Hugo Chavez
and Petro Populism

By Christian Parenti
The Nation

The views from the slopes of Barrio San Agustín del Sur are spectacular. Tight passageways frame Caracas and the lush, cloud-draped Avila Mountain beyond. Along the neighborhood's rough cement steps, teenagers lounge around, flirting, arguing or lost in the cheap text-messaging functions of their cell phones. Ascending a nearby cliff is a small garbage dump. From afar its refuse looks like the sand in some ominous urban hourglass.

Illiteracy, violence, disease and the listlessness of endemic unemployment have shaped the life of this barrio since landless squatters from the countryside first settled it about forty years ago. But much of that could be changing.

"Even though we have had problems, we are moving forward," says Carmen Guerrero, a woman in her late 40s who is one of San Agustín's most dedicated activists. "Here, we are all with President Chávez. Everybody except for maybe six families."

On the yellow walls of her living room are masks in the form of fashionable ladies' faces, a clock, a mirror and a small picture of Venezuela's populist president, Hugo Chávez Frías. Guerrero explains that she and her neighbors are studying in several government-created programs called missions and organizing themselves into committees to deal with everything from local and national election campaigns to sanitation and legalization of land titles.

Like most slums in Caracas, this community also has a state-owned, subsidized market, a soup kitchen, a number of small-scale cooperative businesses and a little two-story, octagonal, red-brick medical center. Upstairs two Cuban doctors live in cramped quarters; downstairs is a small waiting room and clinic.

Guerrero's neighbor, a young man named Carlos Martinez, is showing me around; he works with the local construction cooperative. They have a contract from the mayor's office to lay new drainage pipe in the barrio. Given the recent flooding, it is an important task. Later he shows me where a patch of ranchos--dirt-floored shacks made of corrugated tin and wood--are being replaced at government expense by solid, two-story brick homes.

For this little barrio and a thousand others like it, such changes mean a lot. Like two generations of Venezuelan politicians before him, Chávez has pledged sembrar el petróleo--to sow the oil. That is, to invest its profits in a way that transforms the very structure of Venezuela's economy. But what would that entail? Are social programs enough?

Lately Chávez has been talking about a "revolution within the revolution," about "transcending capitalism" and about "building a socialism for the twenty-first century." It is a discourse that frightens his enemies, electrifies his base and inspires the left throughout Latin America. After two decades of the US-promoted Washington Consensus--a cocktail of radical privatization, open markets and severe fiscal austerity--Latin America is an economic disaster marked by increasing poverty and inequality.

Taken as a whole and controlling for inflation, Latin America has grown little since the mid-1980s and hardly at all in the past seven years. With the entire region primed for social change, a new breed of populists and social democrats is coming to power. Brazil, Argentina and Uruguay, in addition to Venezuela, have leftist governments of some sort, while Colombia, Ecuador, Mexico, Nicaragua and Peru will hold presidential elections in 2006.

But a closer look at Venezuela reveals just how vexing and complicated a political and economic turn to the left can be, even in a country that is rich with oil and not deeply indebted.

Thus far, Venezuela's Bolivarian Revolution, named for South America's nineteenth-century liberator, Simón Bolívar, has deepened and politicized a pre-existing tradition of Venezuelan populism. Despite Chávez's often radical discourse, the government has not engaged in mass expropriations of private fortunes, even agricultural ones, nor plowed huge sums into new collectively owned forms of production. In fact, private property is protected in the new Constitution promulgated after Chávez came to power. What the government has done is spend billions on new social programs, $3.7 billion in the past year alone. As a result, 1.3 million people have learned to read, millions have received medical care and an estimated 35-40 percent of the population now shops at subsidized, government-owned supermarkets. Elementary school enrollment has increased by more than a million, as schools have started offering free food to students. The government has created several banks aimed at small businesses and cooperatives, redeployed part of the military to do public works and is building several new subway systems around the country. To boost agricultural production in a country that imports 80 percent of what it consumes, Chávez has created a land-reform program that rewards private farmers who increase productivity and punishes those who do not with the threat of confiscation.

