Chavez hits a bump on the road

international | anti-capitalism | feature Wednesday December 05, 2007 22:17 by Ed - ISN

Hugo Chavez casts his vote in the referendum
Photograph courtesy of Agência Brasil under a Creative Commons License

Sunday's referendum defeat may turn out to be a blessing in disguise for the Venezuelan Left

An analysis of the recent Venezuelan referendum including coverage of the issues by both alternative and mainstream media. This article includes some factual data about the reality of Venezuela’s economy which effectively counters the “conventional wisdom” arising from propaganda spread by much of the mainstream media. The article also draws some interesting contrasts between the political situation in Venezuela and its next door neighbour, Colombia.

Related Links:
Venezuela after the Referendum: Socialist Unity — Tariq Ali on CounterPunch
Recent Indymedia Coverage: Global Women’s Strike in Venezuela call for a Yes vote

Hugo Chavez suffered his first electoral defeat last weekend as a referendum on amendments to the Venezuelan constitution was defeated by a narrow margin. The result has naturally delighted opponents of Chavez at home and abroad. Behind the distortions that have infected so much of the media coverage tackling Venezuelan politics, there are some important lessons from the set-back that will have to be taken on board if the Left in Venezuela is going to build a model of ‘21st century socialism’ worth celebrating.

First of all, what were the bare facts? The ‘No’ campaign won by 51% to 49%. 45% of the electorate abstained from the vote. Chavez accepted the result, telling supporters ‘I accept the decision a people has made.’ The turn-out was significantly down compared with last year’s presidential election: 75% of voters turned out in December 2006 to re-elect Chavez. Secondly, let’s remind ourselves what was in the defeated reform package. The only feature of the constitutional amendments to be widely discussed in the English-speaking media was the proposed removal of term limits for the presidency. Other reforms – a reduction of the working day, transfer of power to community councils, the assertion of democratic control over the central bank – were generally ignored.

This discussion largely revolved around claims that Chavez wanted to make himself president-for-life. So it’s necessary to point out the obvious – that was never on the agenda. If the removal of term limits had been approved by the voters, Chavez would have had to put himself up for re-election every time his mandate ran out. A list of modern political leaders who have served three or more terms in office would include Bertie Ahern, Tony Blair, Margaret Thatcher, John Howard and Felipe Gonzalez. This is not quite the stuff of tyranny. If the people were to get fed up with him between the official polling dates, they could collect signatures and call a recall referendum – a provision of the Chavista constitution that was already used by the opposition in 2004.

The expressions of concern about the future of Venezuelan democracy might have seemed a little more sincere if the same commentators had been waxing forth about the actions of Colombian president Alvaro Uribe, who has already changed the law to enable him to run for another term, and is considering doing so again. Uribe didn’t hold any referendums consulting the people of Colombia about his move: he pushed it through the Colombian parliament, a body heavily infiltrated with supporters of the right-wing death squads. When the hard-right leader was re-elected last year, more than half the electorate abstained, and the paramilitary gangs issued blood-curdling threats warning that retribution would follow if Uribe was defeated.

http://www.guardian.co.uk/business/2007/mar/27/colombia...lnews

While many will be eager to proclaim the end of Chavismo, a more nuanced verdict on the result is required. It seems clear that Chavez would still win comfortably any election or referendum where the Venezuelan people had to choose between him and the right-wing opposition as the leadership of the country. He has won every contest of that sort since 1998. But a significant number of people who have repeatedly voted in favour of Chavez either defected to the ‘No’ camp or stayed at home. The big increase in abstentions was key – if just one in twenty of those who cast no ballots had voted in favour of the referendum, it would have been carried.

The Guardian’s Irish reporter Rory Carroll quoted a young taxi driver who told him: ‘I've voted for [Chavez] every time before but not this time, I'm worried where this is headed. I want him to stay in office but on a leash.’

http://www.guardian.co.uk/international/story/0,,222101....html

Given that Chavez lost over three million votes in the space of twelve months, the most plausible assumption must be that similar feelings were widespread. The president was too keen to press ahead with the legal changes and didn’t do enough to bring his support base with him.

This underlines the importance of a line of criticism noted by Sujatha Fernandes in Z Magazine before the poll. Fernandes referred to the comments of Javier Biardeau, a Venezuelan sociologist: “Rather than having a small group of representatives decide on the proposed reforms and then put them to the people in a referendum, Biardeau argues that it would have been preferable to convoke another Constituent Assembly to allow for a public debate and the broad participation of a range of social movements and popular groups. Through the proposed reforms, argues Biardeau, 21st century socialism is being decreed from above rather than democratically debated and given substance from below.” http://www.zmag.org/content/showarticle.cfm?SectionID=4...14258

If the proposal to abolish term limits had come out of a wide-ranging debate in an elected assembly, it would surely have stood a better chance of passing. More importantly, a process of that sort would have engaged the popular classes in the decision-making process, far more than a package of amendments drafted by Chavez and his allies without any direct input from below. They are paying the price now for taking short-cuts.

