In September, Venezuelan movie audiences will be treated to a new release, Amanecer de golpe, which dramatizes the events of February 2, 1992. The movie reconstructs six or seven tense hours a half-decade ago when a contingent of rebel soldiers, led by Lt. Col. Hugo Chávez Frías, came within a hairbreadth of assassinating President Carlos Andrés Pérez and overthrowing the oldest democracy in South America. A Venezuelan-Spanish-Canadian coproduction, the film was directed by the "committed" Venezuelan director Carlos Azpúrua and written by the late José Ignacio Cabrujas, master of one of the country’s leading exports after oil--the soap opera.

Three factors give the release of this film acute political significance. First, Venezuelans are scheduled to elect a new president in December. Second, in the current race the leading contender is the same Chávez Frías--now retired from the army, released from prison, and recycled as a kind of political pop star. And, third, far from condemning the attempted coup, the film romanticizes both the event and its author. This last circumstance points most meaningfully to the pathological nature of Venezuela’s present political crisis.

Plummeting Quality of Life

What ails Venezuela? Basically, the collapse in the world price of oil, on which the country’s political system--and indeed its very political stability--has rested for four decades. Even now, with prices depressed to near-record lows for the postwar period, Venezuela remains a wealthy country. But it was much wealthier in recent memory. Between 1973 and 1983, that is to say, during the glory years of the world oil cartel (the Organization of Petroleum Exporting Countries), the country earned as much as in all the years between 1830 and 1973. As if that were not enough, during the boom decade of the 1970s Venezuela accumulated a public foreign debt of $29 billion; the interest on this debt consumes roughly 40 percent of the country’s income.

The impact of this decline on the quality of life in Venezuela can be measured in various ways. Per capita income has dropped a quarter in the past four years. In the past ten, the gross domestic product has remained virtually unchanged and caused the cumulative rate of inflation to grow seventeen times. Capital is reportedly fleeing the country at the rate of $500 million a month, and the fiscal deficit is so large as to be declared unmanageable by the government itself. Caracas, no beauty spot, is looking more down at the heels than ever, with a decaying infrastructure and increasing street crime. Public services are frequently brought to a halt by strikes.

A prolonged period of low oil prices has shaken the political system to its foundations because in the best of times that system always rested on a radically inefficient allocation of resources. As Moisés Naim points out, Venezuela has long suffered from what he calls the "reverse Midas syndrome," systematically turning gold (or, in this case, oil) into poverty. "For more than thirty years," he writes, "Venezuela spent 10 to 14 percent of its total GDP on so-called social programs." In the public health sector, for example, Venezuela spent three times more per capita in 1985 than Chile, Jamaica, or Panama.

"But in 1988," Naim continues, "Venezuela’s infant mortality was 200 percent higher than Jamaica’s, 80 percent higher than Chile’s, and 30 percent higher than Panama’s." The same was true for education. During the 1980s, no country in Latin America spent more per student than Venezuela, though illiteracy rates, dropout rates, and enrollment percentages were among the worst in the region.1 Thus, while it is demonstrably true that austerity programs imposed by the International Monetary Fund have diminished the quality and availability of essential services, even a sudden upturn in the price of oil would not of itself necessarily address the country’s basic problems.

Popular Backlash

Having been told for so long that wealth was their heritage and birthright, Venezuelans have reacted angrily and at times violently to bad economic news. The tendency has been to blame individual politicians, political parties in general, or that all-purpose abstraction, "neoliberalism." Though he escaped Chávez’s bullets, President Carlos Andrés Pérez was impeached by Congress on a legal technicality and presently languishes under house arrest. He was succeeded by former president Rafael Caldera, who was elected in 1994 on a promise to turn his back on market economics, a pledge that he has found impossible to keep. Now eighty-one and nearing the end of his career, Caldera retains a certain prestige for his personal integrity and his role as one of the founders of Venezuela’s democratic system, but he has no heirs and bequeaths his country no coherent legacy.

Indeed, one of the striking features of the Venezuelan scene is the disintegration of its party system. Not so long ago it was one of the more successful examples of a largely two-party electorate, with Acción Democrática (AD), affiliated with the Socialist International, taking turns with the social-Christian COPEI. (The leftist Movement toward Socialism--MAS--and Causa Radical were too small to be of much account.) Since 1990, however, both major parties and also MAS have suffered serious defections.