The government has also structured many of its social programs in ways that force communities to organize. To gain title to barrio homes built on squatted land, people must band together as neighbors and form land committees. Likewise, many public works jobs require that people form cooperatives and then apply for a group contract. Cynics see these expanding networks of community organizations as nothing more than a clientelist electoral machine. Rank-and-file Chavistas call their movement "participatory democracy," and the revolution's intellectuals describe it as a long-term struggle against the cultural pathologies bred by all resource-rich economies--the famous "Dutch disease," in which the oil-rich state is expected to dole out services to a disorganized and unproductive population.

But for the moment, the Venezuelan battle against poverty is possible only because oil prices have been at record highs for several years, and the state owns most of the petroleum industry. All of Venezuela's oil and mining and most of its basic industry were nationalized in the mid-1970s. On average, oil sales make up 30 percent of Venezuelan GDP, provide half of state income and make up 80 percent of all Venezuelan exports.

Internal and often sympathetic critics of the reform process in Venezuela say it is one thing to "spend the oil" on social welfare; it is another altogether to "sow the oil" and create new collectively owned, productive, nonsubsidized industries that will generate wealth in an egalitarian and sustainable fashion.

"When the coup happened we realized we had to get involved or we would lose everything," explains Carmen Guerrero. She says she was always a Chávez supporter but was not very active until the April 2002 coup d'état against Chávez launched by Venezuela's main business council, its notoriously corrupt labor federation, dissident military officers and masses of middle- and upper-class Caraqueños. Declassified documents have since revealed that the CIA knew at least a week beforehand that a coup was planned, while other US government agencies, such as the National Endowment for Democracy, were channeling aid to the opposition.

"There is no going back now," says Guerrero. Then, very seriously, she adds: "I hugged Chávez at a rally. I don't know how I got through security. I guess because I am short. I can't explain the feeling, the emotion was so strong." She clutches her fists to her breast and looks away.

Guerrero started supporting Chávez in 1992, on that fateful day when the then-unknown 37-year-old colonel launched a failed coup of his own. When defeat appeared imminent, Chávez surrendered. To avoid a bloodbath he went on television and asked his compatriots who were still holding two cities to put down their weapons.

During that short live broadcast Chávez did two things that electrified the Venezuelan imagination. First, he took personal responsibility for the botched coup. This seemed to many viewers like a significant break from the standard political tradition of lying and blaming others for failure. Then, in explaining the defeat, Chávez said, "For now, the objectives that we have set for ourselves have not been achieved."

During the next two years, while Chávez was in prison studying, that key phrase--"for now," or por ahora in Spanish--became a rallying cry, a slogan of defiance painted on walls, a talisman of hope in an otherwise squalid and corrupt political landscape.

Guerrero's sentiments, down to the details about the coup and the por ahora speech, were echoed again and again in dozens of interviews throughout some of Caracas's poorest slums. The majority of people here--ranging from formerly apolitical housewives to hard-core veterans of the urban guerrilla movements of the 1970s--revere President Chávez. They view him as a political saint, a savior, the embodiment of a new national ideal.

But through Guerrero's open front door we can see the Modernist towers of offices, banks, hotels and luxury apartments in the other Caracas, a city that has grown fat on the vast oil fortunes flowing from Venezuela's subsoil.

It is this contrast between rich and poor--a contrast so visually obvious as to make the landscape of Caracas feel almost didactic--that animates Venezuelan politics. And in the other Caracas, the one with the country clubs, the citizens hate Chávez with an ardor as strong as the devotion one finds for him in the barrios. Just as the urban poor and campesinos love Chávez because of his swarthy, indigenous looks, tight curly hair and his rough, down-to-earth talk, so too are the wealthier classes driven apoplectic with rage by the fact that their president looks likes a construction worker or cab driver.

For six years Chávez and his supporters have battled this opposition, an enemy that Chávez has nicknamed los escuálidos, or "the weaklings." But the opposition has not always been so weak. It includes the privately owned mass media, which have been virulently and propagandistically hostile to the government, devoting days at a time to commercial-free attacks on it as "totalitarian" and "Castro communist." There was the armed coup, then the oil strike, which cost the economy an estimated $7.5 billion and led to severe shortages of gas, food and beer. As one consultant in the Planning Ministry said in all seriousness: "I thought the day we ran out of beer would be the day the country fell into anarchy and civil war."

