January 21, 2006

Out and Out Censorship

Regular readers know I've long resisted calling Chavez's government a dictatorship, and have criticized those who do. For all of the government's evident, growing authoritarianism, three basic elements of a dictatorship seemed to be missing:

  • Censorship

  • Systematic (rather than selective) repression of dissidents

  • Systematic (rather than selective) repression of opposition organizations

  • Well, you can strike the first one off that list, now that Prosecutor General Isaias Rodriguez has asked the National Telecommunications Council (Conatel) to investigate six TV stations and four newspapers for publishing leaks relating to the Danilo Anderson murder investigation and, much worse, instructed five of his own prosecutors to investigate those news organizations for "obstruction of justice." (In my book, what they're guilty of is more like "obstruction of obstruction of justice"!)

    How alarming are these developments? Very. Very, very. Note:

  • Once again Isaias investigates the leakers, not the leak. On the substance of the latest revelation - documentary evidence that his key witness was in jail in Colombia at the time he claimed to be hatching the Anderson conspiracy in Panama - not a word.

  • Three of the five prosecutors Isaias has asked to launch this farcical "obstruction of justice" investigation (Yoraco Bauza, Gilberto Landaeta, and Turcy Simancas) are publicly implicated for taking part in Anderson's extortion racket. The same three, lest we forget, who are still heading the Anderson murder investigation.

  • Conatel - a TELECOMMUNICATIONS regulatory agency - is being asked to investigate four NEWSPAPERS. But newspapers are not telecoms!! They do not use the public airwaves: by definition they are outside Conatel's realm of competence.

  • The Prosecutor General is seeking an injunction to prevent publication of future leaks of trial materials as well as "any information concerning statements, the identity, or any other information about witness Geovanny Vasquez de Armas." The wording really couldn't be any broader. Isaias is seeking a sweeping prior restraint order - a court action to ban publication of embarrassing information before the fact.

  • There are no two ways about it, this is the first clear cut instance of out-and-out, no-more-mister-nice-guy censorship in the Chavez era. We're no longer talking about intimidation, harrassment, measures to encourage self-censorship...none of that. These guys are seeking a sweeping prior restraint order. By any definition, that's censorship, pure and simple.

    We've seen this coming for a long time. Now it's here...

    January 20, 2006

    Fun Proposals for the Coat of Arms...

    Leave it to Venezuelans to crack jokes about anything...

    "Gentlemen of the Assembly: how about this proposal?"

    by some guy in Noticiero Digital

    The Antidote to Decency

    Talking to Europeans about Venezuela, I find that one of the hardest things to communicate is chavismo's utter lack of common decency. Sure, if you follow the papers every day, it's easy to grasp. But for people coming at it from the outside - say, the idealistic young things heading to the World Social Forum in Caracas - Chavez's passionate, redemptive discourse seems so straightforwardly decent it's hard for them to quite grasp the ethical black hole at the heart of the regime. People, in my experience, actively resist believing it.

    Nowhere is the government's ethical turpitude clearer than in the Fiscalía, Chávez's putrid play thing of a public prosecutions service. Run by Former Vice-president Isaias Rodriguez, one of Chavez's most slavishly accomodating yes-men, the Prosecutor General's Office has systematically plumbed the depths of political dirty tricksterism. Serving as both an implicit guarantee of immunity for loyal chavista criminals (who have to get caught on videotape killing people before they face any risk of prosecution) and as a cudgel to intimidate dissidents, Isaias' fiscalía is the biggest culprit in the ongoing collapse of the rule of law in Venezuela today.

    And nowhere has the extent of Isaias' sheer mendacity been clearer than in the increasingly bizarre Danilo Anderson murder investigation saga - which over the last three months has become a kind of distillate of chavista dishonesty. Yesterday, we learned that Isaias's "star witness" in his effort to incriminate key opposition figures - a guy we already knew was a compulsive liar with a string of convictions for identity fraud on his record - was actually serving jail time in Colombia at the time he claimed to have been in Panama plotting to kill Anderson.

    Undoubtedly, Isaias will tell us that the jailed Vasquez de Armas was only the real Vasquez de Armas's CIA-planted stunt double. (Or maybe Vasquez de Armas' claim to have witnessed such a meeting was part of the 15% of his testimony even Isaias admits is false.)

    This latest revelation - which effectively demolishes what was left of Vasquez's credibility together with Isaias' entire case - was backed up with documentary evidence in a Globovision report last night. Is it any coincidence that just days ago, Isaias was threatening a wide-ranging investigation into any news reports casting doubt on his version of the Anderson case?

    Folks, the Anderson investigation is like a bucket of shit: you can dig down through it as much as you want, but all you find is still more shit...

    January 19, 2006

    Utterly Spineless, Fantastically Debased, Prostrated, Grovelling, Bootlicking Sycophancy Chronicles

    Yes, I know that by even touching on this subject I'm only taking the bait, playing into a crass ploy to distract attention from much more important issues, etc. etc. etc. I know that, really. But this whole absurdist little play over Venezuela's coat-of-arms is really a provocation too far.

    Just to recap: some weeks ago, Chavez mentioned in passing that his youngest daughter, the adorable 9-year old Rosinés, had asked him why the horse on Venezuela's official coat-of-arms is shown headed to the right with its head turned backwards, and suggested it would be better for it to be pictured galloping to the left. Kids can be so cute! As for dad mentioning it to a national audience, well, we've gotten used to these kinds of folkloric digressions in Chavez's speeches. They're usually mostly harmless, and by now we just tune them out.

    The little annecdote was silly enough for satirist Laureano Marquez to write a funny column about it in Tal Cual, gently noting the way it seems only Chavez's kid is allowed to criticize him. The first sign that the story wouldn't just go away came a few weeks later, when the National Council for the Protection of Children and Adolescents opened an investigation against Tal Cual for running Laureano's piece, rapping the paper for dragging a kid into the political arena. It seemed like a fairly sycophantic over-reaction, but to a certain extent, you could see their point.

