Venezuela: a complicated referendum

After eleven resounding election victories in less than ten years, President Hugo Chávez Frias of Venezuela finally had to concede defeat in a referendum on constitutional change on 2 December 2007. On a day when only 56% of the 16.1 million eligible voters went to the polls, 50.7% of these rejected the president's proposal to modify forty-six articles of the 1999 constitution. 51.05% of voters similarly rejected an additional proposal by Venezuela's national assembly to change a further twenty-two articles.

Stephanie Blankenburg is lecturer in international political economy at the School of Oriental and African Studies (Soas) in London.

Her work includes (with Herbert Schui) Neoliberalismus: Der theoretische Entwurf, der Gegner und die praktische Verwirklichung (Neoliberalism: Theory and Practice)], Hamburg, VSE Verlag, 2004 (2nd edition)

Stephanie Blankenburg is based at present in Caracas, where she works as an an economic advisor to Venezuela's vice-president, Jorge Rodriguez.

She writes in a personal capacity

Also by Stephanie Blankenburg in openDemocracy:

"Corporate rights and responsibilities: restoring legal accountability" (9 May 2007) - with Dan Plesch

Of Venezuela's twenty-four federal states, the Sí for the president's proposal carried the day in fifteen, many predominantly rural, with margins of between 2% and 16%. Amongst the states in which the Sí for the president's reform proposal lost most markedly were those led by opposition governors, those recently rocked by maladministration and corruption issues and, less markedly, the capital district, Caracas.

A victory in defeat

Election-day in Caracas was a strange affair, in that civility, harmony and expressions of mutual respect prevailed. It was a contrast to the previous weeks of heightening tension - fuelled by turbulent protests by anti-Chávez students at Caracas's elite Central University, the widely publicised breach with Chávez of his former close ally Raúl Baduel (the ex-army chief-of-staff who retired as defence minister in July 2007), and even the No stance of Chávez' ex-wife. Only far into the night was there a brief moment of acute tension: after waiting for several hours for the national election council to brief the press on preliminary results, opposition members - surrounded by military guards - demanded an immediate declaration. This indeed followed promptly.

Almost instantly, calm was restored. Everyone's attention focused on the nearest TV screen to await one thing: Chávez's reaction. This was measured, calm and plainly sovereign. Chavez conceded defeat without a moment's hesitation, congratulating the opposition on their victory. More importantly, he made no secret of his agony in the run-up to the final result, saying that "I prefer that things ended as they did". Why? Because it had become clear quite early in the day that the only alternative would have been an astronomically narrow - what Chávez called a "mathematical" - victory for the Sí camp. That he did not want. It would have been akin to Florida's notorious hanging chads the United States election of 2000, and unworthy of his reform project. In addition, while any narrow victory of the opposition would be hailed as a legitimate victory of democracy over despotism, there could be no doubt that a similarly narrow victory of the government camp over the opposition would carry the risk of violence in Venezuela. That he didn't want either. Better to accept defeat when it comes.

A paradox of the result, then, is that it has taken a defeat - however close - to restore Chávez's democratic credentials. While the most rightwing press in Latin America is still crying "fraud", arguing that the defeat was much more pronounced and that Venezuela's election council concealed this by declaring a marginal defeat, in Venezuela the mood on the day after the referendum is very different. After initial spontaneous eruptions of celebrations in some parts of Caracas and the rest of the country, the opposition is at pains to avoid any demonstrations of triumphalism, and is engaging in a rare exercise of self-constraint and humility. At the same time, support for Chávez again appears rocket-high. "His" people are turning out in droves to declare their loyalty, both to him but to his intentions for Venezuela.

It's the economy, stupid (mostly)

What is happening in Venezuela? openDemocracy's many articles on the Hugo Chávez years offer detailed, independent analysis and argument in the interests of informed understanding. They include:

Ivan Briscoe, "The invisible majority: Venezuela after the revolution" (25 August 2004)

Ivan Briscoe, "All change in Venezuela's revolution?" (25 January 2005)

Jonah Gindin & William I Robinson, "The United States, Venezuela, and "democracy promotion" (4 August 2005)

Ivan Briscoe, "Venezuela: a revolution in contraflow" (10 February 2006)

Ben Schiller, "The axis of oil: China and Venezuela" (2 March 2006)

George Philip, "The politics of oil in Venezuela" (24 May 2006)

Phil Gunson, "Bolivarian myths and legends" (1 December 2006)

Juan Gabriel Tokatlian, "After Bush: dealing with Hugo Chávez" (13 March 2007)

George Philip, "Hugo Chávez at his peak" (28 March 2007 )

Phil Gunson, "Hugo Chávez: yo, el supremo" (13 April 2007)

Julia Buxton, "The deepening of Venezuela's Bolivarian revolution: why most people don't get it" (4 May 2007)

Ivan Briscoe, "Venezuela: is Hugo Chávez in control?" (9 August 2007)

Why then did Hugo Chávez lose; and why is it this defeat is - the narrow margin notwithstanding - such a devastating and important one?

