the
extent to which the increase in oil production and income
was followed by a corresponding decrease in agricultural
production and delays in industrialization. While
agricultural production made up about one third of
Venezuela’s GDP in the 1920s, it shrank to less than one
tenth by the 1950s. Currently agriculture makes up about 6%
of GDP.
In addition to the typical Dutch Disease problem, the
sudden increase of oil revenues in the 1970s caused a
serious problem in the government’s fiscal policies. That
is, the new revenues created the illusion that oil income
could be used to industrialize the country via massive
infrastructure projects, to “sow the oil,” as the president
at the time of the oil boom, Carlos Andres Perez, used to
say. What happened is that the quadrupled government income
caused government spending to quickly increase and even
surpass the newfound revenues. When the oil income began to
decline, it was not as easy to reduce government spending as
it had been to increase it. Over a period of two decades,
between 1982 and 1998, the price of oil began a steady
decline, going from $15.93 per barrel (in 1973 dollars) in
1982, to $3.19 per barrel in 1998.[2] The result was that
the government gradually went deeper and deeper into debt.

A combination of factors thus came together in Venezuela
over the course of the last twenty years or so:

Declining per capita oil revenue (47% drop from 1963 to
Doubling of the population (from 12 million in 1975 to 24
million in 2000)
The “Dutch Disease” (declining industrial and agricultural
Increasing state indebtedness (from 9% of GNP in 1970 to
53% in 1994)
These four factors together combined to produce several
consequences that are very important for understanding
today’s Venezuela.
First, the declining per capita state oil revenues and
growing population meant a smaller redistribution of
Venezuela’s mineral wealth. Average annual per capita oil
income during the Chávez presidency was only 26% of what it
was in Venezuela’s heyday, during the presidency of Carlos
Andrés Perez (1974-78).[3] So, even though per capita
income remained relatively stable between 1984 and 1998,
poverty increased dramatically, from 18% of the population
in 1980 to over 65% in 1996.[4] This is the greatest
increase in poverty of any country in Latin America during
that 16-year period. What this combination of increased
poverty and stagnant per capita income means is that
inequality increased tremendously in Venezuela, between
1984 and 1998.[5]
Second, declining agricultural production, as a result of
the “Dutch Disease” and perceived oil wealth, produced a
massive exodus from the countryside to the cities. The new
immigrants to the cities, of course, formed the bulk of the
country’s poor, residing in “barrios” of self-built homes on
occupied land. Anyone visiting Venezuela cannot help but be
impressed by the hills upon hills filled with these
barrios, lining the road from the airport to the country’s
Third, the combination of increasing poverty and high
indebtedness (lower, though, than in other Latin American
countries) led to one political crisis after another,
culminating in riots and massacres in 1989, two coup
attempts in 1992, and the election of a leftist populist
president in 1998.
These are just some of the more important economic
consequences of Venezuela being an oil-based economy with a
system that distributes this wealth inequitably and
dysfunctionally. However, the oil income also had some
consequences for Venezuela’s political and economic
culture, the most important of which can be described as
the general perception among Venezuelans that they have a
“magical” or omnipotent state. Also, the state-dependent
distribution of oil wealth contributed to an amalgam of
rentierism, patronage, and corruption.
Venezuela’s self-perception of its state being something
magical is an observation made by the anthropologist
Fernando Coronil.[6] Venezuela’s use of state spending,
mostly a legacy of the “dependency school” of economic
theory of the 1960s and 70s, emphasized investment in large
infrastructure projects. The result of such policies was
that, according to Coronil,