There was also a prolonged public protest by a group of respected former generals who urged active soldiers to rebel. Then there was a series of violent protests by rightist street fighters calling themselves the Guarimbas, who set up burning barricades during early 2004.

Despite all this, Chávez and his political allies have won seven national ballots, including the approval of a new Constitution, an overhaul of the notoriously corrupt judiciary, two national legislative elections, two presidential elections and one attempted presidential recall.

Through it all, occasional armed clashes between hard-core Chavistas and opposition militants have left about twenty people on both sides dead or seriously wounded. And the Chávez government has enacted a media law that punishes slander with jail time and prohibits broadcast of the twenty-four-hour-a-day video loops that were an opposition favorite, drawing sharp criticism from press-freedom advocates. But there has been no major government campaign of repression, not even against the architects of the coup, many of whom are at liberty and still in Venezuela.

The barrio 23 de Enero (January 23) is to the Venezuelan left what Compton is to hip-hop: the home of its hard core. The barrio's eponym is the date of a popular uprising that took place in 1958 against dictator Marcos Pérez Jiménez. Tucked into a Caracas valley and flowing over a few hillsides, 23 de Enero is a mix of 1950s-era cement tower blocks and the usual cinder-block homes wedged along winding staircases and walkways.

The ten- and fifteen-story tower blocks are adorned in an improbable and tatterdemalion layer of colorful laundry hanging from external drying racks or barred windows. Behind the clothes and the bars one can see lush potted plants, caged and squawking birds or household items stacked up in the tiny, overcrowded apartments. On the back sides of the towers, mounds of trash sit in and around dumpsters that are placed below long, dilapidated external garbage chutes that usually have big sections of pipe missing.

From the top of each tower flies a red-and-blue flag: the colors of the Coordinador Simón Bolívar, a powerful community organization that has its roots in the urban guerrilla movements of the 1970s and '80s. Described with the catchphrase Tupamaros, these urban partisans were really a collection of groups and factions rather than a single force, as the name would suggest.

Even today, many comrades in the barrios are still armed. A fellow journalist was pulled over by masked gunmen at a Tupamaro checkpoint in 23 de Enero during the tense days around the August 2004 referendum. The homies were making sure no escuálido thugs snuck into the 'hood to do a drive-by. They also wanted my friend to donate his videocamera to the revolution, putting a gun to his head to help him make his decision. But when adult supervision finally showed up, the muchachos running the traffic stop were persuaded to give back the camera.

At the Coordinador's little headquarters I meet this other type of Chavista: not a sentimental housewife like Guerrero, but a hard-core ex-guerrilla. Juan Contreras is balding, a bit paunchy and has rather unassuming boyish features, but he got his political education the hard way and at a young age: in the form of demonstrations, police beatings and shootouts with the paramilitary forces of the state. He is now one of the key organizers in the Coordinador.

The walls outside the office are covered in revolutionary murals: One honors a youth killed in a demonstration against Henry Kissinger in the 1970s, another is for the Zapatistas, a third displays the classic Alberto Korda portrait of Che Guevara. Most of the art predates Chávez, and none portrays his image.

"Chávez did not produce the movements--we produced him," explains Contreras. "He has helped us tremendously, but what is going on here cannot be ascribed only to Chávez."

According to Contreras and a few of his comrades, the Coordinador got its start after the failed Chávez coup in 1992. In the wake of that defeat, the government began jailing leftists. Contreras fled to Cuba for a month with twenty-nine other activists from 23 de Enero; upon their return, almost all of them were arrested, and Contreras went into hiding. About a year and a half after the attempted coup, the activists regrouped and decided that armed struggle was definitely over and done with. They created the Coordinador and devoted themselves to aboveground work.

