Chavez's Term Seen Cut Short As Venezuelans Grow Defiant

Dow Jones Newswire ^ | August 9, 2002 | Charles Roth

[RedWhiteBlue]

DJ-As Venezuela careens into a national strike Tuesday that will include an alarming drop in oil production and exports, the clock on President Hugo Chavez's presidency appears ever closer to striking midnight.

While the way the endgame plays out isn't yet clear, that Chavez has antagonized enough workers and managers at state-oil behemoth Petroleos de Venezuela S.A. (E.PVZ), or PdVSA, to bring oil exports to a virtual halt and cut gasoline distribution in parts of the country lead analysts to conclude that he won't last through December.

"What we've seen is President Chavez's slow-motion theft of democracy, and we're now seeing a slow-motion meltdown," said Jerry Haar, a scholar at the University of Miami's North-South Center. "Unlike any previous Venezuelan president, he's united an entire country against him."

Thanks to a bullying, autocratic governing style, Chavez - whose mandate runs through 2006 - has certainly stacked the cards against himself.

On Tuesday, public sector workers and the nation's largest private business federation, Fedecamaras, are going on a 24-hour national strike, though organizers have threatened to extend it indefinitely.

Public sector teachers and medical workers were already striking for unpaid back wages and salary rises with near regularity. The country's main newspapers have decided not to publish Tuesday.

Thanks to his attacks on the Catholic church, the media, the middle and upper classes and a slew on non-governmental organizations, many expect a repeat of a Dec. 10 national strike, when, with the exception of the oil sector, the country was virtually shut down for a day.

With those in the vital oil sector now joining the ranks of the disaffected, the pressure on Chavez will be tremendous. That's because oil represents 80% of the country's export receipts, half of government revenues and about one-third of all economic output.

Normally, contingency plans for oil worker strikes involve management taking over workers' posts to keep things running. But with PdVSA management and workers united against Chavez's attempts to pack the company's board with technically unqualified political allies, contingency plans won't work, industry experts say.

The PdVSA protests also render Chavez's attempt to buy off public workers with a non-budgeted 20% wage hike, announced Sunday, ineffectual. Even if he could come up with the money to pay for the increase, economists point out that any such hike would widen the fiscal deficit and fuel inflation, which is already accelerating following the recent devaluation of the currency.

Chavez's wage announcement also comes too late, analysts suggest.

"Venezuela is a destabilized country," said Miguel Enrique Otero, chief editor at Venezuela's El Nacional, one the country's top dailies. The country can't function with Chavez's antagonism toward virtually the whole of the Andean nation's institutional landscape, he told a conference in New York last week.

"Seventy percent of the population dislikes him," said Gersan Zurita, senior director of international public finance at Fitch. Speaking on his own behalf and not that of Fitch, Zurita, a Venezuelan, said Chavez has even managed to alienate a great many poor, the vast majority whom once supported him.

"The country can't function on 30% support for Chavez and 70% opposed," Zurita added.

The paralysis in governability hasn't been lost on legislators, who last week voted in favor of holding a debate aimed at petitioning the president to sack his interior minister. The vote indicated the Chavez coalition's slim majority in the National Assembly appears fractured.

In addition to soaring crime, a foundering economy also undermines the president's continued viability.

Thanks to the February devaluation of the bolivar ($1= VEB913.05), eroded purchasing power is expected to exacerbate already depressed demand and send the economy into recession, pushing high unemployment even higher.

Analysts reckon the bolivar will finish the year around VEB1200, while inflation will likely run about 30%, up from 12% at the end of 2001.

Political violence is also on the rise. Militant civilian groups, organized and funded by the executive branch and its allies in various state and local governments, have taken to threatening and, at times, assaulting anti-Chavez protesters and journalists, whom, among many others, Chavez accuses of subversion.

How the military responds to the growing unrest is anyone's guess. Some analysts say Chavez has bought off many higher ranking officers either by giving them plum civilian posts or through advanced promotions.

But, said Marc Falcoff, a scholar at the American Enterprise Institute, it's not possible to grease the palms of all officers, especially those in the lower and middle ranks. "Chavez has created a revolution within the army," he said. "Chavez has opened a breach between the senior and middle ranks."

Indeed, so far this year, four active officers have denounced Chavez and called for his resignation. They opposed his domestic policies, which they characterized as communist, as well as his praise of Fidel Castro's Cuba and direct contacts with Colombia's Marxist guerillas.

The U.S. state department has said Venezuelan military officials sounded its diplomats out on support for a coup to oust Chavez. But the U.S., which is Venezuela's top foreign oil market, said all sides should follow the constitution.

According to the country's magna carta, a referendum on Chavez couldn't be held till next year. Yet patience has clearly run razor thin.

"Either we change the way the nation is run, or we are headed toward economic ruin," said Pedro Carmona Estanga, the head of Fedecamaras, the business federation.

The Venezuelans now taking to the streets and striking against Chavez appear to agree, and increasingly look to the ousters of presidents in Argentina, Ecuador, Peru or the Philippines in recent years to inspire their cause.

None of the analysts spoken to for this article thought Chavez would remain in office through the end of this year.

New York , Dow Jones Newswires 08-04-02 1947GMT

[RedWhiteBlue]

"What we've seen is President Chavez's slow-motion theft of democracy, and we're now seeing a slow-motion meltdown," said Jerry Haar, a scholar at the University of Miami's North-South Center. "Unlike any previous Venezuelan president, he's united an entire country against him."

None of the analysts spoken to for this article thought Chavez would remain in office through the end of this year.

The egomaniac would rather drag the whole country down with him than resign.

[Semper Paratus]

Communists don't go out quietly if they go at all.
Chavez is goint to take the 'Allende' retirement package.

[Eric in the Ozarks]

Perhaps he'll fly to exile in Havana. He's known to like the politics there.

[Redbob]

Had it not been for the way we handled Granada, Castro would likely have tried to prop up his buddy Chavez.

[livius]

None of the analysts spoken to for this article thought Chavez would remain in office through the end of this year.

I really, really hope they're right. I wish I had more confidence in their prediction.

[Eric in the Ozarks]

Even if Chavez gets the boot, nothing much will change. The Vens have a saying about changes in government, "new dictator, same old corruption."

[Lucius Cornelius Sulla]

The Vens have a saying about changes in government, "new dictator, same old corruption."

That would be a big improvement over the current situation. The problem with Chavez is not corruption, though he is corrupt, the problem is a leftist totalitarian regime being built in a country which is a source of a vital resource for the US.