February 8, 2007
CARACAS—Looming over Venezuela is a climate of uncertainty about the future, of considerable anxiety, of tension and preoccupation. The elections of December 3, when Hugo Chávez won a mandate to govern for another six years, have paved the way for this President to manifest his plan to lead the country into the “21st-century socialism” that so few people understand, and which to many others increasingly resembles 20th-century socialism.
The announcements Chávez made early this year leave little room for doubt. There will be no renewal of broadcast licenses for one of the opposition’s private TV channels to remain on the air; the principal electric and telecommunications companies will be nationalized; and the state sector as a whole will grow until Venezuela's private businesses have been reduced to a marginal position.
Through an “enabling law” passed by the Congress he controls, the President has obtained the power to legislate. Soon the Constitution will be reformed, with the unrestricted support of Parliament, to include unlimited reelections of the President, and Presidential power to change the nation's political-territorial structure. The latter will cause the independence of city and state governments to be lost completely to the central power. Also expected to be approved is an education law that’s raising much concern because it would impose harsh state control over private schools.
Many in Caracas wonder whether Chávez will manage to accomplish all these plans—plans which would give him a truly dictatorial and absolute power—leading the country down a socialist path resembling not the socialism of the Swedes and Norwegians, but that of the Russians under Soviet communism, or the Cubans under the power of the Castro brothers.
The most obvious answer is yes, Chávez does possess sufficient political resources and control of the state to impose any change he wants, because he possesses a popular support that—while not as great as the National Electoral Council’s figures would lead us to believe—is at least enough for him to forge ahead with his plans.
The future is not, however, completely clear. That support enjoyed by Chávez depends to a large extent on the impressive alms he is giving away through so-called “missions” to millions of Venezuelans who receive money directly from the state. Of course, each individual gets relatively little, but for some, it’s enough to live on without even taking a job. The government spends money by the fistful to ensure its political backing; it has created what until now could be called a “petroleum socialism,” an odd system in which the revenue produced by crude oil becomes the administration’s principal source of support for its political domination of the country.
But after last year’s climb, the price of oil is now dropping, while state expenditure continues its constant rise because Chávez must maintain his domestic support as well as his backing abroad. This disparity has led to an increase in the fiscal deficit; thus Venezuela is approaching—at a pace faster than anticipated—one of those crises we Venezuelans know all too well: they hit us hard in 1983, 1989, and 1994. For public expenditure to remain at current levels, the government would need to sell oil for more than $60 per barrel, not $40 or $50, the likely price within the next few months.
What will Chávez do when he can no longer feed the millions who live off oil money? How will the people react once they see that what they receive drops in value due to inflation and currency depreciation? If by that time Chávez has managed to consolidate his dictatorial powers, it is quite possible he’ll establish a regime similar to the one in Cuba: classic totalitarian socialism. If he hasn’t, or if public opinion turns decidedly against him, it is likely that conflicts of an unforeseeable magnitude will begin.
Perhaps, with his characteristic shrewdness, Chávez will then backpedal toward more conventional forms of populism, leaving for later the task of completing his project of socialist authoritarianism. It is also possible that, confident of victory, he will plunge into a final offensive that would take Venezuela right down the road of violence. Eventually Venezuela may resemble Castro’s Cuba, Hussein’s Iraq, or Perón’s Argentina, depending how this complex situation is resolved. The fact is—as the reader will understand—that the reasons for the uncertainty and general anxiety we’re experiencing today are many.
Carlos Sabino is an adjunct fellow with The Independent Institute, and a visiting professor and researcher at the Universidad Francisco Marroquín Foundation in Guatemala.