    But Tuesday this idiotic little saga took a totally bizarre turn when the all-chavista National Assembly met for the first time and, in its first decision, actually voted to adopt Rosinés's suggestion, officially changing the coat of arms to conform to her cute little idea. I know, it seems made up, but they really did it!

    There's soooooo much that's soooooooo fundamentally fucked up about this whole thing it's hard to know where to start. The episode speaks volumes about the debasement of Venezuela's institutions in the Chavez era, about the increasingly unrestrained cult-of-personality around the guy, and just - God, how to even express it - just the wholesale surrender of common sense in the Chavez movement, the fantastical extent of his followers' determinition to debase themselves to prove their allegiance.

    A few things to note:

  • Apparently even mentioning Rosinés gently in an oppo newspaper is not ok, but having this 9 year old kid dictate policy is peachy.

  • It's now clear that the all-chavista National Assembly is determined to turn this legislative session into a kind of brown-nosing olympics, a contest between deputies trying to outdo each other in showing just how far they're willing to push the envelope to prove their unswerving adherence to anything Chavez - or, hell, even his kids - say.

  • The National Symbols - the emblems of National Unity - are again used to divide Venezuelans, to rub dissenters' noses in it, to flout the utter absence of restraints on presidential whims

  • I just don't understand how episodes like this one can fail to set off alarm bells for first-world lefties, at least those endowed with a modicum of common sense. Granted, we've seen a lot of barely believable lows over the last seven years, but the day the president's 9 year old started making national policy...man, this has to be one of the lowest...

    January 17, 2006

    The Petrostate that never went away: Part I

    With vague hopes that some curious, open-minded World Social Forum participants might stumble on Caracas Chronicles over the next few weeks, I'm re-posting again this background piece from early 2003 on the history and evolution of the Venezuelan petrostate. It's a longie but a goodie, this one, a reaction to the context-free way Chavez's leadership is typically discussed in the first world. I've just finished editing it to bring it up to date.

    The Petrostate that was and the Petrostate that is:
    I: The Accion Democratica Model

    Back in 1996, I did some field work for a thesis on the Venezuelan labor movement in Cabimas, a dusty little oil city in on the eastern shore of Lake Maracaibo. One day, I met a bunch of guys playing basketball at a municipal court and thought I'd hang out with them for a while - not that I'm any good at basketball, but I thought they might offer a different perspective on things.

    Later, when I told my labor movement buddies what I'd been up to, they were horrified. "What!? You were hanging out with those adeco basketball players? Oh Jesus, did you give them any information?!"

    I was shocked. Adeco basketball players? I'd often heard about how deeply political parties had penetrated Venezuelan society, but the notion that even the guys shooting hoops down the street had a party affiliation struck me as deeply weird.

    Undaunted, I went back and asked the guys about it.

    "So, you guys are from AD?"

    They kind of smiled awkwardly and one of them said, "well, we needed a court and..."

    He went on to tell me the story about how they'd always wanted a proper court to play on, and they'd never had enough money for shoes, balls and uniforms and such. The mayor of Cabimas at that point was an Accion Democratica politician, and one of their uncles was a party member, so they asked him for help.

    The uncle pointed them to their neighborhood AD party official. They went asked him if he'd press their case with the mayor. The organizer said he would, but told them the mayor would be, cough-cough, much more likely to sympathize with their request if they'd sign up to become party members.

    The bargain was pretty simple - a chunk of the municipal recreation budget in return for joining AD and helping out with election campaigns and get-out-the-vote drives. This didn't strike the guys as such a bad deal, so they signed up, pressed their case, and after a year or so they'd gotten their court built, and a few balls to play with...with the slight inconvenience that the whole town started to think of them as "those adeco basketball players."

    I love this little anecdote because it encapsulates so neatly the entire structure of the Venezuelan petrostate, the old-system Chavez built his image denouncing.

    The petrostate trick is turning oil money into power - or, more precisely, turning control of the state’s oil money into control of the state - in a self-perpetuating cycle.

    The way you do that is by building a huge patronage network. Tammany Hall politics on a national basis.

    The party organizer in Cabimas was able to use his influence over a small share of the state’s oil money – just enough to build a basketball court - to fund a miniature local patronage network. His clients - the basketball players - would return the favor on election day, not due to any sort of ideological affinity, but simply to keep their access to his influence over funds. And he would use his influence over them, his ability to mobilize them for political purposes, to bolster his position in his role as client to the next patron up the line, the mayor.

    This basic pyramidal system was replicated all throughout the country, in every imaginable sphere of life, from multi-billion dollar infrastructure projects to things as petty as a neighborhood basketball court.

    The mayor of Cabimas - who played the role of patron in his relationship with the neighborhood organizer - was in turn client to the next patron up the line, probably the governor of Zulia state. And the Zulia governor played client to his higher up, perhaps a politician or a faction in AD's all powerful National Executive Committee. And that patron in turn played client to the party secretary general, or to the President of the Republic...one neat string of patron-client relationships running from the dusty backstreets of Cabimas all the way up to the presidential palace in Caracas.

    Copei, the second party, ran a parallel (if somewhat smaller) patronage pyramid, and MAS, the nominal left-wing party, ran a much smaller and weaker one.

    This, basically, was the system Chavez was elected to dismantle. By the time the 1998 elections came around people resented it acutely. But before launching into a (by now redundant) critique of the system, it bears stopping to notice a few of its features.

    For one thing, it's important to realize that the system was not totally paralyzed - the basketball court did get built. No doubt the funds that built it were mercilessly stripped at every step of the ladder from presidential palace to dusty backstreet as successive layers of patrons took their cut, but the court did eventually get built.

