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 alternative future.

"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 look like.

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 metabolism."

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 repression."

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 prison."

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 First Boston.

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 mannerisms.

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 and inefficiency.

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 "consultations."

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.

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