Since February 2, Venezuela--arguably one of the three most important Latin American countries for the United States--has been on something of an emotional binge. Its newly elected president, Colonel Hugo Chávez Frías, has been crisscrossing the country promising the imminent righting of all the nation’s wrongs, along with instant prosperity and happiness for Venezuela’s 23 million people, 80 percent of whom (by some estimates) live in poverty. Not since the emergence in Cuba of the young Fidel Castro--a personality Chávez resembles in some disturbing ways--has any Latin American country experienced anything like it.

On the face of it, Venezuela would seem an improbable locale for messianic politics. Since 1958, it has enjoyed uninterrupted civilian rule, with two strong political parties taking turns governing the country. Its vast oil and mineral wealth have consistently put it in the top rank of Latin American countries for per capita income. Even during the so-called debt crisis of the 1980s, Venezuela had enough ready cash to buy down a significant part of its foreign obligations. Though real oil prices today are at their lowest point in the past quarter-century, the country is still in a better position than most of its neighbors. Yet the Venezuelans are not happy. Far from it. The dominant note in their politics today is anger and the thirst for revenge, combined with wildly unrealistic expectations for the future--a dangerous brew indeed.

Why is this so? The answer lies largely in what the traveler sees immediately on arrival in the country. Once the taxi has cleared the international airport area and emerges from a long tunnel, the vehicle begins the descent to Caracas along apparently endless mountain roads. Every ridge and fold of the landscape, as far as the eye can see, is packed with shanties--jerry-built structures, some with electricity, others without. An entire city of slums perches on the edge of a huge, casually opulent if somewhat tasteless metropolis, a kind of bad copy of Los Angeles. Here are the two Venezuelas, face to face.

To be sure, drastic inequalities of income exist in all Latin American countries without immediate political consequences. In Brazil, for example, slums far worse than those of Caracas invade the parks and hills of Rio de Janeiro. The difference stems from Venezuela’s recent history. For nearly three decades, the country experienced almost uninterrupted economic growth, thanks to the exponential rise in the price of oil, its basic export. For the past decade and a half, however, income from that source has sharply declined. As a result, the average Venezuelan has experienced a 40 percent net loss of personal income, a loss that in human terms has been doubly painful because of the widespread corruption and inefficiency of government services.

After nearly two generations of luxuriating in massive oil revenues, Venezuelans have come to embrace two completely fallacious notions. The first is that a country’s wealth is strictly a function of its natural resources. This explains why, in a recent survey, some 82 percent described their country as the richest in the world. The second is that all economic problems can be ultimately resolved by political means. In the recent past, this meant reelecting presidents associated with the boom days of high oil prices (Carlos Andres Pérez, Rafael Caldera). When both of these men, in different ways, failed to perform the expected miracles, the public turned to the ultimate outsider--a formerly unknown military man whose principal claim to fame was his unsuccessful attempt, in the company of other officers, to overthrow Pérez in February 1992.

The World According to Chavez

The rise of Hugo Chávez cannot be explained, however, merely by disillusionment with Venezuela’s traditional political class, uninspiring as it is. Much of what he says makes good sense. He speaks of a bloated, useless bureaucracy that soaks up resources needed for basic human needs. He ruminates about 1 million Venezuelan children living at the subsistence level. Or he points out that Venezuela, despite its macroeconomic figures, has one of the highest infant mortality rates in Latin America. Or that it has a deficit of at least 1.5 million housing units. He argues for a diversification of the economy to attract investment to nontraditional areas. The president repeatedly reminds his people that "we cannot depend only on . . . the price of a barrel of oil." Indeed, as he said in his inaugural address, "even...if oil returns . . . to $40 a barrel . . . we would still continue sinking into an ethical and moral swamp."

All true, and all too true. Unfortunately, most of Chávez’s proposals to remedy this situation are eccentric, otherworldly, at best irrelevant. At the international level he advocates both immediate economic integration with other Latin American countries and the revival of that relic of the 1970s, the New International Economic Order. The former rather naively supposes that Latin America’s economic problems are largely ones of scale rather than of quality. The latter--a project that would level out developm ental differences between nations by votes at the United Nations and predetermined commodity price agreements--is about as probable as the return of the dinosaur.

In Venezuela he proposes an antipoverty campaign to be financed by elimination of government perks (first-class air travel? chauffer-driven limousines?), the presidential emergency fund (too small to buy more than one lunch and one dinner for every Venezuelan), and contributions from the multilateral lending institutions (which are unlikely to want to subsidize the poor in one of Latin America’s resource-richest countries).

Meanwhile, Chávez has decreed an across-the-board 20 percent increase in the salaries of public employees, no trivial expenditure since about a third of the urban population works for some branch of the government. He has also announced his intention to seek renegotiation of Venezuela’s $23 billion foreign debt, though the country’s congressional budget authorities have found that only about 12 percent of this obligation lends itself to this immediate purpose.[1]

On broad economic issues Chávez is remarkably vague. Like almost all leaders in the West these days including our own Hillary Rodham Clinton, he seems to prefer the Third Way. As he said in his inaugural address, "our project is not one that seeks state control, no. It is not extreme on the side of neoliberalism. We are seeking a point in the middle of the road. We want as much state participation as we want market participation: the market’s invisible hand and the state’s visible hand." One would have thought that this was precisely the system under which Venezuela has labored for the last forty years--one characterized by a noncompetitive domestic industry, subsidies in all directions, and a welfare state whose proceeds were largely siphoned off by bureaucrats and politicians.

