Wilpert: Why Venezuela's Middle Class (for the most part) Opposes Chavez

Fred Feldman ffeldman at bellatlantic.net
Sat Nov 2 08:59:14 MST 2002


The introductory note below, which precedes Wilpert's article, is by
"redflagau" who posted the article to CubaNews.  The article highlights one
of the many contradictions that face a regime which is  beginning  the
redistribution of wealth and power within the framework of a capitalist
economy and capitalist state and government machinery.  Since the
capitalists still control the means of production in cities and countryside,
redistribution tends to first and most sharply negatively affect the quite
large sections of the  middle classes who live to a substantial degree  from
the trickle-down from the wealth that the capitalists and landlords extract
from the labor of working people.  One of the purposes of this trickle-down
is to consolidate these layers as a political base of support for the
capitalist rulers and their system.

On one point I think "redflagau"'s introduction can give the wrong
impression.  While there is no doubt that the capitalists are sabotaging the
economy in Venezuela in protest against the Chavez regime's attempts to
benefit workers, peasants and the poor, as also happened in Chile,  the
basic causes of the economic crisis in Venezuela is not "the economic chaos
unleashed by [Venezuelan] capitalists in league with the CIA" but a
deepgoing economic crisis of world capitalism.  This has steadily spread,
devastating much of South America, Africa, Asia (including such places as
Taiwan and South Korea), and the former Soviet Union, and increasingly
affecting the imperialist countries including the United States.  Even Cuba
is being deeply affected -- note the need to shut down a large part of the
sugar industry because the nation's main product no longer finds an
acceptable price in an ever more unfavorable world market.

As the Venezuelan workers and peasants move forward, as they have been
doing, they will more and more confront this fundamental cause of the
deepening exploitation and oppression that working people face on a world
scale.
Fred Feldman

[Posted on z net. Despite a whole lot of differences it is a bit
reminiscent of Chile under Allende where the middle clasee didn't
benifit from the reforms aimed at the poor but suffered from the
economic chaos (unleashed by Chilean capitalists in league with the
CIA)]

Why Venezuela's Middle Class (for the most part) Opposes Chavez

Gregory Wilpert


"Chavez' greatest error was to screw the middle class," says Carlos
Escarrá, a prominent constitutional lawyer and former Venezuelan
supreme court judge, who describes himself as being with
the "proceso," but not a Chavista. The "proceso" is the process of
social transformation that was initiated by the movement which
brought President Chavez to power.

When Chavez first got elected, nearly four years ago, it looked like
a vast majority was with the "proceso," but now, large sectors of
society that at first supported Chavez, particularly the middle
class, appear to have joined the opposition. A clear indication of
this opposition was the October 10 demonstration against the
government, which attracted anywhere between 400,000 (government
estimate) and 1,000,000 (opposition estimate) mostly middle class
participants. No matter what the precise number, there is little
doubt that this was probably one of the largest demonstrations in
Venezuelan history, which was matched two days later by a pro-
government demonstration of at least equal size, representing mostly
the lower class of Venezuelan society. Why is the middle class so
opposed to Chavez and the lower class not? The reasons are numerous
and have to do with economics, government policies, the media, and
racism.

The Economy

2002 was and still is a difficult year for Venezuela. The currency
devalued 50% in the first six months, inflation skyrocketed from 12%
in 2001 to 35% or more in 2002, and unemployment jumped from 13% to
17%. Contrary to what many people in Venezuela seem to believe, these
economic trends have affected the middle class much more than they
affected the poor. That is, the currency devaluation has a greater
negative economic impact on the middle class because the middle class
tends to purchase more products that are denominated in dollars,
whether it is cars, computers, real estate, or vacations to the U.S.
Suddenly they can no longer afford these purchases because their
income is worth half as much as it was before the devaluation.

Also, while the devaluation causes a general inflation of prices,
since Venezuela imports over 70% of its consumer goods, inflation is
more acute among the products that the middle class consumes because
they tend to purchase more imported goods than the poor do. Another
reason why inflation affects the middle class more than the poor is
that the middle class depends on a salary that is fixed at the
beginning of the year. The poor, who are by and large employed in the
informal economy, however, can more easily adjust their income to
match inflation, simply by immediately charging more for their
products and services - they do not need to wait for the annual
salary increase. Finally, the poor tend to have more of a social net
that softens the impact of inflation, in the form of larger extended
families and communities that help each other out and in the form of
free public services, such as health care and education. The middle
class, however, tends to rely on private education, and private
health care, which is of a better quality, but which have to be
discontinued as soon as the prices for these service rise too much
for their income.

