Hugo Chávez, elected president of Venezuela in 1998, heads the most radical populist government currently in power. Now, after four years, his regime is at a crossroads as social turmoil and conflict continues.

Throughout Latin America, mass protests and opposition to the neo-liberal policies of the 1990s have brought workers, peasants, students and the middle classes onto the streets. In Argentina, Peru, Ecuador and elsewhere, governments wedded to neo-liberalism have been forced out of office. Radical populist, nationalist movements have developed, some being swept to power on a rising tide of anger and demand for change. Venezuela is at the centre of this process and indicates what will unfold in other Latin American states and throughout the world.

Hugo Chávez was swept to power promising to end the rule of the corrupt elite and to abolish poverty. The inspiration for his reformist programme came in the person Simon Bolivar, a radical democrat and leader of the Latin American wars of independence in the 19th century. The laudable aims of Chávez and his genuine revulsion at the corruption and decadence of Venezuela’s politicians are blocked by the absence of a programme to overthrow the capitalist system and build socialism.

Chávez and his Movimiento por la V Republica (MVR – Movement for the Fifth Republic) are attempting to ‘reform the market’. In doing so, they face the wrath of Venezuela’s national ruling class and US imperialism. Both are bitterly opposed to the measures he has introduced. They fear the mass movement of the poor and dispossessed and the possibility that it will push the regime in an even more radical direction. This fear also has an international dimension: that Chávez and other regimes in the future could be pressured into adopting policies which will conflict with the interests of capitalism and imperialism.

US imperialism wants the removal of Chávez and the installation of a more compliant and ‘reliable’ regime. This is particularly important because of Venezuelan oil production. Venezuela is the fourth-largest exporter of oil in the world and among the three largest suppliers to the US. George W Bush’s administration has denounced Chávez for "using oil to spread his ideology".

US manoeuvres

Chávez is an irritant to US foreign policy in the region. He has opposed its armed intervention in Colombia and banned US military flights from entering Venezuelan airspace. The Colombian conflict is rapidly becoming the main theatre of operations for US imperialism in Latin America.

Chávez condemned the 11 September attacks on the World Trade Center. Subsequently, however, he denounced US policy in Afghanistan, displaying photos of dead Afghan children and calling on the US to "stop the slaughter of innocents". He accused the US of "replying to terror with terror". Displaying the customary arrogance of US imperialism, its ambassador, Donna Hrinak, met with Chávez and told him to "keep his mouth shut".

At the same time, Chávez is unable to resolve the economic crisis and satisfy the demands of the poor and all those exploited by capitalism. This is eroding his support amongst the middle class and sections of the working class. It has provoked protests and allowed the Venezuelan ruling class and US imperialism to prepare the ground to destabilise the government, with the aim of overthrowing it. At this stage, they are building support for the opposition with the objective of pushing Chávez out of office without recourse to military action.

Should this strategy fail, however, a right-wing coup may eventually be attempted. Such an attempt is fraught with danger for the ruling class. The extent of support for, or opposition to, Chávez in the armed forces is unclear. Although a section of the high command opposes Chávez, he is backed by other sections of the armed forces and retains a base of support amongst the most exploited and downtrodden people in society. Any premature military intervention runs the risk of provoking a backlash and could even trigger a civil war. Chávez warned the ruling class that he was a soldier for more than 20 years and ‘knows who is in the barracks and how they think’.

The Financial Times urged caution on the issue: "They [the US leaders] should remember that Mr Chávez was popularly elected and in spite of the decline in his popularity still commands widespread support among Venezuela’s poor. If the president were to be ousted violently it would make him a martyr and give new life to the outdated ideas that he seems to champion". (12 December 2001)

Mass opposition to an attempted coup would erupt throughout Latin America and beyond and risk provoking further instability. In the short term, there is less likelihood of a right-wing coup attempt. However, this is not a certainty. A rapid development of the crisis could provoke a section of the military to try and overthrow the government especially if the ‘constitutional’ campaign runs into a dead end.

There are many similarities to the campaign to destabilise Chile’s socialist-led government of Salvador Allende, who was elected president in 1970. Economic sabotage, the mobilisation of the middle class and constitutional traps were used by the Chilean ruling class, the military and US imperialism. When these failed to topple the government, the ground was prepared for a military coup in September 1973. Chávez noted the comparison himself saying that he "would not be toppled like Chilean president Salvador Allende". (Financial Times, 7 December 2001)

There are important differences, however, with the situation that existed in Chile between 1970-73. There the government was compelled to go much further than it intended and nationalised key sectors of the economy. The working class was in the process of building its own independent organisations – the cordones – and was consciously fighting to replace capitalism with socialism. The coup was successful because of the mistaken policies of the socialist and communist parties which held back the mass movement.

