Friday, March 11, 2011
An Assessment of Venezuela’s Bolivarian Revolution at Twelve Years
Feb 2nd 2011 , by Gregory Wilpert - Venezuelanalysis.com
On the 12th anniversary of Chavez’s first oath of office as president of Venezuela on February 2, 1999, one can easily get the impression from the international mainstream media that Venezuela is trapped in a terminal spiral towards becoming a state socialist dictatorship. One reads about a failing economy, presidential authoritarianism, rampant crime and corruption, arbitrary nationalizations of companies, and persecution of the private media and of opposition leaders. If all of this is true, then why does President Chavez continue to enjoy widespread support within Venezuela, according to polls? True, recent electoral successes have been relatively narrow for Chavez, but he and his supporters continue to maintain the support of approximately half the country’s population.  More importantly, opinion polls regularly show that Venezuelans say their political system is more democratic and their economy is functioning better than the polities and economies of most other countries in the region. Leaving aside the theoretical possibility that the opinion polls and electoral results are false, how can it be explained that Chavez and his government continue to enjoy this much support when Venezuela is supposedly a nightmare of crime, repression, and a failing economy?
I argue that Venezuela is far from being a failed leftist experiment. Rather, there is substantial evidence that just the opposite is the case. Venezuela has made significant progress in the past 12 years of Chavez’s presidency towards creating a more egalitarian, inclusive, and participatory society. Indeed, these advances explain the government’s ongoing popularity. At the same time, though, one must recognize that there are significant shortcomings that have either persisted throughout Chavez’s presidency or in some cases are new. This helps to explain why the Chavez government’s popularity seems to have peaked with Chavez’s 2006 reelection (winning 62.8% of the vote in December of that year) and has gradually declined since.
In order to explain the relatively high level of support after 12 years in office I will first present some of the most important advances of the Chavez government in the areas of polity, economy, society, and international relations. I will then also take a look at what some of the most important shortcomings are and what factors or obstacles might explain the persistence of these shortcomings. This is by no means a comprehensive list, but merely a summary of what I consider to be the most important advances, shortcomings, and obstacles.
In the political realm
Many of the political changes that have taken place in Venezuela in the past 12 years have involved an increase in political inclusion of previously excluded sectors of society. This has taken place in a wide variety of areas. For example, the percentage of the voting age population that is registered to vote rose from 79% in 1998 to 92% in 2010. Also, Voter participation in presidential elections increased from 65.5% in 1998 to 74.6% in 2006. The combination of increased participation rate and of increased registration means that the participation rate of the voting age population increased from 51% to 69% between 1998 and 2006.  Since most Venezuelans are poor and previously tended not to vote, most of the new voters come from poor backgrounds. Compare this to the United States, where in one of the highest turnouts in recent decades only 57.4% of the voting age population voted in 2008. 
Further bolstering Venezuela’s democratic credentials is the fact that as a result of the new 1999 constitution that was passed under Chavez, Venezuela instituted one of the most fraud-proof electoral systems in the world, with dual electronic and paper ballots – a system that has been praised by election observers from around the world.
In terms of including previously excluded sectors of the population, with the 1999 constitution the indigenous population now enjoys many new rights, such as the right to their own languages, cultures, and territories, as well as three guaranteed representatives in the National Assembly.
Also, women are now explicitly included in every aspect of the 1999 constitution and housework is supposed to be considered as wage-earning work for the purpose of calculating pension benefits (which, however, has so far not been implemented). More than that, women and indigenous peoples are given affirmative action opportunities for loans, land reform, and access to social programs such as public education and poverty alleviation.
Not only are more Venezuelans included in the political process, they also have more opportunities to participate than previously. These greater opportunities for participation take many forms, such as the right of citizens to initiate referenda to recall any elected official, to approve of laws, and to repeal laws.
Perhaps the most important new form of participation takes place in community self-organization, via citizen assemblies, which since 2006 have resulted in the creation of more than 30,000 communal councils and dozens of agglomerations of community councils, known as communes. Communal councils are formed when 150-400 families come together and decide to work on a wide variety of community improvement projects, for which they receive substantial funding from the government.
