Venezuela Defeats the Coupmakers

VENEZUELA’S POOR met the news of Hugo Chávez’s referendum victory with joy. Thousands of people from the nearby barrio of Catia jammed the streets around Miraflores, the presidential palace, just as they did in April 2002 to defy–and defeat–a U.S.-backed military coup.

This time, the scene was sheer celebration, with demonstrators dancing in the streets to the music of popular salsa bands. Young people crammed onto the back of pickup trucks. One of the many 1970s Chevy sedans seen around the city–kept on the road through necessity, and by the ingenuity of Caracas’ poor–somehow crawled along with 20 people on board, jammed inside and standing on top.

The numbers in the streets were still growing when Chávez addressed the crowd from the palace balcony, shortly after 4 a.m. on August 16. Perhaps the biggest cheer came when he declared, “This is a blow to the center of the White House.”

A few hours later, Chavistas organized caravans, honking their horns in the rhythm of the popular chant: “Uh, ah, Chávez no se va!” (Chávez isn’t going!) “This is a victory for the people,” said Maria Luisa Delgado, a retired teacher, as she and a friend prepared to join a celebration in the midst of opposition territory–the upper middle class suburb of San Antonio de los Altos. “We have real democracy in Venezuela, participatory and proactive.”

Predictably, the misnamed Democratic Coordinator–the opposition coalition funded by the U.S. government-backed National Endowment for Democracy–made claims about fraud in the functioning of the electronic voting system. But these charges were undercut when international observers–including former U.S. president Jimmy Carter–accepted the results announced by Venezuela’s National Election Commission, with 58 percent voting “no” to the recall and 42 percent “yes.”

Even the U.S. State Department went along. With 94 percent of the votes counted, the vote count for Chávez was nearly 5 million–an increase of more than 1 million votes over his total in the 2000 elections. The opposition had won 3.6 million “yes” votes in a turnout initially estimated at 80 percent. The huge turnout in the barrios made it clear that Chávez still has the backing of the 80 percent of the population that lives under the poverty line.

In a country that, according to one recent study, has more social inequality than Brazil or South Africa, the wealthy have despised Chávez all along for raising the expectations of the poor. Today, they hate him even more intensely for delivering on his promises, with a series of anti-poverty programs paid for by rising revenues from oil exports.

The U.S., meanwhile, sees Chávez’s nationalism as a dangerous break with the free-market “neoliberal” policies of the so-called Washington consensus. In a period in which popular rebellions against intolerable economic and social conditions have overturned governments across South America, Chávez is bidding to become a regional leader.

Plus, his regular denunciations of U.S. imperialism have always infuriated U.S. officials–and today carry added weight because of the crisis of the U.S. occupation in Iraq. All this is reason enough for Washington to undermine Chávez.

And since Venezuela is the number one exporter of oil to the U.S., the situation was even more embarrassing for Washington: Chávez not only regularly pokes Uncle Sam in the eye, he does it with pocketfuls of U.S. dollars. That’s why the U.S. backed the military coup against Chávez in April 2002–euphemistically referred to as a “temporary alteration of constitutional order” on the U.S. State Department Web site–and immediately recognized the new government of the coup-makers.

But the opposition immediately showed its true dictatorial colors–provoking a popular rebellion that toppled the new regime within two days and forced the military to allow Chávez’s triumphant return. Now, if a report in the Spanish newspaper El Mundo is accurate, the CIA concluded that Chávez’s victory in the recall vote was inevitable–and that Washington’s spies had met with its Latin American counterparts in Chile to discuss Chávez’s alleged plans to spread his “Bolivarian revolution” to neighboring countries.

This, of course, is nonsense–but it provides a pretext for future efforts to isolate and destabilize Venezuela. That will be harder now, however. Chávez’s victory is the seventh in a series of electoral successes for his movement–including his first election win in 1998 after the collapse of Venezuela’s political parties; the election of a constituent assembly the following year to write a new constitution; and Chávez’s reelection in 2000 for a six-year term.

Now Chávez has rolled up his biggest majority yet. But that won’t bring political stability to Venezuela. Not only will the opposition and its U.S. backers keep hammering away, but the contradictions between Chávez’s politics and his social base are likely to come into the open.

At a press conference prior to the election, Chávez vowed to meet with leaders of the opposition immediately after the vote–the latest in a series of attempts to make a deal. Given the size of his victory, he may find some takers among some big business executives and opposition figures–but only as they buy time until they can challenge him again.

Behind the rise of Chavismo

CHÁVEZ’S DEALINGS with the opposition and big business highlights the contradictory role of a man who calls himself a revolutionary, but who runs a capitalist state dominated by a hostile bureaucracy. Much of the government remains staffed by members of the two traditional ruling parties of Venezuela–the center-left Democratic Action (AD, according to its initials in Spanish) and the conservative Social Christian Party (known as COPEI).

