Transcript

Host: This is “On the Line,” and I'm Eric Felten. Venezuelan President Hugo Chavez has imposed price controls on basic goods and says he will nationalize any businesses, including local grocery stores, that do not accept them. Mr. Chavez is threatening widespread nationalizations under sweeping new powers granted by the National Assembly. He now has the authority to rule by decree for the next year and a half. Opposition leader Manuel Rosales warned that if Venezuelans do not get to work defending democracy “We will witness the coronation of Hugo the First, the first king a Venezuelan society will have.”

President George W. Bush said of Mr. Chavez's new powers, “I am concerned about the undermining of democratic institutions.” Mr. Bush said, “My worry, of course, is that the nationalization of industry will make it harder for the Venezuelan people to be lifted out of poverty, will make it harder for the people to realize their full potential.”

Secretary of State Condoleezza Rice says that the U-S will continue to call attention to the concerns about democracy in Venezuela. Rice: I do believe that the president of Venezuela is really destroying his own country, economically, politically. And this is a place with which we've had traditionally very good relations and would like to continue to have good relations.

What do Hugo Chavez's new powers mean for the people of Venezuela and for Latin America in general? And what can U-S policy makers do to address the erosion of democracy in Venezuela? I'll ask my guests -- Alejandro Chafuen, president of the Atlas Economic Research Foundation, Ted Brennan, a former staff member of the Congressional subcommittee on the Western Hemisphere, and Peter DeShazo, director of the Americas Program at the Center for Strategic and International Studies. Welcome. Thanks for joining us today.

Peter DeShazo, a recent U-S State Department assessment of the state of democracy in Venezuela said that “There is growing consensus that democracy in Venezuela is in grave peril.” Do you think that's an accurate assessment at this point?

DeShazo: I think certainly the institutions of democracy in Venezuela have been steadily undermined by the Chavez administration. The separation of powers -- the balances of powers between the executive, the legislature, and the judiciary -- basically doesn't exist anymore. This latest enabling law from the Legislative Assembly, which Chavez has called “the mother of all revolutionary laws,” which gives him power to basically emit decrees over an eighteen-month period in a very wide variety of topics, puts extraordinary power in his hands. So clearly there are concerns about the direction that Venezuela's political system is taking, towards a more authoritarian model.

Host: Ted Brennan, are there any limits left at this point on Hugo Chavez's power in Venezuela?

Brennan: I don't think so. The National Assembly has one-hundred-sixty-seven members, and all of them are Chavez's, as well as the judiciary. Chavez increased the size of the Supreme Court to put in his own people. So yeah, his power is unlimited. He can do whatever he wants.

Host: Alejandro Chafuen, how did this happen? How did a functioning democracy in Venezuela come undone so quickly?

Chafuen: Well, there are many factors, obviously. There are internal factors and how -- In societies where there's a huge division in the wealth, you know, and even in the cultures of the people, it's very hard to build a common ground around republican principles. But it also has been aided by ignorance and even perhaps bad will and accomplices from abroad. I have been in programs in the “Voice of America” with State Department officials in the beginning of Chavez, when we knew what was going on and calling it a dictatorship. It would be “dictatorship” by his name. And they would say, “No, he wins elections. So if you win elections, that's democracy.” False. What I think the United States should do -- The official United States should work very hard to pass fast the free-trade agreements with Columbia, with Peru, and also with Ecuador. If we block that road to progress and interaction with Latin America, we will hand more of Latin America to the enemy. The civil society -- we have to practice what we preach. We have corporations. We have foundations who play the Pontius Pilate game. One nearby here, a good company, A-S -- I love them, but they stayed out of the fray. “Let's not get involved in civil-society efforts.” Well, they were kicked out of Venezuela recently. Big foundations, nice people, lovers of the free society say, “No, it's too politicized. I don't want to play a role.” I think those of us who are in civil society have to work to help our friends who are fighting for democracy in Venezuela and increase the cost of those who are negotiating and making millions with the regime.

