Introduction

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 defeated.

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:

1. Declining per capita oil revenue (47% drop from 1963 to 1997)
2. Doubling of the population (from 12 million in 1975 to 24 million in 2000)
3. The “Dutch Disease” (declining industrial and agricultural sectors)
4. 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 capital.

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 things.

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 thread.

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 shutdown.

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 supporters.

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 supporters.

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 2004.

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 case.

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 years.

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 inclusive.

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 attention.

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 legislature).

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 candidates.

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 posts.

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 office.)

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 pay.

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 more.[18]

Can Venezuela overcome its internal and external obstacles?

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 program.

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 Chávez.

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 result.

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.