Was Hugo Chávez Good for Venezuela?

by Dominic Waters

Hugo Chavez

The death of President Hugo Chávez of Venezuela in early 2013 provoked a range of contradictory reactions. Whilst his supporters wept openly in the streets at the news, his opponents celebrated into the night. Respected publications took widely differing stances; some praised him and portrayed him as a saint, but others denounced him, claiming that he ruined Venezuela. Contradictory facts and statistics have been thrown around and used selectively, making it difficult to ascertain exactly how far Chávez was a good president for Venezuela from when he came into power in 1999 to his death in 2013.

Economy

The Venezuelan economy is one of the most fiercely fought-over legacies. His supporters claim he increased the wealth of the country and its citizens, yet his critics argue he squandered oil money and gutted the Venezuelan economy.

Many critics point to an inflation rate of often more than 20% and argue Chávez did not do enough to reduce it. However, looking at Fig. 1, in the years before Chávez was elected inflation was far more sporadic and so, although inflation was higher than most developed countries around the world during his time, it seems unreasonable to suggest Chávez’s policies were the main causes of the inflation. Before Chávez, there was a strict IMF-approved free-market economic policy and that didn’t bring Venezuela’s inflation in line with the rest of the world as it aimed to. Supporters argue inflation rates alone cannot show the quality of living or purchasing power – according to the IMF purchasing power increased from 204.2 in 1998 to 378.9 in 2011 – the government regularly increased the minimum wage to match inflation and wages elsewhere followed suit.[i] This does not address the frequent devaluing of the Bolivar and the black market which was created, but it shows that Chávez did not cause inflation, nor did inflation stop people becoming better off during his time in office.

The unemployment rate in Venezuela rose considerably during the nineties and it seemed that rate was set to continue during Chávez’s era – it climbed to a high of 21% in 2003[ii]. But by 2010 employment was at 8.6%[iii]. This fall can be blamed on a number of factors, but some of the credit must surely go to Chávez, whose programmes appear to have helped in tackling unemployment. Economist Mark Weisbrot[iv] points out that there were ten times more front-line doctors in the public sector and that enrolment in higher education had doubled thanks to Chávez. Under Chávez the number of people claiming pensions also rose dramatically - from less than 500,000 in 1999 to nearly 2 million in 2011[v].

One area where Chávez has been continually attacked is in his approach to Venezuela’s oil. Venezuela is one of the world’s top oil producers and has for a long time relied on oil exports for a large part of its spending. However, this oil is heavy and sulphurous, so it needs continuous investment to keep it coming out of the ground. Around 50% of government income came from oil[vi] during most of Chávez’s rule and before Chávez took control of the PDVSA (Venezuela’s national oil company) there was consistent investment in the oil infrastructure, which kept production consistent and safe. Many of Chávez’s social programmes used money from what were previously the oil investment funds (although the exact amount is unclear as statistics are hard to come by), causing investment in oil infrastructure to fall. This meant production fell by around 30%[vii], and Chávez was only able to keep up the high level of spending thanks to rising world oil prices. Indeed, he campaigned for tighter quotas in the OPEC to keep prices higher. The lack of investment in infrastructure has been blamed by many critics for the 2012 fire at the Amuay refinery, which left 42 people dead.

It is clear that Chávez left Venezuela with an oil industry that had suffered from underinvestment and this is a challenge for whoever runs Venezuela in the future. There is hope though – there is estimated to be 235 billion barrels of unconventional extra-heavy crude oil left, which, if the technology becomes available, could be extracted to rival Saudi Arabia’s oil production.[viii]

Venezuela has had unpredictable and volatile GDP throughout the last few decades and many have criticised Chávez for not bringing stable and predictable growth to Venezuela. It is true there have been huge fluctuations, with the economy shrinking and growing under Chávez – especially during the 2003 oil strike which made Venezuela grind to a halt and caused chaos. However, under Chávez, GDP per capita rose and stayed above or in line with other Latin American states such as Brazil or Columbia[ix] – America’s shining example of successful capitalism in the region. Chávez is often blamed for Venezuela’s high debts – but looking at Fig. 2 whilst it is still high it has not increased out of line with Columbia’s trend since Chávez came to power.

