The Obama Administration and the Americas: Agenda for Change

Chapter 10: Engaging Venezuela: 2009 and Beyond

Since his election in 1998, President Hugo Chávez of Venezuela has taken on the mantle of creating a new model of independent politics and economics, and of challenging U.S. dominance in the region and the world. Utilizing a strategy of intense confrontation with adversaries at home and abroad, combined with new foreign alliances globally and integrationist schemes regionally , the Chávez administration seeks to redistribute power and resources both domestically and internationally. In so doing, it has vexed the United States, exasperated neighboring Colombia, befuddled Latin American and European governments, and attracted support from those who feel exploited, marginalized , or impotent in the face of capitalist markets or U.S. unilateralism. U.S. foreign policy interests make imperative an attempt to find a modus vivendi with Venezuela in order to cooperate on issues of mutual interest and coexist on issues of disagreement. As a major energy producer and a competitor in the marketplace of ideas, Venezuela should command respectful attention from Washington. The mutual dependence on the oil trade—the United States buys about 55 percent of Venezuelan oil exports and Venezuela provides between 11 and 14 percent of U.S. imported oil—keeps the antagonism within bounds and has not been interrupted even when diplomatic relations have fractured. Narcotics transshipments, Chávez’s support of Cuba, and growing ties with Russia, China, and Iran are also issues of concern expressed in Washington.Venezuela’s early strategy of revitalizing OPEC and emphasizing production cuts and higher prices over increased market share 145 ten Engaging Venezuela: 2009 and Beyond Jennifer McCoy provided abundant revenues to fuel Venezuela’s traditional petrodiplomacy in recent years. Simultaneously, the lack of U.S. attention to Latin America since 2001 has provided a vacuum into which Chávez has enthusiastically stepped to offer ideas that are alternatives to the liberal democratic market model embraced by the United States. Nevertheless, the late 2008 downturn in oil prices may diminish the sustainability of the current strategy of petrodiplomacy. And the extreme concentration of power that is accompanying Venezuela’s model of participatory democracy risks a return of deep polarization, destabilization, and violence that could spill over to Venezuela’s neighbors and trade partners. Chávez’s Venezuela With the election of Hugo Chávez in 1998, Venezuela was the first of several governments—followed by Bolivia, Ecuador, and Paraguay—elected to bring about fundamental change through constitutional “re-founding” and the inclusion of previously excluded groups in the distribution of power and resources.1 Simultaneously, another group of countries—including Chile, Brazil, and Uruguay—elected center-left governments to address through more gradual reforms the frustrated expectations arising from the transitions to democracy and open markets in the 1980s and 1990s. Venezuela’s own political dynamics must be evaluated in the context of the demand for radical change expressed by the voters in the 1998 election. A near tripling of poverty rates from the 1970s to the 1990s produced a serious social dislocation, and a rejection of the traditional political elites led to the collapse of what had been considered one of the strongest political party systems in the region. Venezuela’s political regime today remains in a transitory state, as one political system was dismantled and another is still being created. The constitutional “re-founding,” or rewriting, promised by Hugo Chávez in his 1998 campaign initiated a process of elite displacement, redistribution of economic and political resources,concentration of power,and experimentation with new forms of participatory democracy. It included a new constitution written by a popularly elected constituent assembly and approved by Venezuelan voters in 1999. The process has been conflictive, including mass protests with occasional violence,an attempted coup in 2002,a two-month petroleum strike in late 2002 and early 2003, and a presidential recall referendum in 2004. Although President Chávez survived each attempt to remove him from power and subsequently consolidated his power, the country has not yet achieved a new social contract including all sectors of the society, and the society remains polarized. 146 Jennifer McCoy The 1999 constitution did not radically change the constitutional foundations of the state; it essentially followed the statist approach of the 1961 constitution, protecting private property while giving the state responsibility for social welfare, but also rolling back some of the liberalizing reforms in the labor market and in pensions. The constitution deepened human rights and citizen participation mechanisms...