Venezuela after the Coup Attempt: Will Chavez' Project Survive?

By Gregory Wilpert, May 6, 2002

More and more details about the attempted coup against President Hugo Chavez of Venezuela are beginning to emerge, although much of it still remains shrouded in mystery. The perhaps biggest unsolved mystery is who were the snipers who
started the shooting at the April 11 demonstrations, which resulted in 17 dead, and provided the justification for the coup? It appears that there were as many as five or six snipers, firing from various buildings, some of whom might have been arrested, but who were subsequently freed during the brief coup regime, before they could be identified. Earlier reports that two members of the radical and violent left-wing opposition party Bandera Roja were among the
snipers have become less certain. Chavez supporters here, though, have little doubt that the only ones who could have stood to gain from shooting at demonstrators were those who planned the coup. Anti-Chavez forces, though, seem to argue that Chavez is so mentally instable that he would place
snipers, even to shoot his own supporters and even if it is against all logic and self-interest.

Of course, another big mystery that is on everyone's mind here in Venezuela is
the extent to which the U.S. government was involved. There is little doubt now
that the U.S. government has been supporting the Venezuelan opposition
financially and through advice, as recent New York Times and Washington Post
articles have reported. The National Endowment for Democracy, a US government
funded institution known for its support of anti-progressive forces throughout
the world, has provided nearly $1 million to Chavez' opposition in 2001, with
another $1 million in the pipeline for 2002. Also, as Wayne Madsen, a former
National Security Agency intelligence officer, reports, the U.S. Navy had
stationed ships off of the coast of Venezuela to monitor troop movements and
report these to the officers involved in the coup attempt. Assuming that the
coup was carefully planned down into the last detail and not merely a
coincidence of events, as the coup supporters here claim, one has to also
assume
that there was a central coordinating force behind this normally uncoordinated
and fragmented opposition movement. Whether the U.S. government played that
coordinating role or exactly how involved the U.S. really was we will probably
not find out for certain until the relevant documents are declassified decades
from now.





Chavez since the coup attempt



Perhaps more important than the details of how the coup was organized, is what
the coup means for the future of Chavez' policies and his hold on power. The
coup has done at least five things to change the political situation in
Venezuela. First, it has helped Chavez separate the secret opponents and
opportunists from his true loyalists. The coup lasted just barely long enough
for the opportunists in his government to reveal themselves when they
celebrated the coup.



Second, because the coup failed, and because it provided some clarity as to who
is with Chavez and who is not, it has emboldened many hardline Chavez
supporters to push for fuller implementation of Chavez' political program.



Third, the coup showed just how strong the opposition is and how far it is
willing to go to oust Chavez. In other words, that the opposition can mobilize
over a quarter million demonstrators and that it is quite willing to trample on
Venezuela's democratically approved constitution.



Fourth, and as a mirror-image of the third point, the coup has shown just how
strong Chavez' support is and how far his supporters are willing to go to
defend the "Bolivarian revolution." Chavez' supporters managed to mobilize an
equal number of demonstrators as the opposition, during a complete media
black-out, solely by word-of-mouth, in less than a few hours time. Also, it is
clear now that many Chavez' supporters are willing to defend the "Bolivarian
revolution" with their lives, if necessary.



Finally, the coup and subsequent counter-coup have created a degree of
political uncertainty previously unseen. Everyone is wondering whether there
will be another coup attempt, whether someone will now try to assassinate
Chavez, whether Chavez is now just a puppet of the military, or whether the
country is headed for an interminable dead-lock between government and
opposition.



It would seem that Chavez has decided that the only way to move forward in this
post-coup situation is through reconciliation and dialogue. In numerous
statements to the public, Chavez has promised to "sheathe his sword" and to
initiate a dialogue with the opposition. Although much of the opposition is
extremely skeptical about this, some sectors, such as the Church, some business
leaders, and some union leaders have decided to take Chavez up on this offer.
As part of this more conciliatory approach, Chavez' party has promised to
implement a truth commission, which will make an independent investigation of
the events of April 11 to 14, modeled upon the truth commissions of Guatemala,
El Salvador, and Argentina.



The problem Chavez faces now, perhaps more than ever, is that his supporters
are divided between what have come to be called the "Talibanes," the radicals
who are saying that Chavez should implement his program now more than ever, and
the "Miquilenistas," named after Luis Miquilena, the moderate former Interior
and Justice Minister and elder statesman of Venezuelan politics. Miquilena left
Chavez' cabinet last fall, in the wake of the controversies surrounding the set
of 49 "enabling laws" (leyes habilitante), which outraged the business sector
and had led to the business strike of December 10.