    So while it was inefficient, bloated, antidemocratic, and everything else, the system was not totally useless - and in its own amoral way, the corruption served as a rough-and-ready way to spread the oil money around, to make sure its benefits reached many hands, not just a few. The recipients of the final product - the basketball players - were the end-point of a sprawling corruption scheme: it's just that they got paid off for their services in courts and basketball gear rather than cash.

    The Petrostate is a State of Mind
    It’s important to note that the Petrostate is not simply a system of social relations - a huge pyramid linking everone who's on the take - it's also a cultural system, an interlocking set of beliefs, a state of mind.

    The guys in Cabimas had no doubt that if they wanted a basketball court, it was the state's job to build them one - after all, wasn't the country awash in oil money? Insofar as the petrostate has a culture, that's its central conceit - the idea that the government has so much oil money that it can, and should, bankroll the needs and desires of the entire society.

    Within the petrostate mental model that's what the state is for, and governments are to be judged by how well they deliver on that promise.

    That's not just me saying it - polls consistently find that over 90% of Venezuelans think this is a rich country, with over 80% calling it - incongruously - "the richest country on earth."

    Those beliefs didn't just appear in the popular imagination by accident. The petrostate's founding myth was at the center of the AD political program from the 1950s onward. AD's founding father, Romulo Betancourt, wrote a number of books on the subject.

    For a while, it worked. So long as the population was relatively small, the state relatively efficient, and the oil revenue stream relatively steady, a simple redistributive strategy went a long ways.

    Throughout the 50s, 60s and into the mid 70s, the petrostate model yielded a huge improvement in Venezuelans' standards of living. Infrastructure got built, people got jobs, and each generation could reasonably expect to live better than the one before. The country got universal schooling, free universities, hospitals, public housing, sewers, phones, roads, highways, ports, airports, and all kinds of markers of modernity decades before other Latin American countries had them.

    Less tangibly, but just as importantly, the petrostate bankrolled institutions ranging from paid maternity leave and severance pay, to old age pensions and statutory vacation pay, all the way back in the 1960s.

    By creating sprawling patron-client networks, the political parties became strong enough to make a limited form of democracy viable. The web of social relationships were arguably quite useful in the early decades of democratization. Patronage webs ensured that enough people were socially and economically attached to democratic institutions to feel they had a personal stake in the political system. This loyalty was a key to keeping the country stable and democratic at a time when most of Latin America was not.

    And it worked, the system actually worked. There were elections every five years, parties routinely and peacefully alternated in power, Venezuela was an island of democracy and stability in a continent torn apart by Marxist insurgents and coup-plotting generals.

    But it didn't last. There are many reasons why the relatively benign clientelism of the 50s and 60s atrophied into the kleptocratic lunacy of the 80s and 90s. Corruption is the typical reason cited, but the truth is both more complex and less morally satisfying than that. The underlying reason for the system's breakdown, in my view, has everything to do with the increasing volatility of the world oil market, together with appalling mismanagement and good old demographics.

    Until 1973, oil had traded in a relatively narrow price range, making Venezuela's revenues more or less predictable from one year to the next. The petrostate model worked rather nicely under such conditions.

    But starting with the oil embargo in 73 - remembered as the "oil crisis" in importing countries but as the "oil bonanza" here - the world market started to gyrate wildly, making it impossible to forecast state revenues with any degree of certainty. With each new boom, huge torrents of petrodollars would pour into the Venezuelan economy, only to be followed by busts that were just as marked and unexpected.

    This boom and bust cycle was destructive on a number of counts. From a merely macroeconomic point of view, it's clear that economies don't do well under that sort of instability.

    More destructive than the market cycle itself, though, was the chronic government mismanagement of the cycle. The politicos seemed to believe that high prices would last forever, and so they would take out huge new debts even as money poured in at record rates. When prices fell, the boom-time excess would only fuel increasingly acute recessions, made all the worse by the new debt burden that had to be financed. This is the famous debt-overhand hypothesis that many careful observers blame for the onset of Venezuela's economic decline in the 1980s.

    But I would argue that the most destructive effects of the petrostate were cultural rather than economic. The massive influx of oil dollars in the 70s shifted public morals in this country. Amidst the abundance of oil dollars, graft became accepted in a way it had never been before. The perception was that only a pendejo, a simpleton, would miss out on the opportunities for easy riches that proliferated in those days for the well-connected. This culture of easy-going racketeering, of matter-of-fact robbery, penetrated deep into the Venezuelan psyche. We've never managed to shake it.

    At the same time, population growth gradually diluted the oil wealth among a bigger and bigger pool of recipients, making the principle of petrodollar-funded prosperity for all ever less feasible. Even if the state redistributed all its oil rents in cash equally to everyone, most Venezuelans would not stop being poor.

    By the late 1980s, the petrostate model had broken down irretrievably. Even if the politicians of the day had been a gaggle of angels gifted with Prussian administrative efficiency, there just wasn't enough oil money to go around.

    Alas, the politicians we had then were the polar opposite of Prussians and anything but angels.

    Patrons' reliance on their patronage networks to sustain their positions made the entire system exceedingly difficult to reform, and particularly deaf to calls for change from the outside. Never particularly suited to ideological debate, the petrostate model became ossified completely: power itself became its only ideology. The drive to amass more of it, to climb higher in the pyramid, to gain access to ever more lucrative sources of patronage, came to dominate the political system entirely. As the system became more and more dysfunctional, people's resentment of the corruption at the heart of the system grew ever stronger, though very few within the state seemed to recognize it at the time.

