Friday, June 13, 2008

Venezuela's Chavez a Serial Bungler

The Economist has a story named "Hugo Chavez: Master Tactician or Serial Bungler?" After ten years, the empty shelves in the cities and abandoned farmsteads across the country leave little room for doubt---Hugo is a titanic catastrophe for the country and either a democratic revolution from below or a military coup may be necessary to lance this carbuncle from the top of the Venezuelan menagerie.

When I worked for a major aoil company, I found that the basis for a civil society was far more advanced in Venezuela at the time than in Mexico, another country on my entry-strategy concerns [Mexico had a bloated oil workforce in "ghost jobs" that comprised 20% of the country's labor force]. But since his mini-coup, Chavez has become a traditional cacique with his own populist claque clamoring for goodies & begging for a cradle-to-grave welfare state. That large mass of lumpenproletariat Venezuelan society is about 40% of the country, almost all packed into urban favelas.

Unfortunately, people keep pouring into Venezuela's cities relentlessly because of the oil wealth, which is distributed more in large urban venues. And Colombians comprise about 20% of the Venezuelan population, according to the country's official Chief Demographer. Economic immigrants from other countries nearby are also numerous, making Venezuela the Latin equivalent of the USA.

Chavez's chief problem is that he really cannot trust the main body of the military, which even after a decade of his misrule, has remained impervious to much of his tinkering. The biggest problem of all, I was told by then-president Carlos Andres Perez, is that the country itself is governable only by corrupt bargains with local caciques who comprise a bunch of oligarchies spread across the country. The corruption is endemic, but the system works, he said, if democracy allows some sort of arena for compromise. But the Economist reminds us that this zany freak continues to aim for a complete socialist takeover by the left, as his "Fairness Doctrine" coup demonstrated early this year:
Amidst an economic slowdown, annual inflation of around 30% and an unprecedented crime-wave, his prospects of avoiding another humiliating defeat look slim. A new drubbing at the polls would be likely to dash any hope of reviving his plan to evade the constitutional ban on his re-election in 2012. A reaffirmation of the expiry date of his presidency would, in its turn, fire the starting gun of the race to succeed him, thereby further undermining his authority.

Some pundits argue that the recent spate of U-turns simply reflects a populist president's desire to avoid alienating the electorate. The more conspiratorially minded believe that the introduction of unpalatable measures, followed by partial retreats, is a deliberate strategy. They suggest that Mr Chávez is seeking to unsettle the political climate to such an extent that he retains the option to suspend the November elections if the polls look adverse.

A simpler reason for Mr Chávez's many U-turns may be that he has a habit of making policy mistakes, which then require correction. A few months ago, for example, the government announced a series of measures to prevent the economy from overheating. But it overdid the course-correction. In the first quarter of this year, the annual growth rate slowed by around four points, to 4.8%, in comparison with the same period last year. On June 11th, in yet another about-turn, the president announced that some of the measures in the original package would be reversed.

Still, amid all the tactical confusion, Mr Chávez does not appear to have lost sight of his two main strategic goals: the installation of a “socialist revolution” in Venezuela and his own indefinite re-election. After his defeat in the December referendum, a huge billboard went up on a building not far from the presidential palace. “Por ahora” (“For now”), it read.

That should be a warning. His foes have learnt the hard way that it is dangerous to underestimate Mr Chávez. He is fond of citing the battle of Santa Inés, in the war for independence from Spain, when a feigned retreat led to victory. As November's election approaches, he is working hard to make sure that he holds on to as many as possible of the 20 states (out of a total of 24) that are currently in chavista hands. He has repeatedly told his followers that if important states were to fall to the opposition, his own future would be in doubt—even going so far as to suggest that in such an event “there would be war”. It is too soon to count him out.

Sadly, Chavez is a near madman, closer in mentality to Cindy Sheehan and High-School dropout Sean Penn than to the advanced technocrats I dealt with in the Oil & Foreign Ministries. He is a dangerous uneducated fool and has no use for democracy unless it can further his advance to one-man rule.

The drama may have several more acts to go.

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