Another form of civil society participation takes place in the nomination of members to three independent branches of government (judiciary, prosecutorial, and electoral branches).
With regard to the media, ordinary Venezuelans now participate in the creation of hundreds of new and independent community radio and television stations across the country. Previous governments persecuted community media, but state institutions now actively support them - not with ongoing financing, but with training and start-up equipment.
The combination of greater inclusion and greater participation has led to a greater acceptance of Venezuela’s democratic political system, according to the annual Latinobarometro opinion polls, which allow for comparisons with other democracies in Latin America. That is, more Venezuelans believe in democracy than citizens of any other country in Latin America. Eighty-four percent of Venezuelans say, “democracy is preferable to any other system of government,” while the average for all of Latin America is 61%.  Forty-nine percent of Venezuelans says that they are satisfied with their democracy, which is 5 points above the regional average of 44% and 14 points higher than it was in 1998.  Also, more Venezuelans express an interest in politics than in any other Latin American country (35%, with the regional average at 26%).  Finally, contrary to what one would believe by reading mainstream media, only 25% of Venezuelans say that the president controls the mass media, which is 4 points lower than the regional average of 29%. 
In the economic realm
Just as the Chavez government has democratized Venezuela’s political system over the past 12 years; it has done the same with its economic system, both on a macro-economic level and on a micro-economic level.
On a macro-economic level this has been achieved by increasing state control over the economy and by dismantling neo-liberalism in Venezuela. The Chavez government has regained state control over the previously quasi-independent national oil industry. The government nationalized private sub-contractors of the oil industry and incorporated them into the state oil company, giving workers full benefits and better pay. It also partially nationalized transnational oil company operations so that they control no more than 40% of any given oil production site. Then, the government eliminated the practice of “service agreements,” whereby transnational oil companies enjoyed lucrative concessions for oil production. Perhaps most importantly, the government increased royalties from oil production from as low as 1% to a minimum of 33%.
In the non-oil sector the government nationalized key (previously privatized) industries, such as: steel production (Sidor), telecommunications (Cantv), electricity distribution (production was already in state hands), cement production (Cemex), banking (Banco de Venezuela), and food distribution (Éxito).
On a micro-economic level democratization has taken place by promoting workplace democracy. The government supported the creation of more than 100,000 cooperatives with low-interest loans and free training. This represents a more than 100-fold increase from pre-Chavez days. In cases where factories were idle the government has allowed former workers to take them over so that dozens of worker co-managed factories were created.
The democratization of the workplace has had its perhaps profoundest effect in the agricultural sector, where rural land reform has benefited more than a million Venezuelans, not just with tracts of land, but also with training, credits, technology, and access to markets.
The results of the Chavez government’s economic policies have been a 50% drop in the poverty rate, from 49% of the households in early 1998 to 24% in late 2009.  Similarly, the extreme poverty rate dropped more than two-thirds, from 21% of households in 1998 to 6% in late 2009.  While most of this drop in poverty is attributable to social policies that benefit the poor, much of it is also traceable to a dramatic drop in unemployment, which fell by nearly half, from 14.5% in early 1999 to around 7% in late 2010. Some countries that pursue neo-liberal economic policies have also achieved lower poverty rates, but usually at the expense of greater inequality. In Venezuela, though, inequality, as measured by the “Gini coefficient,” dropped from 0.49 in 1998 to 0.39 in 2010,  one of the lowest levels in Latin America.
All of this has meant that more Venezuelans are satisfied with Venezuela’s economy—despite two years of recession (2009 and 2010)—than most Latin Americans are of their respective economies. That is, in 2010, 38% of Venezuelans said they are satisfied with their economy, while the Latin American average is 30%. 