Today the Coordinador pursues a three-pronged strategy that involves reclaiming public space from drug gangs, recovering local cultural traditions and promoting organized sports. Already the barrio has produced several players for Major League Baseball, including Ugueth Urbina, Juan Carlos Ovalles and Juan Carlos Pulido. Later a young guy named Kristhian Linares stops by to pay his respects to Contreras. Only 18 years old, Linares has just signed with the Florida Marlins. He starts spring training as soon as his papers are in order.

After building these forms of social solidarity, the Coordinador then launched another project, setting up committees to deal with health, land titles, elections and the like. Some of this work interfaces with government-funded missions, some doesn't. But the paramount issue here is security. The slums of Caracas are extremely violent. Every week, around eighty people are murdered in this city of 5 million.

"We use culture and sports and organization to take over public spaces," explains Contreras. What if the drug gangs refuse to move? "Well, many of them are connected by family to the larger community, so we use that pressure. There is the armed tradition here, and they respect that. And there is a tradition of lynching in this barrio. In the past the community has killed some criminals. Not recently, but it has happened. So most of the gangs take us seriously and stay away from the central areas."

Later, as we scale a ridge packed with little homes, he explains that farther into the barrio are some agricultural projects but that I'll have to come back to visit them because the outlying areas become dangerous in the afternoon. Clearly, cultural reclamation plus threat of lynching does not completely displace crime.

It also seems that the opposition, or elements in it, have on occasion used criminals against Chavistas. An activist from nearby 23 de Enero, a woman who once lived in California, tells the story of a gangster who was paid to make death threats against the local Cuban doctors. The doctors got so freaked out they split. But the woman, a trained social worker, found the young thug, a local guy, and explained to him that he would certainly be tracked down and killed by angry Chavistas if he persisted with his threats. The gangster reconsidered and decided to stay out of politics. The Cuban doctors returned.

The organized opposition to Chávez is rather thin on the ground these days, having been largely discredited by the right-wing extremism of their coup and the economic devastation caused by their oil strike. So I visit the offices of the right-wing tabloid Así Es la Noticia, owned by one of Venezuela's top-circulation dailies, El Nacional.

"Look, Chávez won the referendum. People have to accept that," says the editor, Albor Rodriguez. She is in her early 30s, an escuálido all the way, but she respects the facts.

Standing erect at her desk, one black-clad shoulder tipped forward, she takes long drags on her cigarette between comments. "There is no 'Castro communist' here. That's ridiculous. They say there are Cubans in the government and the security. But there is no proof. However, does Chávez have autocratic tendencies? Yes! He comes from the military. Does his government, or he himself, know what they are doing? No! His head is a mix--a marmalade of notions and slogans. He speaks without thinking. He makes innuendoes about Condoleezza Rice being in love with him. That's insane. He's totally erratic."

Albor, to my surprise, is almost as harsh on the opposition: "They lost because Chávez has a deep emotional connection with the people, and they have no connection with the people. Also, he has spent a lot of money on the barrios. He pours money into the barrios."

She explains that when her paper reported on the real work of the missions, some readers accused her of lying and "having gone to the moon to find these things." She explains: "The opposition lied to itself. They were deluded and now they are smashed." With that rather definitive summation, she puts out her cigarette and invites me to lunch.

There are some in the opposition whose critique focuses less on Chávez's supposed abuses of power and more on the government's alleged mismanagement and left-wing economic tomfoolery. Oscar Garcia Mendoza is president of Banco Venezolano de Credito, a very old and conservative bank. He's what Chávez would call an "oligarch," the official enemy: a capitalist financier. But when I meet him in his beautiful corner office on the ninth floor of a Modernist highrise, he is beaming. He wears a dark blue suit, his gray hair is cropped stylishly short and he has that healthy look that seems to come from being rich and relaxed.

Classical music filters out from speakers in the ceiling; on the table are fine Cuban cigars. We sit in bent plywood and leather Herman Miller chairs, and gaze out across the city through a glass wall lined with thick green plants.

"Business has never been better," says Garcia. "This government is totally incompetent. They have no idea what they are doing. The head of their land reform, Eliezer Otaiza, is a former male stripper. And did you see they just appointed Carlos Lanz, a former terrorist kidnapper, a communist, as head of Alcasa, our largest aluminum company?" Through it all, Garcia wears a slightly suppressed grin as if he thinks the whole thing is hilarious. "I mean, can you imagine that?"

