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26 March 2015

Hugo Chávez Rewrote the Textbook for Social Change: Activists should learn from both his successes and failures

by Dada Maheshvarananda

From an impoverished family, Hugo Chávez joined the army for a chance to play baseball, but soon came to love the service that gave the opportunity for advancement to anyone based on hard work and performance. Disgusted by the corruption, censorship and human rights abuses of the Venezuelan government, the young officer started a secret organization in the military, the Bolivarian Revolutionary Movement-200 (MBR-200), to overthrow the dictatorship. As one of the most popular teachers in the Venezuelan Military Academy, he recruited young officers for ten years. Caught red-handed twice and brought before a tribunal for subversion, Chávez managed to brazenly talk his way out of the charges both times. He was so successful that by the time he led a coup d’état in 1992 to overthrow President Carlos Andrés Pérez, he had 130 officers and nearly 900 soldiers under his command, approximately ten percent of the Venezuelan military.

Though the rebels came within a few meters of capturing Pérez, they failed. The military high command arrested Chávez and ordered him to tell the rest of his men to lay down their arms. Wearing his military uniform and red paratrooper beret, this unknown lieutenant-colonel was put in front of live television cameras for 72 seconds so that he could order all his men to surrender. What he said electrified the nation. Invoking the liberation hero Simón Bolívar, Chávez assumed full responsibility for the failure, which almost no Venezuelan leader had ever done before. Then he said that the objectives of this movement were not achieved "for now". As he went to prison, he had suddenly become a national hero to millions who realized that these soldiers were not hungry for power, rather they were risking their lives to save their country. A group of 62 retired generals ran full-page advertisements in newspapers attacking the government and supporting the coup leaders. In his cell Chávez began receiving hundreds of letters a week from supporters.

After two years all the coup leaders received amnesty, and Chávez started a four-year electoral campaign for president. He ignored the existing political parties and formed his own. Until voting day, he was discounted by political analysts because everyone they polled lived in the rich parts of Caracas; they didn't grasp that Chávez was effectively campaigning in the poor barrios and villages, organizing the silent masses that had always been ignored. When he assumed office at the beginning of 1999, he formed a commission to write a new constitution that was open to all suggestions; a group of Proutists also submitted our proposals. The new constitution, approved in a national referendum, is one of the most progressive in the world, guaranteeing many more human rights, including free education up to tertiary level, free quality health care, access to a clean environment, and the right of indigenous peoples and other minorities to uphold their traditional cultures, religions, and languages.

The "Dutch Disease" is a term used by economists to describe how manufacturing and agriculture fall if a country gets a huge influx of money from petroleum sales, resulting in a stronger currency due to the exchange rate. For fifty years oil has made Venezuela the richest country in Latin America, but the poor people saw very little of that wealth. Chávez coined a slogan, “Venezuela now is for everyone,” that symbolized his use of petroleum wealth to help the poor. Many social welfare missions were begun, including subsidized food stores and free kitchens, free health care, educational programs, and the building of more than 700,000 houses for the homeless.

The gains in social justice have been dramatic. During the last decade, the percentage of households in poverty was reduced by 39 percent, and extreme poverty by more than half. Inequality, as measured by the Gini index, fell substantially, from 48.1 in 2003 to 39.0 in 2011.

The number of primary care physicians in the public sector increased 12-fold from 1999-2007, providing health care to millions of Venezuelans who previously did not have access. The mortality rate for children under five years of age, which according to the World Health Organization is one of the best indicators of overall health in society, has fallen by 33 percent in Venezuela since 1999 (from 22.1 to 14.9 deaths per thousand live births in 2013).

There have been great advances in education from 1999 to the present. Pre-school enrollment rose from 43.4 to 70.7 percent; primary attendance from 85 to 92.2 percent; and secondary from 47.7 to 75.1 percent. Meanwhile higher education enrollment has increased from under 900,000 students to almost 2.5 million; UNESCO now ranks Venezuela 5th highest in the world in university matriculation rate.

These and more social programs won the hearts of the masses, so that by December, 2012, his coalition had won 16 out of 17 national elections due to successful consciousness-raising and politicization among the masses.

Unfortunately, while Chávez successfully redistributed wealth and reduced inequality, his economic policies caused the productive sectors of the economy to decline. Though there was a big imbalance in the economy even before he was elected, with petroleum emphasized at the expense of everything else, this trend increased during the Chávez presidency.

Some of the major policy mistakes were:

1. Maintaining strict currency controls that led to an overvalued currency. While this was done to insure that goods were cheap, and it worked for some time, it made imported goods much cheaper than anything that could be produced locally. These currency controls were probably the most damaging mistake, because they destroyed the foundation of the local economy, hurting both industry and agriculture. Oil money was used to import even essential food products.

2. Strict currency controls created opportunities for high level corruption. As the official exchange rate was always lower than the parallel market rate, importation permits became an invitation to make a huge profit from the difference. Government officials who granted these permits could make enormous amounts in bribes. Whereas corruption is an old problem throughout Latin America and the world, it has spread in all areas of government, and become one of the biggest problems of the country. This year, a report by the International Consortium of Investigative Journalists found that Venezuelans were among the top Swiss clients of HSBC, holding more than $14.8 billion in secret accounts, more than any other country except Switzerland and the UK.

3. The government subsidizes gasoline, selling it for only US$0.02 per liter. Since this is significantly less than the actual cost of extraction, refining and transport, the government is paying for every liter that is sold. More than 40 percent the gasoline sold in Venezuela is smuggled to neighboring countries, creating another very lucrative source of corruption.

