Chavez After the Oil Boom

It's not easy being a progressive Venezuelan opposed to the Chavez Regime. A lot of my leftie friends in the US look south and see a fresh, irreverent if slightly over-the-top leader sticking it to the man and fighting for Latin America's poor...understandably, they can't help but wonder if I haven't gone all Wall Street Journal on them when I voice my rejection of his regime.

"But I heard the poor are doing much better than they were before, and they really love him," they'll say to me, struggling to grasp how an apparently sane person could fail to grasp the romance, the heady excitement of seeing a popularly elected leader fighting back against the years of Washington Consensus crap imposed on Latin America by the neoliberal elite.

I've been down this road many times before, and I know the conversation that follows won't be easy, because the misunderstandings about Venezuela are deep.

For one thing, most Americans remain under the impression that Venezuela is, basically, a Latin American country. It isn't. We are, first and foremost, a petrostate. - a place where the government gets to pump massive amounts of money more or less directly out of the ground.

Nothing about Venezuela makes sense until you've worked out the deep implications of that one, basic fact. Deep down, Venezuela has much more in common with Algeria, Iran, or Russia than with Colombia, Brazil or Cuba.

For starters, we experience the oil cycle upside down.

Take the 1970s. Folks in the US remember them as the bad times: gas shortages, inflation, unemployment and the general, society-wide funk that came to be known as the age of malaise. Your oil crisis, though, was our oil boom: we remember the 70s as the time we hit the jackpot, an age when a huge amount of free money suddenly flooded the country, setting off a collective spasm of high-intensity shopping the likes of which Venezuelans had never seen before. (Needless to say, our president was intensely popular back then, too!)

The flip side came in the 90s, when Americans enjoyed an economic boom made possible, among other things, by dirt cheap energy, which, on our end, led to a string of bank failures and a decade-long recession that left the country in the mood for radical change.

At the start of this decade, the pendulum swung again, bringing yet another oil boom which you'll recall mostly in the form of the murderous prices you were paying at the pump last summer. From our end, though, the last five years have been a time when the gods of global energy decided to smile upon Venezuela again, sending the government on a breathless spending spree, and setting off yet another country-wide consumption boom, with unemployment falling, wages rising, and smiles all around.

The twist is that, this time, the oil bonanza happened with a self-described Marxist revolutionary in power, a guy who claims to be locked in a mortal fight with global capitalism but leads a state run by a gaggle of platinum-card toting socialists.

All of which has contributed immeasurably to the weird sense of dislocation of Venezuela in the last few years, an era of revolutionary slogans painted on the sides of massive new shopping malls where the people whose job it is to administer the Revolutionary Bolivarian Socialist state think nothing of plunking down a couple of thousand dollars for a plasma-screen TV before heading off for a bit of lunch in an LA-style sushi bar where obscenely overpriced bits of fish flown in from the other side of the globe get washed down with $4 bottles of Corona.

It's this oil fueled spending boom that accounts for the popularity of the Chavez regime, and there's nothing progressive about it. All the boom-time spending ended up sloshing all around the Venezuelan economy, where it set off a dynamic the world had surely never seen before: a kind of Marxist Trickle-Down Economics. In the end, for all the rambling ideological speeches, the Chavez boom is just a tweaked rerun of the 70s for us, with vastly different ideological muzak but social and political consequences that are pretty much the same.

The irrelevance of Chavez's ideology to his popularity comes into sharpest relief when seen in international context. In fact, just about every petro-state has seen its government's popularity spike over the last five years, whether those governments are marxist (like ours), nationalist (as in Russia), Islamic (think Iran) or, even, genocidal (Sudan). The political economy of petro-spending binges doesn't actually hinge on the ideological label a governments prefers to slap on its own lapel: in the end, oil goes out, money comes in, stuff gets imported, jobs are created, people get happy, leaders get popular.

It is a fact that Chavez has been far less repressive than his hyper-radical rhetoric might lead you to fear. To me, though, the measure of Chavez's tolerance has been the scale of the oil revenue stream. Chavez grasped all along that there was no point in jailing masses of people, censoring newspapers and generally playing the highly damaging role of repressive ogre when he had enough cash on hand to co-opt the co-optable and bankrupt the rest. It's a trick the Chavez regime has mastered with chilling speed, and one that has allowed it to avoid the reputation costs of repression without really having to compromise its increasingly tight grip on society.

Now, though, the credit has crunched and the oil market's gone off a cliff. Venezuelan oil, which was selling for $129 a barrel just five months ago, fetched just $31 at the end of last week. The revolutionary elite is now having to face wrenching spending choices. Suddenly, not every labor union's wage demands can be met, not every interest group's aspirations can be underwritten, and the feel-good factor the oil boom once generated is dissipating with alarming speed.

For years now, what traditional autocrats achieved with the gun and the gallows, Chavez has been achieving with his bulging pocketbook. That's not going to be possible for much longer. The quiescent, satisfied society of the Marxist trickle-down era risks being replaced with something much more fractious, where interest groups fight one another for their share of a fast shrinking resource pie and none of the shortcuts for batting down dissent are available. It's a situation Chavez has never had to face, and the temptation to maintain control through force will be strong. Very strong.

Will Chavez resist it? Stay tuned...