These two parties ruled Venezuela according to a power-sharing pact negotiated in 1958 after the collapse of a military dictatorship. By constitutionally mandating nationwide slates for elections and centralizing power in the federal government–state governors were appointed, for example–AD and COPEI were able to exclude rival parties, such as the Communist Party, from mounting a serious challenge.

Party cadres regularly stole elections by intimidating voters at polling places, invalidating ballots and manipulating registration lists. Their omnipresent political machines were funded by revenues from the oil company, PDVSA–which was nationalized in 1976 under President Carlos Andrés Pérez of the AD party, along with other industries.

This state capitalism reinforced the political power of the two ruling parties–and produced an economy and a state permeated with corruption. During the financial crisis of the 1980s, for example, government officials helped their cronies gain easy access to dollars, allowing an $11 billion capital flight from the country, while real wages for Venezuelans plunged 20 percent.

This was a symptom of a wider economic crisis of stagnation, as the state-run industries were squeezed by competition on the world market. Meanwhile, PDVSA, supposedly run by the state, became a power unto itself, investing money in overseas operations to minimize taxes.

It was in this context that Pérez was elected president again in 1988. This time, he launched an aggressive neoliberal austerity plan, cutting government spending and allowing huge price increases for essential goods, in accordance with an International Monetary Fund (IMF) agreement.

This triggered a spontaneous, insurrectionary protest on February 27, 1989, in which as many as 1,500 were killed by police and the armed forces, according to activists. The repression caused a crisis inside the army among mid-ranking officers and soldiers, including Chávez.

In 1992, he led a military coup against Pérez, but surrendered and was imprisoned. Chávez wasn’t seen as a would-be military dictator, but as a popular hero–and he was pardoned the following year. He began to articulate the anger and aspirations of workers and the poor, who had suffered under the government’s harsh neoliberal policies.

The percentage of workers in the informal sector–those in day labor, street vending and the like–grew from 34.5 percent to 53 percent by 1999. Real wages in Venezuelan industry–which includes auto assembly plants for both General Motors and Ford–dropped by 40 percent between 1980 and the late 1990s.

This was part of a wider shift in wealth from the poor to the rich. Between 1981 and 1997, the poorest 40 percent saw their share of income drop from 19.1 percent to 14.7 percent in 1997, while the richest 10 percent grabbed a third of the national income. In the decade up to 1994, poverty rates nearly doubled, reaching 66 percent.

Over the same period, budget cuts obliterated what had been one of the more developed welfare states among poor countries. Spending on housing and urban development was slashed by 70 percent in the early 1990s, health care by 37 percent, and social development by 56 percent.

All this meant that Chávez found a ready audience for his ideas of a nationalist “Bolivarian revolution”–named for Simón Bolívar, the leader of Venezuela’s anti-colonial struggle against Spain in the early 19th century. Although “Bolivarian” politics were vaguely defined, one point was clear: the poor had suffered long enough, and their time had come.

Revolution from above?

CHÁVEZ SUPPORTERS describe the political changes in Venezuela as “el proceso”–shorthand for the Bolivarian revolutionary process. “El proceso”–which Chávez called a “third way” between capitalism and “failed” communism–began haltingly when he took office in 1999.

The high-profile Plan Bolivar 2000 put the military in charge of several anti-poverty programs, such as repair of homes, schools and public buildings; medical aid; and food distribution. More far-reaching was land reform.

In a country where 70 percent of agricultural land is owned by just 3 percent of the population, Chávez’s government turned over state-owned land to 130,000 families in 2003 (takeover of private land has been authorized, but not implemented). Urban land reform gave property deeds to families in poor neighborhoods where community organizations organized to request them.

The late 1990s recession, a collapse in oil prices, and capital flight from Venezuela soon limited funds for reform, however. With the economy shrinking, the opposition was able to mobilize a massive anti-Chávez march on April 11, 2002–which served as the springboard for the failed military coup.

The next blow was the oil industry strike called by the Venezuelan labor federation, the CTV–historically “financially dependent on successive AD governments and politically controlled by the AD party,” as Venezuela specialist Julia Buxton wrote in a recent book on the country. Oil workers and the military were able to break what amounted to a lockout, but the economy was devastated, shrinking 8.9 percent in 2002 and another 9.4 percent last year.

The Economist magazine smugly predicted Chávez’s eventual downfall. But the spike in world oil prices–thanks in part to the U.S. war and occupation of Iraq–has changed all that. The Venezuelan economy is on track to grow by as much as 12 percent this year.

This allowed Chávez to launch new reform projects, known as “missions,” to bypass the inefficient bureaucracy and shore up his political support. The programs include subsidized food markets for the poor; medical care in rural areas and urban slums provided by Cuban doctors; and greater access to higher education.

The missions were key to mobilizing countless delegations from the barrios for a mammoth pro-government rally August 8 in Caracas–estimated at over 1 million strong. “The victory of Chávez means that Venezuela is finally coming to use its riches for the well-being of the people,” said 70-year-old Maria Carmen.