…the Venezuelan state astonishes through the marvels of
power rather than convinces through the power of reason, as
reason itself is made part of the awe-inspiring spectacle of
its rule. By manufacturing dazzling development projects
that engender collective fantasies of progress, it casts
its spell over audience and performers alike. As a
“magnanimous sorcerer,” the state seizes its subjects by
inducing a condition or state of being receptive to its
illusions—a magical state.[7]
The second and closely related cultural consequence is the
fairly common combination (for oil-rich Third World
societies) of rentierism, patronage, and corruption. That
is, the fact that almost all wealth in Venezuela came from
the oil industry, an extractive industry that can produce
immense profits, meant that the most efficient source of
wealth for those not already involved in this industry was
to somehow attach themselves to the industry or to its
owner, the state. Of course, if rentierism is the
extraction of rents from the state or the oil industry, the
flip side is patronage, whereby state actors extract loyalty
from those seeking the oil rent. In practice this has meant
a system in which two governing political parties, Acción
Democrática and Copei controlled the entire government
bureaucracy and regularly won elections through their
patronage systems and through the exclusion of other
parties from the oil profits.
The overall system of limiting politics to the two dominant
parties was cemented in a formal pact, known as the “Pact of
Punto Fijo” (the town where the agreement was signed), in
which the main parties agreed to divide the spoils of the
oil state amongst each other and to actively exclude any
challengers, particularly from the left, such as the
socialists and the communists. With time this system
degenerated, from the perspective of the citizenry, into
increasing corruption and pauperization of the general
population, which is what eventually allowed Chávez to
completely break the pact.
The increasing levels of inequality, the periodic economic
crises, and the increasingly obvious levels of corruption
combined to produce a political system that was ever more
unstable. The IMF riots and subsequent massacre of 1989, in
which the police and the military killed anywhere between
300 and 1,000 people, the two coup attempts of 1992, the
1993 election of a former president running as a candidate
of a new political party, and the 1998 election of Hugo
Chávez, a former coup conspirer and political outsider,
were all symptoms of the political crisis in Venezuela.
However, while all these events of the 1990s were symptoms
of the same crisis, the election of Hugo Chávez in some
ways represents the apex and turning point in the crisis.
Recent Developments
Chávez's six-year presidency can be broken down into three
phases. The first phase, from Chávez's assumption of the
presidency in 1999 to the approval of a new constitution
and election of all public offices under that constitution
in 2000, I call the consolidation of Chávez's power. The
second phase was one of heightened conflict between Chávez
and the opposition and went from mid-2001 until the
opposition’s defeat in the recall referendum in mid-2004.
Finally, the third phase begins with Chávez's ratification
in the referendum and will probably last until the new
presidential elections in late 2006, in which Chávez is
eligible for one more six-year term.
Phase 1: 1999-2000 — Consolidation of Power
Chávez's landslide election, with 56% of the vote,[8] which
a large segment of Venezuela’s middle and political classes
initially supported, gave him a mandate to convoke a
constitutional assembly and to introduce far-reaching
changes to Venezuela’s political system. Chávez immediately
set to work, organizing a referendum on whether to hold a
constitutional assembly. Voters easily approved the project
and, next, a vote was held for who should constitute this
assembly. Again, Chávez won this vote in that 95% of the
assembly members who were elected were Chávez-supporters.
Following a relatively accelerated discussion process, the
new constitution was put to a vote in December 1999, when
it passed with 72% voting in its favor. With the new
constitution in place, all elected offices were renewed in
2000. Legislative elections were held, in which the
pro-Chávez coalition won two thirds of the seats. Also, in
the regional elections for state governors and city mayors
Chávez supporters won a majority of these. Finally, Chávez
was also re-elected, this time to a six-year term, winning
59% of the vote.
At the time, the Chávez coalition included not just
Chávez's own party, the Fifth Republic Movement (Movimiento
Quinta República, MVR), but the Movement towards Socialism
(Movimiento al Socialismo, MAS), Fatherland for All (Patria
Para Todos, PPT), the Communist Party of Venezuela (Partido
Comunista de Venezuela, PCV), Red Flag (Bandera Roja, BR),
and a few other small parties. By the end of 2000, Chávez
was at the height of his power, with a new constitution, a
legislative majority, and his appointees as attorney
general and in a majority of the supreme court judgeships.
Also, by 2000 the country the country was recovering from a
recession, largely thanks to Chávez's efforts to bring
production quota discipline back into OPEC, by convincing
non-OPEC oil producers to restrain their production. As a
result, the price of oil began to rise again, which had an
immediate positive effect on the Venezuelan economy. It
seemed that nothing could stop Chávez now.
Phase 2: 2001-2004 — Heightened Conflict (coup, oil
shutdown, and referendum)
However, the core of Chávez's program, the redistribution
of the country’s wealth, the inclusion of the country’s
marginalized population, and the development of an
alternative to neoliberal economics, had yet to be
implemented. While the main tool for the implementation of
this program is, in a sense, the constitution, its details
still needed to be filled in. One of the legislature’s
first orders of business thus was to pass an “enabling”
law, which allowed the president to pass certain laws, on
predetermined issues, by decree. This is something that
earlier Venezuelan presidents, such as Carlos Andrés Perez,
had also been allowed to do.
The enabling law was set to expire in November 2001 and,
just before its expiration, Chávez presented the 49 laws
and passed them by decree. These laws allowed the president
to restructure the oil industry, forced banks to dedicate a
portion of their loans to micro-credits and agriculture,
made large fishing companies fish further from the shore,
so small scale fishers could fish closer, and threatened
large landowners with land redistribution, among many other
The outcry against these laws was immediate. The first to
protest was Fedecamaras, the country’s largest and most
important chamber of commerce, which unites most of
Venezuela’s big businesses. Their main complaint that was
that these laws were anti-business, undermined private
property rights, and were passed without consulting them or
anyone outside of government circles. Venezuela’s main union
federation, the Confederation of Venezuelan Workers (CTV)
quickly joined the fray. Ironically, their main argument
against the laws was that they were harmful to Venezuela’s
business community and therefore harmful to Venezuelan
workers. A more likely explanation for the CTV’s support of
the employer federation, however, was that the CTV had just
gone through a pitched battle with the government over who
would control the organization. A month earlier the Chávez
government had forced the CTV leadership to submit itself
to a grassroots vote, which the federation’s old
established leadership won amid the government’s claims of
fraud, resulting in the government’s non-recognition of
that leadership to this day.
The result of this vehement CTV/Fedecamaras opposition to
the government was that the two organizations decided to
call for a “general strike” on December 10, 2001. The
strike met with moderate success, but the media and the
private sector’s lockout of their employees for a day gave
the “strike” a heightened visible effect.
But it was not only the package of 49 laws that provided
fire to Venezuela’s conflict. Another crucial factor was
that the economy suddenly slowed down in the wake of the
September 11 terrorist attack on the U.S. The attack had
sparked a worldwide recession and, with it, a decline in
the price of oil. This double-blow—low oil prices and a
global economic slowdown—forced the government to adjust
its budget and cut back spending in all areas by at least
10%. The impact was almost immediately noticeable, as
unemployment began inching upwards again, after it had
steadily declined in 2000 and 2001.
Meanwhile, an escalation in verbal attacks between Chávez
and his opposition began reaching new heights.  The
economic downturn, the 49 laws, and Chávez's strong
discourse against the “squalid opposition” and the “rancid
oligarchy,” all made it relatively easy for the opposition
to chip away at Chávez's popularity, along with substantial
help from the private mass media. Opinion polls—which can
show some trends, but which are not necessarily reliable
because their ability to reach into the hearts of the poor
neighborhoods is doubtful—indicate that Chávez went from a
