Hugo Chávez at his peak

George Philip
27 March 2007

No matter how his period of rule ends, Hugo Chávez has now become publicly known as the most prominent opponent of the United States government in the western hemisphere and as an aggressive proponent of the politics of redistribution rather than wealth creation. He also aspires to the mantle of Fidel Castro. His radical reputation today is well-enough deserved, but it is worth remembering that none of this was foreseen when Chávez was first elected president of Venezuela in December 1998.

Then, oil prices were too low for redistribution policies on the current scale to have been feasible. Then, too, the whole intellectual climate in Latin America was different. "Neo-liberal" figures such as Carlos Menem, Alberto Fujimori and Ernesto Zedillo were still in power in the region, and the first two were still hopeful of a further re-election. Market economics was the ruling orthodoxy, and there was serious talk (which proved ineffectual) of a Free Trade of the Americas pact.

What has really turned Chávez from a national leader to an international figure has been his high-profile reaction to trends and developments not of his making. Chávez was able to take advantage of the discrediting of market-oriented reform in much of Latin America, itself largely the result of problems in the international commodity markets at the end of the 1990s. He benefited, too, from the distrust that many people around the world feel toward the aggressively interventionist nature of the George W Bush administration. Even more to the point, international oil prices have been unexpectedly high, and Chávez has been able to convert Venezuela into an aid donor.

Overall, therefore, Chávez has gained advantage from clever but essentially opportunistic responses to domestic and international developments that he could not control or even in many cases foresee. In the absence of these, there would still have been a President Chávez, but his policies would have been very different.

George Philip is professor and reader in Latin American politics at the London School of Economics. Among his books is Democracy in Latin America: Surviving Conflict and Crisis? (Polity, 2003)

Also by George Philip in openDemocracy:

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

The Venezuelan dynamic

Chávez's evolution in office has also been, to a degree, a reaction to Venezuelan as well as international developments. He was radicalised by the disastrous political strategies adopted by some of his conservative opponents. These at first thought they could co-opt him, and then hoped to use their control of the media in order to stir up a crisis so as to justify his removal. This led to a coup attempt in April 2002 that could only have succeeded at the price of outright dictatorship. The opposition then supported a strike at the national oil company Petróleos de Venezuela SA (PdVSA), in the hope that this would damage the economy and thus destroy Chávez's popularity. The first part of this objective was indeed accomplished. Great economic damage resulted. However, these tactics largely undermined any possibility of finding any common ground within Venezuela and accelerated the personalisation of politics under Chávez. Today the opposition, at last, seems to have become a bit wiser.

Admittedly Chávez always intended to be different from his predecessors. His aggressively pro-Opec policies did mark a breach from earlier government policy. Moreover Chávez's military provenance, his dislike of the established political parties in Venezuela and his distrust of civilian politicians - including sometimes his own supporters - has marked him out from the party politicians who ruled Venezuela before 1998. Furthermore, Chávez always defined himself as being on the left, and it was inconceivable that the pro-foreign capital orientation of his predecessors would continue. However a lot of what is now regarded as Chavismo was a response to domestic and international circumstances.

For this reason, one can expect Chavismo to continue to change over time. It is clear that George W Bush will cease to be US president in January 2009. If, as seems probable, the next US government reverts to a softer foreign-policy stance - at least in public - then Chávez's anti-US rhetoric will not have the same resonance outside Venezuela. Indeed there are already signs that Washington is adopting a softer line in respect of Latin America. Bush's visit to Latin America on 8-14 March 2007, while not achieving much at policy level, at least showed that the US government is happy to deal with left-of-centre Latin American politicians.

Also on Hugo Chávez, Venezuela, and the "Bolivarian revolution" in openDemocracy:

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)

Phil Gunson, " Hugo Chávez’s provocative solidarity"
(14 June 2006)

Phil Gunson, " Bolivarian myths and legends"
(30 November 2006)

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

While nobody can reasonably predict the future of the oil price, there are worrying economic trends in Venezuela. Oil production is stagnating while domestic consumption is rising and starting to cut into the exportable surplus. The Venezuelan government is continuing to press for the ultimate nationalisation of oil. A part of this is, of course, negotiating strategy but it will not bring more capital into the oil industry. The state oil company is not investing nearly enough either. As a result, Venezuela now needs international oil prices to stay high, which is not something that national policy can control.

Chavismo after Chávez

Venezuela has historically had short and intense oil booms followed by recessions. It had a boom in the late 1940s, another in the mid-1950s, another in the 1970s and there is one today. When comparing today's boom with past ones, there are some differences. This time around, the government has been more committed to redistribution as a policy objective than most of its predecessors. Pro-poor policies have been pursued with real energy and commitment but there have been mistakes and considerable misuse of funds as well. The government has more financial than human capital and this often shows. There is not much private investment either, and bottlenecks and shortages are already starting to appear. I suspect that the current oil-boom exuberance will end reasonably soon.

A decline in oil income and even a general economic deterioration will almost certainly not spell the end of Chavismo as a political force. After all, Peronism in Argentina was historically based on aggressive policies of redistribution as long ago as the late 1940s - and Peronism is still the dominant force in Argentina today. However, as an international influence, Chavismo may have passed its peak. The likelihood is that Hugo Chávez will slowly become less popular at home and less prominent abroad as Venezuela's prosperity declines and United States policy in the region and the world becomes milder.

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