Society

Chávez’s declared aim was to make Venezuela “a sea of happiness, real social justice and peace.”[x] This seemed to be failing when all around the world there were papers complaining of food shortages and long queues for basic items in 2008 and 2011. Chávez’s critics claimed these were due to his mismanagement and misunderstanding and his squandering of Venezuela’s natural resources on ineffective and inefficient social programmes. The shortages were the result of high inflation and relentless currency devaluation, which made it cheaper to import than to produce domestically. Chávez’s strict price controls disincentivised sellers from selling in Venezuela – they found it too hard to make a profit. Food shortages were one of the key factors which sparked the 1992 riots which inspired his coup – the problem had not completely gone away.

However, while the food shortages attracted a lot of media attention, the most vocal criticism was from those who already disliked Chávez’s policies and approach. Whilst the shortages were a result of mismanagement and Chávez has to take the blame for that, their impact was inconvenient rather than disastrous. The main problem was the lack of choice – as one buyer said during the 2007 shortage “It’s not that there’s no food, you just don’t always get what you want.”[xi]

The shortages under Chávez were not like the shortages of 1989, caused by the IMF package introduced by Pérez, which led to the “Caracazo” – looting and riots which left hundreds dead. Overall, Chávez improved access to food during his time in government. His state-subsidised Mercal stores saved thousands from malnutrition – one customer said of the shortages “we need to be patient - before, we couldn't eat a complete diet, now we can afford everything”.[xii]

Under Chávez’s administration malnutrition has decreased by over two-thirds, to under 5%. Food shortages were not a problem Chávez could claim he solved, yet nor were they unique to the Chávez era. Of course, his policies must share the blame for altering the market and contributing to shortages and scares, but most Venezuelans would surely prefer to eat their second choice of meal than have nothing at all. Despite all the flaws and shortages, average calories consumed went up by 50% under Chávez and meat consumption rose by 75%. In 2012, total food consumption was over 26 million metric tonnes, a 94.8% increase from 2003.[xiii]The situation is not perfect, but it is better than it was in 1999 and is continuing right trajectory.

As well as the subsidised food, the oil money critics claim he squandered went to various programmes and “missions”. In these missions Chávez identified a problem and then threw money at it. This was not always the most efficient method and his critics were quick to point out various inefficiencies and opportunities for corruption, but surely it was better than the previous system of ignoring the problem and keeping the money in Swiss bank accounts[xiv].

Under Chávez 1.5 million Venezuelans learnt to read and write thanks to “Mission Robinson”, UNESCO claimed illiteracy was eradicated in December 2005. The number of children attending school doubled and the number of people attending university nearly tripled. The cut-price oil he sent to Cuba was not merely to please Castro, as opponents suggested, it was part of a deal through which Venezuela received an influx of teachers, doctors and sports instructors – citizens could now receive eye care in Cuba and Venezuela had 400% more doctors, thanks to Chávez.

Chávez’s policies were aimed at helping the poor; he himself had grown up in poverty. He enjoyed the mass of support he did because he was the first Venezuelan leader to come from the poor majority and to put them first.

By any measure, he made good progress. Under Chávez extreme poverty fell from 16.6% to under 7%.[xv] Even The Economist [Fig. 3], which preached about how Chávez’s social programmes were ill-advised and ineffective, couldn’t deny that under his leadership Venezuela had the second highest poverty reduction in the whole of Latin America.

One of the most striking and relevant measures of Chávez’s commitment to equality is the “Gini Coefficient” of Venezuela. The Gini Coefficient of a country measures the income distribution, with 1 being total inequality (i.e. one person earning all the income) and zero being total equality (i.e. every person earning exactly the same). When Chávez became President, the measure was 0.486; by 2013 it had fallen to 0.398.[xvi]

Oxfam’s chart of Latin American countries[xvii] [Fig. 4] puts this change into perspective – comparing Venezuela under Chávez to Venezuela with the IMF package in 1990 and to other South American countries.

Equality under Chávez’s economic policies was far better than under the IMF imposed rules. Whatever other issues people have with him, they cannot deny he put the poor first and genuinely improved equality.

