Summary on Venezuela . Enrique ter Horst
Summary on Venezuela 10
Caracas, 24 April 2007
By Enrique ter Horst
Almost four months have passed since Chávez‚ radical speeches and announcements on the 8th and 10th of January (See Summary 9). The nationalizations of CANTV, the telephone company, and of EdC, the largest private electricity company are being finalized with compensations agreed with the main shareholders, Verizon in the first instance, AES in the second case, at a correspondingly high cost to the national treasury. Negotiations with the operators of the Orinoco heavy-oil improvement joint ventures have proven more difficult and are still ongoing, even if they are to revert to PDVSA already on 1 May. As salaries are to be cut to PDVSA levels, specialized personnel is accepting work offers abroad. Chávez continues to simultaneously pursue radical, fundamental change while fracturing his own political and military power basis by recklessly trying to force his political allies into one Unified Socialist Party of Venezuela and by trying to turn the Armed Forces into the armed instrument of the revolution. His followers are more and more calling him „Mi Comandante”, and he increasingly speaks of himself in the third person, „El Lider de la Revolución”.
The Enabling Law has not yet produced a single text, with the exception of the Decree-Law on Hoarding of Basic Staples and a decree announced by Chávez last Sunday regulating the prices charged by private hospitals. The much heralded reform of the Constitution is being dealt with in a secret drafting group working directly with Chávez; translating Chávez‚ dogmatic discourse into a coherent conceptual framework and a practical and effective set of policies and measures is apparently proving difficult. The closure of RCTV is however proving to be politically much more costly, both domestically and internationally, as nobody is buying the government’s argument that the decision is not simply not to renew the station‚s license, but to close it because of its frontal opposition to the government. Pressure is increasing however, and there is speculation that he may instruct the Supreme Tribunal to sentence in favor of a request to keep the station operating as is after 27 May, the date the license expires. He has repeatedly declared that the RCTV issue has put his life in danger and that the CIA has a plan to kill him.
In a manner reminiscent of Aristide when he was President of Haiti, Chávez is now losing the last group of relatively independent people he still had, as his huge ego only allows him to tolerate unconditional loyalists. Patria para Todos and Podemos, the two largest parties in the governing coalition after his own Movimiento Quinta Republica, while declaring that they will continue to work and defend the revolution and to recognize Chávez as its leader, have decided not to dissolve and join as individuals his new Partido Socialista Unido de Venezuela, as Chávez had requested (instructed might be a better word). Not able to negotiate a party-to-party merger, they have, not surprisingly, preferred to retain their identity while stressing their attachment to democracy, a non too subtle way of distancing themselves from Chávez´ evident slide into autocracy.
Governors Bolivar, of Aragua, and Martinez, of Sucre, both of Podemos, last week incurred Chávez’ wrath by promoting this independent position, and he has announced that recall referenda against them will be organized shortly in order to cut short their terms of office. Last Sunday he said that Venezuela is a centralized State, and that some Governors were „behaving like little Presidents..”, in open contradiction with article 4 of the Constitution, which states that Venezuela is „a federal, decentralized State”. „How we need the Unified Socialist Party! All this nonsense must stop!”, he said. Other referenda against some of his own MVR governors are being organized by previously unknown chavista voter groups, and there is a strong assumption that Chávez‚ hand is not at all foreign to these initiatives.
Chávez‚ megalomania carried him as far as declaring that military officers who do not subscribe to the motto of „Patria, socialismo o muerte” must leave the institution, in open violation of article 328 of the Constitution which consecrates the professional and apolitical character of the Armed Forces. Before that, at a meeting in Caracas commemorating the fifth anniversary of the failed Carmona coup he got a group of cadets to actually chant the slogan, all retransmitted live on television. Normally, a judicial procedure for violation of the Constitution would have been engaged by the Prosecutor General, or directly impeachment proceedings by the National Assembly or the Supreme Tribunal of Justice. Today all these violations are accepted without even a word from the institutions charged with the protection of the Constitution.
