Hugo Is Boss
by John Marshall and Christian Parenti
In These Times magazine, December 2001
From the 23rd story offices of the Venezuelan Ministry of
Planning, the slums can be seen stretching out . ~ across the
verdant mountainsides and far into the distance. Equally clear,
on the highway just below, are the swank SUVs of the upper classes,
streaming out of town and back to their gated redoubts. Inside
the office, the walls are covered from floor to ceiling with dry-erase
boards and butcher paper illustrating elaborate visions of an
"We're trying to have a revolution with the enemy inside,"
explains Enrique Vila, a poet, professor, artist and now a leading
planner in Venezuela's populist government. "It's not easy."
Vila is in charge of building a series of large, experimental,
economically self-sufficient, ecologically sustainable rural communities,
complete with local currencies and organic farming-the kind of
thing most Berkeley anarchists only dream about.
But Vila's planned communities are just one example of a broader,
frequently overlooked social experiment that began here with the
election of President Hugo Chavez in late 1998 Attacked by the
American right as a military thug-his first bid at power was a
failed coup attempt in 1992-Chavez remains something of an enigma.
Is he a populist blowhard, talking tough but doing little? An
old-school Marxist, minus the Soviet subsidies? A far-left authoritarian,
waiting to blossom? Or a doomed balcony socialist in the tradition
of Peru's Gen. Juan Velasco or Panama's Omar Torrijos?
Or, perhaps most interesting, how is it that Chavez and his
posse haven't learned the famous Thacherite lesson: "There
Is No Alternative"?
Since taking office, Chavez has done more than just hire bohemian
planners. His "Bolivarian Revolution"-named for Simon
Bolivar, the 19th-century South American liberator-has ratified
a new constitution, abolished Venezuela's plutocratic upper house
and overhauled the country's corrupt judiciary. His party, the
MVR (or Fifth Republic Movement), also has won big in congressional,
state and local elections. More important for the impoverished
majority, Chavez has reined in inflation, boosted growth rates,
beefed up social spending, launched a massive public works program
and clamped down on tax evasion.
On the international front, Chavez has been just as daring.
He has brought Venezuela closer to Fidel Castro-swapping Venezuelan
oil for Cuban doctors and sports instructors-and has sharply criticized
the policies of "savage neoliberalism" imposed on Latin
America by the United States. Chavez has even withdrawn the Venezuelan
military from regional naval exercises in the Caribbean and denied
the U.S. military access to Venezuelan airspace, thus hampering
Washington's proxy war in Colombia. Most recently, he has criticized
U.S. bombing of Afghanistan as "fighting terrorism with terrorism."
Chavez's trump card is oil: Venezuela has the largest petroleum
reserves outside the Middle East and is the largest U.S. source
of gasoline and heating oil. Petroleum revenues account for a
third of Venezuela's economic activity and three-quarters of its
exports. Oil also pays for Chavez's redistributive social projects
and gives little Venezuela major clout on the world stage. Through
the efforts of its former minister of energy and mines, Ali Rodriguez
(a former Marxist guerrilla turned statesman), Venezuela has led
a revitalization of OPEC, which in turn has boosted the price
of crude oil from $8 a barrel to as high as $35 a barrel.
The government knows how to play chess. I am trying to teach
them how to play Go," says Vila, referring to the Chinese
board game in which a player attempts to surround and absorb his
opponent's pieces rather than strike and remove them. The metaphor
helps explain the whole Bolivarian project, which aims to develop
some sort of semi-socialist mixed economics without alienating
the private sector.
In practical terms, that means diversifying and restructuring
a distorted and oil-fixated economy in which 80 percent of all
food and consumer goods are imported. According to government
and international figures, 45 percent of Venezuelans are marginally
employed in the "informal economy"; 80 percent are defined
as "poor"; half of those are "critically poor,"
meaning they can't afford an adequate diet. Thus, the immediate
task of the Chavez government has been to redistribute wealth
and services down the social hierarchy by beefing up services,
creating jobs for the poor and making the rich pay higher taxes.
At the same time, the Chavistas want to redistribute population
and investment more evenly across the country. "We're not
talking about forcing anyone out of cities," Vila says, "but
rather about attracting them back to the countryside with economic
opportunities." Sixty percent of the nation's capital is
currently invested in a narrow coastal belt around Caracas. As
a result, 85 percent of the population has concentrated in the
city and a handful of other northern coastal urban centers. Vila's
planned communities-the largest will house 3,400 people-are prototypes
of what a more balanced and sustainable form of development might
Thanks to consultation with regular Venezuelans, the visionary
settlements will also be pragmatic. "This will be cooperative
living, not utopian collectivism," Vila says. Toward that
end, the settlements are composed of individual, private homes
with familial land plots for subsistence crops, such as yucca
and beans. But there will also be larger communally owned parcels
for producing cash crops such as melons, oil palms and livestock.
