International Political Dialogue - Venezuela in Crisis

International Political Dialogue - Venezuela in Crisis [printable version]

Venezuela in Crisis
Washington D.C.

Mr. Gustavo Coronel, a founder member of PDVSA, the Venezuelan oil company, addressed over 90 guests when he spoke about the latest political and economic developments in his country. Mr. Coronel had accepted an invitation of the Transatlantic Dialogue Programme of the Friedrich Naumann Foundation for Liberty.

In 1998, Hugo Chavez had been elected president on his promise to create jobs and fight corruption. Instead of fulfilling his promises, he had turned Venezuela into a “tropical monarchy”. Since Mr. Chavez had assumed office, the income from oil extraction had reached about $ 600 billion, which was higher than the spending on the Marshall Plan which provided the assistance to rebuild Europe after World War II. During the time in office of Mr. Chavez, the debts of the country had almost quadrupled from $ 22 billion to $ 80 billion. There had been a considerable rise in poverty and inflation; unemployment had reached about 15 per cent. The country’s crime rate was the highest in Latin America.

Over the same period, Mr. Chavez had distributed $ 30 billion abroad for purchases of weapons and loyalty.

Chavez’ ideological profile was a minority complex, coupled with ego-centrism and a deep hatred of the United States. He dreams of being a new Fidel Castro and Simon Bolivar.

At present, his popularity ratings had dropped to only 30 per cent. In 1998 he had won the presidential elections on the basis of three promises: political and institutional reforms, eliminating corruption and a fight against poverty. So far, however, he had only “achieved a political revolution”, which, in actual life, meant smashing existing institutions or appointing compliant followers to work in them. Corruption inside the country had reached unprecedented levels. At the same time, Mr. Chavez had made gifts representing the equivalent of about $ 30 billion to foreign governments to buy influence. A rich flow of oil money provides him with the funding required. In sum, President Chavez had tried to turn the country into a “tropical monarchy”, as Mr. Coronel put it.

His rule was characterised by a crude muddle of various ideologies, his personal sense of mission and egocentrism. Meanwhile, his approval rates among the people had dropped to below thirty per cent, but he still had the support of the poor. Mr. Coronel outlined three scenarios for the future of the country: He felt it was rather unlikely that Mr. Chavez might succeed in raising himself to the status of a “new Fidel” for good. Local elections in October might introduce a slow decline of his regime, and Mr. Chavez might be replaced by a referendum in 2010. In Mr. Coronel’s view, however, established opposition leaders have put their money on a strategy of wait and see until the 2012 presidential elections. Under the constitution, Mr. Chavez may not be re-elected. But this period of waiting may cost the country dearly.