On the economic front, Chávez’ announcement that the outstanding balance with the World Bank, 53 million dollars, had now been fully paid concentrated attention on the countries‚ internal and external debt. Total debt, including PDVSA, now stands at over 74 billion dollars, or 36% of GDP, up from 33 billion three years ago, or 28% of GDP. Although still easy to manage, such a jump is difficult to explain with the oil prices prevailing in that period, and is in sharp contrast to the very generously provided international assistance, mainly to Cuba. In fact, Venezuela has incurred debt in order to keep Fidel Castro in power. However, Chávez’ revolutionary project also needs, as pointed out by respected economist Gerver Torres, an ever increasing income to be able to satisfy also ever increasing expectations. As Chávez lacks the „heroic factor”, since Venezuela’s abundance of natural resources makes it unnecessary to take from the rich in order to give to the poor (but is an indispensable condition to be included in the Latin American gallery of revolutionary icons), increasing the national debt, particularly if oil prices were to fall in light of a global recession and a resolution of the Iranian nuclear crisis, would provide the ideal opportunity of „heroically” attacking the rich and (formerly) powerful and fill this gap in his revolutionary credentials. The price of Venezuelan bonds has been falling in the last two weeks, at a time when all other emerging market debt is rising. Some analysts argue that bringing the country close to bankruptcy is part of a larger „twist-my-arm” strategy in order to exercise total control in an even more authoritarian, maybe brutal fashion.
The stated objective of reducing oil exports to the United States (Venezuela is now the fifth largest exporter to the US market, overtaken last year by Nigeria) and the nationalization of the heavy-oil joint ventures on the Orinoco tar belt are to be seen as the main driving force behind the 1st South American Energy Summit organized by Chávez last week in Margarita. But a new sense of urgency could be the result of the US taking measures to substitute Venezuelan oil, while Chávez continues to be highly dependent on the US market (a race has started on who stops depending on whom first), and of a number of oil majors more than reluctant to pour large amounts of money into a country that no longer honors its signature. Held under the aegis of the Comunidad Suramericana de Naciones (CSN), in which Brazil is the dominant force, the ethanol squabble provoked by Chávez after Bush’s and Lula’s recent reciprocal visits was laid to rest with a 180 degree turnaround. Chávez now not only supports the development of ethanol, but promised to buy 200.000 barrels a day from Brazil.
Furthermore, Brazil‚s Braskem agreed to participate in a joint venture with PDVSA at the Jose petrochemical complex, and the construction of the pipelines to cross Colombia towards the Pacific also received a push to be built more quickly. All these agreements to better complement South America‚s energy needs and capabilities are eminently sensible, particularly as they are being carried out within the CSN, an integration scheme modeled on the European Union which foresees, but does not yet have, strong democratic institutions. Chávez’ attempt to push for the establishment of an OPEC for Gas failed precipitously, squashed by Brazil, the largest regional gas importer. Brazil‚s influence on Chávez seems to be growing again, as it finally has decided to play its cards more decisively. Last but not least, in a „joke” with Kirchner that sent shivers down the spines of more than one, he asked when Argentina would sell him „a little nuclear reactor”.
It is very difficult to predict where all this is leading to, as Chávez’ vulnerability is directly proportional to the power he accumulates. On the one hand, Chávez’ domestic support and his own political machine have been weakened by his own mistakes; one does not become a mercurial despot while pursuing such a radical project, particularly when your political coalition has widely differing motivations and is still far from constituting an obedient structure in the mold of the Cuban communist party. Today, over 75% of Venezuelans, including quite a number of chavistas, are against the establishment of the Socialist Unified Party and the indefinite reelection of the President. On the other hand, Chávez is a master tactician, capable of quickly changing positions and charming his adversary into submission if it so suits him, only to return in a position of strength in order to better crush him. Chávez no longer tolerates criticism from within, and it is clear for all to see that now is the turn of those closest to him that still have the audacity of having a mind of their own to become the recipients of his destructive wrath.
The powerful Chávez now appears determined to push through his project with full force, but his project appears to be more about becoming a despotic monarch than about carrying out a revolution. Also, he may want to have his hands free when it comes to rewriting the Constitution more publicly, and it could prove embarrassing to have critical voices within his own ranks. Conventional wisdom would dictate that he is clearly overestimating his strength, but his huge pool of money and the expertise of the Cuban secret service are not to be underestimated. How far can he go without losing even more international support?
The somewhat self-serving argument of many in the old opposition that nothing much needs to be done by them as this regime is proving quite adept at taking good care of its own demise, is also ringing more true by the day. Chávez is now surrounded by yes men (and yes women). On the other hand, having accumulated so much power by relying on his instincts and the strategic plan designed with the help of his Cuban advisers, why should he stop now? More mistakes are inevitable, and, bizarrely, the one that sinks this regime may not be that far away.