Argelio, a young man from the Barrio Adentro anti-poverty mission, said that Caracas “popular zones” like his were central to Venezuela’s political change. “The barrio of Del Valle is important to the Venezuelan revolution, to our liberty, to patriotism, to the people of Venezuela.”

The anti-poverty programs and reforms, coupled with Chávez’s frequent denunciations of U.S. imperialism and neoliberalism, mark a break from the free-market “Washington consensus” of privatization, deregulation and “flexible” labor policies imposed across Latin America. Chávez’s network of advisers includes leaders of the French anti-globalization group ATTAC and a number of internationally known left-wing intellectuals.

But does this constitute a “revolution?” In some respects, Chávez is a throwback to Latin America’s nationalist and populist leaders of the past–Lázaro Cárdenas in 1930s Mexico, and Juan Perón in Argentina a decade later. But where these governments nationalized key industries to develop their economies, Chávez hasn’t moved to expropriate private industry.

Instead, he’s trying to use his control of the PDVSA oil company to discipline Venezuelan big business and become more assertive in trade agreements–opposing the Free Trade Area of the Americas, for example. In this sense, Chávez is following a policy that Brazilian President Luiz Inácio “Lula” da Silva calls “sovereign insertion” into the world market.

This is a policy of reasserting national initiative against imperialism and its institutions–including the IMF, World Bank and World Trade Organization. Yet where Lula has capitulated to those pressures, Chávez has pushed back, using oil revenues to chart a different course.

Even so, Chávez has continued to pay off the IMF loan sharks, and he’s sought to reconcile with sections of Venezuelan capitalists. The majority of workers–including those in the left-wing labor center, the National Union of Workers (UNT)–support Chávez against the employer-backed opposition. Many UNT affiliates pulled out of the CTV federation following the oil industry lockout.

Still, real wages haven’t increased, and the employers’ decimation of jobs through layoffs and outsourcing hasn’t been addressed. A strike earlier this year by the independent steelworkers’ union at Venezuela’s steel company–half owned by the state and half by a consortium of foreign companies–brought these issues into the open.

For its part, the CTV accuses the UNT–which gets preferential treatment from Chávez–of being virtually an arm of the state. The UNT has received resources from the government–but also at times has found itself at odds with government policy.

The Venezuelan capitalists who run the privatized companies have their own links to the world market and are loathe to hand the initiative to Chávez and the state. They and their backers in Washington–which includes Republicans and Democrats alike–will continue to undermine Venezuela’s government.

What’s next in Venezuela?

THE RESULTS of Venezuela’s referendum are a victory for everyone opposed to neoliberalism and U.S. imperialism–in Venezuela and around the world. But the polarization of Venezuelan society reflected in the recall vote won’t be resolved by the election results.

Washington’s intervention will continue. Venezuelan big business and the wealthy may hanker for a military coup like Chile in 1973–but the armed forces remain loyal to Chávez, so they will have to build an electoral opposition and bide their time.

Yet the often-quoted phrase of Chávez supporters that “the Venezuelan military are on the side of the people” is no guarantee against a future coup. Armies are inherently rigid, conservative and hierarchical institutions, in which the chain of command is followed unquestioningly if they are to be effective–and the top officers are socially intertwined with the wealthy and powerful.

The military, after all, is the core of a state that reflects and reinforces class relations in society. Chávez’s “Bolivarian Revolution” has tried to remold and bypass that state–but hasn’t dismantled it. That means the process of social change will be continually impeded and undermined, if not blocked altogether.

Since the defeat of the oil lockout, activists on the left in popular organizations and the movement have complained that “el proceso” has been bureaucratized and “cleaned up.” In an interview after the referendum results were announced, Roland Denis, a former vice minister for local planning in the Chávez government and an activist with the popular organizations, said that the struggle will intensify after the celebrations are over.

“This is a process that is immensely majoritarian, sustained fundamentally, of course, by the popular classes, and [the election results] show their force,” said Denis, who was reportedly forced from office for being too left wing. “It’s evident, however, that revolutionaries can’t rely on an electoral plan to construct a new society.”

He added that there is a “big contradiction between the policy of the process and its program”–tensions between leading elements who want to slow down the changes, and those who want to break with all limitations and “deepen” the process. This reflects the fact that Chávez has so far been able to balance antagonistic classes–business and the wealthy on one side, workers and the poor on the other.

As in previous elections in Venezuela, the recall vote channelled that conflict into the ballot box. Now, Chávez’s recall victory, along with economic growth and the anti-poverty missions, will raise popular demands for deeper change.

That can bring workers and the poor into struggle for their own interests–faster and more extensive land reforms, rebuilding the traditional health care system, higher wages, more jobs. Such struggles will be met with ferocious resistance by business and the wealthy–and force the Chávez government to choose sides.

In the midst of those battles, the debate over the nature and direction of the revolutionary process in Venezuela will develop–and have an enormous impact across Latin America and around the world.