http://www.guardian.c o.uk/oil/story/0,11319,1284461,00.html

Venezuela: Oiling welfare's wheels

Leader
Tuesday August 17, 2004
The Guardian

It was, surely, a great victory for democracy in Venezuela yesterday of the kind for which George Bush is striving through-out the world - and this in America's own backyard. The Venezuelan president, Hugo Chávez, had submitted to a recall referendum, admittedly at first with reluctance but more recently declaring his firm commitment to step down if the vote went against him. After a vigorous campaign on both sides, Venezuelans queued for hours to cast their votes in the highest poll the country has ever recorded. The polls were kept open till midnight because of the sheer number of voters and the use of electronic technology which, while prolonging the operation, also provided a guarantee against fraud. With a clear majority in his favour, Mr Chávez resisted the temptation to lambast the opposition which has been trying for years to undermine him by fair means and foul: instead he acknowledged their good faith and called for national reconciliation. In a gloomy world, this was good news coming out of Caracas.

Yet to no one's great surprise, Mr Chávez's victory was instantly challenged by the opposition which is claiming foul, on the basis of the alleged results of its own exit polls. In view of the large margin between the two sides, that will be a very difficult proposition to sustain: the definitive word must await the verdicts of international monitors but the result already appears to be in line with the samplings of the Organisation of American States observers. Even if the result is universally accepted, a second line of argument is already being deployed against Mr Chávez, who was widely described in news reports yesterday as a "populist president" who had engaged in "lavish spending" on welfare programmes to boost his popularity with the electorate.

The suggestion that a ruling politician may seek to win votes by embarking on policies that benefit the majority of voters is hardly a sensation in most democratic societies, including our own. However let us be clear what is being talked about here. Although Venezuela is the world's fifth biggest oil producer, with the largest reserves outside the Middle East, it is still a society where one in three live in acute poverty and Mr Chávez has made no secret from the start of his determination to improve their lot. While his flamboyant style of leadership has alienated some who were previously supporters, and he has failed to deal effectively with unemployment, the main thrust of opposition has come from the elite and middle-class interests who oppose his redistributive policies. Ironically the failure of the coup of 2002 which they launched (with ill-judged approval from Washington) gave Mr Chávez the opportunity to radically reorganise the state oil company and divert a significant portion of its revenues into welfare, educational and health programmes.

Initially, oil pundits predicted that Mr Chávez would cripple production and kill off Venezuela's golden goose. Now it is admitted, as the New York Times reported last month, that Venezuela has made a "Herculean return" to the international market. While raising oil royalties Mr Chávez has been careful not to frighten off foreign investors: indeed he has been lambasted by the ultra-left for his alleged "defence of capitalist interests". International criticism is now focused more narrowly on the argument that Mr Chávez is the beneficiary of higher oil prices and that re-investment has suffered from his social expenditure.

Though the point may be debated at length it is hardly sufficient grounds for removing a president in mid-term. Radical change cannot avoid dividing a society already polarised by wealth and poverty but Mr Chávez's critics should take a less dramatic view and accept the democratic verdict.