    So the late 1980s were a critical moment in the country's history. Venezuela needed massive reform. It needed to reinvent itself, to leave behind a model of governance that was well past its sell-by date and find a way to integrate itself into the world economy, shedding its reliance on oil, not just as a source of money, but as lynchpin of its socio-political and cultural systems. Venezuela needed to ditch clientelism, reinvent social relations at every level, pry apart the patronage networks that had defined its social relations for so long. We needed to ditch the notion that the state could bankroll everyone's way of life just by distributing the oil money. We needed to invent a whole new idea of the state, a new model where the state helps us create wealth instead of distributing wealth to us. What Venezuela needed was nothing short of a total rethink of society, the state, and the relationship between the two.

    And we failed.

    That failure is the reason Hugo Chavez is in power today. His political success is the inevitable outcome of our inability to cast off the petrostate model.

    The Petrostate that never went away: Part II


    II: Our botched attempt at reform
    Back in 1989, all you needed to do to realize how badly Venezuela needed reform was pick up a phone. On a bad day it could take half an hour or more to get a dial-tone. You’d unhook the phone, go make yourself a sandwich, check for a dial town, eat the sandwich, check for a dial tone again, wash your dishes and put away the mayonnaise, come back and check for a dial tone again…it was pretty ridiculous.

    But once you’d managed to place the call, your troubles had only started: more often than not you’d have to go through the delightful ritual of the llamada ligada - the “linked call.” This was a queer little phenomenon where two entirely unrelated conversations would become entwined in the circuitry somehow, and you’d end up sharing your conversation with two complete strangers. Sometimes, these absurd little four-way interchanges would develop, as each set of callers tried to convince the other set to hang up and try their call again: of course, you didn’t want to be the one to hang up, because then you’d have to wait who-knows-how-long for a new dial tone.

    Ah, the days of the nationalized phone company. Working with 40 year old equipment, CANTV (as the company’s called) was far, far behind the technological and service curves. Waiting times to get a new phone line could extend into months or years. Predictably, the delays spawned their own little hotbed of corruption: if you needed a new phone line, you had to pay off somebody inside CANTV to bump you to the front of the line.

    Phone lines were such a scarce luxury that they carried a premium on the real-estate market: in the classified ads, people selling their apartments would advertise not just location and size, but, proudly, “con teléfono” – an item that would add a good 5% to the price of an apartment. Having a second phone line became the ultimate status-symbol, the height of conspicuous consumption.

    It’s just one example, a particularly vivid one, but typical of the times. State-owned CANTV was prey to all the vices of clientelism run amok. Shielded from competition, the company could get away with bloody murder. As a consumer, you were powerless: a supplicant in the grip of a system that existed more to extract bribes than to provide phone service.

    The CANTV-style attitude of total contempt for the user/citizen pervaded the state. Trying to get anything out of the bureaucracy was a nightmare. Registering your car or trying to get a passport or a cédula (a national ID card) became an exercise in frustration-control. Notoriously, even paying your taxes became a problem. Tax officials knew that you needed that little shard of official paper they controlled (the certificate that you’d paid your taxes) for a number of reasons – you couldn’t sell real estate without it, for instance - so you ended up in the incredible position of having to bribe an official for the privilege of paying your taxes! That’s how entrenched the culture of corruption was.

    But the rot wasn’t confined to the micro-level: macroeconomically, the country was also in serious trouble. The Central Bank was more or less out of foreign reserves. Protected by years of tariff barriers and subsidies, Venezuelan businesses were inefficient, rent-seeking leeches cranking out substandard goods at inflated prices.

    Thirty years of petrostate clientelism had turned the government into albatross around the nation’s neck. The public sector payroll was impossibly bloated. The petrostate model had degenerated into a full-employment scheme for governing party clients. In 1988, Venezuela had more public employees than Japan, but as the dark joke at the time went, “of course, in Japan they don’t get quality public services like we do here.” Lots of people on the state payroll showed up just twice a month to collect their paychecks, without doing any actual work. Many others treated their official salaries as a sort of retainer, but everyone understood that the real money was elsewhere – in the kickbacks, commissions and bribes that state jobs gave them access to.

    A sprawling state-owned sector of the economy was made up of a single profit-making firm (PDVSA) and dozens of parasitic, loss-making firms that relied on oil revenue to stay afloat. Money that might have gone to build schools and hospitals went instead to prop up loss-making state sugar-refineries, banks, mining companies, airlines, even, famously, a fast-food joint in Caracas called "La Sifrina" (que tiempos aquellos!)

    People were sick of it, and understandably so. But – and this is a crucial “but” – they didn’t see the need for root and branch reform. What they wanted was to see the petrostate fixed, not replaced. Venezuelan longed for the bonanza days of the 70s, when windfall oil revenues financed a huge and rapid expansion in consumer spending. If they were angry at politicians, it was because they thought politicians had failed to deliver on their basic mission to meet everyone’s needs by distributing the oil money fairly and generously. Do that, they figured, and the country could return to the good old days of the 70s.

    Here we get back to the mental model that underpins the Venezuelan petrostate, and its founding myth that Venezuela is a fantastically rich country so all the state has to do is distribute the oil rents for everyone to live comfortably.

    If you genuinely believe that, as 90% of Venezuelans still do, but you personally live in poverty, then the obvious inference is that the reason you’re poor is that somebody stole your fair share. Those adeco bastards!

    Let me be clear about this: corruption really was a huge problem back then (still is.) But Venezuelans had wildly unrealistic notions how much their lives could improve if corruption was stamped out. Few grasped that even without corruption, the petrostate model was unworkable. The complicated structural and demographic reasons that made it fundamentally non-viable were not a part of the national debate. They were understood only partially even in academic and technocratic circles. So the perception that corruption was the whole of the problem in fact impeded a deeper examination of the real reasons the state had stopped working.

    El Gocho pal '88
    Lo and behold, the 1988 presidential election featured a candidate uniquely positioned to play into people’s anger at the state of the state: Carlos Andrés Pérez, who had actually been president once already, from 1974 to 1979, when the first big spike in petrodollars reached the country. CAP, as everyone called him, ran as an old style populist, promising to turn back the clock and govern just as he had the first time around. Venezuelans wanted a revamped petrostate, and he offered a revamped petrostate. Not surprisingly, he won by a landslide.

