[Marxism] June 2003 WSJ article on Venezuela

Walter Lippmann walterlx at earthlink.net
Mon Feb 2 11:31:52 MST 2004

(Here's what the Wall Street Journal said about Venezuela
just seven months ago. Pretty much the same things as it
is saying now. When you look at today's article and this,
you can see they've been on a campaign about this. Now,
however, they're escalating their rhetoric and leaving
out the many strengths Chavez retains among the people 
of his country: doctors, teachers, literacy and other
programs, all of which are being brought to the country
with Cuban assistance. Further, the relatively high $$
in dollars for Venezuelan oil is a further cushion to
underpin Chavez' ability to carry out his programs.)


June 12, 2003 
Some Fear Nation's Radical Stance 
Could Hurt Stability in the Region 

CARACAS, Venezuela -- Nearly every Sunday from somewhere in
this oil-rich land, President Hugo Chavez sits down at a
small table, looks into a television camera and talks. And
talks. And talks.

For four or five hours, without a break, he fields phone
calls, quizzes government ministers, dictates lessons in
history, economics and geopolitics and occasionally breaks
into folk songs of his western plains homeland. In one
memorable show last year, he repeatedly blew a soccer
referee's whistle and shouted "That's enough!" as, one by
one, he fired seven dissident executives at the state-owned
oil company.

For many residents of wealthy neighborhoods, the television
program "Hello, President," is sheer torture, the ramblings
of a Fidel Castro wannabe. But in the sprawling slums and
working-class barrios surrounding this Caribbean capital,
it's better than salsa music. "I have him on for hours on
Sunday. He's like a guest in my house," says Aurora
Querales, a 47-year-old seamstress waiting in line to buy
cut-rate black beans at a government food store. "Before
Chavez, no one respected us; no one listened to us. Now, we
may be poor, but Chavez is giving us dignity. He's giving
us hope and faith that things are going to get better."

By almost any measure, the economy of Venezuela -- the
world's fifth-largest oil exporter -- is in shambles.
Pollsters say about 60% of Mr. Chavez's countrymen oppose
him. Yet the former paratrooper and coup leader has managed
to keep his hold on power since being elected in 1998. He
has done it in part by dusting off tools of political
control that Latin America supposedly put away long ago:
demagoguery, class warfare and a clampdown by the state
over the means of production.

His ability to use these tools so effectively says a lot
about the degree of ideological uncertainty gripping Latin
America these days. Despite more than a decade of
Washington-blessed economic policies -- privatization,
deregulation, a flood of foreign capital -- the poor feel
neglected and left behind. Politicians all over the
continent are scrambling to figure out a way to capitalize
on that.

Washington, which initially dismissed Mr. Chavez as a
harmless big talker, now fears Venezuela's increasingly
radical stance could hurt regional stability and hobble
U.S. initiatives ranging from free trade to the war on
drugs. Some U.S. officials say Venezuela has become
Washington's biggest Latin American headache after the old
standby, Cuba. About 14% of U.S. oil comes from Venezuela,
and the nation is considered a key supplier because it is
so close. It takes about five days for the U.S. to import
oil from Venezuela, compared with about five weeks from the
Middle East.

Mr. Chavez, 48, pops up at regional summit meetings to
complain international leaders are doing little to improve
the plight of the masses in Latin America, who survive on
less than $2 a day. About once a month, he boards the $75
million Airbus jet he had the government purchase after he
was elected in 1998 to visit neighboring countries, where
he charms the antiglobalization set, local activists and
old-line leftists. He regularly criticizes Washington's
multibillion-dollar efforts to help Colombia in its
decades-long battle against guerrillas and drug

Mr. Chavez didn't grant a request to be interviewed for
this article.

His opponents are in disarray. After a bungled military
coup in April 2002 and a crippling, though unsuccessful,
national strike in December and January, they're back to
square one. The Organization of American States recently
brokered a loose agreement that might pave the way for a
vote this year on whether the president should serve out
his current term, which ends in 2007. But the opposition
first has to gather 2.5 million signatures, a process that
Mr. Chavez could thwart through his control of the congress
and the courts.

"He'll do everything he can to get around the referendum or
not heed its results," predicts Riordan Roett, director of
Latin American studies at Johns Hopkins University.

Mr. Chavez's worst sin, some critics contend, is his close
relationship with communist Cuba's dictator Fidel Castro.
Venezuela is now Cuba's largest trading partner, providing
53,000 barrels a day of cheap oil to the energy-starved
nation. In turn, Cuba dispatches hundreds of experts to
help Venezuelans operate medical clinics, raise organic
vegetables and import food. Chavez opponents claim Cubans
also assist Venezuelan security and intelligence agencies.
The Venezuelan government denies that.