In the social realm
Greater participation, closer government attention to the poor population’s needs, and a more equal distribution of the country’s wealth have led to a wide variety of improvements in people’s lives. In the realm of social policies these improvements have been achieved via a wide variety of new social programs, known as “missions.” For example, in the area of education the government has almost tripled the rate of university attendance, from 28 per 1,000 inhabitants in 1999 to 78 per 1,000 inhabitants in 2007 (from 657,000 university students in 1999 to 2.1 million in 2007);  it achieved a 50% increase in the enrollment rate in primary education from 40.6% in 1999 to 60.6% in 2008;  and increased by 30% the percentage of GDP dedicated to education, from 4.87% of GDP in 1999 to 6.34% in 2008. 
In the area of health the advances include: universal health coverage, via the Barrio Adentro Mission (community doctors in most neighborhoods); a drop in the infant mortality rate from 19.0 per 1,000 live births in 1999 to 13.9 per 1,000 in 2008; a 1.5 year increase in Venezuelans’ life expectancy, from 72.4 years in 2000 to 73.9 in 2009. 
With regard to retirement and social security there has been a steady increase in the coverage and in the level of social security benefits for retired persons, which has led to a doubling of resources dedicated to social security, from 2.28% of GDP in 1999 to 4.75% in 2008.  In terms of the population covered, this has increased from 20.3% of those over 60 years old in the year 2000, to 43.3% in 2009. 
As a result of these policies, Venezuelans report to have an exceptionally high level of general well-being. According to Latinobarometro, 84% of Venezuelans say that they are satisfied with life, which is the second highest level in Latin America and well above the average of 71% for all of Latin America.  Also, Venezuela’s Human Development Index (HDI), with which the UN Development Program tries to measure a variety of social indicators, increased from 0.78 in 1998 to 0.84 in 2008 (the world’s HDI hardly changed at all during this time). 
In the realm of international relations
With regard to international relations the Chavez government has prioritized two primary objectives. First, it seeks to create a “multi-polar” world, in which there are no superpowers that would dominate global politics, as is currently the case. Such a multi-polar world would allow for a better balance of national and regional interests and would create a more level playing field in international affairs. Second, the Chavez government has focused on regional Latin American and Caribbean integration. Regional integration not only supports the effort to create a multi-polar world, but it is also based on the recognition that Third World countries will have a better chance for economic and political development if they join forces and integrate regionally instead of competing against each other or individually against countries of the North. Chavez has embedded these foreign policy objectives firmly within an anti-imperialist framework that tries to challenge U.S. hegemony at every turn, whether with regard to the wars in Afghanistan and Iraq, U.S. support for Israel’s occupation of the West Bank and Gaza, or efforts to impose neo-liberalism via the World Bank and IMF.
Moves in the direction of regional integration and the creation of a multi-polar world have advanced on several fronts. One example is the creation of the Union of South American Nations (UNASUR), which brings together all of South America’s nations in a new political and economic project, with a view towards creating a South American currency, among other things. While this is a joint project of all South American nations, Venezuela has been one of its main promoters.
Venezuela, together with Cuba also launched a different kind of integration project, the Bolivarian Alliance for our Americas (ALBA), to which Venezuela, Cuba, Bolivia, Ecuador, Nicaragua, Dominica, St. Vincent and the Grenadines, and Antigua and Barbuda belong. This regional alliance establishes new forms of trade relations that are based on solidarity and fair exchange instead of on free trade.
A similar project, but limited to the oil sector, has been the creation of PetroCaribe, through which Venezuela provides oil and technical support to Caribbean nations at generous financing rates, so that they are less exposed to the ups and downs of the world price of oil and less dependent on transnational oil companies.
Also, the Chavez government has emphasized people-to-people diplomacy based on solidarity, in the form of Miracle Mission, a program that offers free eye operations to the poor in all countries of the Americas (including the U.S.), with the help of Cuban doctors. Another project that supports this people-to-people diplomacy is the U.S. Heating Oil Program, which provides heavily discounted heating oil to poor communities and particularly to Native American communities throughout the U.S., via Venezuela’s U.S.-based oil company Citgo.