    Now, what on earth CAP was thinking when he ran his campaign that way is still a subject of debate in Venezuela today. Looking back, it’s clear that the state was in no financial position to bankroll the whole of society anymore, and CAP must have known that. Some people think it was all a carefully calculated ploy from the start, that he knew he needed to talk the talk to get elected, but was aware all along that he wouldn’t walk the walk.

    Not everyone agrees. As one delicious anecdote would have it, CAP was certain that he could revamp the petrostate because he had already worked out a preliminary deal with the incoming US administration. The soon-to-be secretary of the treasury was fully on board for a financial rescue package that would allow the Venezuelan government to keep doing business more or less as usual…and that incoming administration would be run by President Michael Dukakis. Oops.

    Well, CAP won with a record number of votes, but of course Dukakis went down in flames. Literally weeks after being elected, CAP found himself at the head of a barely functioning, bankrupt state. He had little choice but to renege on pretty much everything he’d stood for during the campaign.

    Instead, he announced a program of massive, IMF-sponsored structural reforms – lifting tariff barriers, dropping subsidies, privatizing state assets…a straightforward neoliberal, Washington Consensus type program. Now, it's easy to rant against the IMF, but context is key here. Given the scale of the mess that state finances were in, and the role petrodollar-funded patronage played in undermining state finances, there's a good case to be made that radical reform was badly needed with or without the IMF. Which, in general, is my critique of the standard critique of the IMF: put forward in a context-vacuum, it fails to take note of the entirely Venezuelan reasons why reform was necessary to overcome the bottlenecks generated by petrostate clientelism.

    Be that as it may, it's also true that CAP's reforms were also a bald-faced betrayal of everything he’d stood for just weeks before he announced.

    Venezuelans thought they’d elected CAP to fix the petrostate, instead, he immediately moved to dismantle it. It barely made a difference that the petrostate was badly in need of dismantling: anyone needing a phone-line in those days should have been able to see that. Consensus on the need for reform was confined to technocratic circles - the public sphere just was not on board.

    The point is that there was nothing like political agreement for reform at that point. And CAP didn’t seem to think he needed to make the case for dismantling the petrostate. He thought he could just do it, steamroll over all opposition and present the country with a fait accompli. His thinking, apparently, was that the economic benefits of reform would be so evident within a couple of years that the critics of reform would be marginalized.

    Alas, he miscalculated badly. First off, CAP was elected on an AD ticket, as the candidate of the party that benefited the most from the petrostate model. In fact, arguably the main source of resistance to CAP’s reform push was his own party. CAP might have had a road-to-Damascus moment sometime after Michael Dukakis imploded, but the rest of AD was still very much wedded to petrostate clientelism. And CAP’s reforms were plainly incompatible with their vision of the state.

    Take CANTV. Sure, it was a nightmare for consumers, but who cares about consumers? For the AD patrons who got to run it, the phone company was a cherished power-base. Not only could they exploit their control over a scarce commodity – phone lines – to demand any number of bribes, enriching themselves and feeding their personal patronage networks, they could also use the company to listen in on their opponent’s phone conversations, to distribute CANTV jobs to clients, and, of course, to install multiple phone lines in their own homes. If you privatized the company, the phone system might start working, but the whole patron-client network it sustained would come crashing down.

    Similar arguments could be made about any of four dozen other state institutions CAP wanted to sell off, streamline, or reform. From the state owned steel-maker to the public hotel network, every bit of the petrostate had a powerful set of AD caciques dead set against reform.

    CAP's reform package would drive a dagger through the heart of the party’s whole racket - not surprisingly the caciques mobilized furiously against the president they’d just helped to elect.

    Soon, CAP found himself engulfed in a rising tide of unmanageable protest and dissent. Every scrap of reform met strong resistance in congress. AD patrons exploited people's strong adherence to the petrostate cultural model to fuel resistance to reforms that would undermine their power bases. The IMF was predictably demonized, as was CAP for caving in to its demands. Many Venezuelans were genuinely outraged at what they saw as an unacceptable onslaught on their petrostate perks. In the end, too many people were too dependent on the cash that flowed through the patron-client networks for reform to be viable – and those who stood to lose the most were, by definition, easy to mobilize politically, precisely because they were part of the network.

    The straw that broke the camel’s back came when the government cut back its fuel subsidies at the end February 1989. Public transport operators responded to a 10% increase in gas prices by doubling fares, and the shit hit the fan.

    On February 27th, 1989, a group of far-left agitators in Guarenas, a Caracas suburb, started a small riot over the fare hikes. The riot spread incredibly quickly, first to Caracas itself and then throughout the country. For three days Venezuela went through an unprecedented spasm of rioting, arson, and very widespread looting. The police was helpless in the face of the sudden outburst of anarchy. Eventually, the government called out army troops with orders to shoot rioters on sight. At least several hundred people were shot dead in the next two days, by some estimates the real toll was over a thousand.

    It was the end of Venezuela’s age of innocence.

    The effect of the 1989 riots was in some ways analogous to 9/11 in the US: the event transformed the country deeply. Until then, Venezuelans had seen themselves as different, more civilized, more democratic, better than their Latin American neighbors. 31 years of unbroken, stable, petrostate-funded democracy had made us terribly cocky. In a sense, the riots marked Venezuela’s entry into Latin America. The country was no longer different: just another hard-up Latin American country struggling to put its democracy on a stable footing.

    CAP’s reform program was seriously hobbled by the riots, but it continued, at half-steam, for another 4 years. Economically, it was a relative success – after a serious recession in 1989 that saw the economy contract by 10.9%, Venezuela experienced real economic growth for the first time since the 70s. Real per capita income was expanding steadily: 3.9% in 1990, 7.1% in ‘91, 3.6% in ‘92 - though, again this was helped by the spike in oil prices following Irak's invasion of Kuwait. From a narrowly economic point of view, it seemed to be working.