One problem which got dramatically worse under Chávez is violent crime. Whilst he may have put it down to the capitalist system or various media lies, the fact is by 2011 the intentional homicide rate per 100,000 population was 45.1 compared with 25.0 just twelve years earlier.[xviii] Complacency on Chávez’s part in assuming that reduced inequality would naturally reduce crime and a reluctance to act early on meant not enough was done and the problem got very serious very quickly. This will be remembered as one of Chávez’s biggest failings.

Many Venezuelans clearly felt they were better off under Chávez than any of the alternatives or they would not have voted him in or supported him. To win repeated majorities at elections some people must have felt their lives had improved – and the statistics seem to agree. Perhaps Chávez’s most lasting social legacy is, as Moisés Naím of Bloomberg put it, the “shattering of Venezuela’s peaceful coexistence with poverty, inequality, and social exclusion.”[xix]

International Relations

Chávez was a different kind of leader for Venezuela from those before him; he followed his own path and was happy to criticise other governments which disagreed with the direction in which he was taking Venezuela. Before Chávez, various presidents had worked closely with the United States and there were many strong links between the two countries – they co-operated over combating drug trafficking and production and many American companies had property and investments in Venezuela (particularly the oil industry).

Chávez’s coup-attempt and his reformist outlook ensured he was not America’s first choice in the 1998 elections – attempts to get a visa to the US were blocked and former US ambassador to Venezuela Michael Skol said:

“I’m shocked and terribly disappointed that somebody whose actions to this date have been terroristic, anti-constitutional and anti-democratic has been able to reach this point.”[xx]

Clearly America felt Chávez was not the best candidate for their interests. Nevertheless, when Chávez won the election and they realised they were going to have to work with him, things changed. They granted him a visa as well as meetings with top US officials, including one with President Bill Clinton himself. White House spokesman Jim Dobbins proclaimed Chávez was “clearly not the person he was in 1992”[xxi] (the year of the attempted coup). John Maisto, America’s ambassador to Venezuela summed up the reluctant US acceptance of Chávez when he said,

“Watch what Chávez does, don’t listen to what he says”, suggesting that his urgent rhetoric didn’t always translate into incisive action. Indeed, journalist Bart Jones claims Chávez’s actions “while bold - weren’t radical”.[xxii]

For his part Chávez tried his best to keep relations with the US cordial; he banged the closing gavel at the New York Stock exchange and threw out the first ball at a New York Mets baseball game. He also kept Venezuela’s interests in mind – after his address to American investors and financiers on the same trip in 2001, the host said “Chávez put those financiers in his pocket”.[xxiii] Chávez did not make America his enemy and American policy at that point was to keep it that way. He kept within the bounds of the IMF agreement negotiated by previous president Caldera and did nothing to harm Venezuela’s reputation and relations.

When Bush came to power the relationship changed. After 9/11 Chávez condemned the terrorists’ actions and called for a minute’s silence. But he also urged world leaders not to launch a war and seek revenge but to deal with the causes of terrorism. On October 29th 2001 he went on air and condemned Bush’s bombing of Afghanistan and the civilian casualties it caused. Despite his protests that he wanted to be America’s friend, Bush’s inflexible attitude of “if you’re not with us you’re against us” lead to a breakdown in relations. Soon after, when Washington sent a strongly worded letter and their ambassador to Chávez asking him to retract the statements, Chávez took the unpragmatic but principled stand of telling the ambassador that that was no way to talk to a head of state and asked her to leave.[xxiv] Bush’s appointment of many officials involved in the Iran-contra affair outraged many Latin Americans – it was an insult and a message to leaders in the region that Bush was no Clinton.

In April 2002 there was a coup against Chávez led by members of the opposition and the military (where he was “overthrown” for two days). A number of the circumstances around this led to a further breakdown of Venezuelan-US relations. Among the most obvious is the fact that, apart from Spain, America was the only country to recognise the coup government as legitimate.