Much of the community's waste will be recycled in state-of the-art
"biodigesters," producing fertilizer and biogas fuel.
The goal, Vila says, is to create a zero-pollution "circular
Politically and educationally, the communities are designed
to be relatively autonomous and self-governing with decision-making
councils that ascend from the level of the neighborhood to the
community as a whole. Most of the families, all of whom are now
marginally housed and willing to participate in such an experiment,
have already been chosen. The first settlers are due to move in
at the end of this year. But the communities are still under construction;
their layouts look like dusty crop circles in the jungle.
Meanwhile, Chavez is proceeding in more traditional ways.
Last year the government created a thousand "Bolivarian Schools,"
which provide students with additional hours of instruction and
two hot meals a day. Teachers' salaries were doubled, and public
schools were forbidden from charging parents "supplementary
fees." As a result, primary school enrollment increased by
a million students. The goal for 2001 is to convert 3,000 more
schools to the Bolivarian model and . to keep the school kitchens
open throughout the summer.
The rather backward, USAID-inspired curriculum too is being
overhauled. Leading the educational revamp is a Marxist sociologist
and former guerrilla named Carlos Lanz. He wants a curriculum
that teaches Venezuelans to reject "individualism and competitiveness"
and the "concentration of property among few people, classes
or social layers." But the schools have been derided in the
U.S. press as militarized brainwashing academies and denounced
by critics at home as a sign of creeping "Cubanization."
The government also has quadrupled spending on health care,
is constructing rural clinics, and now provides free emergency
care in Venezuela's public hospitals. The state funds a nationwide
chain of subsidized pharmacies called SUMED, where drugs sell
for 30 to 40 percent below market prices. Similarly, the military
has created subsidized "popular markets" in which soldiers
with otherwise idle military vehicles are sent into the countryside
to buy produce from farmers, transport it to towns and cities,
then sell it at below cost to small vendors who pass on a 30 percent
savings to consumers.
To deal with unemployment, the government is attempting to
create 100,000 new jobs through "civic-military production
units," in which soldiers and civilians work together on
road-building, forest restoration and agricultural projects. At
times the role of this military involvement in social projects
takes on absurd dimensions. When university student Manuel Bazo
first heard the helicopters and then saw them dropping leaflets,
he feared the worst. "I thought it was a coup," he recalls.
Not quite. It was just an informational literature drop to inform
people in a nearby barrio when the army would be sending in dentists,
barbers and other free services.
Most of the money for the reform program comes from recently
buoyant oil prices, but the Chavez government is also seeking
to redirect state funds that are currently consumed by a corrupt
and inefficient bureaucracy. "We may have political power,
but we still don't control the government," says Gilberto
Buenano, vice minister of regional planning, who, like Vila, got
his Ph.D. at Berkeley in the late '60s. "Here in Venezuela,
those are two very different things."
According to Buenano, the country's vast oil wealth-as much
as $20 billion in annual revenues-has created not just oligarchs,
but also a parasitic middle class. Venezuela's financially flush,
labyrinthine state sector has plenty of room for nepotism, patronage,
corruption and sheltered incompetence. The World Bank says the
only solution is mass l privatization. The Chavistas agree with
the diagnosis but refuse the neoliberal medicine. They want to
make the state efficient, not sell it off to foreign interests.
Using his weekly radio call-in show, AIo Presidente, Chavez
routinely urges workers and consumers to denounce corruption where
they see it. And although the government has raised wages across
the board, it also has tried to eliminate thousands of government
jobs- which the Chavistas insist are sinecures. For example, one
steel mill in Ciudad Guyana is said to have as many 6,000 people
on the payroll who don't exist.
But attempts to eliminate this sort of bloat have caused a
massive backlash from the country's unions, which have staged
scores of strikes in every sector of the economy. Though vexed
by the labor disputes, the government is also proud of its record
in handling them. "In all these strikes not a single person
has been killed, there are no political prisoners," Buenano
says. "Not even our most rabid opponents can accuse us of
Yet the president's electoral successes have yet to translate
into grassroots participatory structures. Nowhere is such failure
more apparent than in the unions. Shown in numerous opinion polls
to be among the least credible and least respected institutions
in the nation, the old-guard trade union leadership was dealt
a serious blow in December 2000, when 67 percent of voters passed
a referendum mandating the direct election of union leaders by
the rank and file. The plan was simple: force the unions to democratize,
then take power from the old guard hacks in clean elections. But
now those internal elections are underway, the Bolivarian activists
are losing badly.
The private sector also is being leaned on to help pay for
the reform and development campaign. In June, government officials
announced plans to clamp down on tax evasion by large businesses.