    But none of that mattered to the old-style patrons, the 10,000 little caciques heading up administrative fiefdoms large and small throughout the country. What they cared about was power, and CAP’s program constituted too big a threat to their habitual way of getting it. From their perches in AD’s National Executive Committee, in congress, in the courts, the nationalized companies and the labor movement, they were extraordinarily well placed to wreck the reform drive.

    It was during the third year of this little CAP vs. AD psychodrama that a certain army lieutenant colonel first entered the public scene…and with a bang. On February 4th, 1992, a group of junior officers launched a bloody coup attempt against the elected government. The crazy adventure – the first time someone had tried to overthrow a Venezuelan government by force of arms since the 60s – left about a hundred dead. But it also turned its leader into a kind of folk hero – the valiant paratrooper willing to put his life on the line to stop CAP’s outrageous drive to dismantle the cherished petrostate.

    The coup-plotting lieutenant colonel went to jail, where he whiled away two years reading (but not understanding) Rousseau, Bolivar and Walt Whitman.

    In those two years, the government faced a second, even bloodier coup attempt by officers loosely associated with the first. Eventually, CAP was impeached by his fellow AD party members on flimsy charges, and after a brief interim government, the presidency passed to yet another petrostate dinosaur – Rafael Caldera, who had also been president already, but even further back than CAP, in 1969-1974.

    Like CAP, Caldera ran as an old style populist. Unlike CAP, Caldera governed like one.

    The Return of the Mummy

    By the time he reached power for the second time, Rafael Caldera was over 80 years old. He’d spent 58 of those years in front-line politics. Frail, some would say decrepit, his voice tremulous and barely audible, he wasn’t exactly the kind of leader you’d turn to for bold new ideas. Caldera tried to patch up the old petrostate system – the only one he understood – as best he could.

    Predictably, he failed. Corruption continued unabated, cronyism as well, while the banking sector collapsed, the economy languished, and the nation’s collective impoverishment continued afoot. Eventually, he was persuaded of the need for some reform, including an important overhaul of the criminal system and of social security. But he didn’t understand, much less share, the notion that the basic model of the state he had spent a lifetime championing needed a total overhaul.

    If the petrostate was well past its sell-by date in 1989, by the end of Caldera's term in 1998 it was putrefact. Nobody doubted that the country needed a serious shake-up, a massive jolt to move beyond the stagnation and decay of the last 20 years.

    Indeed, all three of the candidates who ever looked to have a serious shot at power that year were anti-establishment figures, people who’d built political careers outside the traditional party system. The country faced a choice between a one-time Miss Universe turned centrist mayor of a wealthy district of Caracas, a reformist conservative governor from Carabobo State, Henrique Salas, and the aforementioned leftist Lieutenant Colonel (who’d been pardoned by Caldera and released from prison in the meantime.)

    Disenchantment with the old party structures ran so deep that Copei didn’t even bother to try to run a party insider as candidate. Instead, they tried to co-opt the beauty queen, Irene Saez, who collapsed in the polls the second she accepted their nomination. As always, AD was the last to get the message: they nominated Luis Alfaro Ucero, a semi-literate 80 year-old cacique, a sort of capo di tutti i capi sitting at the pinnacle of the party’s patronage structure. The guy never got beyond 7% in the polls. The much vaunted adeco patronage machine had sputtered to a halt. Soon enough, it was all down to the governor and the coupster, and it was clear that the election would go to the one who best voiced the people’s virulent rage at the ongoing failure of the petrostate.

    And if that’s the game you’re playing, nobody but nobody beats Hugo Chavez.

    III: From institutional clientelism to the Chavista cult of personality

    The scene went down in the middle of one of his infamous, never-ending televised speeches in 2004. President Chavez had barely hit his stride when something caught his eye. His tone changed. Concerned, he started looking towards the scaffolding to the left of the stage he was using, the one used to put up the lights for the speech.

    "Hey, come down from there," he said in a soft, fatherly tone, "no, don't climb to the front, it's hot there because of the lights...that's right, climb down towards the back. Don't worry, you'll get to talk to me. I want to hear your problem. I saw you crying earlier, just, just come down from the scaffolding and come up here."

    Soon, a 15 year old kid has climbed down from the scaffolding and is walking towards the stage. He's crying. Chavez calls him up to the podium. With the camera's running, millions of people watching, Chavez takes him, hugs him hard and holds him for, oh, 45 seconds or a minute, while he the kid tells him, in between sobs, how his father recently died and his mother is sick and he can't afford the medicines to make her better...Chavez listens at length, pets his hair, assures him that he's going to help him.

    The crowd is ecstatic, chanting "that, that, that's the way to govern!"

    Welcome to the new era of chavista postinstitutional clientelism. This sort of thing is typical of Chavez's governing style. The president never turns down a personal plea for help, at least not in public. His weekly TV call in show amounts to a parade of supplicants - each week, the lucky few who manage to get their calls through see their wishes for a job or a pair of crutches or an operation fulfilled. The president works hard to make the entire audience feel how much he wants to help them all, personally, one by one.

    Obviously, this brand of clientelism is quite a different animal from the old adeco version. Just as obviously, it's still clientelism.

    Chavez's peculiar contribution to the concept has been to cut out the middlemen. In the old system, each client's relationship was with the patron immediately above him. But the chavista patronage system only has two levels: the president and everyone else. The old system was held together on the basis of the personal bonds between people in adjacent levels of the pyramid. These days, the relationships that hold up the system are imagined rather than personal - the charismatic leader's bond with each of his followers individually.

    Chavistas are, in a sense, imagined clients.