Host: Peter DeShazo, what do you think on both of those points of trying to expand trade in the region as a way of sort of blocking Chavez's growing power in the region, and what role is there for civil society?

DeShazo: Well, trade and civil society play a big role. You have to go back to the reasons why Chavez won the election in 1998, and that was because democracy in Venezuela wasn't functioning well in terms of delivering basic services and meeting the needs of many Venezuelans. And that's a key point that is still a major problem in Latin American today -- the need for jobs, the need for poverty reduction, the need for people to participate meaningfully in society. And that's where the United States can play an important role, not necessarily in terms of countering Chavez. That's not the point. The point is to work with other countries in the region to make the reforms needed in their political and their economic institutions to be able to deliver the goods for citizens of the region.

Host: Ted Brennan, is Chavez's position in Venezuela at this point going to be dependent on his ability to deliver goods, or has he solidified enough power where that won't matter?

Brennan: No, I think it does depend on it. I'm not sure if he's solidified his power enough to be safe from having something happen to him. I mean, that's always something that's a reality, in Latin America particularly. He does have to deliver the goods. For example, there's a very high crime rate in Venezuela -- almost out-of-control crime, murders and violent crimes -- that he can't seem to get a hold of. He's tried, but he can't seem to get a hold of that, and I think the street is starting to realize that, “Hey, this guys is not delivering.” Another thing is the infrastructure. If anybody's been to Venezuela recently, the bridge from Maiquetia, where the airport is, to Caracas fell down a couple of years ago. And it's not there anymore, and they haven't rebuilt it. It takes a lot longer to get to the airport than it used to. So I think there's -- That basic function of government is not being performed, and we'll see what happens with these food shortages and his will or ability to correct that problem. But I think people are starting to realize that this guy is not the new Moses. He may not be able to deliver on the promises he made.

Host: Alejandro Chafuen, we've seen the world over, when there are price controls and nationalization of industries, rarely does that prove to be a model that improves an economy. What happens in Venezuela with the kind of economic moves that Hugo Chavez has been taking?

Chafuen: I think price controls are more destabilizing for the government that imposes them, but they usually find a scapegoat to blame for the failure of price control. We have them -- For almost twenty centuries, people have tried to impose them, and they always fail, from Diocletian to Nixon. On the other hand, nationalization is very dangerous, because I think it always helps accumulate power, to the detriment of the people of Venezuela. I have to agree with what President Bush and Secretary Rice said. For example, take the deal that they are doing -- Petróleos Venezuela with the city of London. There you have Venezuela. The poor people of Venezuela are going to subsidize the people who are on welfare and travel in the wealthiest city in the world -- by income, in the Western world -- and the fifth city in the world by income, per capita. So this is obscene. By total control of all the power, by trying to manipulate media, a dictator like Chavez can get away with it and continue to be popular.

Host: Well, Peter DeShazo, how does that play in Venezuela when Venezuela is giving away oil or subsidizing oil to London and also subsidizing oil to people in the U-S?

DeShazo: Chavez sees that as an element of his foreign policy, which, in Venezuela, probably right now does not play particularly well but would play a lot worse if the price in oil fell and Chavez found himself strapped for cash and had to cut back on the subsidies, the services, the investments that he's made in the poorest areas of Venezuela. And the bottom line is that the enormous resources generated by the petroleum boom is what is financing his programs abroad and at home. And he rides the crest of the oil boom, but at the same time he's very dependent on it.

Host: Ted Brennan, how dependent do you think he is on the oil?