Investigators plan to audit about a thousand companies, but among
the first targeted are a major television network, a bank and
a leading telecommunications firm. Despite all appearances of
profitability, these firms claim they cannot afford to pay taxes.
"I don't believe them," Chavez said in a mid-June radio
broadcast. "Either they pay, or their bones will end up in
Yet another hurdle for the Chavistas is a quiet "human
capital strike" among the professional classes. There is
an internal brain drain: engineers, accountants and agronomists-
hopped-up on anti-Chavez propaganda-refuse to participate in alternative
development projects, while local doctors prefer to focus on plastic
surgery for the country's legendary beauty queens rather than
tend to the needs of the rural poor. This lack of support is particularly
frustrating because much of Chavez's macroeconomic program has
benefited the professional classes. Since taking office, the administration
has cut inflation from around 40 percent to a projected 12 percent
for this year. Meanwhile, the Venezuelan economy is expected to
grow by a healthy 4 percent this year, according to Credit Suisse
Yet the middle-class-oriented news media remain uniformly
hostile. Not a day passes without anti-Chavez calumny covering
almost every front page. Both print and broadcast outlets routinely
fabricate stories about impending martial law, economic collapse
or new medical evidence that Chavez is psychotic. Along with the
frenzied red-baiting, the media attack Chavez for being "vulgar"
and "uncultured"-code that is widely understood as a
reference to his African and indigenous origins and working-class
Amid this self induced paranoia, Venezuelan capitalists have
reduced domestic investment, citing "political instability."
Instead, much of the country's liquid assets are piped to Miami;
one economist estimated such capital flight at more than $10 billion
last year alone. The government is trying to incubate small firms
with a new micro-lending law and cheap loans from newly created
state banks. But these banks have already become mired in corruption
Some Chavez supporters are urging the president to publicly
court the middle classes and national bourgeoisie. "The problem
is that Chavez has to talk tough or lose some of his base,"
explains Walter Sandoval, an economic journalist with the Caracas
daily El Nacional. Sandoval says the poor want change-and lots
of it-right now. And while government's increased social spending
has positive impacts, the economic position of most people has
not changed fundamentally. Nor are the poor likely to wait patiently
if Chavez coddles and coaxes cooperation from the spooked shopping-mall
set. A11 of this has left Chavez in a bizarre predicament: economically
serving but politically alienating the middle-class professionals
his development plans desperately need.
Despite all of the obstacles, many Chavistas remain hopeful.
"Little by little, it'll happen," says Don Julio Cezar,
a restaurateur in the small beach town of Santa Fe. "The
people are learning, the economy is developing. This is not a
violent revolution-it'll take time."
Officially, the United States has taken a "wait-and-see"
attitude toward Chavez, but Washington's stance may be hardening.
"I am concerned sometimes when I see what [Chavez] does,"
Vice President Dick Cheney told The Associated Press in early
June. "He was democratically elected by the people of Venezuela,
and that counts for something. Sometimes, I wish he had other
friends is the way I'd describe it."
More threatening are the bellicose allegations from the State
Department's specialist on Latin America, Peter Romero, who has
called Chavez and his civilian defense minister, Jose Vincente
Rangel, "professional agitators." "There are indications
that the government of Chavez has supported violent indigenous
movements in Bolivia and, in the case of Ecuador military coup
members," Romero told the Washington Post.
Shortly after these statements, the Miami Herald reported
that Washington was reducing its intelligence cooperation with
Venezuela because, as one official explained, "There was
a sense that anything we gave the Venezuelans would wind up in
Havana." And in late October, angered by Chavez's public
criticisms of the "slaughter of innocents" in Afghanistan,
the United States called its ambassador back to Washington for
Another serious threat is Washington's ability to exert economic
pressure on Venezuela. In an attempt to diversify the economy,
Chavez sought to join the Andean Trade Preferences Act (ATPA)
and thus gain better access to U.S. markets, but American officials
have signaled their reluctance to permit Venezuela's entry. "On
ATPA, Venezuela is going to have an uphill battle because a lot
of folks here are concerned about reaching out to Chavez at a
time when he's not being very friendly to us," a Republican
congressional aide told the Herald.
None of this American hostility is lost on Venezuelans. Before
departing Caracas, we eat the traditional dish of arrepas and
drink rum with a diehard trade unionist. He says the Chavistas
are ready to arm themselves to defend the revolution at all costs.
"Any coup attempt will lead to civil war," he warns,
adding: "I wonder if the oil-hungry United States is really
ready for that."
John Marshall is a researcher and analyst working in the U.S.
Iabor movement. Christian Parenti is the author of Lockdown America
and reaches at the New College of California in San Francisco.