Mr. Chavez disavows communist leanings. "Fidel Castro, my
friend and brother, is a communist, but Venezuela's project
is not communist," Mr. Chavez said on Sunday's television
address, in which he also called himself "ugly" and "a
little uncouth." Since becoming president, Mr. Chavez, a
baseball lover, has played in a friendly game against a
Cuban team led by Mr. Castro. In a recent address, Mr.
Chavez, a southpaw pitcher, spoke out in support of Chicago
Cubs slugger Sammy Sosa, who was ejected from a game for
using a corked bat.

Analysts who have spent more than a decade tracking Mr.
Chavez's rise to power say they doubt he wants to impose
the Cuban system wholesale on independent-minded
Venezuelans. The president, they say, has spent years
concocting a mishmash of ideologies. His thinking is
influenced by his romantic view of the continent's
guerrilla revolutionaries of the 1960s and his sense of a
personal connection with Simon Bolivar, the father of
Venezuela and "liberator" in South America's 19th-century
fight for independence from Spain.

One former U.S. official who met with Mr. Chavez three
times in 2000 says each time the president was holding a
copy of Bolivar's sword and asked visitors if they could
"feel" the presence of Bolivar in the room. In 1999, he
spearheaded a movement that officially changed the
country's name to the "Bolivarian Republic of Venezuela."

Mr. Chavez, who spent 20 years in the army before entering
politics, wants to build a strong "civic military" alliance
that puts soldiers in the forefront of government
initiatives, running medical clinics, schools and even food
markets. He favors small businesses over large ones. But he
also favors investments from foreign companies over
domestic entrepreneurs -- largely on the theory that the
foreigners won't meddle so much in politics. The model, if
one exists, may be China, where an authoritarian government
dominates the economy in cooperation with politically
passive businessmen.

"He has very general ideas of a socialist type of economy
and society that are full of ignorance about how things
really work," says Gerver Torres, an economic consultant in
Washington and former Venezuelan privatization minister.
"He wants a strong state that is very militarized ... that
is very anti-United States in its heart, but does business
with the North Americans out of necessity."

Mr. Chavez grew up in the sparsely populated western plains
of this nation of 24 million people. One of six sons, he
lived with his parents, lower-middle-class teachers, and
his grandmother. He often talks warmly of his grandmother,
who regaled him with stories of his countrymen who fought
in the bloody civil wars of the 19th century and rose
against an early-20th-century dictatorship. In high school,
he studied with a militant Communist teacher.

While at the Venezuelan military academy in the early
1970s, he was contacted by an underground Communist group,
the Venezuelan Revolutionary Party. The group's leader,
guerrilla Douglas Bravo, had been building a secret network
of collaborators inside the armed forces as part of a
nascent civic-military alliance. That concept has since
proved to be the cornerstone of President Chavez's vision
for his country.

"We believe that the military should play an active role in
social battles, and Chavez became one of the young officers
who were politically restless," recalls Mr. Bravo, 70. The
president has since broken with Mr. Bravo, who now
questions Mr. Chavez's revolutionary credentials, saying
his oil policies are too friendly to the U.S.

Mr. Chavez served in various army units before moving to
the capital, Caracas, in 1980 to teach sports and history
at the military academy. In 1982, he and other junior
officers formed a secret group, the "Bolivarian
Revolutionary Movement 200," or MBR-200, swearing an oath
under the same ancient tree where Bolivar once camped. They
vowed to change a society they considered corrupt because
of power-sharing between the country's two main political

As Mr. Chavez and his key conspirators rose through the
ranks, Venezuela's oil boom turned sour in the 1980s. The
country's population soared, fueled by immigration, while
petroleum revenue plateaued and per capita incomes

The young officers of the MBR-200 made their move against
the government in the early hours of Feb. 4, 1992. Though
other commanders seized their objectives in the interior of
the country, Lt. Col. Chavez, leading a regiment of
paratroopers, failed to capture the Presidential Palace. He
hunkered down in a military museum across the street. After
withering fire, he surrendered.

But instead of being seen as a failure, it was then that
Mr. Chavez's political career began. It turned out to be
the first of many times the political and economic elite of
Venezuela didn't take the Chavez phenomenon seriously. "He
was seen as someone who is not a great danger," says Tarek
William Saab, a top legislator in Mr. Chavez's Fifth
Republic Movement political party.

The obscure military officer was allowed to make a short
televised statement, asking his comrades to lay down their
arms, because "for now," the objectives of the coup hadn't
been met. That brief appearance turned the young,
charismatic Mr. Chavez into a star -- which grew brighter
during his subsequent two years in prison.

"They thought they'd give him his 15 minutes of fame,"
recalls Mr. Saab. "But, instead, he became a turning point
for contemporary Venezuelan history."

Mr. Chavez's popularity and ambitions increased while he
was in prison. Once pardoned, he opted to gain power via
the electoral route. The charismatic candidate campaigned
on an anticorruption, people-power platform. He appealed to
poor and working-class Venezuelans because he shared their
modest circumstances and their ethnic ancestry, a mixture
of white, black and Indian. Many middle-class and even
upper-class people also backed Mr. Chavez, agreeing the
ruling class had plundered the resource-rich nation. Mr.
Chavez was elected president in 1998 with a solid 56% of
the vote.