Venezuela's government has a large role in the economy, which means
that a fluctuation in public spending has nearly immediate
repercussions for economic activity in general. In other words,
government spending cut-backs tend to push the economy into
recession. Since about a third of government income comes from oil
revenues, any fluctuation in the price of oil is rapidly felt in the
rest of the economy. For example, in late 2001 the price of
Venezuelan oil dropped from $18 to $16 per barrel. This caused a
tremendous shortfall in revenues, so that public sector income
declined by 13% in the first quarter of 2002, compared to the same
period in the previous year. Most of this loss was attributable to
declining oil revenues, which dropped by 46% in the first quarter,
compared to the previous year's first quarter. As a result, the state
budget for 2002 had to be reduced by 7% relative to what had been
planned. At the same time, in late 2001, the opposition decided to
intensify its campaign against the government, by calling a general
strike and organizing large demonstrations. This economic and
political crisis contributed to massive capital flight, which, in
turn, made the political and economic crisis worse. The central bank
could no longer defend the currency against the devaluation pressure
that the capital flight was causing and when it abandoned its efforts
to defend the currency, the currency devalued and inflation shot up.

The combination of inflation and reduced government spending proved
to be a double blow to the economy, so that many businesses were
forced to close and unemployment increased dramatically. While
unemployment had been reduced from 18% when Chavez came to power in
1999 to 13% in 2001, it went up to 16% by late 2002, according to
government statistics. Also, the economy contracted by a whopping 7%
in the first half of 2002. Of course, the attempted coup of April 11,
2002 exacerbated the economic situation because it temporarily
stopped some oil shipments and generally increased economic and
political uncertainty in the country. Now that the oil price has
risen to over $27 per barrel of Venezuelan oil and that deflation has
made it much easier for the government to cover the 2003 budget with
its oil dollar income, the economy should grow significantly again in
late 2002 and early 2003.

Government Policies

As mentioned earlier, the recession is not the only reason that the
middle class opposes the Chavez government. Another factor is that
the government's policies have not benefited the middle class all
that much. That is, the most important reforms the government has
introduced, such as involving the new constitution, education, health
care, or land reform, all tend to benefit the poor much more than the
middle class.

The government's health care and education policies have benefited
the poor more than the middle class because the middle class tends to
rely on private health care and education. In contrast, the poor have
benefited from the institution of universal health care for the first
time in Venezuela's history, even if that health care is relatively
miserable, at least it is more accessible to the poor than it has
ever been. The situation is similar with education. The government
has introduced thousands of "Bolivarian" schools throughout the
country, which provide three free full meals per day to all students;
something they would never be guaranteed if they stayed at home. As a
result, one million new students have been matriculated in schools,
who were never part of the school system before.

One of the most significant achievements of the new constitution is
that it permanently broke the two-party system of Venezuela and has
thus enabled the participation of large sectors of society that were
traditionally excluded from government before. Important in this
regard are the constitution's inclusion of women, indigenous peoples,
and homosexuals, who in the earlier constitution had few real rights.
Again, these are changes that, at best, the vast majority of the
middle class feels quite indifferent about.

Another area that is high on the Chavez government's agenda, but
which leaves the middle class out, is land reform. The government has
introduced two kinds of land reform programs-rural and urban. The
rural land reform has caught quite a bit of attention and its passage
in November 2001 was arguably the beginning of the opposition's
campaign against the president. The land reform law is essentially
designed to put idle land into production and to redistribute idle
land to landless peasants if landowners refuse to put their land into
production. The basic purpose is to both create greater social
justice and to increase the country's agricultural production. This
program is also supplemented by a wide variety of agricultural credit
and training programs.

The urban land reform program, in contrast, is designed to confer
ownership titles to land which the urban poor currently occupy
illegally through land invasions and to help them improve their
communities through self-governance. The urban reform program sets up
land committees of up to 200 families in the poor neighborhoods that
help measure plots of land, determine communal property, negotiate
with government for services such as water and electricity, and
create a communal identity. This democratization of property is to be
combined with a democratization of local governance through
participatory planning processes for local projects, such as has been
spearheaded in parts of Brazil under the Labor Party there.