In a way, Lanz's appointment is not so outrageous: Another former guerrilla, Ali Rodriguez Araque, once minister of mining and energy, then head of OPEC, is now foreign minister and widely respected as a level-headed negotiator.

Garcia also has some very concrete criticisms. He says that the current economic boom is a chimera based on oil prices. In 2004 government spending jumped 47 percent, much of which went to pay for healthcare and education--the missions. But despite the oil windfall, the government has had to borrow heavily. Instead of turning to international financiers, it has increased its internal debt to Venezuelan banks.

Garcia says that in the past four years this internal debt has gone from $2 billion to more than $27 billion. The Finance Ministry confirms these figures and says that 60 percent of this debt is held in government bonds.

"But what makes this really crazy," says Garcia, "is that the government is depositing all its oil revenue in the same banks at about 5 percent, then borrowing it back at 14 percent. It's a very easy way for bankers to make money. That's why I say this is a government for the rich."

Last year Venezuelan banks made $1.38 billion in profits, just a bit more than they did the year before. And most of that money came from lending to the Chávez government and trading in special government-approved, dollar-denominated bonds, a legal loophole in the new currency-control law. Garcia's bank actually does no business with the government, but the huge increase in oil revenues has doubled his loan portfolio. The economy is awash in money: Growth was 17.3 percent in 2004.

So if the economy is booming, why does Garcia dislike Chávez?

"These people are crooks," he says. "Look, Venezuela has always been corrupt, but these guys are the worst." When I point out that the government just fired 120 managers in Zulia state for corruption, Garcia waves it away as insufficient.

"What are they doing with all the money? They are not investing. They spend it all on food and medicine. As soon as oil goes down, their party is over." So what should the government do to avoid this? "They should privatize everything."

Getting a Chávez government response to charges of mismanagement, corruption and overdependence on freakishly high oil prices is difficult. My inquiries are fed into the labyrinthine bureaucracy of the Information Ministry, where every few days a new official loses my paperwork and needs a full CV and another letter from my editors and another complete written explanation of my project.

After three weeks no one in the Chávez government has come forth with an on-the-record statement except for one laid-back spokesperson at the Higher Education Ministry.

Finally an old friend gets me an interview with his boss, Jorge Giordani, a former academic who befriended Chávez during the rebellious paratrooper's stint in jail and is now the planning and development minister. On matters of economic development, Giordani is the revolution's brain. We meet in his office near the top of South America's tallest building, one of a pair of towers, the other of which stands half-burned, its gold-tinted, mirrored windows blown out and black, the result of a recent accident caused by bad maintenance.

Giordani is tall, gray and hunched. He wears big glasses, a tie, a brown cardigan sweater and has a short white Abe Lincoln beard. He evades most specific questions. As for corruption, he says simply: "We are not doing enough. It is a very serious problem."

Mostly he offers a long but interesting explanation of Venezuela's historical development and its lack of internal economic integration. We move from map to map as he explicates the economic geography of various regions.

Many Chavistas hope that investing in physical infrastructure, health and education will open new, nonpetroleum industries in high technology, business services, healthcare and agriculture. When I ask Giordani how the country plans to wean itself from oil, about land reform and about the many so-called "endogenous" development projects being promoted, he sighs and shakes his head as if I am naïve.

"We've been fighting political battles for most of our time in office. Many people have learned to read in the last few years, but how long will it take for them to work in high technology, or medicine, or services? Ten years? A generation? We are fighting a very individualistic, rentier culture. Everything has been 'Mama state, Papa state, give me oil money.' To organize people is extremely hard."

After a long, roundabout discussion in which I press him on the question of import substitution and new industrialization, he settles on one key point: Venezuela's only real hope lies in regional economic integration. Only then will internal markets be big enough to nurture alternative technologies and new industries that might otherwise threaten current multinational monopolies.

Giordani seems weary and cynical. "No, I am just practical," he says with a chuckle. "Development in Venezuela will take at least fifty years."

And how long will the oil last?

"Maybe twenty years, maybe thirty."

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