popularity rating of around 60-70% to 30-40% between June
2001 and January 2002.
These were the detonators that allowed the opposition to
believe that it could defeat Chávez before the end of his
presidency. Three concrete attempts thus took place between
January 2002 and August 2004. The first was the April 2002
coup attempt,[9] whose apparent detonator was the oil
industry management’s resistance to Chávez's efforts to
gain control over the state-owned oil industry. Crucial to
this attempt, however, was a disgruntled sector of the
military that, for a variety of ideological and
opportunistic reasons, believed that it could and should
get rid of Chávez. The failure of the coup was emblematic
of all subsequent opposition failures to oust Chávez from
the presidency. The opposition consistently underestimated
the president’s popularity, believing instead the mass
media’s constant claim that Chávez was hanging on a
Following a period of uncertain calm, the opposition once
again thought it could oust Chávez, this time by organizing
an indefinite shutdown of the country’s all-important oil
industry in early December 2002. While the opposition
labeled this action as a “general strike,” it actually was
a combination of management lockout, administrative
employee strike, and general sabotage of the oil industry.
Also, it was mostly the U.S. fast food franchises and the
upscale shopping malls that were closed for about two
months. The rest of the country operated more or less
normally during this time, except for food and gasoline
shortages throughout the country, mostly because many
distribution centers were closed down. Eventually, though,
the shutdown was defeated, once again due to the
opposition’s underestimation of Chávez's support. That is,
while over half of the oil company’s employees were
eventually fired, for abandoning their workplaces, the
government managed nonetheless to re-start the oil company
with the help of retired workers, foreign contractors, and
the military. According to government figures, the industry
is now [September 2004] operating at normal levels,
producing over 3.1 million barrels of oil per day. The
opposition, however, claims, to this day, that production
has not exceeded 2.6 million bpd since the end of the
The third and presumably last attempt to oust Chávez during
his current term was the August 2004 recall referendum.
After having suffered defeat in two consecutive illegal
attempts, the opposition was forced to follow the only
democratic and constitutional route for getting rid of
Chávez. At the end of the oil-industry shutdown, on
February 2, 2003, the opposition had initiated a process
for organizing a wide variety of referenda against Chávez,
but these were subsequently dismissed by the Supreme Court
or dropped by the opposition itself, mostly due to the
incorrect manner in which the referendum petitions were
formulated or due to the timing of the signature collection
process.[10] The agreement to follow a strictly
constitutional route for resolving Venezuela’s political
crisis was formalized in a signed agreement between
opposition and government that the Organization of American
States and the Carter Center facilitated in May 2003.
Much political wrangling followed, mostly because neither a
functioning electoral council (CNE) nor laws governing
recall referenda were in place once Chávez's presidency had
reached its halfway point on August 19, 2003. Eventually,
once the CNE and the rules governing recall referenda were
in place, both the opposition and the pro-government forces
organized signature collection drives—the opposition to
petition for a recall referendum against President Chávez
and against pro-Chávez legislators, and the pro-Chávez
forces against opposition legislators. The signature
collection took place in late November and early December,
with all sides claiming success. However, after a long
drawn-out process of verifying the signatures and after
several Supreme Court challenges, the CNE ruled that nearly
one million out of the 3.1 million signatures the opposition
submitted had to be certified by the signers. The reason for
this was that personal data on sheets with up to ten
signatures appeared to have been written in the same
handwriting, suggesting that one person signed for ten.
Eventually, once signers were allowed to certify their
signatures, enough signatures were validated for convoking
the recall referendum against Chávez. 2.5 million
signatures were declared valid, just barely over the 2.4
million needed (20% of the electorate). The recall
referenda petitions against legislators did not fare so
well, with only nine opposition legislators having to face
recall referenda, out of 36 petitions. None of the 30
petitions for recall referenda against pro-Chávez
legislators succeeded.
Phase 3: 2004-2006? — Referendum victory and deepening of
the process
Finally, on August 15 the recall referendum against
President Chávez took place. This was nearly a year after
the opposition initiated its campaign for the referendum
and only four days before a constitutional deadline (August
19) that would lead to the vice-president filling the rest
of the president’s term, should the president’s mandate be
revoked. The campaign leading up to the referendum was
marked by one stark contrast: the opposition hardly
campaigned at all while Chávez and his supporters
campaigned tirelessly. Polls showed that Chávez was gaining
on the opposition continuously, so that one week before the
referendum most published polls (many
opposition-commissioned polls were not published because
they were too embarrassing) indicated that Chávez would win
by a margin of between 11% and 25%. Both sides in the
conflict, though, managed to mobilize truly impressive
numbers of people for their final rallies, each ranging in
the hundreds of thousands.
The day of the vote both sides made a big effort for
everyone to go and vote. The result was that people began
lining up already at 3am for voting centers that were
supposed to open at 6am. However, mostly due to technical
and logistical problems, many did not open until as late as
10am. The lines in all parts of the country, both in the
poor barrios and in the middle and upper class
neighborhoods were extremely long, with waits of up to ten
hours. Voting hours had to be extended several times and
some voting centers did not close until 3am, since the CNE
said that centers had to remain open as long as people were
still in line. By and large, the vote went smoothly, despite
the long waits.
The main disturbance in the vote was that the opposition
made good on its threat to release exit poll data well
before the polls closed. They did not do so officially, but
via rumor and via the U.S. polling firm Penn, Schoen, and
Berland, which broke Venezuelan law and sent out a press
release to news outlets in the U.S., claiming that the
opposition would win the recall referendum with 59% of the
vote. Later this would form one of the main pieces of
opposition “evidence” that there had been fraud committed
against their side.
Shortly after 4am on August 16, CNE president Francisco
Carrasquero announced the first preliminary results of the
referendum, giving Chávez a 58%-to-42% victory.[11]
Immediately after Carrasquero’s announcement, opposition
leaders held a press conference in which they stated
unequivocally that fraud had been perpetrated. They offered
no evidence for this claim except to say that they were
convinced of it.
That day the whole country waited anxiously to see what the
international observers would say about the referendum.
Would they support the CNE’s decision or would they side
with the opposition? In the afternoon of the 16th they
finally provided an answer, saying that they agreed with
the CNE that Chávez had won the referendum. As was to be
expected, Chavistas celebrated the announcement with car
caravans and parties in the barrios, while the opposition
was outraged. They could not believe that their exit polls
and their conviction that Chávez was unpopular could
possibly be so wrong.
In his conciliatory victory speech, Chávez said that the
Venezuelans “who voted ‘yes’ [in favor of the recall]
should not feel defeated by any means.” He added, “It is
not true that we have a country project that excludes
them.” He called on the opposition to “come with us to
national unity, the unification of all Venezuelans, to make
a reality of the Fifth Republic and to make a reality of the
project that is contained in this Bolivarian constitution.”
He went on to announce that now would begin a new phase of
his government. “From today until December 2006 begins a
new phase of the Bolivarian revolution, to give continuity
to the social missions, to the struggle against injustice,
exclusion, and poverty. I invite all, including the
opposition, to join in the work to make Venezuela a country
of justice, with the rule of law and with social justice.”
While most of Venezuela’s opposition leaders still claim
that they were the victims of fraud, most of the rest of
the country, including important opposition sectors such as
the chambers of commerce and the private mass media have
been moving on. Without any shred of evidence of fraud and
with only their highly dubious exit polls, the opposition
leaders who still claim that there was fraud risk making
themselves irrelevant. Divisions within the opposition