4. Following the Marxist model of rigid price controls for all essential items has meant that neither Venezuelan private businesses nor even cooperatives can afford to produce basic necessities. With inflation at more than 60 percent per year, fixed price controls have forced many manufacturers and retail businesses into crisis and, in many cases, failure. Chávez took over companies that he considered were making excess profits, but the newly nationalized enterprises were not managed effectively. As a result many of the nationalized companies became liabilities to the government rather than assets.

5. From 2002 to 2006, the government actively promoted cooperatives. However, due to a lack of training in managerial skills and insufficient access to finance, as well as the very difficult business climate, more than two-thirds of the more than 200,000 registered co-ops failed. After that Chávez withdrew support for them, and instead promoted “socialist enterprises” that the government owned and controlled.

These economic failures provided the opposition with an opportunity to attack the social and redistributive policies of Chávez, when in fact they were not to blame for the failure. Had the proper economic policies been put in place, Chávez’s social reforms would have worked well.

The capitalist-led opposition attempted a military overthrow of Chávez in 2002 with U.S. government knowledge and support; two days later the masses and the military united and brought him back from the island naval base where he was held prisoner. After that, Chávez became much more strident in his rhetoric about class warfare against the oligarchy, calling them “squalids.” He announced that he was committed to “the elimination of capitalism” and to “socialism for the twenty-first century.” Socialist and military values have influenced the masses to a great extent in terms of participatory democracy, grassroots communal councils, frequent military parades, the new national police force and other initiatives.

The U.S. press regularly condemns "human rights abuses" and "the corruption of democracy" in Venezuela. However, none of the incidents are comparable to Mexico, where human rights workers and journalists are regularly murdered, or to Colombia where more trade unionists are killed than anywhere else; still the United States gives both these countries huge amounts of financial aid, including military and police funding and weapons. The Carter Center, after observing several elections in Venezuela, along with delegations from the European Union and the Organization of American States, has publicly declared that the country has the "freest and fairest elections in the Americas."

On March 9, 2015 President Barak Obama declared “a national emergency with respect to the unusual and extraordinary threat to the national security and foreign policy of the United States posed by the situation in Venezuela.” What threat could Venezuela possibly hold for the greatest military power on earth?

It is the threat of a good example. If a country replaces free market capitalism with a socialist economic system, and people’s living standards improve, it would send a signal all over the world that an alternative exists to the economic, political and military domination of the United States.

U.S. corporations have been making tremendous profits from their business in Venezuela for decades; now, according to Reuters, 40 of them, all members of the S&P 500, together face a total loss of at least $11 billion due to currency restrictions and the devaluation of the Venezuelan currency.

The U.S. government has openly funded $90 million to Venezuelan opposition parties since 2000 with the pretext of "promoting democracy". Of course the U.S. Central Intelligence Agency has also covertly funded strikes and economic sabotage, armed proxy armies, and assassinated heads of state. The list of U.S. interventions includes Guatemala, Vietnam, Laos, Cambodia, Indonesia, Congo, Dominican Republic, Cuba, Nicaragua, Granada, Chile, Panama, Brazil, Ghana, Greece, Uruguay, Angola, Jamaica, the Philippines, Honduras, Fiji, Surinam, Guyana, South Yemen, Chad, Bolivia, Peru, Algeria, Panama, Iraq, Afghanistan and Haiti.

What are the lessons that Hugo Chávez taught us about social change? First that a radical anti-capitalist message can resonate with the poor even though it may alienate the rich―the radical parties Podemos in Spain and Syriza in Greece have succeeded with this approach. Second, that after 500 years of European descendants heading all the governments of Latin American, it is possible for people of color like Chávez, Lula de Silva of Brazil, and Evo Morales of Bolívia, to usher in Leftist governments. Third, that it is possible to mobilize the poor to win elections, and by creating social programs that benefit them, to do it again and again. Fourth, that by strengthening ties with other countries of the Global South, it is possible to forge new alliances and new institutions independent of the United States, such as Telesur TV, the Bolivarian Alliance for the Americas (ALBA) and the Bank of the South. Fifth, these new alliances can provide enough strength to successfully stand up to the might of the United States and win.

We should learn from Chávez’s mistakes as well. Good political policies and poverty reduction are not substitutes for sound economic policies. Both are necessary to have a long term impact.

Chávez also failed to effectively tackle corruption; violent crime rose to dangerous levels during his rule, as well. In his constant preoccupation with votes, he turned a blind eye to evidence of corruption by some influential party leaders; if he had courageously launched popular educational campaigns about ethics in every level of school and in the popular media, and if he had denounced and punished wrongdoers, ending impunity, he would have actually strengthened the Bolivarian Revolution.

Another disappointment is that Chávez did not encourage constructive criticism by his followers, nor did he open channels for respectful dialogue and listening to complaints with members of the opposition; a more inclusive stand, like the Occupy slogan, “We are the 99 percent,” could have won the allegiance of many good people among the middle class.

Otto van Bismarck said, “Politics is the art of the possible.” For activists around the world, Hugo Chávez dramatically showed the possibilities of changing a society within a short period. Activists have a lot to learn from Hugo Chávez, both from what he got right and from what he got wrong.

Dada Maheshvarananda is yogic monk, activist and writer. He is the director of the Prout Research Institute of Venezuela. He can be reached at maheshvarananda@prout.org.ve, and website www.priven.org.