Comments

[Torotibio]

At least I’ am not the only Venezuelan leftie who believe the Chavez is a nightmare for our country

[KolyaV]

In the piece above Francisco Toro writes:

"It's not easy being a progressive Venezuelan opposed to the Chavez Regime. A lot of my leftie friends in the US look south and see a fresh, irreverent if slightly over-the-top leader sticking it to the man and fighting for Latin America's poor...und­erstandabl­y, they can't help but wonder if I haven't gone all Wall Street Journal on them when I voice my rejection of his regime."

How true! Many Americans do not realize that there are plenty of progressive and left of center Venezuelans opposed to Chavez. Chavista propaganda quite successfully labels those opposed to Chavez as bitter right-wingers and apologists of previous corruption. Thousands of students, from all backgrounds, protest against Chavez, and government propaganda calls them "elitist rich boys."

[Loroferoz]

Elite democracy??? What the devil are you talking about? Accion Democratica was "elite"? Strange news to Venezuelans who have a memory and knowledge of populism under AD and Carlos Andrez Perez (by the by, he was the president for 1973-78)... Maybe COPEI was somewhat "elite", but it did win far fewer elections.

You know, most of the persons in his government have a history prior to 1998. They were Adecos, Copeyanos, Masistas, Causa R, and military who lived (and well too) under previous governments.

Scarcely does the chavista in the barrio sip Corona. But like the adeco he almost surely was before, he has sipped Polar courtesy of the government now and before.

Chavez became popular because he announced a movement to renew the political institutions and end corruption at a time of economic malaise. That, he did not, except to grab more and more power. The old corrupt, sectarian adeco and copeyano system of graft was replaced by a new corrupt chavista system of graft. Chavez was lucky enough to have an oil boom in 2003. He cemented that popularity with a highly divisive discourse, that hinged on chasing corruption. Which he did not.

The ham handed attempts by the opposition at ousting him cemented his reputation as a hardy politician, somebody worthy of support because he will not be bested by anyone. He is still hardy, but now he has to battle the fatigue, expectations and skepticism of his own base of voters, with little money.

[AhmadH]

Funny that you would use CAP as your example that the Adecos were not serving the interests of the elite. Ever heard of "los doce apostoles"???

Anyway, the literature on the subject is pretty vast. There's no need to argue it here. Most scholars recognize that Venezuela during the IV Republic was a "democracy of the elite".

Until you understand that, it is pretty pointless to try to understand why the Bolivarian Revolution is so popular. Its popularity has everything to do with the rejection of the old elite-dominated system.

[Loroferoz]

I have ex-adeco relatives who are now (or have been) chavistas. If anything, the chavista modus operandi is far more sectarian and polarizing than the adeco system.

Adecos were somewhat radical, third-world, populist socialdemocrats. Chavistas are radical socialists. That is the surface of it (only). Both AD and PSUV (or MVR) are (or have been) the dominant political parties of a petrostate. Of course, the real difference is Chavez himself. Intensely charismatic, autocratic, and daring what no adeco ever dared: to stay in power indefinitely, personally.

I know perfectly well the difference between message and appearance, actual operation, and consequences of operation. Yes, both parties tell Venezuelans that they are "popular" and use appropriate imagery and discourse, both are (were) populist, both dole (d) out money to the poor and nationalize (d) private enterprise. And both finish up serving the interests of an "elite" of well-connected politicians and "businessmen". The four Venezuelan "spies" recently found guilty in Florida (and their quarry Antonini Wilson) are an interesting sample, complete with detailed accounts of their relations and activities.

About "los doce apostoles": One of them (Gustavo Cisneros) is notorious for having made big gains in THAT government and THIS government. For example, the main commercial rival of his Venevision TV station (RCTV, May 2007) was removed by govt. decree because it was "golpista". Cisneros accommodated in the end to avoid further harassment. And Chavez surely remembers all the free publicity and support received in 1998 and 1999.

[enaid]

And now I think I'll forward Sean Penn's article to all my friends and family.

[Oshi]

Sorry, but the evidence simply doesn't support this. Chavez had won 3 electoral contests by the year 2000 when oil prices were still low. Then, even after the economic collapse of 2002, 2003 Chavez still won a smashing victory the very next year. The electoral turnout in favor of Chavez has remained solid, even during hard economic times.

It is a very convenient argument for those who do not like Chavez to simply explain away his popularity by claiming its all an "oil boom". But seldom do they mention the nationalist role Chavez played in uniting OPEC, protecting prices, raising royalties, enforcing taxes, etc. which have allowed for increased spending. (previous governments did none of the above, allowing oil prices to get as low as $7/barrel)

But there is much more to the story. Chavez is popular for reasons that you don't seem willing to acknowledge. The Chavez support base is hardly enjoying Sushi and Corona's at an LA style bar, and you know that. In fact, a quick look at this month's elections show that it is the POOREST parts of the country that vote for Chavez, and the richest parts of the country are very opposed to him.

You cannot explain Chavez' popularity without explaining a little thing called "elite democracy" that dominated pre-Chavez Venezuela.

[LMPE]

As far as I can tell, Hugo Chavez is a better person than Rush Limbaugh.

[AMCaruso]

I will say that "you cannot explain Chavez popularity without explaining a big thing called" under educated people and lazyness" that dominated actual-Chavez Venezuela. How you can explain the most popular phrase in Venezuela, "I have the right to have a house, a car, a medical attention, but I don't need to work because the government can give me everything". NICE!!!! I want to live there too. Let's go. The paradise of Venezuela.....