coalition, the Democratic Coordinator, are already showing.
Smaller parties that don’t have much to lose from boycotting
future elections, such as Alianza Bravo Pueblo (Good
People’s Alliance) and La Causa R (The Radical Cause) are
taking the hardest line in their fraud claims. But those
who have something to lose in the upcoming regional
elections for governors, mayors, and city councils are
trying to stake out a middle ground between fraud claims
and agreeing to participate in the October 31 vote.
Acción Democrática, the long-time governing party, which is
Venezuela’s largest and most important opposition party, did
not even seem to be interested in the recall referendum,
most likely because they would like to nominate any
potential successor to Chávez, but currently do not have
anyone who could take on that role. As a result, they would
probably prefer to have Chávez complete his term, so that
they have enough time to find a candidate to oppose Chávez
in 2006. During the opposition’s lackluster referendum
campaign Acción Democrática did the least to promote the
“YES” vote for the referendum.
Why Chávez won
Aside from the opposition’s internal divisions and their
corresponding inability to mount a coherent campaign
against Chávez, the outcome also reflects factors that have
to do with Chávez and his supporters. First of all, if there
is anything that Chávez is good at, it is campaigning.
Countless events were held throughout the country, all
featuring Chávez as the main speaker. Every time Chávez
holds a public event, the crowds are enormous. One of the
last rallies before the end of the campaign, in Caracas’s
largest boulevard, attracted between 300,000 and 500,000
When it was time to decide whether to campaign in behalf of
a “no” or a “yes,” Chávez and his supporters said they would
prefer the opposition to keep its “si” campaign, which it
had been using all along, while they themselves would
campaign for a “no.” Choosing a “no” campaign (as in “no
recall of the president,” instead of “yes the president
stays”) was in some ways a stroke of genius. It had
generally been assumed that campaigning in favor of a “yes”
would be easier because people by nature are more inclined
to be positive or agreeable, thus giving the “yes” vote a
slight psychological advantage. However, by campaigning for
“no,” the pro-Chávez forces were in a position to clearly
state what they are against, which is always much easier
than to concretely say what you are for. The no campaign
was thus based on saying “NO to the past!,” “NO to the
privatization of PDVSA!” (the state oil company), “NO
return [of the old elite]!,” “NO to the dismantling of the
missions!,” etc. These are all quite concrete demands.
On the other hand, the opposition had a much more difficult
time with the “yes” campaign because they had to say what
they are for, which was not easy for the highly fragmented
opposition. Their campaign was based on relatively vague
feel-good terms, such as “YES” to “peace,” “unity,” “work,”
and “security”—which are, of course, what everyone wants,
Chavistas included, and are thus not particularly
distinctive. The only major campaign event that the
opposition organized was a large demonstration and rally on
the capital’s main freeway, which, similar to the pro-Chávez
rally, attracted several hundred thousand opposition
But more important than the relative strengths and
weaknesses of the referendum campaigns were the changes
that have been taking place in Venezuela in the past few
years. That is, while there certainly have been many
problems in this period, including a tremendous two-year
decline in GDP of nearly 20%, Venezuelans who voted for
Chávez tended to blame the opposition for this decline.
Also, although the poor had suffered reduced income during
this two-year period, numerous other indicators suggest
that their condition was improving.
First of all, many people who live in the barrios
consistently report that their sense of hope and of being
noticed by the government has increased tremendously. A
large part of this hope stems from the urban land reform
program, which is giving people the hope of having some
level of financial security and of recognition for the
investments they have made in their communities and homes.
Nearly half of Venezuela’s population of 24 million could
eventually benefit from this program. Others sources of
hope have only developed in the past year, with the
introduction of the numerous new social programs known as
“missions,” which provide community health care, literacy
and adult education, subsidized supermarkets, employment
training, and university scholarships for the poor.
Indicators that these programs are having an effect can be
found in polls, where well over 60% of the population
(mostly among the poor) report that they support these
programs. Also, there are numerous quality of life
indicators, such as infant mortality, which has dropped
from 18.8 per thousand to 17.2 between 1998 and 2002, and
life expectancy, which has increased from 72.8 to 73.7
years in the same period.[12] One should note that 2002 was
one of the worst crisis years of the Chávez presidency, so
one can expect that an improvement in these figures for
Another very interesting indicator is found in the
Latinobarometer,[13] an annual study conducted with the
support of the Interamerican Development Bank, the World
Bank, and various Latin American governments. According to
this study, the support for democracy has either decreased
or stayed the same in nearly all Latin American countries.
The only country where there was a significant increase in
the population’s support for democracy was Venezuela,
where, with 74% support, it ranks second highest in all of
Latin America. The increase during the Chávez presidency
alone has been over 14%—an increase that is nearly four
times as high as the country with the next largest
increase, Honduras, with only a 4% increase in the same
time period.
Certainly such an increase could be attributed to a variety
of factors, and not necessarily with how happy Venezuelans
are with Venezuelan democracy. However, the analysts of the
Latinobarometer argue, “The transformation that the Chávez
government has produced in Venezuelan political culture is
evidenced in that Venezuela is the country in Latin America
in which the fewest believe that the country is being
governed for the few, and where the most believe that it is
governed for the good of the people.” That is, only 51% of
the Venezuelan population would agree with the statement
that the country is governed in the interests of the
powerful, while in Peru a full 85% believe this is the
Also, with regard to Venezuelans’ satisfaction with
democracy, Venezuela is only outranked by Uruguay and Costa
Rica, with 42% of Venezuelans saying that they are satisfied
with it and 45% of Uruguayans and 48% of Costa Ricans. In
addition, Venezuela experienced the largest increase in
satisfaction with democracy during Chávez's presidency,
going from 35% to 42% in five years.
What accounts for this increased satisfaction with
democracy and increased support for democracy in Venezuela?
The answer almost certainly has to do with the policies of
the Chávez government that promote “participatory
democracy,” which have allowed many Venezuelans, but
especially the poor, to feel included in Venezuelan
democracy more than they ever have been before. That is,
contrary to what the opposition claims, the Chávez
government has actually increased opportunities for
democratic participation in Venezuela, via its new 1999
constitution. For example, in addition to a wide variety of
referenda, civil society is given an important role in
nominating judges and various other public officials. Local
citizens’ assemblies enjoy a constitutional status, so that
they can force local officials to be more accountable.
Also, local public planning councils play an important role
in shaping local government, based on the model found in
Porto Alegre, Brazil. These and other measures have given
ordinary Venezuelans a greater sense of participation and
stake in their government.
In the referendum the greater sense of stake meant that the
poor turned out in greater numbers than ever before to vote.
However, opposition voters also felt that a lot was at
stake, with many of them firmly believing that Chávez was
leading the country towards “Castro-communism.” The result
was a massive turnout on the day of the referendum.
Statistically, with a 70% turnout, the vote might not have
reached historic heights, in terms of the percentage of
registered voters going to vote. But one must keep in mind
that the percentage of voters registered had reached a
historical high with 53% of Venezuela’s total population
(or about 87% of the voting age population). That is,
compared to the last presidential election (in which 6.3
million voters voted), participation, in raw numbers, had
increased by 55%, to 9.8 million voters, in just four
As a result, lines for voting on August 15 were extremely
long, completely overburdening voting centers, leading to
over ten-hour waits. While the statistics on voter turnout
by demographic group are not yet out, it is almost certain
that most of the increase in turnout came from the barrios,
the country’s poorest neighborhoods. Historically, just as
in nearly all democracies in the world, voter turnout is