Reactionary campaign gathers pace

In Venezuela, Chávez has not implemented such far-reaching policies and is not fighting for socialism. His ideal is a radical change in the character of capitalism expressed through his vague concept of a ‘Bolivarian revolution’. This reflects the bitter anger of the poor and those exploited by capitalism but has limited itself to measures such as increased state intervention and abandoning the neo-liberalism of the 1990s. The masses have supported Chávez as an expression of their opposition to neo-liberalism, the capitalist class and its representatives. They have not yet embraced the idea of socialism as an alternative system.

Notwithstanding these important differences with Chile in the 1970s, the rightwing and US imperialism want Chávez out. His radical populist regime conflicts with what they consider to be in their interests, at this stage. And they fear it could be forced in more radical directions by the masses.

They are also fearful that Chávez, far from being an aberration from the past, will be the first in a series of new populist governments that could come to power in the next period in Latin America. The crisis in Argentina, the prospects for a victory of the Partido dos Trabalhadores (PT – Workers’ Party) in Brazil, and events in Ecuador demonstrate a new wave of mass struggle and a resurgence of radical, populist and nationalist movements with a new set of reformist ideas and policies. This process represents a decisive change from the neo-liberal regimes which dominated Latin America in the 1990s.

As the current crisis in Venezuela shows, such regimes – however good the intentions of some of their leaders may be – will not be able to solve the mass poverty and grinding exploitation because they remain within capitalism. They are compelled to take back with the right hand whatever concessions or reforms they may give with the left.

Despite the failure of Chávez to break with capitalism, the ruling class is now rapidly developing a campaign to force him out of power. La Razon - a right-wing Venezuelan daily newspaper – outlined the plan of action in an article on 12 March: "Everything is now ready for the first phase of democratic and constitutional change from president Chávez - whose resignation has been repeatedly demanded by Venezuelan civil society, the workers, the employers, political parties and most importantly the armed forces".

A ‘transitional pact’ has been established involving the corrupt, pro-capitalist trade union leaders of the CTV (Venezuelan Workers’ Confederation), Fedecamaras (the employers’ organisation), and the political parties opposed to Chávez, with the support of the Catholic Church. They are proposing a plebiscite on Chávez’s removal from power and judicial action in the supreme court to have him declared ‘mentally insane’. On 5 February, the US Central Intelligence Agency expressed its ‘deep concern’ at the political instability in Venezuela. Forty-eight hours later, airforce colonel Pedro Soto issued the first of a series of statements by military officers calling for Chávez to resign!

Rising poverty and discontent

A national protest in January saw 70,000 march against the government. This substantial demonstration included the main groups of the rightwing and old capitalist parties. However, they also included sections of the middle class and some workers who are disappointed at the failure of Chávez to ‘deliver’ economically. Unemployment has continued to rise and living standards have fallen because of the economic crisis and sabotage by the ruling class. According to most opinion polls, approval ratings for Chávez have fallen from 65% to around 30%. This discontent is the basis of the campaign against Chávez. The failure of Chávez to resolve the economic situation will strengthen the opposition and undermine his government.

In response to this developing crisis, the government announced further ‘radical reforms’, including more state intervention in the economy, land reform and oil industry taxation. These measures have enraged the national capitalists and multi-national oil companies. The government announced that it would seize land that was not being used productively by landowners and threatened to nationalise the banks. Royalty tax payments on oil are to be increased from 16.6% to 30% and the state oil company, PDVSA, would be compelled to take over more than 50% of all joint ventures.

It was in response to these announcements that the campaign to undermine Chávez was stepped up. Oil industry managers declared a ‘strike’ for higher salaries with potentially disastrous consequences for the economy. Confronting this ‘strike’, Chávez attempted to rally support from the peasants and urban poor by asking: "Do you know how much the heads of PDVSA earn a month? Fifteen million bolívares [$16,120]… Last December without consulting the government and without government authorisation they decided to give themselves a bonus of 80 million bolívares [$86,000] - this could equip a Bolivarian school or give a 10% wage increase to all workers. This is immoral". He revealed that the oil magnates have access to luxury chalets, yachts and other "grotesque privileges - and act like a state within a state with its own government". (El Nacional, 13 March)

The conflict of interests between Chávez’s attempt to implement reforms within the capitalist system and attacks on some privileges of the ruling elite have inevitably provoked them into taking measures to defend their own class interests. There has been a flight of capital from the country. In three days in mid-February, $700 million was taken out of the country by the ruling class as part of its campaign to destabalise the government. Central government reserves have fallen 15% during the last year and stand at only $10 billion.