First, former president Rafael Caldera broke with COPEI, which he had helped found, to run for reelection in 1994 as a candidate of the Convergence, a coalition of dissidents from all parties. Second, many AD leaders have either left to start new parties of their own or have been expelled. Examples of the first include the 1994 AD candidate Claudio Fermín, while the second group includes former president Carlos Andrés Pérez, who proposes to run for the Senate while under house arrest.

Third, two new parties have arisen as vehicles for independents--the first is IRENE, whose candidate is a former Miss Universe, Irene Saez. The other is the Bolivarian Revolutionary Movement, also known as the MVR or sometimes MVR-200, the principal vehicle for Colonel Chávez. (He is also supported by three leftist groupings, MAS, All for the Fatherland, and Causa R.) Whatever happens, the next president of Venezuela will rule without anything approaching a working majority in Congress.

The Perils of Chávez

At this point, Chávez is far ahead in the polls--some giving him as much as 42 percent of the vote, with his closest competitor, Henrique Salas Römer, former governor of the state of Carabobo, slightly more than twenty points behind him. This is a significant spread in a first-past-the-post system like Venezuela’s, although public opinion there is very volatile, and one cannot be certain that the gap will not close somewhat by election day. While Colonel Chávez thrills some Venezuelan audiences with speeches in which he threatens to suspend payments on the foreign debt or dissolve Congress, impose price controls and arbitrary wage increases, renationalize the steel industry and cancel recent concessions to foreign oil companies--or, indeed, to jail or shoot corrupt bankers and politicians--he scares many voters with the prospect of massive political instability, capital flight, and even the collapse of public order. His negatives--24 percent--are the highest of any candidate.

As victory seems ever nearer to his grasp, Chávez has taken to moderating or qualifying some of his more sensational campaign promises. (One example is his recent performance at the Caracas Stock Exchange, which, in its capacity to refashion fundamentally anti-free market policies for the consumption of the business community, might be compared with Hitler’s landmark speech at the Industrieklub in Düsseldorf in 1932.) At present, the Venezuelan establishment seems to have talked itself into the idea that if worst comes to worst, they can live with the colonel if they have to; he, for his part, has started to try to throw them just enough rhetorical bones to sustain their most extravagant hopes.

Meanwhile, the Venezuelan Left has largely passed, bag and baggage, over to the Chávez cause. Particularly striking has been the defection of MAS--over the protests of its founders and leaders Pompeyo Márquez and Teodoro Petkoff. Clearly, Chávez has learned the art of appealing to many different constituencies at once; some of them are so disparate, however, as to make one wonder who is fooling whom.

What is particularly troubling about the possibility of a close outcome--one, for example, in which Chávez would be edged out at the last minute by Salas Romer or, for that matter, Irene Saez--is that the colonel has already made it clear that anything less than a victory for him will be a fraud and that he has a million men under arms (where?) to guarantee that the "decision of the people" is respected. This posturing has led some people to fear a Chávez defeat as much or even more than a Chávez victory.

Hugo Chávez Frías is a character who seems more appropriate to fiction than to reality--as if any novelist would possess the imagination to invent him. Tough, handsome, and strangely naive, he appeals to both the authoritarian Right and the revolutionary Left. His speeches are a confusing jumble of nationalism and populism that he calls "Bolivarianism" and claims is the next political wave for all Latin America. Chávez has already taken his message to Panama, Mexico, and Cuba, where dictator Fidel Castro hailed him as a future liberator of the continent. Thus, one of the big questions facing U.S. policy makers and members of the business community is whether Chávez, if elected, will be satisfied to limit his disastrous experiments to his own country or, like the younger Castro, also attempt to export them.

Chávez’s commitment to democracy and constitutional rule is also an open question. His comments on this subject tend to be Delphic ("I am not a rebel against democracy because you can’t rebel against something that doesn’t exist."), and his suggestions about calling for a new constituent assembly to rewrite Venezuela’s basic charter offer no information on the kind of system that he plans to introduce. One possibly troubling indicator is his pilgrimage to Spain this spring to promise rehabilitation to exiled former military dictator Marcos Pérez Jiménez, who fled the country three decades ago with more than 200 million illicit dollars in his baggage or deposited in foreign banks.

