Venezuela So Polarized That Crisis Could Dramatically Worsen, Says Council’s Latin America Studies Deputy Director Julia Sweig

Julia Sweig, the Council on Foreign Relations’ deputy director of Latin America Studies, says that strikes and demonstrations against Venezuelan President Hugo Chavez could continue for months and even worsen. Although President Hugo Chavez’s popularity is at only 30 percent, Sweig says that unless the fractious opposition can unite behind one candidate, Chavez may well win the next election – whenever that occurs. The Bush administration would like early elections by next month, but Sweig says that August may be a more realistic goal.

Sweig, author of the new book Inside the Cuban Revolution, was interviewed on January 8, 2003, by Bernard Gwertzman, consulting editor for cfr.org.

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Q. What’s the situation like in Venezuela?

A. It’s extraordinarily chaotic and fluid. The strikes have now been going on for over a month, but they really have been coming in fits and starts for more than a year. They have been very dramatic in the last month because of the strikers’ ability to shut down the oil industry. No one is talking about an imminent resolution.

Q. What’s causing the constant eruption of street demonstrations? Is there a terrible dictator in charge? Are people seeking a change in government? And how does oil figure into all this?

A. I don’t think Hugo Chavez can be described accurately as a “terrible dictator.” He’s a democratically elected head of state, who, in 1992, launched a coup from his paratrooper barracks. It failed, but he became a national political figure overnight for his efforts against a government widely considered corrupt. He was sent to jail, then emerged in the mid-1990s with a new political party explicitly opposed to establishment parties.

Since taking power he has governed in a very clumsy and, some would argue, undemocratic, in-your-face, authoritarian way. When he was elected the first time, in 1998, he pulled in 56 percent of the vote, and in 2000, he won with 59 percent.

Q. And the previous political parties, which had dominated Venezuelan politics, more or less evaporated after the 1998 election?

A. They did evaporate, and they have yet to reorganize and resurface. The opposition today is a very diverse amalgam that spans from Marxist on the one hand to Chamber of Commerce types on the other. It includes the traditional labor federation, which has played a very large role, as well as the management and workers in the oil industry.

Q. Let’s focus on the oil industry. What caused the strike that began last month?

A. I have to go back a bit to the April 2002 brief coup. The oil industry was very important in the coup. The oil workers joined a strike that led to a one-day overthrow of Chavez by the military. The workers’ principal beef was that Chavez had put his own cronies into the governing structure and the top leadership of the state oil company, Petroleos de Venezuela [PDVSA]. The Chavez appointees were associated with leftist ideologies and were not people who had cut their teeth on what is described as a meritocracy within PDVSA. But public protests demanded Chavez’ return and the military allowed him to return as president.

Underlying this conflict and PDVSA’s involvement in opposition to Chavez is a debate that has been taking place in Venezuela— and I suspect in other oil-producing countries— about the role of the state in managing oil revenues and exploration and investment. For a time in the early 1990s, you had people running PDVSA who wanted a policy of “opening” the Venezuelan oil industry, which had been nationalized in the early 1970s. They no longer wanted Venezuela to adhere to OPEC [Organization of the Petroleum Exporting Countries] production quotas. The argument of the market advocates was “let a thousand flowers bloom.” They said open up the industry, not only to foreign investment, but to Venezuelan capital and individual investment, which would reduce the role of the Venezuelan state in controlling the market and industry.

That argument is pitted against the people around Chavez, who believe that Venezuela should be a member in good standing of OPEC that should gain market share, not through production but by keeping prices up through production quotas. It’s an oil industry debate, now taking place in Venezuela, but it has become highly symbolic of who controls oil revenue. And it is very, very politicized. Venezuela, of course, is a major oil producer, and is the third largest exporter to the United States.

Q. Chavez and his supporters want the state to continue to control the oil industry?

A. That is correct. They say that in any joint venture, there should be a 51-49 split. They do not want Venezuelan private capital to have the right to invest in Venezuelan oil and they want to keep majority control in the hands of the Venezuela state.

Like many presidents before him, Chavez has called PDVSA a “state within a state,” arguing it is a bloated, inefficient bureaucracy controlled by the nation’s elite. Chavez, unlike past presidents, however, is willing to risk applying his ideological focus to PDVSA by using the spoils for social programs. This is anathema to PDVSA management as they have their own interests, contrasting ideology, and pride in being one of the most prestigious state-run, but autonomous oil companies in the world. The debate is whether making PDVSA an arm of the state’s social program coffers would undermine the efficiency and profitability of the company.

Q. How did this affect the current efforts to unseat Chavez?

A. When Chavez was reinstalled after the April coup, he pulled his cronies out of PDVSA. He brought the head of OPEC, who is a Venezuelan, back to run PDVSA, and attempted to make peace in the oil sector. But he failed. He failed less for oil-specific reasons than for the generalized polarized climate that he allowed to develop and which the opposition fomented as well. When the PDVSA workers got directly involved in the strike again in December, there was a mobilization in front of the PDVSA offices. Chavez’s troops fired tear gas and wounded a few PDVSA employees. That particular moment unleashed the pent-up anger at Chavez and produced what you see today— a general strike that threatens Venezuela’s existence as a reliable oil-producing nation for the first time ever.

