Monday, December 10, 2007

After the Venezuelan Referendum

This is from CBC. While there no doubt are lineups and some shortages the price of basic necessities is kept within the reach of the poor. Transportation is probably dirt cheap as gas is about 4 cents a litre! There is no discussion of attempts by Chavez to set up local organisations that get the marginalized involved in politics local affairs. This is a counterpoint to the authoritarian tendencies that are always emphasized. Although this is certainly not just anti-Chavez propaganda and makes many valid points it is rather strange that she makes nary a mention of US intervention in Venezuela. The leftist intellectual, Petkoff, she mentions as anti-Chavez is actually a type of neo-liberal supporting the leftist governments of leaders such as Lula in Brazil who certainly have done even less than Chavez for the poor. However Petkoff is also an opponent of US intervention. In an earlier government Petkoff adopted neo-liberal economic policies:
" In the second government of Rafael Caldera (1993-1998), MAS was in coalition with the centrist party Convergence of Caldera, along with other left-wing parties such as the Communist Party of Venezuela (PCV) and the MEP, and other right-wing parties as the National Movement of Integration. Petkoff served as Minister of the Central Office of Coordination and Planning (Cordiplan), directing the government's economic policies. From Cordiplan, Petkoff managed the Venezuela Agenda, a neo-liberal government program for reducing the size of the public administration, controlling inflation and stopping the currency devaluation, while administering social programs aimed at improving the population's nutritional health and providing "children-mother" services for the poorest."
Petkoff has rejected his communist past and is now firmly in the liberal fold not just in political but also it seems economic terms. Nevertheless, Petkoff is certainly correct that Chavez is dependent upon oil and for his changes to last over the longer term the economic base must be broadened so as not to be dependent on solely high prices for oil, nevertheless there is surely nothing wrong with using oil rents to further social programs at present. I just wonder who is driving all the new cars in Venezuela and paying almost nothing for fuel.

After the referendum
December 6, 2007
I'm writing this on the voyage home from Caracas to Mexico. Experts consider it the most popular flight in the Western Hemisphere for moving illegal drugs.

Accordingly, before boarding, passengers were divided into male and female line-ups. Each of us was frisked. I was pulled aside when they found my hidden money pouch.

After my frisker quickly rifled through the U.S. cash inside, she said, "Don't worry. You are OK." Lucky for me, Venezuela has become so expensive that I spent most of the money I brought with me.

Not so lucky for Venezuelans.

Socialism or the basics

Venezuelan President Hugo Chavez, shown at a news conference on Dec. 5, 2007, must reframe his agenda in the wake of the referendum loss. Chavez argued the referendum result was a 'crap victory' for the 'No' side but a 'courageous defeat' for his 'Yes' side. (Miraflores Press Office/Associated Press) As President Hugo Chavez ponders how to move his "21st century socialism" along after changes to the constitution were defeated in a squeaker vote on Sunday, the people of Caracas have plenty of ideas to keep the president busy. Whether the people I talked with loved Chavez or hated him, their priority wasn't an ideological plan to transform Venezuela into a socialist state. They could all cite a list of very basic things they want their government to deal with.

They want:

milk, beef, chicken, cooking oil, toilet paper (to name a few) in the stores
an end to line-ups
an end to the rampant violent crime in Caracas
an end to the tension and mistrust that has built up between those who support Chavez and those who don't
an end to the infernal traffic jams that can easily eat up half a person's day

That's what we heard when we travelled to several poor barrios as well as middle class neighbourhoods.

Voters reject constitutional amendments

In those very neighbourhoods, the official vote tallies from the referendum show that many of the poor, traditionally 'Chavista' (pro-Chavez) communities did not vote for his reform package.

Many people in the barrio of La Vega, which didn't support the referendum, said they still loved their president for the attention he has paid to poor people and the changes he has made, but they were afraid of the proposed constitutional amendments because they didn't have enough information on what they were voting for.