    Though Chavez has spent billions of dollars on emergency social programs that effectively re-distribute petrodollars to his political supporters (the famous misiones) I'd argue that his success has almost as much to do with raw sentiment, with primary identifications. Many chavistas feel deeply, personally, almost mystically wedded to the president - the intensity of their emotions towards him are hard to overstate. I've heard journalists describe meeting chavistas who carry nothing in their wallets but an ID card, an icon of the virgin mary, and a picture of El Comandante.

    That's a departure from what we'd seen before. In the old system, the relationship between patrons and clients was basically a quid-pro-quo, a matter of mutual interest. Insofar as feelings played into it at all, they didn't go beyond a certain deference born of respect and fear of the boss. With Chavez, the bond comes from the heart. Chavez's rhetoric is so powerful he makes people want to see him as a saviour: they want to cry on his shoulders, they want to redeem themselves through him.

    In other words, Chavez's bright idea for moving beyond the outdated system of vertical interpersonal relations is to replace it with a cult of personality.

    It's bad news.

    In the old system, the state had two fully independent institutions: AD and Copei. It's true, it's terrible that there were only two real institutions around, that the
    courts and the elections authorities and the nationalized companies and every other part of the state was subjugated to one party or the other. But at least there were two of them!

    If nothing else, AD and Copei served to balance each other off. No truly transcendent decision could be made without at least a tacit agreement between the two.

    Moreover, each of the two big parties was a complex institution in its own right. Their National Executive Committees were composed of factions that had to deliberate with one another to set the party's position on any given issue. Each faction would press the interests of a given constituency - the pro-business faction would haggle with the labor bureau to agree on the party's minimum wage policy and the peasant representatives would hash out the party's position on agricultural imports in talks with the technocrat wing. Each party had its own internal deliberative process. It was hardly a model of tocquevilian pluralism, granted, but at least some deliberation and interest-aggregation took place.

    In the chavista state, there is only one institution: Hugo Chavez. Note that I'm not talking about the office of President of the Republic, I'm talking about Hugo Chavez personally. When an important policy decision has to be made, the only deliberations that matter take place between his ears.

    All loyalties are directed at him personally. Supporters are in no doubt, their gratitude for the misiones is not directed at the state generally but at him personally. With the president locked in a circle circle of relentlessly sycophantic collaborators, all dissent is equated with treason. The one man who makes every relevant decision personally is never confronted with a view of the world that differs one iota from his own.Chavez has largely blurred the the institutional distinctions between state, government, party, presidency and president. The result is an accelerated decay in the state's institutional structure, to the point where no part of the state can act independently of Hugo Chavez personally. Venezuela today is an exercise in turbocharged personalism.

    Clearly, some aspects of the petrostate model have changed - everyone recognizes this. What I'd like to highlight, though, are the elements of continuity - elements that are often underestimated in commentary about Chavez. If the basic petrostate trick is to turn control of the state's oil dollars into control of the state, Chavez has merely brought the system up to date, yielding a petrostate for the 21st century.

    Of course, Chavez thinks of himself as the pre-eminent critic of the post-1958 state. But his critique is based on ideas that have always been at the heart of the petrostate's cultural model. Chavez certainly thinks he's rebuilding Venezuela's political and social structures from the ground up. But like so many self-described revolutionaries before him, he's blind to how much his vision has in common with the old regime.

    Again, the central conceit of the petrostate cultural model is the idea that the state can and should use its oil wealth to bankroll society. Rather than a critique of the petrostate as such, what Chavez provides is a critique of the way it went astray in the 1970s and 1980s, and particularly of attempts to dismantle it, such as CAP's.

    Chavez doesn't realize it it, but his outlook places him squarely in the intellectual tradition pioneered by Romulo Betancourt more than 50 years ago. Because the clear implication of his line of reasoning is that the old party bosses forfeited the state's mission, which was to distribute petrodollars to the people. Ultimately, Chavez is just peddling a very old petrostate line - the old longing to fix the petrostate, to reform the unreformable.

    That longing has been the key to his political success. In beating the old petrostate drum, Chavez taps into a rich vein of Venezuelan culture. Breaking the petrostate's hierarchical social system is child's play compared to the monumental task of breaking the petrostate as an idea, as a collective understanding of what the state is for. And Chavez never challenged the dominant understanding on that score, he merely leveraged it to his own advantage.

    In 1998, the voters wanted to hear someone tell them that the country is rich, that prosperity is their birthright, and that the only reason they are poor is that their share of the oil money was stolen. They wanted to hear that because that was what they intimately believed. And Chavez articulated it brilliantly. With amazing vigor and charisma, he captured the volcanic anger people felt about the breakdown of the old model. Chavez became their voice. So they voted for him. What could be more natural?

    There's just one minor inconvenience: the Chavez era has made the petrostate model even more unworkable than it was at the outset. Oil production has fallen. Chavez's mismanagement of the oil industry has left the state dependent on periodic oil booms to generate the resource stream he needs to finance his promises.

    That's worth a brief explanation. Those of us who don't work in the oil industry tend to think of oil wells more or less as water faucets: you want oil, you just turn the thing on. It doesn't quite work that way. As oil wells age, their pressure decreases, and increasingly complex methods are necessary to keep the black stuff flowing. That costs money, so, as oil wells get older, you need to invest more and more money just to stay even. Venezuela's rate of depletion runs at about 20% a year, meaning that, in the absence of new investment, that's how much our production capacity would fall each year.

    Hugo Chavez either doesn't understand that or doesn't care. Since 1999 his government has pressured PDVSA so hard to hand over more and more cash that the oil men haven't had enough money on hand to even maintain capacity. Insufficient investment has sent Venezuela's capacity tumbling - from 3.8 million barrels per day in 1998, capacity had fallen to about 3.3 million b/d at the end of 2002. After the oil strike, capacity is thought to have shrunk farther still, though reliable data is hard to come by. In December 2005, the International Energy Agency, perhaps the most impartial source on the matter, reported Venezuelan production was down to 2.6 million b/d.