Other major government programs that primarily benefit the poor, but
not the middle class are the public housing program and the micro-
credit programs. Related to this, the government recently announced
the creation of a new "Social Economy" ministry. This ministry would
support workplace democracy, especially the creation of cooperatives
and other social justice projects, such as the micro-credit programs.

A policy that directly hurts the interests especially of the upper
middle class is the government's effort to collect income taxes for
the first time in Venezuelan history. Only those with incomes in the
top 20% or so are required to pay income taxes.

The Media and Psychological Warfare

Added to the mix of middle class economic decline and lack of
government programs that benefit the middle class is a virulently
anti-Chavez media. As if the economic and political neglect of the
middle class did not provide enough reason to oppose the Chavez
regime, the media supply additional justifications every day.
Accusations of government incompetence, mismanagement, and corruption
fill the papers daily. These accusations would be an example of a
serious free media doing its job, if it weren't for the fact that the
vast majority of these accusations are in the form of unverified
reports from opposition politicians. The media rarely practices fact-
checking and counter-posing the responses of the accused to an
accusation.

Often the media reflect the latent racism/classism in Venezuelan
society. An example of this racism/classism was on open display in
the October 14th lead editorial of one of Venezuela's largest serious
(non-tabloid) newspapers, when it wrote about the truly massive pro-
government demonstration of October 13:

"The president's and his followers' response to the concerns of
Venezuelan society about the serious crisis we live in (the economic,
the political, the military, and the institutional) consisted of
bringing from the country's interior the same lumpen [dregs of
society] as always, converted into everlasting bus passengers with a
piece of bread and some rum, so that they come and cheer to the great
con man of the nation."

The cumulative effect of the media assault is psychological warfare,
in that the media present the general public with an image of
Venezuelan society that is on the verge of complete collapse and that
the government has lost all popular support and legal legitimacy.
Front-page unsubstantiated accusations, such as those of Carlos
Ortega, the leader of the union federation CTV, that the government
was planning to murder two to three thousand people at the anti-
government demonstration of October 10th and that the demonstration's
organizers managed to avert the massacre, are not unusual. Much of
the opposition thus appears to genuinely believe that Venezuela is
under a "castro-communist" dictatorship.

The hard-core opposition, which includes the CTV, the main chamber of
commerce, Fedecameras, almost all of the opposition parties, and
nearly all of the private media have come to believe their own media
campaign, that practically no one supports the government and that
those who participate in pro-Chavez demonstrations, such as the one
on Sunday October 13th, are paid around $30 per person by the
government for their participation.

Of course, not just the middle class buys the oppositional media's
propaganda, but so do many of the poor, just as many from the middle
class do not accept the media's version of reality and continue to
support Chavez. Still, it is probably fair to say that a majority of
the middle class opposes Chavez and a majority of the poor support
him.

While Venezuelan society has always been divided along class and race
lines, for the first time in Venezuelan history the classes (and
races) are now also divided along clear ideological lines,
particularly around the figure of Hugo Chavez. Many Venezuelans and
outside observers have a hard time understanding why Venezuelan
society is so polarized and in their puzzlement argue that
Venezuelans should simply find the path of dialogue. This is
certainly a laudable sentiment. However, there is a fundamental
obstacle for dialogue if one side does not want to recognize some
basic rules for having a dialogue in the first place. That is,
Chavez' opposition is of the firm belief that it is in the majority
and that it therefore has the right to demand the immediate removal
of the president before his term has expired. The opposition does not
seem to realize that even if they were in the majority, which is
doubtful, a fundamental rule of the democratic game is that leaders
are elected for a pre-defined term and that if one wants new leaders,
one has to wait until the next constitutionally scheduled election
and not for a dip in the popularity polls. Until now, the largely
middle and upper class opposition in Venezuela steadfastly refuses to
recognize this basic rule, which makes meaningful dialogue virtually
impossible.

Gregory Wilpert is a freelance journalist and sociologist, who lives
in Caracas and is currently working on a book on Venezuela during the
Chavez presidency, which will be published by Zed Books in 2003. He
can be reached at: Wilpert at cantv.net










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