In the information void, they told me, rumours circulated like wildfire: that the reforms would turn Venezuela into another Cuba, that their small properties might become the property of the state, that this would bring on more confrontation within Venezuela and with other countries. More troubles are the last thing they want when daily life is such a struggle.

For someone who loves the president, it's not easy to tell him "no." But Chavez took the results like a true democrat, honouring the oh-so-close vote but promising to return with his grand plan for socialism.

Chavez should address the fundamentals

In the meantime, many voters say they really want the president to address the country's fundamentals.

A 'Yes' campaign banner hangs across a street in the January 23rd barrio, a poor neighbourhood in Caracas where Venezuelan President Hugo Chavez went to cast his ballot. (Connie Watson/CBC) Crime is on the rise. During my stay in Caracas, the local papers tallied 50 murders over one weekend and 46 over the next. These are mostly young men between 18 and 35, often murdered in the poor areas of the capital, often in drug- or gang-related incidents.

Line-ups for food waste hours of every day. Food shortages and scarcities of the most basic products have a way of making people angry with their government, no matter how much they love their president. They don't know what exactly is wrong, but they know they want the president to fix it.

Prices are rising. Inflation is higher than almost any other country in Latin America. All the oil cash floating around is fueling demand for all kinds of goods. Supply is being sated by imports and more imports.

When it comes to food, the government controls prices of the basic items (including milk, beans, rice, cooking oil) so that those living in poverty can still afford them. That policy is colliding with the government’s policy to control Venezuela’s currency exchange rate. (Rates for Venezuelan Bolivars on the black market are often three times the official rate.) That means farmers often would pay more to produce an item than they are allowed to charge for it.

Traffic in Caracas makes Mexico City look like a fast-moving freeway. You can easily spend three to four hours a day stalled among blaring horns. The combination of gas so cheap you can fill up your tank for a Canadian dollar and oil cash so plentiful that more people are buying cars makes city streets like parking lots. Yet very little of Venezuela's oil riches has been invested in much-needed infrastructure, such as public transit, highways and bypasses. Private investors are steering clear of Venezuela because of the political uncertainty and Chavez's recent nationalization of major industries.

The Chavez government has prioritized direct aid to the poor rather than major infrastructure projects. It gives monthly payouts to people living in poverty, to spend as they choose. And Petroleos de Venezuela, the government's oil company, is now the major financier of social "missions" that work inside the poor barrios. These missions — which are extremely popular — include schools (for everything from basic literacy to high school education), health care clinics and soup kitchens.

The curse of oil

Venezuela has had a long history of political battles over how to best use its oil riches.

That debate has intensified and become more polarized under Chavez.

Effigies of Venezuela President Hugo Chavez and Simon Bolivar, considered the liberator of Latin America, at a 'Yes' side rally. Chavez officially changed the name of the country to 'The Bolivarian Republic of Venezuela' in Bolivar's honour. (Connie Watson/CBC) As the leftist intellectual Teodoro Petkoff puts it, "We are victims of the curse of oil. Petrol states are very wealthy. But at the same time, this wealth is a blessing and a curse. It's an economic disease." Petkoff is editor of Tal Cual newspaper, a former economics minister, former leftist guerrilla and an outspoken critic of Chavez. "As in any other petrol state, we have wealth concentrated in very few hands. Even after nine years of Chavez. And you have 60 per cent of the population living in poverty. But in these years of Chavez, the problems have deepened. We depend much more than before on oil."

Chavez points out that Venezuela's oil reserves are so vast, and the price of oil is so high, that he has breathing room to deal with the economic and political ills of the country. But rather than fixing one problem at a time, Chavez argues he needs a bolder plan that would give him the power to control Venezuela's purse strings — its spending and its exchange rate — as well as to construct a new socialist version of the petrol state.

As one highly educated man at a pro-Chavez rally told me, "Chavez has given these poor people dignity, and that's something people who don't like Chavez can't take away."

That is true. Poor people are feeling more confident and more politically powerful since I last visited to Venezuela, but they're also wasting countless hours in food line-ups, traffic jams and behind locked doors, worried about their own personal security. And all the oil money isn't addressing those fundamental issues.

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