On top of this it is now known American officials began meeting with opposition figures in late 2001 (in itself perfectly legitimate, they can meet with whichever politicians they like) but what angered Chávez was the way they were, by their own admission, “sending informal, subtle signs that we don’t like this guy”[xxv]. It seems certain that the CIA and members of the US administration had prior warning of the coup and chose not to tell Chávez

The American National Endowment for Democracy sent funds to various institutions in Venezuela and many allege it found its way to opposition groups and parties.[xxvi] There is strong evidence that there was a degree of passive involvement in the coup from America –. A CIA Senior Intelligence Brief from 5 days before the coup says “dissident military factions, including some disgruntled senior officers and a group of radical junior officers, are stepping up efforts to organize a coup against President Chávez, possibly as early as this month. To provoke military action, plotters may try to exploit unrest stemming from opposition demonstrations.”[xxvii]

The main reason used as justification for the coup and for America recognising its legitimacy was the shooting of demonstrators. The White House blindly accepted the Venezuelan media’s assessment that the 19 people killed from both sides were shot by Chávez supporters staging an ambush[xxviii] (despite previously being aware of the possibility of the opposition attempts to incite unrest). Puente Llaguno: Claves de una Masacre, a 2004 documentary, all but disproves the claim those shot were killed by Chávez supporters firing handguns as the media suggested. It has now emerged that those killed were shot by snipers, but the real debate is over who told them to shoot. Both sides were shot – Chávez supporters and opposition demonstrators were both targeted.

Yet ordering snipers to shoot demonstrators would be ineffective and counter-productive for Chávez – given his outrage at the 1989 shooting of protestors he would be keenly aware of the effect this would have on the public mood. Whilst surrounded at Miraflores (the presidential palace), he had no idea what was going on in the outside world. It is unlikely Chávez would have ordered protestors to be killed if he didn’t have an accurate picture of what was going on.

There are even claims that the opposition ordered the shootings – in order to provide a reason for Chávez’s deposition. Otto Neudstadl, a correspondent with CNN en Español who recorded an announcement from one of the coup leaders denouncing “killings”, claims the recording was made before the shots were fired – meaning the opposition planned and anticipated deaths before they happened.

Whatever the truth, it is clear Washington was premature and irresponsible in claiming “the Chávez government suppressed peaceful demonstrations”.[xxix]

When Chávez was reinstated 47 hours after the coup started, he never forgot the role he felt the US played in his downfall and how quick they were to denounce him and accept a new leader. The relationship would never be the same. Eduardo Porter, of the New York Times’ editorial board, said of the USA’s apparent support for the coup it “the worst possible decision the United States could have taken. It not only locked in eternal enmity from the Chávez administration but it made it very difficult for anybody else in Latin America to like the United States."[xxx]

Through the years Chávez and both the Bush and Obama administrations traded criticisms over foreign and domestic policy and denounced each other numerous times – Chávez famously called Bush “the Devil” at the UN, a move described by The Nation’s Greg Grandin as “Claiming a privilege that had long belonged to the United States, that is, the right to paint its adversaries not as rational actors but as existential evil.”

Even though Chávez did little for Venezuela’s political relationship with America, the result was not as disastrous as one might expect. He knew where the line was and made sure he never provoked America enough to stop them buying Venezuelan oil. Similarly, America never ended all ties with Venezuela because the upheaval would be too great.

A US Government Accountability Report shows that exports of crude oil and refined petroleum products were relatively stable under Chávez – apart from the period during the 2003 oil strikes.[xxxi] Whilst Chávez may have seriously damaged Venezuelan relations with America, the real effect on Venezuela is limited. Oil still flowed between the two countries and whilst Venezuela may have lost a powerful friend the change in relations has had very little effect on the lives of most Venezuelans.

Related to the relationship with the US were Chávez’s close ties with America’s enemies. From China to Iraq, Chávez seemed to delight in being seen to praise those whom America denounced. He visited Syria, Iran, China, Iraq, Libya – and many more regimes with controversial and undemocratic rulers.

By endorsing the West’s enemies he tried to make himself heard more clearly. Whilst his support and praise was clearly morally dubious and hard to condone, it did help Venezuela’s economy. Numerous trade deals were signed with China and Venezuela became the biggest recipient of Chinese aid in Latin America.

Perhaps the most controversial visit was to Iraq in 2000, where he called for a lifting of sanctions. The US was outraged, reporters claimed he was endorsing Saddam’s regime and one official claimed his actions bestowed “an aura of respectability upon Saddam Hussein which he clearly does not deserve”.[xxxii] Yet rather than endorsing the regime, Chávez felt sanctions should be lifted simply because they hurt innocents – a view shared by the Vatican!