What makes this division particularly dangerous for Chavez' political program
is that members of his coalition in the legislature have gradually been leaving
the coalition. Chavez' formerly solid majority in the legislature has now
shrunk from 99-66 to 85-80. Five of the most recent defectors are members of
his of own party, belonging to the Miquilenista faction. It is estimated that
there are about 15 more in this faction and if only three of them leave, Chavez
will have lost his majority in the National Assembly, which would make it
extremely difficult for Chavez to implement the rest of his program. In other
words, it is not just because of the economically and mediatically powerful
opposition that Chavez has to tread lightly, but his own base in the assembly
threatens to break away if he does not moderate his approach.





The Opposition to Chavez



As mentioned earlier, one thing that the coup attempt and the events leading up
to it did was to remind Chavez and his supporters just how powerful his
opposition is. Chavez, his Movimiento Quinta Republica (MVR) party, and the
other parties in his coalition (Movement Towards Socialism - MAS, Fatherland
for All - PPT, and the indigenous parties) have a hold on all branches of the
political system, as a result of their tremendous electoral victories during
the election years of 1998-2000. However, the opposition to Chavez holds
tremendous economic and media power.



This opposition, just as Chavez' camp, is also divided between
confrontationalists and reconciliationists. The good news for Chavez is that he
can practically dismiss the confrontationalists because they are for the most
part in the legislature, where they are fragmented into about ten political
parties. The real opposition to Chavez is the main union federation, the
business sector, most of the mass media, and the church. This
extra-parliamentary opposition has, since the coup attempt, shown signs of its
willingness to engage Chavez in dialogue and reconciliation.



Chavez' parliamentary opposition is showing no signs of having learnt anything
from the failed coup and is going full steam ahead with calls for his
resignation, impeachment proceedings (on grounds of mental instability, not for
having broken any laws), and with efforts to convoke a referendum to cut short
Chavez' term in office. On the last point, according to the constitution,
Chavez' term in office is six years and would last until 2006. However, a
recall election may be called four years into the president's term. Also, the
constitution allows for popular referenda, which is what the opposition is
planning on organizing, but such a referendum could only be consultative on
Chavez' term of office, unless it changes the constitution.



In an attempt to appease the extra-parliamentary opposition, particularly the
business sector, Chavez recently named a more market-oriented economic team to
his cabinet, one of whom even earned his doctorate in economics from the
University of Chicago. But what seriously bothers the business sector are the
recently passed laws which deal with land reform, banking, oil revenue, and
microfinance, among many other things. Perhaps the most important of these, for
Chavez' political project and for his supporters, is the land reform law, which
is supposed to redistribute idle plots of land to the landless. Legislators in
Chavez' coalition have said that they are willing to revise these laws, so as
to allow input from the opposition.



It seems doubtful, though, that it really was these rather technical issues,
including the recent dispute over the management of the state-owned oil
company, which mobilized over 250,000 citizens of Caracas to march in
opposition to Chavez on April 11th. Rather, the growing unpopularity of Chavez
among the middle classes probably has much more to do with the worsening
economic situation, one-sided media coverage of the government, and class
resentment towards a president who takes pride in his indigenous background,
who speaks like a member of the lower classes, and who shows contempt for the
upper classes.



Four weeks after the failed coup, the divisions within Venezuelan society are
as great as ever. The coup has radicalized many of Chavez' supporters in the
barrios-the poor neighborhoods of Venezuela. Many in the lower classes had
their doubts about Chavez before the coup, mostly because they believed the
mass media campaign against Chavez. Now, after the coup, Chavez skeptics have
become followers and Chavez supporters have become diehards.



On the other side, the diehard opposition to Chavez, which is no doubt still
trying to come up with ways of organizing another coup, does not seem to
realize that any non-constitutional defeat of Chavez will mean civil war. The
lootings which took place April 12 and 13, immediately after the coup, were an
indicator of the pent-up anger the lower classes in Venezuela feel towards
those who oppose "their" president.