The answers are connected. In explaining the defeat, the low rate of voter participation is vital: both because it signals widespread disillusion with Chávez's socialist projects, and because it blocks the institutional and legal means to advance a further range of socio-economic projects that would at least have stood a chance to continue to improve the lot of the poor and to promote endogenous industrialisation.

In this context, it is important to emphasise that the constitutional proposals being voted on involved much more than the unlimited re-eligibility of the president or the introduction of a state of emergency; the reform project also included social measures, such as pensions for "informal" workers and housewives and a six-hour working day, as well as moves opening the way to various forms of collective and social property rights designed to create a non-state, non-private communal economic sector.

It is in the area of economics, rather than on the high moral ground of pro-democratic passions, that the referendum was lost. Two factors were decisive here. First, there was (since the January 2007 presidential election) what amounts to a defection from the pro-Chávez camp of roughly 3 million people. Who are they?

Venezuela is a middle-income country with a per-capita income just under $5,000 per year - comparable to that of South Africa, Brazil or Malaysia, and ten times the per-capita income of poor Latin American countries, such as Nicaragua. Thanks to Chávez, it is also the Latin American country with the most equal income distribution (although this is small consolation since Latin America is infamous for its high income inequality). A closer look at what happened to income distribution since Chávez came to power in 1999 reveals a clear pattern. The main winners have been the upper-middle classes, followed by the poorest sections of society; the losers have been the obscenely rich and the lower- and middle-middle classes.

It is early for such a detailed assessment, but a socio-economic analysis of the composition of those 3 million disaffected in the Chávez camp will very likely reveal that two groups were at their heart - the very poor whose high expectations have only been partly met (the voter-queues in Petare and Katia, some of the of the poorest suburbs of Caracas, were strikingly short), and the losers in the lower- and middle-middle classes (many of whom - unhappy about past neglect and uncertain what the "route to a socialism of the 21st century" - must have joined the No queues). Recent food shortages - wholly unnecessary in a country awash with dollars, and the result of a mix of private-sector import sabotage and public-sector incompetence - cannot have helped.

The second factor influencing people to defect from the Chávez coalition was the closure of Radio Caracas TV (RCTV) in May 2007. The chagrin felt by many Chávez supporters at the move had nothing to do with the high values of democracy. They were appalled by the April 2002 coup attempt and RCTV's outrageous role in it, and had turned out en masse to defend their president. But when, five years on, the channel's license was not renewed by the state, there were tears and silent resentment even in many chavista households. This was the end of "their" RCTV, not that of the opposition, the end of soap operas that had been the stuff of family talk since their grandparents' times, and of an institution that had almost defined Venezuela, for better of for worse. A channel like RCTV would not have lasted for a day, let alone five years, in any other democratic country after the equivalent of the 2002 coup attempt; but this was not what mattered to at least a part of those 3 million disaffected. Not everything in life is about politics.

The conclusions to be drawn from this analysis and these impressions go against the grain of the black-and-white "democracy-dictatorship" style of reporting that has been so unhelpfully dominant, within and outside Venezuela during the Hugo Chávez years. For the implication is threefold:

* that Chávez lost because the poor now have the space to voice their discontent with their share in the new Venezuela's wealth

* that Chávez lost, not because he is a dictator-in-the-making, but because the new state is too weak as yet to effectively combat century-old channels of corruption without risking destabilising political contestation by the upper-middle classes

* that Chávez lost because he is impatient: trying to push fundamental transformations in just a few months - from doing away with a national institution to getting endogenous industrialisation off the ground - can backfire.

What to expect

For the moment, everything remains calm in Venezuela. At best, reason might prevail, and a democratic and measured fight for the middle ground of those 3 million "defectors" might take its course. The experience of the past decade suggests the possibility that this middle ground might come round to a better paced and better planned "socialism of the 21st century". At worst, the deeply rooted hatred between (on the one hand) an autocratic and self-righteous ex-elite fighting for lost privileges and (on the other) the emboldened poor fighting for food, housing and emancipation, may come to the fore again and destroy any hopes for a continuation of the civilised, sovereign and highly democratic atmosphere that characterised the election of 2 December 2007.

Amid these possibilities, there is one more thing to remember. In Venezuela, losing is a liability, at least in the medium term. What matters is that you win, no matter what about and why. You may be forgiven one defeat, but definitely not a second.