very highly correlated with education and income, with the
upper classes and those with more formal education voting
at a much higher rate than the poor. Venezuela’s poor,
however, felt that much was at stake this time around and
many said that they were voting for the first time in their
life. That is, they did not even vote when Chávez was first
elected in 1998 or re-elected in 2000.[14]
Revolutionary Politics?
Given that Chávez enjoyed tremendous popularity among the
middle classes when he was first elected in 1998 and then
re-elected in 2000, and given that in those years most
voters came from the middle class, it is fair to say that
Chávez was essentially elected by the middle class.
However, by 2004 his class support had shifted
overwhelmingly in favor of the poor, so that his mandate
was reaffirmed, on August 15, by the poor, who constitute
an overwhelming majority of the country (between 65% and
75% of the population, depending on the study), and not by
the middle class.
What is it exactly, though, that Venezuela’s poor see in
Chávez? What has he done to make them so enthusiastic in
their support? What is the Bolivarian project really about?
The ideology, and to a more limited extent the practice, of
Chávez's Bolivarian Revolution has four core aspects to it:
redistributive, anti-neoliberal, participatory, and
First, it is redistributive, in that the government has
become an instrument for distributing the country’s oil
wealth towards the poor, mostly in the form of a wide
variety of social programs that were mentioned earlier and
in the form of rural and urban land reform.
Second, the Bolivarian project is anti-neoliberal. That is,
economic policies are opposed to the tenets of free trade,
privatization, state austerity, and deregulation, all of
which tend to favor big business over the ordinary citizen.
Instead, the Chávez government’s economic policies emphasize
“endogenous development”—development that is geared towards
diversifying the national economy, especially by supporting
small businesses and cooperatives. Also, related to the
concept of endogenous development, there is an emphasis on
education for the poor. Another aspect of this
anti-neoliberalism is to politically and economically
integrate Latin America so that the South would be better
prepared to confront the North both economically and
politically. The pursuit of Latin American integration has
been accompanied with strong opposition to U.S. foreign
policy, both of which have been a thorn in the side of the
Bush administration.
Third, the Bolivarian project emphasizes participatory
democracy in addition to traditional representative
democracy. The participatory aspect of the Bolivarian
project has taken many different forms, whether the
constitutional provision for referenda, various avenues for
citizen participation in the naming of government officials
such as judges, increased local democracy, or in the form
of local public planning councils, in which ordinary
citizens take an active role in shaping and overseeing
local government.
Fourth, Chávez's project emphasizes the inclusion of those
who have traditionally been excluded, such as the poor, the
indigenous, Venezuelans of African descent, and women. The
measures for including these involve the above-mentioned
redistribution programs, combined with affirmative action
measures, where the poor, women, and indigenous Venezuelans
receive preferential treatment when it comes to
micro-finance loans, housing, or educational programs.
Finally, more as a matter of necessity than of ideology,
there is a realization within the Chavista movement that
these different ideological policy orientations can best be
pursued in a state that is free of corruption and
inefficiency. The fight against corruption was thus one of
the main goals of the Chávez government when it came to
power, but has, until recently, received relatively little
Challenges and Obstacles
The implementation of the Bolivarian project, however, is
less than perfect. This has largely to do with the serious
internal and external obstacles that the project faces on a
daily basis. Among the internal obstacles are the tendencies
towards a cult of personality and an in-group culture. And
among the most important external obstacles are national
and international capital interests and the imperial
ambitions of the U.S. government.
Internal Obstacles I — Personality Cult
The Bolivarian project, and Venezuela’s left in general,
would be nowhere today if it were not for the figure of
Hugo Chávez. It has been almost exclusively thanks to him
that Venezuela’s fragmented left has been able to unite
behind one movement and one leader. The reason Chávez has
been able to do this is directly traceable, more than
anything else, to his charismatic and forceful personality.
In his immediate presence people say that Chávez inspires
strong feelings of confidence and personal rapport with
him. As a leader of large mobilizations, when Chávez gives
a speech, he is capable of electrifying and fascinating
listeners for hours on end. Not everyone, of course is
affected by his personality, but it would be fair to say
that a large majority of his dedicated followers are. No
other political figure in recent Venezuelan history has
been able to communicate with Venezuelans on an emotional
level the way that Chávez has.
There are two flipsides, however, to Chávez's charismatic
leadership. First, just as he provokes dedication among
followers, he also alienates a very large segment of
Venezuelan society. While poor Venezuelans identify with
his folksy way of speaking, most Venezuelans from the
middle and upper classes consider his manners to be
unworthy of a president. So, just as Chávez inspires
passionate love among many of his followers, he inspires
passionate hate among many of his opponents. This hate that
many in the opposition feel is an external obstacle, though,
and one that mostly affects Venezuela’s political climate
and is probably not as important as the other obstacles.
The more important negative consequence of Chávez's
charisma is that it lends itself, as with any charismatic
leader, to the creation of a cult of personality. Chávez's
political party and the government’s Ministry of
Communication and Information often post billboards
throughout the country that say things such as “Chávez is
the people” or “Who is against Chávez is against the
people.” Informative literature about state institutions
generally tends to have Chávez's picture all over it. Also,
pro-Chávez graffiti often read, “With Chávez everything,
without Chávez nothing,” emphasizing that the opposition
may demand just about anything, as long as it is not that
Chávez leave the presidency—a slogan that was common during
the late 2002 oil industry shutdown, where the demand was
precisely Chávez's resignation.
The more serious consequence of such a cult of personality
is that followers tend to lose any capacity for independent
and critical thought, accepting what the leader says as
gospel. Usually this type of conformity becomes evident
when controversial decisions are made. For example,
recently a new Supreme Court law was passed, which included
questionable provisions, such as the legislature’s ability
to dismiss judges if the justice’s “public attitude . . .
undermines the majesty or prestige of the Supreme Court” or
of any of its members or the justice “undermines the
functioning” of the judiciary. Here even Chávez supporters
should recognize that such provisions would undermine the
independence of the court, but practically none have
criticized the law.
Every once in a while Chávez makes verbal attempts to
counter the incipient cult of personality around him, but
it is generally ineffective, since it remains at the level
of talk, in the sense that Chávez tries to emphasize that
he is merely “a leaf in the wind of Venezuelan history” or
similar statements of humility. More practical measures
would be useful, though, such as the limitation of the use
of his photograph for official state literature and the
banning of slogans that equate Chávez with the Venezuelan
people in general.
Internal Obstacles II — In-group culture
Perhaps the second internal obstacle is a consequence of
the first. That is, Chávez and his supporters are currently
in grave danger of recreating the cronyism of the “Fourth”
Republic, the one of the constitution of 1961-1999, which
Chávez has sought to replace. The personal attachment and
dedication to Chávez supports a climate in which Chávez
cannot be questioned and any who do so are suspected of
being opponents or even enemies. Such a reaction, though,
must be seen in the context in which the Bolivarian project
is indeed surrounded by enemies who are intent on destroying
it, as the opposition’s April 2002 military coup and the
December 2002 oil industry shutdown proved. Nonetheless, an
inability to differentiate between real enemies, political
opponents, and mere critics exists within Chavista ranks,
so that all political opponents are often seen as enemies.
The worst consequence and extreme of such thinking is that
in order to benefit from government programs one must be a
Chavista. This is not the case for all government programs,
but there are many where this has practically become a
requirement, such as at the newly created “Bolivarian
University,” some micro-credit programs, and some