In Venezuela the issue was viewed with less importance – an opposition congressman dismissed the outrage saying “I think if the trip is seen as being purely for commercial interest there is no problem”. The trip was indeed for commercial interest – Chávez revived the dying OPEC and needed to visit Iraq just as it needed to visit other member states.

The US’s relationship with Saudi Arabia is a similar example of how states co-operate with leaders they dislike in order to further their own interests, but it seems only they are allowed to call it “realpolitik”.

Through OPEC Chávez established closer relationships with countries around the world and established Venezuela as a more major player on the world stage. He used OPEC to push an agenda of something more than just increasing oil revenue; he urged members to recognize the “tragedy of human poverty”. Following Chávez’s revival of OPEC, Le Monde wrote he became “the main spokesman for an offensive – this time at a planetary level – against savage capitalism”.[xxxiii]

Chávez was just as keen as his hero Simon Bolivar to unite Latin America – he was instrumental in setting up ALBA (the Bolivarian Alliance for the Peoples of Our America), a Latin American organisation aiming to further economic and political co-operation between member states (currently Antigua and Barbuda, Bolivia, Cuba, Dominica, Ecuador, Nicaragua, Saint Vincent and the Grenadines, Venezuela and Saint Lucia). It was seen as an alternative to the US’s proposal of Free Trade Area of the Americas and it aimed to break down trade barriers across the continent. ALBA has strengthened Venezuelan ties with South American countries and this has meant they can interact better amongst themselves.

“Petrocarbe” is an alliance in a similar spirit – Chávez offered oil at preferential rates to other Latin American countries (with deferred payment with low interest rates) in return for food or expertise. It has made a real difference to politics in Latin America and has helped contribute to the startling fact that, in total, Venezuela outspends the US on aid to the American continent. U.S. Ambassador to Uruguay Frank Baxter in a cable released by Wikileaks said "We offer a small Fulbright program; they offer a thousand medical scholarships. We offer a half dozen brief IV programs to ‘future leaders’; they offer thousands of eye operations to poor people. We offer complex free trade agreements someday; they offer oil at favourable rates today. Perhaps we should not be surprised that Chávez is winning friends and influencing people at our expense."[xxxiv]

Under Chávez Venezuela spear-headed the movement for a Latin America with greater autonomy and with less interference from the USA. This may or may not be regarded as a good thing, but the effect it has had on the ground is a positive one. America has offered little, compared to the benefits deals like Petrocarbe and others offer to the average Venezuelan.

Chávez was not alone in trying to limit American influence – perhaps Chávez’s greatest ally, Brazilian president Lulu da Silva joined Chávez in 2005 in rejecting the free-trade agreement proposed by America, condemning “the hypocrisy of protecting corporate agriculture with subsidies and tariffs even as it pushed Latin America to open its markets”[xxxv] Yet Chávez did not always work against America – in 2006 he persuaded Lulu and Argentinian President Kirchner to support a proposal to relieve the debt owed by the poorest American countries to the Inter-American Development Bank – and the motion passed.

Overall, Chávez undeniably had various relationships with unsavoury dictators and oppressive regimes to further Venezuelan business interests and to provoke America. He weakened Venezuela’s relationship and influence with America, but that was not necessarily a bad thing as he made allies closer to home and tried to unite Latin America with common aims. Life for Venezuelans and many Latin Americans improved because of his foreign policy decisions, even if they lost America as an ally.

Politics

One of Chávez’s headline commitments in 1998 was that he would tackle the culture of corruption which had permeated all levels of the political establishment (an ex-president had even recently been on trial for embezzlement). He aimed to reform the culture and make politics transparent and accountable – he declared war on corruption. He lost that war. Whilst there has not been the massive increase in corruption in Venezuela some of his less reputable critics claim, neither is there any evidence of any significant decrease in corruption. It seems that despite his more open and determined attitude, corruption has thrived and Venezuela has stayed at the very bottom end of the world corruption lists. The graph of corruption perception[xxxvi] [Fig. 5] shows that whilst people felt corruption went down around 2000, there was no general trend of decreasing corruption that Chávez might have hoped for. Chávez’s charisma and passion were not enough to defeat a corrupt culture which had thrived for decades – he tried and failed.