Brennan: Extraordinarily. If you look at the Venezuelan budget, for example, that's based on the price of oil. And they base it on a barrel price, and it's set whenever they're doing the budget. But he's spending recklessly, almost like a drunken sailor, not only on the poor areas in Venezuela, which -- By the way, I think when he first came to power, he was a champion of the poor. And I believe that his intentions were good but something happened along the way. But his -- If the oil prices fall or, say, demand even falls, if we develop some new sort of energy source, then he's going to be in real trouble because he's basically buying influence not only in Venezuela among his core constituency, the poor Venezuela, but he's also doing the same thing in other countries -- Bolivia, Nicaragua, and maybe a few other -- Cuba, certainly -- and maybe a few other places that we haven't discussed yet.

Host: Alejandro Chafuen, how does the U-S address what's going on in Venezuela without giving Hugo Chavez just when he wants? When Secretary of State Condoleezza Rice talked about the detriment to the economy and the political system in Venezuela the other day, Hugo Chavez responded gleefully that it had been “days since she has given me any attention.” It does seem as though Mr. Chavez wants to get a reaction from the U-S.

Chafuen: But that's why, I think, we have to work in an intelligent way, with incentives to our allies and with increasing the cost to the allies of Chavez by doing it in a very shrewd way. I have to disagree with the previous speaker. One of the problems we had with Osama bin Laden is that we didn't read what he was saying and his views. And the State Department almost until the end wanted to give another chance to Al Qaeda. If you read Chavez and what he was saying and how he was being trained and his upbringing -- not only when he did the coup, but in the first years -- from the beginning, he showed that he was a dangerous man. I cannot find a single lover of the free society who had your doubts. And my problem was that here in the United States -- You know I am a proud citizen of this country, have lived in this city for 20 years -- I found this confusion. We don't know how to deal with Fascist-lite. Just because someone wins a democratic election or a popular election and speaks about the poor, we think he's going to help them. But trust me. I'm a native Argentinean. I saw one of the richest countries in the world destroyed like this, you know, and still stuck in that paradigm.

Brennan: I admit I was fooled by him initially. I spent some time with him, working on Capitol Hill with my former boss, Congressman Ballenger. And I spent time with the man, listening to him. And I watched him, over the course of his presidency, change from a good talker to a bad doer, okay? And so I don't disagree with what you're saying. But I was fooled by him originally, I'll admit. But then, like a lot of people that were in that boat, we've all come around, and we're starting to see who he really is. I just wish that other countries in the hemisphere and around the world would see the same thing that we're seeing now.

Host: Well, Peter DeShazo, let's talk about the other countries in the region, in the hemisphere. We've seen presidential elections in nearly a dozen countries over the last year, and Hugo Chavez seems to have figured in a lot of these elections, either as someone to emulate by a given candidate or, by other candidates, someone to put forward as the antithesis of what a presidential candidate should be about. How is it playing out in the region?

DeShazo: I think that the role of Chavez in some of the elections in the region has somewhat been overplayed in terms of the image. I don't think that he had anything to do with the election of Daniel Ortega in Nicaragua, for example. That election had everything to do with domestic politics in Nicaragua, in which Chavez had no role. In Peru, he probably did play a role, and I think it was a negative role that probably cost the election to Ollanta Humala. In Bolivia, he certainly supported Evo Morales, but I don't believe that that was the deciding factor, nor was it in Ecuador, of his support for Rafael Correa. I think that one can easily overstate the influence that he has politically, and economically there are lots of deals out there. There are lots of supposed agreements. It remains to be seen exactly how much there is behind all of these different trade agreements and investments that are being made. But Chavez's popularity in region is, I would say, limited, and his possibilities for expanding his influence -- I would say probably also limited. But a lot will depend on the ability of the different governments in power to, as I said before, democratically deliver the goods and prove to people that representative democracy works.

Host: Alejandro Chafuen, what's your sense? Is Chavez a lightning rod that people are going to move toward or away from in the region?