Q. Describe the opposition. Who are they?

A. It is a vague opposition, known as the Democratic Coordinator. There are three principal institutions. One is PDVSA and there are two others. One is Carlos Ortega, who is the president of the Confederation of Venezuelan Workers (CTV). He is the labor "boss." I use that word specifically because he is from the old guard of the labor aristocracy. Ortega has been associated with lots of old style politics of patronage and corruption. He has been central to the strikes because of his ability to put people on the streets. Chavez had tried to put his own people at the head of the CTV, but that backfired immensely and Ortega has vowed to fight to the end until either he or Chavez is knocked out. And the Venezuelan Chamber of Commerce is involved. It was the president of the Chamber who was the figurehead of the coup in April; its new president is now a major leader of the opposition.

The opposition also includes individuals from the national assembly who have created their own political parties. For example, Primera Justicia is one example of a new party that emerged in the last year and a half. It is the opposition as a whole that is a broad, amorphous coalition with no single leader. There is an enormous amount of fighting within the opposition. I think the moderates in both the Chavez government and the opposition have a hard time controlling their extremists. That’s why the potential for violence is so strong.

Q. Can an election be held in August?

A. Yes. Under the Venezuela constitution, a referendum on the presidency can be held in August, and Chavez says he will stand for reelection.

Q. But the opposition wants him out now?

A. Yes. They want something to happen in February. You can call it a non-binding referendum, which is permitted under the new constitution, but the opposition wants it changed to a binding referendum— in effect a new election.

Q. What has the Bush administration said?

A. The administration got stung badly by its apparent association with and support for the coup in April. After April, it took a low profile. It has attempted to let the Venezuelan actors on the scene play this out, while trying to signal it does not support coups and wants a constitutional, peaceful electoral solution.

Now, though, because of the war in Iraq and its timing, and the potential for great humanitarian toll in Venezuela, Bush administration officials have stepped up their statements a bit. And while they are supporting the OAS’ [the Organization of American States] mediation [to try to resolve the crisis], they have said very clearly they want early elections, and they don’t mean August. They are backing the proposal that some kind of electoral event take place in February, and they want the referendum to become, in essence, a presidential election, just as the opposition does.

A pro-government representative has drafted a constitutional amendment in the national assembly [that would allow elections to take place earlier than August]. The United States wants the national assembly to vote on the constitutional amendment, the Supreme Court to authorize its constitutionality, and an election to take place in less than a month. This seems like a very tall order. I think, this is due, in part, to the possibility of war with Iraq.

Q. You mean if there is a war in Iraq, there is concern about oil supplies?

A. Yes. Venezuela is the third largest exporter of oil to the United States. Also, I think that neither the opposition nor the government can contain the peaceful protests between now and August, and if this drags on too long it will explode and explode violently.

Q. What are the odds of the crisis being resolved peacefully?

A. It is hard to imagine a peaceful resolution, as the polarization is stark and neither the government nor the opposition seems ready to agree to a timetable for elections. The best option, and the one most likely to yield a fair and manageable outcome, is a recall referendum in August of this year. But the opposition is dead set against waiting. My sense is that a low level of violence could continue until August as long as the Venezuelan military stays out of the streets. If provocations from any side get out of control, the conflict could rapidly escalate into a very violent scenario.

Q. If there was an election in February, who would win?

A. It is hard to tell. Perhaps, if a governor of a state which is in central Caracas, Enrique Mendoza, runs he could win. He is from the old political system but nevertheless well regarded. Chavez’s popularity has gone down to about 30 percent. But that is higher than other presidents in Latin America. Chavez also could win if the opposition fails to get united behind one candidate.

Q. Who still supports Chavez?

A. Chavez’ 30 percent support of the population represents the poorest and the working poor, who for 40 years felt cut out of the political system in Venezuela. And the interesting thing is that Chavez has not really delivered much in the way of concrete economic or social benefits to the poor. But instead, Chavez has delivered a sense of empowerment. He has given them a voice and is viewed by them as one of them.

Q. Is his popularity in part based on race?

A. Chavez is not of white European descent. He is mestizo. But I would not stress the racial element. If you look at the crowds protesting him, they are of all colors and backgrounds. His backers are the most disadvantaged, along with a whole cadre of trained leftist cadres, who are intellectuals, labor lawyers, union activists, even former guerrillas. You could rattle off a much longer laundry list of those who oppose him.

Q. Has the OAS meditation been effective?

A. I think the mediation of [OAS Secretary-General] Cesar Gaviria has prevented violence from erupting in full force. He has been in Caracas for the last two months. He has not gotten the government and the opposition to agree to anything. But I think if he leaves the country and no one else more senior replaces him, the whole thing will blow up. He needs support from other states. There have been muted statements at best from the region. Besides the new president of Brazil, [Luis Ignacio] Lula [da Sliva], and Fidel Castro, no one is particularly fond of Chavez, but he was democratically elected.