Although Venezuela remains a predominantly capitalistic country—despite President Chavez’s explicit aim to overcome capitalism and to create “21st century socialism” in Venezuela—the country has made significant advances in reversing and alleviating the negative effects of capitalism, via greater political inclusion and participation, greater social justice and economic democracy, and by promoting a foreign policy that emphasizes South-South cooperation and integration against U.S. hegemony.
Despite these undeniable advances over the past 12 years, the Chavez government has not been able to address all problems that Venezuelans face. Again, looking at the political, economic, social, and international realms, the most important shortcomings include the following:
In Venezuela the judiciary system continues to be a politicized institution, despite various efforts to reform it and the creation of an independent prosecutorial branch of government, which includes the Attorney General’s office, the Comptroller General’s office, and the Human Rights Ombudsperson’s office. This politicized judicial system has led to some questionable prosecutions of opposition spokespeople. It is this politicized judiciary, which is independent of the executive, but is strongly influenced by its pro-Chavez outlook, that has often led to accusations that Venezuela violates human rights. This pro-Chavez slant within the judiciary would almost definitely not have been as pronounced, though, had the opposition not boycotted the 2005 National Assembly elections, as they then might have had a chance to prevent the appointment of an almost entirely pro-Chavez Supreme Court.
Another key shortcoming in the political realm is the persistence of an inefficient public administration that tends to be extremely bureaucratic and has become more so over the past few years. This inefficiency gives rise to many opportunities for low-level corruption, where officials offer to solve bureaucratic problems for a bribe. More than that, the bureaucracy also stifles the government’s efforts to create a participatory democracy (more on that later).
Here the main shortcoming has been fairly recent, in that the government did not manage to avoid a two-year recession, unlike most other countries in the region. According to some analysts, the 2009 to 2010 recession in Venezuela was avoidable, had the government saved more revenues during the time of the oil price boom (2004-2008) and engaged in more deficit spending when the world recession hit.  As a result of the pro-cyclical economic policy of the government, Venezuela was one of the few Latin American countries to remain in a recession in 2010.
A longer-term shortcoming in the economic realm is Venezuela’s continued extreme dependency on oil exports, despite the government’s many efforts to diversify the economy. Currently about 90% of Venezuela’s export earnings come from oil and the percentage of GDP that is linked to the oil sector has not changed during Chavez’s presidency. The main reason for the government’s inability to overcome this dependency has to do with the fact that the massive oil revenues tend to stifle domestic production because imports are generally cheaper (especially with Venezuela’s fixed exchange rate), even when the government tries to invest oil revenues in domestic non-oil industries.
Perhaps the most irrational shortcoming in the economic realm is Venezuela’s subsidized gasoline. Venezuela has the most heavily subsidized gasoline in the world, making it practically free and contributing to waste, pollution, and massive traffic congestion in the capital of Caracas. The cost of the fuel subsidy to the Venezuelan state is difficult to calculate, but some estimate it to be on the order of $6-10 billion per year, which is quite substantial compared to Venezuela’s $50 billion state budget for 2010.
Finally, in order to keep inflation down, the government has fixed the currency’s exchange rate, so as to keep imports artificially cheap and inflation lower than it otherwise might be. However, since the exchange rate does not keep up with inflation (which at 27% for 2010 was one of the highest in the world) the currency tends to be overvalued, making imports artificially cheap and making non-oil exports expensive, so that it is almost impossible for these to be sold on the international market.
According the accounts of most ordinary Venezuelans, crime has surged in the past few years, making it the most serious problem Venezuelans face. Latinobarometro, for example, reports that 64% of Venezuelans say that crime is the country’s most serious problem. This is the region’s highest percentage of people who say that crime is the country’s main problem and more than double the Latin American average of 27%.  Oddly, even though the perception of crime is extremely high in Venezuela, the incidence of crime appears to be lower than the Latin American average, with only 26% of Venezuelans reporting to have been a victim or have a family member who was a victim in the previous 12 months. This is 5 points lower than the Latin American average and is by far the greatest gap between incidence and perception. 