Some of the less balanced accusations against Chávez call him a dictator and compare his censorship to Stalin’s – even the more respectable critics are less than subtle in alluding to oppression of the media and an attack on freedom of speech. The reality is that the media was overwhelmingly against Chávez. This explains why a lot of the coverage of the coup and the elections reflected badly on Chávez and misrepresented the facts: the famous clip of the Chavistas firing pistols cutting straight to images of victims of the snipers is an example of the bias Chávez faced.

One of his most criticised acts was refusing to renew the license of RCTV – a popular station which the media (both in Venezuela and the West) widely reported was being silenced for its opposition to Chávez. In fact, RCTV and others were thanked by the 2002 coup leaders for their role in the overthrow of Chávez - "I must thank Venevisión and RCTV," said one leader”[xxxvii], while Victor Manuel Garcia said “I have to thank the media for their solidarity and co-operation”[xxxviii].

It is hard to imagine a broadcasting company being allowed to continue its contract until its legal end had it supported a coup in a western country. The company itself was not shut down the station continued to broadcast through cable and satellite for years after the contract expired. Venezuelan state television may look alien when compared to the BBC: all stations were expected to shift their schedules when Chávez had a “candena” to broadcast. These were long rambling speeches to the nation and his chaotic energetic style did little to improve credibility. However, as Owen Jones points out “State television could rightly be accused of bias towards the government, which is perhaps why it has a measly 5.4 per cent audience share”[xxxix]. Chávez did introduce some change in the media – but it amounted to introducing a watershed and creating a state media by combining small radio and television stations. This was not consolidating his power – he discovered during the coup he could not find any channel to broadcast his speech. He wanted there to be a different view to the established media. Critics claiming he introduced mass censorship is in reality laughable – his long speeches did annoy millions when they cut across their favourite programmes but the media was left to oppose him unhindered, often getting away with mocking him in a way which would seem unacceptable on British TV. Chávez was not an enemy of press freedom.

Claims that Chávez was illegitimately elected can be quickly dismissed. The system for election was described by the Jimmy Carter Institute, which has much experience in monitoring elections, as “the best system in the world”[xl] and in his time Chávez held 15 national elections and referenda. One of Chávez’s first acts as President was to introduce a new constitution in 1999. It improved human rights guarantees and introduced indigenous and environmental rights – there were congress seats reserved for indigenous representatives, ensuring they were (over) represented. Military promotion was no longer controlled by congress and a public selection process for judges calling for input from different groups was introduced. People could carry round the constitution in their pockets and read their rights enshrined in law.

However, the Constitution concentrated a lot of power in the hands of the President and granted him the capacity for an Enabling Law, allowing Presidential rule by decree. That is not to say Chávez was anywhere near a dictator - Chávez did not control the courts as the opposition charged, although thanks to the size of his support there were often supporters in the many legal; and political institutions who were sympathetic to his aims. He was able to push through wide ranging reforms which would not have been possible without widespread support in key institutions. Chávez was very much a one man show and the reluctance of his supporters to criticise him, due to his defensive nature, made much worse by the 2002 coup, after which he was intensely suspicious of the US and the opposition, meant his ideas where largely unmodified and unchecked before becoming law. This didn’t always lead to a bad result as Chávez’s motives were mostly in Venezuelans interests, but the focus on and power of the President is an issue Venezuela will have to address as it leaves the door open for huge abuses of power. Already there are reports of cover ups, and abuses being overlooked by those who were sympathetic to Chávez.

In terms of political fairness, Chávez was trying to do what he felt the people wanted, but he had a tendency to overrule the proper checks and balances and showing such a disregard for the procedure can set a dangerous precedent.

Conclusion

Chávez had an incredible impact on Venezuelan politics; he breathed energy and authenticity into what had become a decayed and cynical political system. His stubbornness and fluster was not always good for Venezuela – relations with the West suffered, hurting business. Overall, however, he was a force for good in Venezuela – he was the first President whom people truly felt had their interests at heart and who was committed to making Venezuela fairer for all.

For all his imperfections, Chávez left Venezuelans feeling they mattered and he improved the lives of millions of people right across Latin America. Whilst individual policies can be repealed and the economy may decline in future, Venezuelans will refuse to be ignored by the political elite again. This is Chávez’s legacy.

This extended essay was shortlisted for the Ithaka Prize 2015