The Economy



It would seem, though, that the opposition is being much too impatient. Where
the coup failed, domestic and international economic pressure might still
succeed, in a much subtler and more profound way. That is, massive capital
flight, which has been going on more or less continuously since Chavez came to
power, but has intensified in the past few months and especially in the wake of
the coup, is causing serious economic havoc. Among other things, capital flight
has led to a constant devaluation of local currency and since Venezuela imports
about 80% of its goods, this means that the imported goods become more and more
expensive. In other words, inflation has become a serious problem. Up until
January 2002 the government has tried to ward off this type of inflation by
using its dollar reserves to buy the Bolivar, the national currency. However,
as capital flight intensified after the first business-led general strike, last
December 10th, the government had to abandon this strategy
because the reserves were being depleted too quickly. Inflation immediately
shot up the following month, to over 9% for the period between January and
April 2002. For all of 2001 it had been 12%.



Capital flight, inflation, and general economic uncertainty have of course also
contributed to a lack of investment and a slight increase in unemployment (from
14.2% in February 2001 to 15% in February 2002). Another consequence of capital
flight and inflation is the relatively sudden appearance of a large fiscal
deficit for the government, amounting to as much as $8 billion for 2002. The
drop in the price of oil in late 2001 also significantly contributed to the
government shortfall. Given that the government already owes massive public
sector debts from the pre-Chavez years, the government appears to be nearly
broke at the moment.



The opposition is arguing that the dire economic situation means that the
government must apply to the International Monetary Fund to finance the
deficit. However, as most IMF-observers and the Chavez government know, going
to the IMF will mean complying with neo-liberal IMF loan conditions, such as
liberalizing trade (more specifically: bust OPEC quotas); cutting back on
social spending for education, health care, and services for the poor (no more
microcredits); privatization (of the oil sector); guarantees for the sanctity
of private property (no land redistribution and no titles for the homes in the
barrios).



Chavez will be loathe to go to the IMF for help. He has continuously railed
against "savage neo-liberalism" and it is doubtful that he will give in on
this. So far he can avoid going to the IMF because Venezuela has about $15
billion worth of reserves, which it could use to finance the deficit instead of
looking for outside funding. The problem with using up the reserves is that
doing so leaves Venezuela even more at the mercy of international currency
speculators and capital flight, since it would no longer have the currency
reserves to combat these. Chavez' main hope at this point is that the price of
oil maintains its current relatively high value, so that the deficit and the
decline in currency reserves can be reversed relatively quickly.





Implications for Venezuela's Future



Based on what is happening in Venezuela now and on what has happened in
Nicaragua, Chile, and Cuba, it would seem that any political movement that
seeks to use the state as a means for redistributing a country's wealth will be
challenged on at least three fronts: the international political (mainly the
U.S.), the domestic economic, and international economic front (the domestic
political front having been conquered by electoral means, in the case of
Venezuela and Chile, by insurrectional means in the case of Cuba and
Nicaragua).



While it is possible for progressive forces to win significant national
political power (the next sign of hope being Brazil), progressives have yet to
figure out how to deal with the other three fronts. Chavez has primarily dealt
with them through confrontation. This approach, in light of the business
strikes, the subsequent coup attempt, and the declining economic condition, is
no longer viable. Sheer national political force, which Chavez has in spades,
is not enough to combat the international political (U.S.) and the domestic and
international economic opposition.



Clearly, Chavez needs to maintain his focus and should not give up on his
principles and his program, the way his predecessor Rafael Caldera did. A
better strategy might be learnt from the local governments of Porto Alegre in
Brazil and of FMLN controlled municipalities in El Salvador, to name just two
positive examples among many others that are cropping up all over the world. In
these places, a true culture of grassroots participation and democracy is being
cultivated.



Chavez has often stated his support for participatory democracy and has even
opened the avenues for such participation through the new Venezuelan
constitution. However, his government has not cultivated a participatory
culture which would flourish in the new institutional structures he has
created. Part of the problem is that most of Venezuela's grassroots leaders are
now in political power, leaving a vacuum of progressive leadership at the
grassroots. Chavez tried to breathe life into this grassroots through the
"Bolivarian Circles", but that approach failed due to their stigmatization as
violent and their lack of leadership.



The examples of places where a true culture of grassroots democracy exists have
shown that these places manage to create development and decent lives for the
poor, precisely because they have become more self-reliant and thus are less
dependent on outside investment and finance. This is not to say that if Chavez
imitates this grassroots approach all his problems will be solved. Rather, what
it means is that such an approach might be more compatible with the forces
arrayed against his movement than outright confrontation is, while putting his
movement in a better position to actually achieve its stated goals of
empowering the poor.





Gregory Wilpert lives in Caracas, is a former U.S. Fulbright scholar in
Venezuela, and is currently doing independent research on the sociology of
development. He can be reached at:  Wilpert@cantv.net