HEADING FOR A CRASH?

When coverage in the mainstream media has not been raising alarm bells about supposedly burgeoning authoritarianism in Venezuela, it has generally been predicting dark clouds on the economic horizon. Another recent article in the Guardian painted a rather lurid picture of the country’s economic health. Beneath the head-line ‘Venezuela scrambles for food despite oil boom’, Rory Carroll described ‘a booming economy with a difference’ where ‘food shortages are plaguing the country at the same time that oil revenues are driving a spending splurge on imported luxury goods, prompting criticism of President Hugo Chávez's socialist policies.’

http://www.guardian.co.uk/international/story/0,,221040....html

Carroll’s report noted shortages of milk, eggs and sugar, and quoted assertions by business spokesmen that such problems were the natural outcome of the Venezuelan government’s left-wing orientation – while also noting the Chavista response that food shortfalls ‘reflect greater spending power by the poor thanks to social programmes which have directed oil revenues into the slums’ and their insistence that ‘10,000 tonnes of imported milk will alleviate scarcity by Christmas and government-funded socialist cooperatives will boost domestic production in the long term.’

If the Guardian had wanted to give its readers a little perspective, it might have drawn on a report presented recently by the Washington-based Center for Economic and Policy Research (CEPR) on ‘The Venezuelan Economy in the Chavez Years’.
http://www.cepr.net/documents/publications/venezuela_20...7.pdf

The study challenges much of the conventional wisdom about Venezuela’s economic performance and explains how much that wisdom owes to prejudice and wishful thinking. One striking example is noted early on: ‘For almost two years, major U.S. media outlets, as well as more specialized publications stated that poverty had increased under the administration of President Hugo Chávez. This was false, but the media did not correct its reporting until the Center for Economic and Policy Research published a paper on the subject.’

Social spending has increased dramatically under the Chavez government. By 2006, it reached 20.9% of GDP – an increase of 314% since 1998. Poverty dropped from 43.9% to 30.4% in the same period, a fall of 31%, while unemployment declined from 15% to 8.3%. The figures for poverty reduction only take account of the increase in cash incomes: if the social programmes now available to poor Venezuelans are also considered, the reduction is even greater.

These social advances are most striking in the field of health care, as the CEPR outlines in detail:

‘In 1998 there were 1,628 primary care physicians for a population of 23.4 million. Today, there are 19,571 for a population of 27 million. In 1998 there were 417 emergency rooms, 74 rehab centers and 1,628 primary care centers compared to 721 emergency rooms, 445 rehab centers and 8,621 primary care centers (including the 6,500 ‘check-up points,’ usually in poor neighborhoods, and that are in the process of being expanded to more comprehensive primary care centers) today. Since 2004, 399,662 people have had eye operations that restored their vision. In 1999, there were 335 HIV patients receiving anti-retroviral treatment from the government, compared to 18,538 in 2006.’

On top of this, the government has opened over 15,000 stores selling subsidised food items, and expanded food programmes for the very poor (such as soup kitchens and food distribution). 67% of the population benefited from these programmes in 2005, 43% in 2006. There have been huge gains in education all the way from enrollment at primary schools to participation in adult literacy courses.

Many commentators will grudgingly acknowledge some of this progress at least, before going on to insist that Chavez is building on sand: his domestic spending spree is based on the high price of oil and will end with an ugly bump as soon as the global market shifts direction. But the CEPR sees little substance behind the confident predictions of doom.

For starters, there is no reason to believe that the price of oil will decline sharply in the foreseeable future. Any external shock (for example, another war in the Middle East) is more likely to increase prices than lower them. Secondly, the Venezuelan government has based its budgeting on very conservative estimates of oil prices: sometimes as little as half of the actual figure. This leaves them with plenty of breathing space if there’s a sudden downwards turn. Venezuela has built up large foreign currency reserves that can be drawn upon if needs require, and would also be able to borrow if it wanted to avoid a drastic contraction in domestic spending.