Strangely enough, the centerpiece of Chávez’s plan for the new Venezuela is not economic at all, but political--a constituent assembly to write a new constitution. Just why rearranging the institutional furniture will solve any of the country’s basic problems is hard to say, except that it might allow Chávez to extend his presidency well beyond its current five-year limit (with no immediate reelection). On this subject the new president is remarkably coy; when asked recently just how long he thought he should serve, the best Chávez could manage was that if he could do so, he would give up power in "one year or two," but only if and when his task has been accomplished. This is, of course, a recipe for an indefinite civic dictatorship, imposed by plebiscite at the moment of a president’s maximum popularity.

A New Castro?

The president’s evident appetite for power and his capacity to mesmerize large crowds naturally bring to mind the example of the early Fidel Castro. There are some similarities. Both are outsiders who rode to power on widespread political alienation. Both have an abundance of charisma and an acute understanding of the characteristic psychological weaknesses of their respective peoples. Both can talk for hours without a text, wandering from subject to subject, sometimes in no apparent order. Both rule countries long subordinated to the cultural influence of the United States and for that very reason somewhat unsure of their own identities. Both have shown exemplary patience and persistence in their quest for power, being willing to serve terms in prison for their efforts. Both have been lucky in their choice of adversaries. Not surprisingly, Chávez has visited Cuba twice, where he heaped volumes of praise on its dictator; indeed, along with former military dictator Marcos Pérez Jiménez, Fidel Castro was an honored guest at his inauguration.[2]

The most troubling similarity with Cuba is the vague miasma of fear that has settled over Venezuelan civil society--the sense that one had best watch what one says or writes, as well as a gradual self-censorship that is taking over the print and electronic media.

But there are differences. For one thing, far from dismantling the army as Castro did in Cuba, Chávez relies on the military, particularly the younger officers and noncommissioned officers, for much of his political machinery. His campaign manager is a retired general from the Signal Corps, and he has been steadily reincorporating officers at all ranks who were cashiered for their participation in the unsuccessful coup of February 1992. The antipoverty campaign will involve the deployment of engineer battalions to some of Venezuela’s most underserved provinces, a move that actually is more reminiscent of Cuba’s Fulgencio Batista in the 1930s than of Castro in the 1960s.

For another, whereas Castro sought immediate confrontation with the United States, since his election Chávez has been extremely conciliatory in his pronouncements and rushed to Washington to meet with President William Clinton. He has also repeatedly reaffirmed his desire for new U.S. investment. At the same time, however, his new administration contains far more leftists than Castro’s did at this point in time. Not just his foreign minister but his interior minister--the key official in charge of the police, including the political police--have Communist or near-Communist backgrounds. His new ambassador to the United States is a prolific writer of anti-Yankee screeds. All Venezuela’s left-wing parties and groups, long excluded from power by an unholy alliance between the two major centrist groups, Acción Democrática and COPEI, are ecstatic at the prospect of power--or, at least, well-paying government jobs.

The international context is greatly dissimilar to Cuba in 1959. Even if Chávez seeks a confrontation with the United States, he is not likely to get one, least of all from the Clinton administration. Venezuela’s oil industry is already nationalized, and Washington is not going to pick a fight with our principal energy supplier, even in the eventuality that it confiscates other American investments. Nor is there a Soviet Union standing by to pay four times the price of the country’s principal export in exchange for political alignment.

The most important differences, however, are geopolitical and historical. Unlike Cuba, Venezuela is not ninety miles away from the United States, and its large middle class cannot possibly entertain the notion--as its Cuban coun terpart did some forty years ago--that it need do nothing to defend its interests but await the arrival of the U.S. Marines. Indeed, in retrospect, one of the biggest policy mistakes made by the United States during the early days of the Castro regime was to open the doors to a massive inflow of Cuba’s middle class, removing in one fell stroke the basis of domestic opposition. This misstep is not likely to be repeated. The situation of Venezuela’s middle class today is rather nearer to that of Chile’s under Salvador Allende (1970–1973); most of its members will have no choice but to fight where they stand. If Chávez expects new authoritarian institutions to insulate him from the consequences of bad economic policies, he may be facing some unpleasant surprises.

Two Imaginable Scenarios

At this point Chávez probably does not know where he wants to take Venezuela. Unfortunately for him, the campaign is over. Now come the hard decisions of governing. So far only two outcomes seem likely. One is that he will persist in policies that only aggravate the economic crisis, pushing Venezuela into further decline, leaving hapless civilians to pick up after him--much as in Peru after a dozen years of military "socialist" governments in the late 1960s and 1970s. The other is that Chávez will dramatically reverse himself on major economic issues and force his country into a cold shower of realism. In that case he may find himself facing an open popular rebellion, much as Carlos Andres Pérez did in 1989. The United States can only stand by and hope for the best while Venezuelans work out the terms of their own national drama.

Notes

1. El Universal (Caracas), January 25, 1999.

2. Although the new Venezuelan government is vociferous in its support for human rights in the hemisphere, it strangely exempts Cuba from any criticism. As Chávez’s new foreign minister José Vicente Rangel puts it, not only should the United States lift its embargo, but Cuba should be reintegrated in the inter-American system without having to meet any ideological tests--as if Communism were an unusual flavor of ice cream.

Mark Falcoff is a resident scholar at the American Enterprise Institute.