government institutions (the health minister once said that
doctors at public hospitals who signed the petition for
Chávez's recall ought to be fired—a statement he later
retracted). When criticizing this practice, however, one
should keep in mind that it is not specific to Chávez
supporters. There are plenty of institutions in the country
that the opposition controls and in which Chávez supporters
are unwelcome, suggesting that this practice is a part of
the larger Venezuelan culture, just as its past would
indicate. Still, the central government ought to set an
example, especially since it came to power with the
argument that it would do away with AD-Copei[15] cronyism
and patronage.
This type of in-group thinking tends to combine with other
pre-modern forms of governance, such as a belief that the
ends justify the means, authoritarianism, and militarism.
That is, all too often, when one challenges a Chávez
supporter on questionable practices, such as policies that
allow only supporters to participate in certain programs,
that person will often argue that “it is about time that
they [the former elite] taste their own medicine,” or “this
is the only way we are going to make a better society.” The
various missions that currently are key to the government’s
social policies are very much part of this type of
subversion of what Max Weber would call legal-rational
authority. Specifically, the fact that the missions operate
outside the existing state structures and thus subvert the
constitution’s requirement that state spending is the
responsibility of the legislature, is another instance of
how good ends (the alleviation of poverty) can be used to
justify questionable means (the subversion of the
The accusation that the Chávez government is authoritarian
is very common among the opposition and generally has no
basis in reality because it tends to be so over the top.
That is, an amazing number of opposition leaders claim that
the Chávez government is a dictatorship (or even
totalitarian) and that Chávez is steering the country
towards “Castro-communism.” However, part of the reason
that the opposition can even make such a claim is because
it does have some, if very limited, bearing on reality. The
recent nomination of pro-Chávez candidates for the regional
elections is a case in point, in that these candidates were
by and large nominated without consultation with
pro-government groups in the candidates’ communities. Many
critical Chavistas have thus recently argued that
candidates should be nominated by the party, in a “primary”
process. Chávez party leaders, however, say that there is no
time for this and urge everyone to unite behind the chosen
An example of Chávez's authoritarian style is his tendency
to issue orders on the spur of the moment, often unaware of
the impropriety of the order. For example, some former
ministers relate stories of how Chávez would call them in
the middle of the night, with some new directive for them
to fulfill. Also, it is well known within government
circles that if one wants to get anything done in
Venezuela’s extremely inefficient public administration,
all one needs to do is to have Chávez issue a direct order
and people start moving. In other words, what marks the
Chávez government is not real authoritarianism as political
scientists would describe it, but an authoritarian style,
one which Chávez has no doubt inherited from his background
in the military.
That the government is militaristic is another favorite
opposition accusation that has some basis in reality, but
not the way that the opposition likes to portray it. Some
opposition analysts have argued that because of the number
of military officers in the government, the Chávez
government is, at heart, controlled by Venezuela’s
military. This is another typical opposition distortion.
However, what is true is that an inordinate number of
military officers are in high-ranking government positions,
whether as governors, candidates for governor, ministers,
vice-ministers, or directors of state-owned enterprises.
Fourteen out of 23 candidates for state governorship are
military officers. Similarly, nearly half of all ministries
are headed by military officers.
Part of the reason for the large military presence is that
Chávez has a difficult time finding qualified personnel who
support his government and have the requisite management
skills to take charge of a large and complicated government
bureaucracy. Often he has had bad experiences with civilians
he has put in charge of a ministry. One of the negative
consequences of this military presence in the government is
that much of the state bureaucracy ends up being run as if
it were the military, where everyone is expected to be a
good soldier, to keep a low profile, to do as they are
told, and not to show too much initiative. This might be
good for efficiency (which nonetheless still is a serious
problem), but not for creativity and flexibility.
Despite this, there is an interesting argument in favor of
the military in the government. Chávez has repeatedly
stated that one of his main goals for the Bolivarian
project is to forge a civilian-military alliance. The idea
is that the military should not be something completely
separate and isolated from the rest of society. Rather, the
military should be integrated into society, so that it may
take up social responsibilities that go beyond the defense
of the nation. Or, to put it differently, Chávez wants to
redefine the meaning of national defense to include social
dimensions, such as food security and the people’s well
being. Chávez has thus used the military for countless
social programs, from building roads and homes, to food
distribution programs, to agricultural programs. So,
despite the militarization of civilian state institutions,
a strong argument can be made that the Venezuelan military
is being “civilized,” as a result of its new duties.
External Obstacles I — Capital interests
It is difficult to overcome internal obstacles when,
simultaneously, you are confronted with obstacles imposed
from the outside, as it were. Among the more important
external obstacles are the capitalist interests of
Venezuela’s ruling class. This class has opposed President
Chávez from the start, although with some notable
exceptions. While Chávez was still only a presidential
candidate, some notable big business interests did support
his campaign, such as the newspaper El Nacional and media
mogul Gustavo Cisneros. Also, a former Chávez supporter and
one of the key architects of Chávez's campaign, Luis
Miquilena, raised large sums of money for the campaign,
mostly from big business. All of these business supporters,
however, soon joined the opposition. It seems that many had
hoped, as had always been Venezuelan tradition, that key
big business supporters of the president would be named to
important ministerial posts. The editor of El Nacional,
Andrés Mata, for example, had clearly hoped to become the
minister of culture. Others were hoping to control the
ministry of production and commerce and other related
economic ministries. Chávez, however, made a clean break
from Venezuelan political tradition in this case and did
not name any of these types of supporters to ministerial
It was thus only a matter of time for these former
supporters from the business sector to turn against Chávez.
But of course it was not just the slight of their
traditional rights that bothered Venezuelan big business;
they also had to contend with a number of programs that
directly touched upon their privileges. Three policy areas
enraged the Venezuelan business class.
 First, right after Chávez became president, he
rescinded a law that stated that Venezuelan business would
no longer have to pay generous severance payment to
laid-off workers. (Venezuela for the longest time required
business to pay generous severance packages. This policy
had been reversed, though, shortly before Chávez came into
Second, Chávez moved forward in enforcing Venezuela’s tax
code. For decades, the Venezuelan business sector avoided
paying taxes and the government, in the belief that looking
the other way in the face of tax evasion would be good for
the economy, tolerated this. During Venezuela’s oil boom
years, the country could easily afford such tax evasion.
However, as the oil revenues steadily declined from the
1980s onward, it could no longer afford tax evasion, but
most governments were too timid to do anything about it.
When Chávez came into office he immediately set about
collecting taxes, closing businesses temporarily or, more
recently, refusing hard currency to them if they refused to
Third, and perhaps most importantly, Chávez introduced the
so-called “enabling laws” mentioned earlier (land reform,
banking reform, and oil industry reform), which touched on
a wide variety of business sector interests.
The main representative of Venezuelan big business is its
largest chamber of commerce, Fedecamaras. As such, it took
up the fight against Chávez and announced its first
challenge on December 10, 2001, when it, together with the
union federation CTV, called for a general strike.
Fedecamaras opposition tactics, under the leadership of its
president, Pedro Carmona, eventually led to the April 2002
coup attempt and Carmona’s two-day self-proclaimed
presidency. It would seem that the chamber’s resistance to
