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Fluctuating Fortunes for Hugo Chavez


Venezuela's fiery President Hugo Chavez is the subject of both adulation and scorn. Some say he is headed toward despotism; others claim he is a man of the people. And still others say he is both.

When Hugo Rafael Chavez Frias was first elected president in 1998, oil-rich Venezuela was ripe for change. For four decades, two parties - - the Democratic Action Party and the Christian Democratic Party -- dominated the political scene. During that time, many observers note, no Latin American country deteriorated more than Venezuela. Its gross domestic product fell nearly 40 percent; three-quarters of the population lived below the poverty line.

According to Riordan Roett, Director of the Western Hemisphere Program at The Johns Hopkins University in Washington, the country's old political elites were guilty of rampant corruption and mismanagement.

"The Christian Democrats and the Democratic Action Party captured the Venezuelan state in the 1970s and 1980s, and robbed it blind. And they bear heavy responsibility for not taking the appropriate social development policies in the last quarter of the last century. [Hugo] Chavez would not exist if the oil wells in Venezuela had been invested in the Venezuelan people, rather than in the pockets of its politicians," says Professor Roett.

He adds that Venezuela's oil wealth -- the largest oil reserves in the Western Hemisphere -- only deepened the discontent of the poor. When Mr. Chavez entered politics, his confrontational style and populist rhetoric served him well. He came to office in a landslide victory in 1998 and was re-elected two years later on his promise to help the poor and reorder the political system.

Consolidating Power

But many critics point out that in the past several years, Mr. Chavez has taken personal control of economic matters, tightening his grip over the military and expanding its role. Moreover, a constituent assembly, which is chiefly made up of Chavez supporters, has written a new constitution that granted the president increased powers and weakens the legislature and judiciary.

Alvaro Vargas Llosa of The Independent Institute, a public policy organization based in California, contends that Hugo Chavez bears all of the hallmarks of an autocrat.

He says, "Chavez is a prototype of a Latin American populist caudillo [i.e., a Latin American military dictator]. Populism has been a staple of Latin America for much of the last century. He came to power thanks to the dishonor of the political class. He has concentrated unhealthy amounts of power and he is using populism thanks to the windfall he obtained from oil to create a large base of support."

Michael Shifter, Vice President of the Inter-American Dialogue, a Washington-based center for policy analysis argues Mr. Chavez has certain authoritarian tendencies. He says Venezuela is currently pursuing “a model that basically tries to get as many resources to consolidate his power and create patronage, so that he can enhance his own political support in Venezuela and abroad. I don't think there has been any strategy of development. So there is militarism, nationalism, socialism -- a mix of a lot of different things."

Vulnarable Economic Strategy

Some analysts, including Mark Weisbrot, Co-director of the Washington-based Center for Economic and Policy Research, argue that the Venezuelan leader and his party, the Fifth Republic Movement, spent the first few years of Mr. Chavez's administration trying to survive turmoil: a right-wing coup attempt in 2002 and several oil strikes that crippled the economy in 2002 and 2003.

"Since then, all they have done is try to deliver on some of their promises. The government is very cognizant of the fact that they have inherited a dysfunctional state from the past and they have only been able to make limited gains. 54 percent of the country now has free healthcare and a majority also gets subsidized food. But he wears a beret. He is a former military officer. So people use this imagery to say it is not a democratic country," argues analyst Weisbrot.

Many Venezuela-watchers agree that Mr. Chavez's popularity with the country's poor strengthened as he made more funds available for social programs. But most analysts, including Riordan Roett of The Johns Hopkins University, question the long-term effectiveness of President Chavez's economic strategy.

He warns, "If you look behind the façade, what you have is a country in which poverty really hasn't been reduced very much. Most of what he has done is handouts to the poor, but no real long-term investment decisions have been made. Oil production is down from where it was ten years ago. PVDSA [Petroleos of Venezuela, the state- run oil company], which was once one of the best-run oil companies in the world, is no longer very well run. And Chavez has been purchasing oil in European markets to meet his forward contracts. So that doesn't give you a very healthy picture of the economy.”

A Call for South American Unity

Professor Roett says the Venezuelan leader has been able to escape accountability because of the country's oil bonanza, which has allowed him to establish what the government calls an 'international development fund', worth an estimated $20 billion, which Mr. Chavez has used to buy influence in the region.

Since taking office, Hugo Chavez has insisted that Venezuela should use its oil wealth to lead South America toward political unity and stand up to foreign powers, mainly the United States. Most observers say Mr. Chavez has given perhaps millions of dollars in financial support to like-minded Latin American leaders, courted friendships with countries like Cuba and Iran, and also alarmed Washington with his anti-American rhetoric, arms purchases and recent statements that Venezuela is seeking nuclear technology.

But President Chavez might be over reaching. Recent opinion polls show that less than a third of Venezuelans believe the country should spend its oil revenues abroad. And his open support of South American leftist populists has alienated some of his supporters in the region.

According to Alvaro Llosa of The Independent Institute, Mr. Chavez's political fortunes are mostly tied to his country's economy -- if it falters, so will his appeal. He warns, "In every single case, from the Mexican revolution in the early 20th century to the 1980s, which was a very populist decade, you've seen the same story all over again. These populists had a very rosy few years in power and then that made a turn toward a very ugly situation. I imagine that will be the case for Chavez."

Yet other analysts caution that with oil prices at record highs, there may be little in the way of Mr. Chavez's advance and popularity, at least in the near-term.

This story was first broadcast on the English news program,VOA News Now. For other Focus reports click here.

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