Added to this is the loss of revenue because of the fluctuation in oil prices during the recent period. Oil accounts for 75% of export revenue and 50% of all tax income. The current government budget was based on oil reaching $18.5 per barrel. It has been selling for $15.50, although the price may increase again because of volatility in the Middle East. These processes leave Chávez trapped in a pincer. He is being attacked by the ruling class and US imperialism but his inability to resolve the social and economic problems of the masses is eroding his support.

Bolivarian Circles

Despite these pressures and the growing dissatisfaction with Chávez, his government undoubtedly still has an important layer of support - especially amongst the poorest sections of society in the barrios (shantytowns). US imperialism and the ruling class will make a big mistake if they underestimate this. Despite all the limitation, Chávez is still seen as heading a government which, at least in words, speaks out in defence of the poor and against the rich elite. A bus driver commented: "We have to defend Chávez come what may, with our lives if necessary. His is the only government that’s ever taken an interest in the poor". (Financial Times, 7 December 2001)

In the face of the campaign to topple him, Chávez has also taken some measures to mobilise support. He has set up bodies which bear some resemblance to the Committees for Defence of the Revolution established by Fidel Castro after the Cuban revolution. In Cuba, these organisations included large sections of working-class people and acted as a transmission belt for implementing the decisions of the government.

In Venezuela, ‘Bolivarian Circles’ have grouped together supporters of the government, particularly in the barrios. According to some reports, they have up to 500,000 registered members and could provide backing to Chávez and the government. Following the devaluation of the bolívar, he appealed to these bodies to report any ‘speculative price rises’ in shops and supermarkets.

These committees are not being established to build independent democratic organisations with the objective of taking over the running of society by the working class. Chávez wants reform implemented from above and not control and management from below. The Bolivarian Circles are being formed as a base on which Chávez can rest and mobilise support if necessary.

The deepening crisis in Venezuela and internationally, upheaval in Argentina and the prospect of populist regimes coming to power in other Latin American countries may combine to push Chávez to adopt further radical policies. At this stage, the opposition campaign seems to be driving him into a corner to defend his ‘peaceful Bolivarian revolution’: "They can put me in front of the firing squad and demand that I change. I won’t do that. Even less so now than ever before". (Financial Times, 7 December 2001)

However, steps in a more radical direction are also likely to be accompanied by repressive measures which can be used both against the rightwing and against workers who defend their rights and interests. His radical populist, but capitalist, government will continue to balance between the different class interests.

Splits and divisions have begun to open up as a section of previous supporters has opposed him in the congress. It is possible that to try and maintain his position, Chávez may concentrate power into his own hands, establishing a more authoritarian regime. Based on sections of the military and MVR, such a regime could aim to maintain the ‘Bolivarian revolution’ and continue with its radical populist economic reforms for a period. Remaining within the capitalist system, however, it would increasingly come into conflict with the working class. It will oppose attempts by the working class to take power into its own hands and establish independent organisations.

Chávez’s attitude to the masses was clearly outlined in a biography about him by Richard Gott. During a meeting prior to the failed coup led by Chávez in 1992, participants raised the question of a general strike and civil uprising, and the need for ‘civil society’ to have an active role in the revolutionary movement. Gott states: "That is exactly what Chávez did not want. Absolutely not! Chávez did not want civilians to participate as a concrete force. He wanted civil society to applaud but not to participate, which is something quite different". Chávez stated bluntly: "Civilians get in the way". (In the Shadow of the Liberator, pp 64-65)

In order to defeat the right-wing forces and the system that gave rise to the corrupt order and imperialism, the working class and others exploited by capitalism need to take power into their own hands. They can only rely on their own strength and organisation. Independent workers’ committees, together with peasants, indigenous peoples, students, rank-and-file soldiers and the urban poor need to be created in all localities.

They need to be linked up on city-wide, regional and national levels to lead a movement to establish a democratic government of the working class and oppressed. Such a government would have to take decisive steps to break with capitalism – with the major monopolies, banks and multinationals nationalised immediately. This would provide a basis for the establishment of a democratic socialist plan of production with workers’ control and management of the economy.

All government officials would be elected, would receive the average wage of a worker and be subject to recall by the people who elected them. A revolutionary socialist government would need to appeal to the workers and peasants throughout Latin America for support and to enact a similar programme. Only by taking steps to establish a democratic socialist federation of Latin America and appealing for solidarity from workers in North America would it be possible to defeat US imperialism and capitalism.

This article first appeared in the March 2002 issue of Socialism Today, monthly political magazine of the Socialist Party, the section of the CWI in England and Wales.

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