Chávez is slowly coming to an end with Chávez's recent
victory in the recall referendum.
External Obstacles II — Old Elites
In addition to the powerful economic interests that the
Chávez government has alienated, there is another
significant sector, Venezuela’s old ruling elite, that to
some extent overlaps with domestic capital interests and to
some extent does not. That is, in addition to big business
one has to add the former governing parties, Acción
Democratica and Copei, the union federation that Acción
Democratica controls (the CTV), Venezuela’s Catholic Church
hierarchy, and the private mass media. All of these
groupings (except perhaps the private mass media) used to
have a significant say in Venezuela’s government until
Chávez came to power. Now they have all dedicated
themselves to overthrowing Chávez. Each one of these groups
even went so far as to participate actively in the April
2002 coup attempt against him.
External Obstacles III — U.S. Imperial Interests
Unlike Chile in 1973, where large U.S. corporations such as
ITT had a major role in overthrowing the Allende government,
international capital appears to show much less interest in
influencing Venezuela’s politics. Part of the reason
probably has to do with the fact that Chávez has not
touched on any international big business interests.
Venezuela’s oil was nationalized several decades ago and
Chávez seems to have no intention of nationalizing anything
else. The only area where some observers have said that
Chávez is affecting international capital is the taxation
of oil production. This, however, tends to be
misunderstood. That is, while Chávez did double the
royalties that oil companies pay to the Venezuelan state
for extracting oil (from 16% to 30%), he simultaneously
lowered the taxes on oil production. In the end, the
contributions of transnational oil companies to the state
remained more or less the same—at most only marginally
higher. The main reason for the shift from taxes, where oil
extraction costs have to be taken into account, to fixed
royalties, where the fee is always the same, is that it is
much easier for the Venezuelan state to account for and to
collect revenues this way.
All too often analysts confuse transnational capital
interests with U.S. imperial interests. Such confusion is
very understandable because often the two coincide, such as
during the Clinton presidency, which was a presidency based
on unifying U.S. imperial interests with those of
transnational capital.[16] As such, Clinton and Chávez were
able to establish a modus vivendi, especially since Chávez
did not attack any U.S. capital interests. This changed,
however, when Bush came to power in 2000, with an
administration to which the pursuit of its conservative
ideology was more important than the pursuit of U.S.
capital interests.
Due to the Bush administration’s more imperial foreign
policy, Chávez has been much more openly opposed to U.S.
government foreign policy than he was during the Clinton
administration. Chávez rarely misses an opportunity to
strongly condemn U.S. policy in Iraq and in Afghanistan,
for example. After one notorious bombing in Afghanistan,
Chávez held up pictures of the victims, who were mostly
women and children and said, “you do not fight terrorism
with terrorism.” Chavez has also been a consistent opponent
of U.S. trade policy, strongly fighting against the Free
Trade Area of the Americas (FTAA) and favoring Latin
American economic integration before making any trade
agreements with the U.S. Another issue that probably has
the Bush administration concerned about Venezuela is
Chávez’s efforts to provide oil to the Chinese market. Bush
would much prefer to have an obedient vassal such as Iraq
provide China with oil than an uncontrollable country such
as Chávez’s Venezuela.
U.S. interference in Venezuela on an overt level thus
quickly became an issue with the Bush administration, with
its constant unfounded accusations that Chávez was
supporting the Colombian guerrillas, allowing Muslim
radicals to move about freely in Venezuela, and that Chávez
was funding opposition movements throughout Latin America.
The interference in Venezuelan affairs came to a head with
the April 2002 coup, in which the U.S. was one of the only
countries in the world to welcome the two-day coup regime.
A month after the coup, reports emerged from a former NSA
officer that the U.S. navy had stationed ships off the
Venezuelan coast in order to monitor troop movements, which
were then radioed to the coup organizers within
Venezuela.[17] One of Chávez's loyal officers also recounts
that a U.S. embassy official, a few weeks before the coup,
approached him during a party, confusing this officer for
one of the coup plotters, and telling him to get in touch
with the embassy as soon as possible, so that unspecified
plans could be made.
While the Bush administration denied any covert
interference in Venezuela, the overt interference continued
throughout 2002 and 2003, mostly via spokespersons such as
Roger Noriega, Otto Reich, or the head of the U.S. Southern
Command, General James Hill, who would all make various
accusations against the Chávez government. More recently,
ever since early 2004, activists in the U.S. have uncovered
documents that show in great detail how the U.S., via the
National Endowment for Democracy, USAID, and Development
Alternatives, Inc., are funding Venezuela’s opposition, at
the rate of three to four million dollars per year or
Can Venezuela overcome its internal and external
Given this wide variety of internal and external obstacles,
it should come as no surprise that Chávez has had a fairly
difficult time implementing his policy goals. It is mostly
thanks to the unity of his movement, which is almost
exclusively based on his leadership, that Chávez has been
able to pursue his goals despite the external obstacles his
government has faced. Also, the overwhelming majority
support Chávez enjoyed in his first few years in office,
which was then re-confirmed during the August 2004 recall
referendum, gave Chávez the needed legitimacy to pursue his
The strategy that Chávez and his opponents have used,
though, has been one of constant confrontation. On the
level of discourse this head-on confrontation reached a
very pitched tone, in which Chávez and his supporters hurl
all sorts of epithets against the opposition and
vice-versa. On the level of power struggle, the conflict
has involved violence, economic strikes, sabotage, and
countless plots.
So far, the confrontation strategy has allowed Chávez to
continue, but it has come at a tremendous cost. Numerous
lives have been lost, mostly of Chávez supporters during
the April 2002 coup (estimates say that up to 60 were
killed by the police during the coup days). Also, about 20%
of GDP was lost during the two years 2002-03, with nearly
$10 billion lost in economic activity during the oil
industry shutdown alone. Along with this, unemployment
skyrocketed and poverty increased. Fortunately for Chávez's
political fortunes, though, his supporters are clear that
the opposition has been to blame for these losses and not
There is a movement, to a large extent funded from U.S.
sources, such as the Carter Center, to find a
non-confrontational path in Venezuela’s politics. To some
extent these efforts have been inspired by the Harvard
University negotiation and conflict resolution expert
William Ury, who argues that Venezuela is at the brink of a
civil war. Many of the warning signs that are typical of
civil wars, such as the demeaning of one’s opponents, the
arming of the population, and the media’s taking sides in
the conflict, are all present in Venezuela. According to
Ury, Venezuela needs to strengthen what he calls the “third
side”—people who might be on one side or the other in the
conflict, who are capable of building bridges, of
communicating and building trust with individuals on both
sides, so that the conflict is de-escalated and avoids the
trap of outright violence.
With Chávez's recent victory in the recall referendum,
however, it seems that the renewed legitimacy the Chávez
government has received has to some extent de-escalated the
conflict. Many who used to be intransigent opponents of
Chávez, especially in Venezuela’s big business sector and
the former governing party Acción Democrática, have now
come to recognize that they have to accommodate themselves
to his presidency, at least until the next presidential
election in 2006. Also, Chávez seems to have recognized
that his triumph has come at a significant cost and that
some manner of reconciliation and negotiation is necessary,
as he has called for dialogue with the “serious” opposition,
the opposition that recognizes the official referendum
Whether such dialogue will be possible, especially if
Chávez makes good on his promise to “deepen” the
revolution, remains to be seen. His success in this
endeavor will also depend on whether Chávez manages to
overcome the internal obstacles of the personality cult
around his person and the in-group culture that has
gradually been developing. Overcoming these internal
challenges will probably be a pre-condition for his coping
with the external challenges of national capital interests
and U.S. imperial interests, since the internal ones weaken
his government and will not leave him with sufficient
strength to overcome the external ones.