Saez: A Declining Phenomenon

Until quite recently Chávez’s closest competitor was Irene Saez. Statuesque and charismatic, Señorita Saez has long been something of a cult figure in Venezuela. A university graduate with a degree in political science, she has shown herself to be an able and determined administrator of the municipality of Chacao, the wealthiest suburb of Caracas. Unfortunately, Señorita Saez has no real program. She speaks of decentralizing government services, particularly the health care system; promoting tourism and other nonpetroleum-related products; combating corruption; paying more attention to education--in other words, bromides. A typical suggestion is her idea of combining ministries so that two functions (say, home affairs and justice) are administered by half the number of civil servants presently on the payroll. (Presumably the others would be retrained, though for what and how she does not say.)

Saez’s real mistake seems to have been to accept the nomination of the COPEI Party (along with that of her own invention, IRENE, and another tiny grouping known as the Force for Change). In the eyes of many Venezuelans, this act suddenly made her a politician like all the others, rather than an independent beholden to no one. (Chávez immediately accused her of being a front woman for the COPEI politicians and the "fugitive bankers.") At any rate, since the COPEI convention her numbers have been steadily dropping, and now she says that she may reconsider her candidacy altogether after the legislative and regional elections, which have been moved up to November. If that happens, the race may narrow at the last minute to Chávez and Salas Römer in a dangerous polarization th at could lead to trouble no matter who wins.

A Fatal Plebiscite

What we are facing in Venezuela at the end of the year, then, is not just an election but a referendum on an entire political system. On one hand, there is the prospect of democracy as usual, with all its warts and failings, represented by either Salas Römer or someone like him; on the other, there is the providential man on horseback (or, now, woman on horseback--or some other mode of transportation), riding onto the scene to smite all evildoers and with the wave of a sword or magic wand set things right. Although Venezuela’s recent history has been one of wasteful, corrupt, and inefficient democracy--still better than none at all, of course--it has a far longer record of personalistic leadership (caudillismo).

This political culture, far from having been superseded in 1958 when Pérez Jiménez was overthrown, seems to have merely lain dormant these past four decades. The tenacity of this heritage was revealed in a study of Venezuelan school textbooks several years ago by political scientist Aníbal Romero: children were taught that Venezuelan history consisted mainly of heroic acts by major historical figures (Simón Bolívar, etc.) who "arranged" things for relatively long spans of time. This is the historiographical equivalent of an economics that assumes that wealth is something found in the ground rather than produced by sustained and disciplined effort.

As Arturo Uslar-Pietri, Venezuela’s grand old man of letters, has said, "Venezuelans need to take the cure of realism…. The government should level with the country about its true situation and invite its support for the great reforms which must be undertaken."2 At this writing, however, no government, either the one in power or any of the combinations presently on offer, are likely to do this.

Alas for the United States, Venezuela’s problems cannot be brushed aside as folkloric peculiarities, material appropriate for Saturday Night Live. Venezuela is our number one source of imported oil and the second or third market for our exports in Latin America. It still has a democratic system, even if it threatens to end in self-immolation. We have no choice but to respect whatever decision the Venezuelans reach about their future leadership, no matter how unwise or irrational. The same goes for any such decisions in economic and oil policy. The recent determination to deny Chávez a visa to visit this country may have been well counseled from the point of view of his unsavory past, but if he wins the race fair and square, the Department of State and the National Security Council--not to mention our Departments of Energy and Defense--may have reason to regret it.

Paradoxically, if Chávez were to win, it would be better that he do so by a huge margin. A narrow victory would be profoundly destabilizing, but a narrow defeat would be worse. That would put the United States in the position of "supporting" a Venezuelan president whose legitimacy would be questioned by a substantial percentage of the population, some of whom--the urban and rural poor--would not be slow to express their frustration and anger.

The best that can be hoped for is a muddling through--either a Chávez suddenly sobered by the responsibilities of power or a civilian politician such as Salas Römer who is capable of reaching out to those who have not voted for him. Venezuela’s real problems, of course, begin beyond the elections and turn on the hard choices that, as Uslar-Pietri has said, both its citizens and its politicians have so far managed to avoid.

Notes

1. Paper Tigers and Minotaurs: The Politics of Venezuela’s Economic Reforms (Washington, D.C.: Carnegie Endowment for International Peace, 1993), pp. 42-43.

2. El Universal (Caracas), July 9, 1998.

Mark Falcoff is a resident scholar at AEI.