The CEPR goes on to argue that while inflation has been rising since 2004, it is not an urgent threat to economic expansion. That will remain the case as long as Venezuela has a large current account surplus, and besides inflation is still a good deal lower than in the immediate pre-Chavez years. One factor that requires attention is the exchange rate: ‘The currency is still significantly over-valued. This is something that will have to be remedied if Venezuela is going to pursue a long-term development strategy that diversifies the economy away from oil.’ But this is not an immediate threat to the economy, and the Chavez government has a number of options for dealing with the long-term difficulty it presents.

Last but not least, the report addresses the problem of food shortages described by Rory Carroll:

‘In recent months there have been reports of shortages of foods such as beef, sugar, corn oil, milk, chicken and eggs. In most cases these foods can be purchased in various black markets when they are unavailable in supermarkets and the Mercal centers [state-sponsored co-operatives]. These shortages are generally believed to be at least partly a result of price controls, the rapid growth of the economy and consumption, as well as hoarding of some items. While this may become a political problem if it persists or worsens, it is something that the government can easily mitigate. Even more so than in the case of inflation, the government has the ability to ease any shortages through imports, and presumably would do so if there were a serious threat of economic or political damage.’

All in all, the Venezuelan government has an impressive economic record. Its successes are even more striking when we recall the impact of the employers’ strike organised by the business federation FEDECAMARAS in 2002-03: without the crippling impact of that sabotage campaign, the figures for growth, employment and poverty reduction would be even higher.

TOWARDS SOCIALISM?

Another section of the CEPR report reminds us that, for all the sound and fury of the past decade in Venezuela, it remains very much a capitalist society where private capital is the dominant force in economic production:

‘The Venezuelan government's moves toward increased state involvement in the economy have not involved any large-scale nationalizations or state planning, and have been careful not to take on administrative functions that are beyond its present capacity. As noted above, the government has not even increased the public sector's share of the economy. The central government's spending, at 30 percent of GDP, is far below such European capitalist countries as France (49 percent) or Sweden (52 percent). There is still plenty of room for both private and public investment.’

This should really be the crux of discussion for people on the Left with an interest in the Bolivarian process (and it’s hard to imagine a left-winger who wouldn’t be interested): Where is Venezuela going? What path does Chavez intend to follow, and what social forces are likely to determine the outcome, regardless of his intentions? Will the ‘Bolivarian revolution’ confine itself to social-democratic reforms, which bring real benefits to the popular classes without straying too far off the capitalist path? Or will we see an experiment in democratic socialism take shape over the coming years?

There’s been a lot of interesting discussion about Venezuela’s prospects among leftists outside the country, and the most useful commentary has generally come from those who are willing to recognise how unpredictable the situation is. http://unityaotearoa.blogspot.com/2007/09/should-marxis....html

It’s doubtful if Chavez himself knows exactly what course he wants to tread. For those liberal and conservative pundits who are quite certain that his name will sooner or later be ranked in the same company as Robert Mugabe, another comparison between Colombia and Venezuela seems in order.

Alvaro Uribe’s move to dodge term limits was alarming by any standards, when you take account of the rest of the picture: low electoral turn-out, endemic political violence, gross social injustice and murderous persecution of opposition activists with the full backing of the Colombian state. Then consider Venezuela. Since the first time Chavez was elected, popular confidence in the political process has increased dramatically, as measured by electoral turn-out and opinion polls.

Progressive social reforms have brought real improvements in the living conditions of millions of people. There have been huge mobilisations of ordinary citizens, and not just at election time. Previous governments in Venezuela sent the army into the slums of Caracas to kill thousands of people and bury them in unmarked graves – the current administration has encouraged them to organise themselves and is exploring ways of giving them a sustained voice in the political system.

There has been no clamp-down on political opposition, despite the violent subversion favoured by large sections of the Venezuelan oligarchy. Opposition parties are able to organise and run candidates for public office. Political activists who disagree with the government are not being rounded up and imprisoned (never mind being killed in front of their families, as happens with sickening regularity over the border in Colombia).

With that context in mind, it seems rational to give Chavez the benefit of the doubt. There is far more reason to be concerned about the health of democracy in Britain (where the government demands the right to imprison its citizens for three months without any charge) or the United States (ruled by a president who has officially legalised the use of torture) than in Venezuela.

It will be irritating to see the crowing of right-wingers in Venezuela and elsewhere at last Sunday’s result. But in the long run, the outcome may turn out to have been for the best. It could be a demonstration of the political savvy many supporters of Chavez possess – uneasy with his approach but unwilling to vote with the right-wing opposition, they stayed at home to show their discomfort. If the process in Venezuela is to go forward, it will be necessary to win back their support by working out a strategy for the democratic transformation of society – a project that can only be carried out with the greatest possible participation from the people who stand to benefit from it.