    So one of the many, many contradictions and ironies of the chavista era is that the president hangs on to the petrostate's founding myth even as he chips away at the oil industry's ability to finance it. If the state couldn't really afford to bankroll society in 1988, and less still in 1998, it really, really can't today.

    January 16, 2006

    Institutional Decay Chronicles

    Huguito gets a front-page thrashing in the current issue of Foreign Policy. The piece by Argentine political scientist Javier Corrales is a good read, though I'm still trying to get my head around the idea of "competitive authoritarianism."

    My only problem with it concerns an omission: Corrales doesn't mention the chavista takeover of the Fiscalia, the Prosecutor General's Office, as an important piece of the chavista takeover of the state. This is a common oversight - even some of the best foreign observers tend to miss the significance of having the only office that can launch a criminal investigation in the hands of a Chavez crony. To my mind, though, the emasculated fiscalia is at the center of the implicit guarantee of impunity for Chavez supporters and of the ongoing sotto voce threat to his detractors, and should be seen as at least as pernicious as the chavista Supreme Tribunal, if not more so.

    In any case, Corrales' piece places particular emphasis on the debasement of Venezuela's state institutions - which I've always thought is the crux of what's objectionable about chavismo - so I'm going to put it on the Reader's Guide to Venezuela in the Chavez Era.

    January 15, 2006

    A postcard from the end of the world

    It's 11:30 in Chile, and I'm watching TV.

    Pundits and politicians are hard at work breaking down the triumph of Michelle Bachelet in today's Presidential elections. Instead of wondering why results are still missing in spite of very expensive electoral machinery, Chileans had official results with 99% of the votes counted by 9 pm local time. Instead of claims of fraud, they are breaking down the vote by gender line -in Chile, men and women vote separately, so it's possible to break down voting patterns- and by counties. All the information is already on the government's website. All this thanks to a transparent system based on a piece of paper, a pencil, a glass urn and an impeccable voter registry - a system that, in spite of being handled by the Interior Ministry, is impartial and trustworthy.

    Is it healthy envy to ask myself why? Why can Chile have a working electoral system that everyone trusts, while Venezuela's citizens have en masse been forced to abandon the vote as an alternative? How can two countries with similar cultural circumstances have such different systems, with such vastly different outcomes? Only Jorge Rodríguez and his conscience can answer this.

    In the meantime, I am amazed to see the international chavista brigade celebrate Bachelet's triumph as another swing to the left in the continent. Ms. Flanker, in the comments forum, has gone as far as saying that, since Bachelet's platform was based on modifying the private pension system, this is enough to place her bust on the lefty mantlepiece. These arguments show a deep, unabashed ignorance of what Chile has become and the type of policies that have driven its success.

    Chile is the only Latin American country firmly on the way to development. It is developing thanks to many of the neoliberal policies that lefties decry. This is a country where a socialist President has inaugurated thousands of kilometers of ultra-modern highways built and managed by private companies in record time. Here, foreign businessmen come and build private parks that effectively cut the country in half (Google Douglas Tomkins for more details) and the discussion centers on whether or not the country has the right to build a road through his land. Chileans have access to modern health-care and pensions thanks to the participation of private industry. The system is not without flaws, but it is miles away from Venezuela's state-run system.

    The country's main industry, copper, is wide open to local and foreign private investment. Tuition in public universities runs in the thousands of dollars per year, but this socialist government (and the coming one) have understood that effective subsidies are those that target the person in need, not those that provide free-for-alls that allow people who don't need them to benefit. This has helped put Chilean universities at the vanguard in the sub-continent.

    This is a socialist government that has pledged to run a fiscal surplus, and Bachelet has pledged to continue on this path and promised not to raise taxes. Chile's socialist government has partnered private industry, and has signed free-trade agreements with the US, the EU, South Korea and China. Japan and India are soon follow.

    Sure, there are problems in Chile. The pensions system is not working well, but Bachelet's reforms involve lower fees, more competition and tighter regulation. It has never crossed her mind that private industry should be shoved out of the system. Likewise, educational achievement has been lagging. But instead of blaming private education, the rich or the Catholic Church, like He-who-must-not-be-named has recently done, solutions are more innovative: vouchers, increased testing, teacher education, investment in "target" public shools. Income inequality is alarming, but she does not blame it on the rich.

    So PSFs, here's some advice: try and not look so ignorant. Ms. Bachelet will preside over a government more "neoliberal" than any Venezuela has ever seen. More than CAP's, more than the second half of Caldera's, more than anything that Primero Justicia is proposing. She will also preside over a more succesful government than anything Venezuela has seen.

    As I read Venezuelan news from afar tonight, my nostalgia mixes with rage. In spite of this, I am happy that my daughter could go vote with her Chilean parent today and learn what democracy is about. Some day, when she is older, I will tell her about how in Venezuela we had a democracy and we let it go to waste because we did not address its many flaws. I will also teach her to love Venezuela in spite of all her failures. I will teach her that the struggle for democracy is the most noble task our people face. And I will teach her that this includes her as well.

    Chavez as divine retribution? Or Cardinal Castillo Lara off the deep end?

    Lets get one thing straight: I enjoy seeing Chavez get a good tongue lashing as much as the next guy. But reading Cardinal Castillo Lara's scathing Divina Pastora homily-cum-campaign-speech, I can't shake the sense that the guy went way, way too far. Towards the end, he actually compares Chavez to the bubonic plague, musing that "perhaps our lord Jesus Christ has wanted to teach us a tough lesson for our faithlessness."

    Is it just me, or is there a whiff of theological devaluation about this particular method of divine retribution? Time was when the good lord punished infidelity with plagues of locusts and such...these days? He sends down tinpot populists, I guess.