He immediately began tearing down old political structures
and replacing them with his self-styled "participatory
democracy." He commissioned a new constitution, which
voters endorsed in 1999. In 2000, Mr. Chavez, with 59% of
the vote, was elected to a new six-year term. The same
election also gave him a solid majority in the new
single-house National Assembly and control of a majority of
key state governors and mayors. The new legislature named
Supreme Court justices who, for the most part, ruled
favorably toward the new regime.

The economy, after dropping a precipitous 6.1% during his
first year in office, began to improve, boosted by strong
international oil prices and jumps in government spending.
Foreign investment flowed into the oil and
telecommunications sectors. Because of the strong local
currency, inflation dropped from 30% in 1998 to a
manageable 12% in 2000 and 2001, increasing the buying
power of Mr. Chavez's poor supporters.

But Mr. Chavez's successes, including improvements in
health care and school enrollments, stalled in late 2001.
The opposition began to coalesce into an unusual alliance
of the million-member Venezuelan Workers Confederation and
the powerful national chamber of commerce.

The coalition, with backing from opposition-owned
newspapers and television stations, showed its strength
with a one-day strike that shut down much of the nation
before Christmas in 2001. Antigovernment demonstrations
picked up again the following spring. Work stoppages were
threatened by executives and managers at the state oil
company, Petroleos de Venezuela SA. Mr. Chavez's
referee-whistle dismissal of the rebel oil bosses fueled
more demonstrations.

The unrest reached a critical mass last April when
shooters, many still unidentified, fired at hundreds of
thousands of people marching on the presidential palace.
Nineteen people were killed and more than 100 were wounded.
When Mr. Chavez ordered the military to implement an
emergency response plan, most of his top generals rebelled
and took him into custody.

For just under 48 hours, Mr. Chavez was replaced by an
interim, unelected president, Pedro Carmona. Many
opposition leaders soon realized they'd blundered, when Mr.
Carmona announced the dissolution of the congress and the
Supreme Court. Deciding the coup had gotten out of hand,
generals who had been sitting on the fence rescued Mr.
Chavez. Elements of his old airborne regiment helicoptered
to the Caribbean island where Mr. Chavez was being held and
brought him back to the palace on Sunday, April 14. By the
next day, a chastened Mr. Chavez was back in power.

The unrest didn't stop. In December and January, dissident
oil executives shut down the nation's critical petroleum
industry, cutting off exports and creating a
never-before-experienced gasoline shortage in car-happy
Venezuela. In response, Mr. Chavez fired 18,000 rebellious
executives, managers and technicians at the state oil
company soon afterward. Replacement workers got the oil
flowing again.

Since then, Mr. Chavez has worked to consolidate his power.
With the backing of the one-third of the country that
worships him, he has denounced his enemies as "fascists and
coupsters." The government has spent hundreds of millions
of dollars importing gasoline at high international spot
prices -- in a country where 25-cent-a-gallon fuel is
considered a birthright. By February, life in this
polarized, traumatized country returned to a superficial
semblance of normalcy.

Mr. Chavez has declared an "offensive" to beat back his
foes. He has instituted price caps on food and electricity
and begun a billion-dollar food-import program to keep
grocery shelves stocked. He has imposed foreign-exchange
controls that have dried up private-sector imports and
threatens to bankrupt his enemies' businesses. "Not one
more dollar for the putschists," Mr. Chavez vowed in a
televised event in January. And he has reorganized military
commands to keep the armed forces squarely in his camp.

The country has paid a steep price for Mr. Chavez's
survival. Gross domestic product, which plunged 8.9% in
2002, fell a record 29% in the first quarter of 2003.
Unemployment is running at 19.1%, compared with 15% a year
ago. Annualized inflation rates hit 35% this month. But not
all the news is bad. The near-total ban on dollar trading,
combined with high oil prices, ensures Mr. Chavez a strong
cash flow. International currency reserves are climbing
steadily from a January low of $11.3 billion to $15.72
billion. A default on the relatively low $24 billion
foreign debt now appears unlikely.

Faced with pressure to hold a referendum on his rule, Mr.
Chavez has, in televised speeches, declared himself in a
"permanent campaign," even though he says he doesn't "walk
around worried." The opposition, he says, lacks
"leadership, plans and a cause" and operates only to unseat
him from power.

Most analysts doubt Mr. Chavez will be ousted any time
soon. The flow of petrodollars, his near mystical link to
his hardcore supporters, the opposition's disarray and the
Bush administration's interest in keeping Venezuelan oil
coming to U.S. ports could all combine to keep him in
office for years.

"He's had a plan and a resolve that is simply remarkable. A
lot of lesser people would have packed up and gone to Cuba
long ago," says Russell Crandall, a Latin Americanist at
Davidson College in North Carolina who consults with a
number of U.S. government agencies. "He knows how to

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