The second most important social shortcoming in Venezuela is perhaps the persistent housing crisis. Venezuela’s housing shortage is reported to have doubled, increasing from 1 million to 2 million homes in the past 12 years. While the Chavez government has dedicated many resources to this problem, including nationalizing the cement industry and producing cheap PVC plastic housing materials to help resolve it, the state housing sector has not been able to alleviate this problem due its chronic inefficiency.
In its pursuit to create a multi-polar world and to support South-South cooperation against U.S. hegemony, the Chavez government has established extremely close relations with numerous authoritarian governments around the world. This, by itself, is generally legitimate if it serves Venezuela’s national interests. However, in the process of establishing exceptionally close ties with these countries, Chavez has given legitimacy and personal support to the authoritarian rulers of Iran, Belarus, China, Zimbabwe, and Syria, among others. Such strong personal ties not only affect Chavez’s personal credibility in the human rights arena, but also make the struggles of the oppressed in these countries more difficult.
While the Chavez government’s advances are far more significant than the shortcomings, both in terms of quantity and of quality, it is important to be aware of the shortcomings if one is to have a full understanding of what is happening in Venezuela today. An analysis of the reasons these shortcomings persist will further deepen this understanding.
Obstacles/Reasons for the persistence of problems
There seem to be four main obstacles within the Bolivarian movement that make internal criticism and course-correction very difficult for the government. The first obstacle is, paradoxically, the main reason the Bolivarian Revolution was able to get as far as it has: President Chavez himself. That is, the Bolivarian Revolution was possible to a large extent due to Chavez’s ability to unite a fragmented Venezuelan left and to mobilize a demoralized and disenfranchised mostly poor population.
However, Chavez’s tremendous leadership capacity has also created a tremendous dependency of the movement on him for the continued advancement of the revolution. This dependency, in turn, makes it very difficult for the movement’s supporters to criticize aspects of the revolution because all criticism reflects negatively on the one individual on whom the revolution depends. Internal debate therefore tends to be cut off before it ever gets going. In short, the Bolivarian Revolution is quite fragile due to its strong dependence on a single charismatic leader. The creation of the United Socialist Party of Venezuela (PSUV) was supposed to overcome this weakness, but so far it has not been able to do so because of its insufficient institutionalization and its own dependence on Chavez for its every move.
Second, despite the very profound changes that have taken place in Venezuela over the past 12 years, its clientelistic (some in Venezuela call it “tribalistic”) political culture has not changed all that much. In such a political culture loyalty to an individual (such as to the President or to a sub-group, to a “tribe” or “clan”) is more important than to political ideals or principles. Such a clientelist political culture creates a breeding ground for corruption as one hand washes the other in the name of loyalty to each other. Criticism under such circumstances not only threatens unity, but also indicates disloyalty and can lead to not being promoted or even to losing one’s job.
Third, the demands for unity and loyalty merge with Chavez’s military management style, which is very hierarchical and top-down. While Chavez’s intention to create a participatory society in Venezuela has been demonstrated over and over again, in his inner circle and within the public administration as a whole, there is a profound culture of top-down hierarchical management that ultimately clashes with the efforts to create a participatory democracy. It would seem that Chavez himself and those around him have not realized that this management style is irreconcilable with the government’s overall aim of creating a more democratic society. As a result, Chavez supporters in the communities, who have been empowered by communal councils and worker-managed workplaces, end up in bitter conflicts with state functionaries who try to implement the top-down directives from their ministers, who get their directives from Chavez.
Fourth, despite the elaboration of a PSUV party program, there is still much uncertainty as to exactly where the Bolivarian Revolution intends to go from here. How far is it willing to take the impulse to democratize society? Into all state-owned enterprises, including the oil company? What about private enterprises? What is its intention with regard to the capitalist marketplace? Will it overcome the market through central state planning or through democratic planning or will it implement a socialist market economy?