[1] For an excellent in-depth treatment of this problem, on
which much of this analysis is based, see: Terry Lynn Karl
(1997) The Paradox of Plenty, Berkeley: University of
California Press.

[2] OPEC Annual Statistical Bulletin, 2003

[3] Ministerio de Finanzas, “Los numeros no mienten.” Per
capita Gross National Income (GNI) was $5,845 in 1984 and
$6,012 in 1998, fluctuating above and below these figures
between these two periods. Source: Central Bank of

[4] Universidad Católica Andrés Bello, Instituto de
Investigaciones Económicas y Sociales,

[5] See Francisco Rodríguez, “Understanding the
Determinants of Venezuelan Inequality”
(http://www.bsos.umd.edu/econ/Rodriguez/Venezuela.pdf ) for
a detailed explanation of how and why Venezuela’s inequality

[6] Fernando Coronil (1997), The Magical State: Nature,
Money, and Modernity in Venezuela, University of Chicago

[7] Ibid., p.5

[8] This is one of the highest percentages of any president
in Venezuelan history and nearly double that of the previous
president, Rafael Caldera, who garnered only 30% when he was
elected in 1993.

[9] For more information on the coup, see:

[10] The president may only be recalled once half of his
term has expired. The Supreme Court thus ruled that recall
referendum petition signatures that are collected before
the halfway point, such as the ones collected on February
2, 2003, are invalid.

[11] The final official result would increase the margin of
Chávez's victory slightly, with 59% for “no” and 41% for
“yes” — many of the additional no votes came from the
countryside, which had to be counted manually and which
went 70-30 in favor of Chávez.

[12] Source: Instituto Nacional de Etadistica,

[13] www.latinobarometro.org

[14] I determined this mostly via random interviews with
poor people who were lining up to vote in one of the
barrios of Caracas.

[15] AD—Acción Democrática (Democratic Action)—and Copei
are the two parties that ruled Venezuela alternating the
presidency between them for forty years.

[16] See Harvey, David (2004) The New Imperialism for a
good dissection of how Clinton, as a neoliberal,
represented the logic of capital while Bush, as a
neo-conservative, represents the logic of territory or

[17] “American Navy 'helped Venezuelan Coup'” in The
Guardian, April 30, 2002 (reprinted at:

[18] See the website www.venezuelafoia.info for more
information. According to the documents, the National
Endowment for Democracy has been providing at least $1
million per year, USAID $2.3 million, and Development
Alternatives, Inc., which acts as a contractor for USAID,
has provided an additional unknown amount of up to $2.5
million per year, during the Chávez presidency. Among other
projects, the opposition’s presidential recall campaign
received substantial funding from these institutions.
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