Chafuen: I tend to agree. It's a mixed bag, you know, especially in countries with Indian populations. They don't like to follow the chieftain of another tribe. So it's a limit. They get annoyed at someone telling them what to do. But on the other hand, the process -- And I know what role Cuba's playing in this, but the process that they installed that is totally against -- I don't like to use the word “democracy” just because someone is elected, you know? Many dictators in the past and today are elected. But the way they do it -- You win one election, you become the majority once, and you immediately try to change the constitution to abolish all division of power, centralize all power in the current popular guy. That was exactly what our founding fathers tried to avoid in this miracle that's the United States.

Host: Well, Ted Brennan --

Chafuen: Sorry. And Peru and Ecuador and Bolivia are trying to follow that path.

Host: Let's talk about this. In Ecuador, we have Rafael Correa, who's talking about trying to change the constitution to expand the powers of his presidency. Where do you think that's headed?

Brennan: Well, we saw in Peru -- I'm sorry -- In Bolivia, they're trying to do that now, trying to change the Constitution, but that's so far been a miserable failure. Hopefully it stays that way, because I think the constitution in Bolivia set up a good government. Obviously, it has some flaws that could be corrected, and hopefully they'll see that. In Ecuador -- Again, Ecuador is a country that's trying to find itself. Having Correa in there, I believe personally, is a negative influence. I believe that Correa is influenced by Chavez, whether by ideology or by finances. Obviously, there's probably some of that. But he's looking at Chavez's model of how to go about consolidating power. And Correa is in the process of doing that. Whether or not he's successful will be determined by the strength of the current institutions in Ecuador and what those institutions will say to changes that Correa was probably going to demand in the rewriting of a constitution.

Host: Peter DeShazo, is there a role for the U-S and U-S policy in trying to affect how all of this plays out in the broader region?

DeShazo: Oh, absolutely. The United States, I think, has to resume a greater leadership role in the region. It has to re-engage in the region. It's seen widely as not being particularly interested in the region, especially after the events of nine-eleven. Its attention is elsewhere. I think the visit of President Bush next month to the region will be good. I think it shows a positive sign of perhaps re-engagement. Let’s hope that’s the case, that the United States firmly intends to re-engage in the region, to work with like-minded governments, again to strengthen multilateral institutions in the region, to defend democracy, to promote sustainable economic growth through wise economic policies, the kind of growth that creates jobs and that reduces poverty on a sustained basis.

Host: Alejandro Chafuen, how do you see the U-S government trying to do this kind of engagement without playing into a Huge Chavez's caricature of the U-S as an imperialist power trying to impose itself on the region?

Chafuen: Well, I think what they are doing now is going to Brazil, Uruguay, Guatemala, or Mexico. If you do it indirectly, like when you're in a tough fight with someone who cherishes this role of being the bull -- I think if you don't have the bull fight, the bull gets bored, so I would be attacking them by defending our friends who are working internally, but again giving a lot of carrots to all our allies on the regions. And giving carrots is not giving gifts. It's just opening ourselves to better dialogue, to better trade with the countless countries in Latin America.

Host: Ted Brennan, we have about thirty seconds left. Your sense on that question?

Brennan: No, I think the United States needs to re-engage itself in Latin America. We have historic relations, even with Venezuela, that need to be strengthened. I'm not saying with Venezuela under the current government, although there is maybe some merit to some kind of engagement with civil society within Venezuela. But I think President Bush going to the region is showing a re-engagement, something that he promised to do in the 2000 elections. So I think by him going to meet with not only leaders and members of civil society and other governments -- or other parts of the government -- I think is a positive thing for this country and for the region.

Host: I'm afraid that's going to have to be the last word. We're out of time for today, but I'd like to thank my guests -- Alejandro Chafuen, president of the Atlas Economic Research Foundation, Ted Brennan, a former staff member of the Congressional subcommittee on the Western Hemisphere, and Peter DeShazo, director of the Americas Program at the Center for Strategic and International Studies. Before we go, I'd like to invite you to send us your questions or comments. You can reach us through our Website at w-w-w-dot-v-o-a-news-dot-com-slash-on-the-line. For “On the Line,” I'm Eric Felten.