There is a positive aspect to the lack of a detailed blueprint for the future: It opens up space for debate and for collective decision-making. However, when the conditions for internal debate are limited, as is currently the case due to the previously mentioned obstacles, then disorientation and opportunism prevails and the government’s shortcomings fail to be addressed.
The Bolivarian Revolution faces other obstacles that come from outside the Chavez camp. These obstacles include a Venezuelan opposition that in the past has often been willing to use unconstitutional means for opposing the government, a super-power—the United States—that uses all of its political and economic might to undermine the Chavez government at every turn, and a global capitalist economy that makes it practically impossible to create an alternative within the existing economic system.
Venezuelans, however, appear not to let themselves be influenced by these external obstacles when it comes to evaluating the government’s performance. Rather, it is the above-named shortcomings of the Chavez government and the internal obstacles it faces in overcoming them that have caused an erosion of support for the government and for Chavez since his reelection in 2006.
If the Bolivarian Movement finds ways to overcome its extreme dependency on Chavez (by organizing a more effective party or movement), its legacy of a clientelist political culture (by developing a more competency-based political culture), and its top-down management style (by adopting a more participatory approach to management in the public administration), then the movement will be in a better position to debate the issues of the day, to identify problems, to find solutions, and to develop a coherent vision of where it wants to go as it heads towards 21st century socialism.
  In December of 2007 Chavez narrowly lost a constitutional reform referendum, by 49.3 percent to 50.7 percent. Then, in February 2009, Chavez won a constitutional amendment referendum to eliminate the two-term limit on electoral offices by 54.9 percent to 45.1 percent. And in 2010 Chavez’s parties won approximately 46.7% of the vote (for the Latin American parliament) to the opposition’s 45.0% (and 2.8% going to the at the time independent PPT).
  Participation rate of voting age population is my calculation, based on statistics found on the website of the National Electoral Council (www.cne.gob.ve ) and the National Statistics Institute (www.ine.gov.ve ).
  Source: http://en.wikipedia.org/wiki/Voter_turnout_in_the_United_States_presiden... 
  Latinobarometro 2010, p. 26 (www.latinobarometro.org )
  Latinobarometro 2010, p. 47
  Latinobarometro 2010, p. 60
  Latinobarometro 2010, p. 34
  Instituto Nacional de Estadisticas (INE) http://www.ine.gob.ve/pobreza/HogaresPobres_linea.asp 
  ibid.
  Ministerio del Poder Popular de Planificación y Finanzas (http://www.sisov.mpd.gob.ve/indicadores/IG0002400000000/ )
  Latinobarometro 2010, p.41
  Anuario Estadistico Integral, Ministerio del Poder Popular para las Relaciones Exteriores, p.180-181
  Ministerio del Poder Popular de Planificación y Finanzas (http://www.sisov.mpd.gob.ve/indicadores/ED0106600000000/ )
  Ministerio del Poder Popular de Planificación y Finanzas (http://www.sisov.mpd.gob.ve/indicadores/ED0401400000000/ )
  Ministerio del Poder Popular de Planificación y Finanzas (http://www.sisov.mpd.gob.ve/indicadores/SA0100100000000/ )
  Ministerio del Poder Popular de Planificación y Finanzas (http://www.sisov.mpd.gob.ve/indicadores/GA0500500000000/ )
  Ministerio del Poder Popular de Planificación y Finanzas (http://www.sisov.mpd.gob.ve/indicadores/SS0100300000000/ )
  Latinobarometro 2010, p.19
  Anuario Estadistico Integral, Ministerio del Poder Popular para las Relaciones Exteriores, p.171
  See: “Update on the Venezuelan Economy ” by Mark Weisbrot and Rebecca Ray (CEPR)
  Latinobarometro 2010, p. 8.
  Latinobarometro 2010, p. 15
06/02/2009: 10 Years of Progress in Venezuela 
06/02/2009: The Chávez Administration at 10 Years: The Economy and Social Indicators