caracaschronicles.blogspot.com By Francisco Toro Sunday, February 16  

Here's part three of what will probably be a four part series. Part I (below) describes the original petrostate design, and how it degenerated through the late 70s and 80s. Part II (also below) goes into the failed attempt at reform in the early 90s, and how the petrostate limped along until Chávez came to power. This part deals with the chavista petrostate. The final part will try to describe some hints I see in society right now that suggest that we might finally be ready to move beyond the petrostate mould if we manage to get rid of Chávez without destroying the country altogether.

The petrostate that was and the petrostate that is, part III

It happened in the middle of one of his infamous televised harangues. The president had barely hit his stride when something caught his eye. His tone changed, he looked towards the scaffolding to the left of the stage, the one used to put up the lights for the speech. "Hey, come down from there," he said in a soft, almost 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 this 15 years old kid has climbed down and is walking towards the stage. He's crying. Chávez calls him up to the podium. With the camera's running, millions of people watching, Chávez 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 died and his mother is sick and he can't afford the medicines to make her better...Chávez listens at length, pets his hair, assures 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 postclientelism. This sort of stunt is typical of Chávez's governing style. The president never turns down a personal plea for help. 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 adeco version. Just as obviously, it's still clientelism. Chávez's peculiar contribution to the concept has been to cut out the middlemen altogether. 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 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.

Of course, working one-by-one Chávez can help only a tiny handful of his supporters in a material sense, which in part explains why his popularity has frayed so much: only 20% of Venezuelans or so back him enthusiastically at this point. But the real mystery is not why so few people support him, but why so many do. Afterall, Chávez has presided over the fastest period of mass impoverishment this country has seen in 160 years. His handouts can't have helped more than a tiny fraction of the total who support him. So most chavistas are, in a sense, imagined clients. Yet they remain steadfast in their support.

The explanation, I think, is two-fold. In the first place, Chávez benefits from a kind of politicized lottery mentality. It's hard for people to think clearly about very large numbers and very small probabilities: that's why lotteries exist. If everyone had a realistic understanding of their actual chances of winning, no one would play the lotery. The same thing happens with chavistas' notions of their chances to get at a piece of presidential patronage. Aló, presidente is nothing but the latest nationwide lotery show, and people here love that kind of thing.

But the more important part of the explanation has to do with raw sentiment, with primary identifications. Your typical chavista feels deeply, personally, almost mystically wedded to the president - the intensity of their emotions towards him are very 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 another departure. In the old system, the relationship between patrons and clients was basically a business arrangement, 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 Chávez, though, the bond comes from the heart. Chávez's rhetoric is so powerful he makes people want to see him as a messiah: they want to cry on his shoulders, they want to redeam themselves through him.

Said differently, Chávez'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.

At least in the old system, the state had two whole 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 christ, 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 them.

Moreover, internally, each of the two big parties was a complex institution in its own right. Their National Executive Committees were made up of all kinds 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 interest-mediation took place.

In the chavista state, there is only one institution: Hugo Chávez. Not even the presidency of the republic, just Hugo Chávez the man. When an important policy decision has to be made, the only deliberations that matter take place between the little voices inside his head. All loyalties must be directed at him personally. With the president locked in a tiny circle of relentlessly sycophantic collaborators, all dissent is equated with sedition. 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. The president can't countenance even the suggestion of reaching minimal agreements with non-chavista sectors of society. Venezuela's state today is an exercise in turbocharged personalism at its most debased.

As a social and political model, it's clearly quite different from what came before, but what has chavismo done to that most enduring feature of the petrostate, its culure? Chávez is an undoubtedly gifted and charismatic speaker, and he's slammed the old regime so much and so often he must have managed to effect some change in the way people see the state's role in society right?

Think again.

Chávez clearly sees himself as the pre-eminent critic of the post-1958 clientelist state. But his critique is based on ideas that have always been at the heart of the petrostate's cultural model. Chávez 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.

The giveaway here is his heavy rhetorical emphasis on corruption and theft as the root causes of poverty. To my mind, perhaps the most reliable rule of thumb in Venezuelan politics is that those who think they can fix the problem by rooting out corruption are hopelessly stuck in the petrostate cultural framework. And sure enough, just about every speech Chávez has given in the last 4 years has featured these long, vitriolic, totally over the top tirades against the soulless oligarchs who stripped and looted the state, used the National Treasury as a personal plaything, and doomed the majority to abject poverty.

Chávez doesn't know it, but that kind of rhetoric places him squarely in the intellectual tradition pioneered by Rómulo Betancourt, AD's founding father, 50 years ago. Because the clear implication of his line of reasoning is that by stealing so much, the old party bosses vitiated the state's fundamental mission, which was to distribute the petrodollars to the people. Ultimately, Chávez is just a particularly crass purveyor of a very old petrostate line - the old longing to fix the petrostate, to reform the unreformable.

What's sad is that, ultimately, that longing, the way he has given voice to that longing, is the key to his political success. In beating the old petrostate drum, Chávez tapped into a rich vein in Venezuela's collective consciousness. Breaking the petrostate's dominance/submission social system is child's play compared to the monumental task of breaking the petrostate as an idea, as a collective understanding of the function of the state. And Chávez 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 Chávez articulated it brilliantly. With amazing vigor and charisma, he captured the volcanic anger they felt at the breakdown of the old model. Chávez became their voice. So they voted for him. What could be more natural?

There's just one minor inconvenience: the Chávez era has made the petrostate model even more unworkable than it was 4 years ago, much more unworkable. Oil production is in freefall. Chávez's catastrophic mismanagement of the oil industry has left the state in such an amazing fiscal mess that soon there may not be any petrodollars at all left to distribute.

Even before the oil strike got under way in December 2002, Chávez had done huge damage to the state's revenue stream. From the moment he took office, not only did he alienate, spy on, harrass and fire hundreds of the oil industry's best managers, he also made such unreasonable demands for cash from PDVSA that the company just didn't have enough money left in hand to even maintain its old capacity levels.

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 sophisticated methods are necessary to keep the black stuff flowing. To keep them working, you need to either re-inject the natural gas you get out of them, or inject steam into them. All of that costs money, so, as oil wells get older, you need to invest more and more money just to stay even in terms of production capacity. 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 Chávez 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 PDVSA'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 last year.

And now, with the oil strike, capacity is falling even faster, much faster. Nothing is worse for an oil well than to stay idle for weeks on end. They silt up, harden, lose pressure, get screwed up in all sorts of ways. The government's pigheaded refusal to sit around the table with the strikers and reach some sort of deal has led to a further, calamitous collapse in production capacity - it's down at least 400,000 b/d from pre-strike levels. The oil people I've talked to think capacity might settle at no more than 2.6 million b/d when all is said and done.

Instead of taking emergency steps to stop this disaster, Chávez has declared a "revolutionary offensive" against the strikers, firing over 12,400 of them - about a third of PDVSA's total payroll. He appears to have decided he'd rather have a much smaller, less lucrative company he can control at will than a larger, more lucrative company that ever places "buts" in the way of his megalomanic whims.

When the dust settle, the country will be able to produce 1.2 million b/d less than it could 4 years ago. To give you a notion of scale, that's about the size of Nigeria's entire industry, and Nigeria is considered a fairly important player in the world market.

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 on 3.8 million b/d, if its overbloated payroll was non-viable on 3.8 million b/d, then it's really, really, really unworkable on 2.6 million b/d. The retrenchment in public spending will necessarily be massive, and the likely social cost of those cuts will make Argentina's crisis last year pale in comparison.

caracaschronicles.blogspot.com By Francisco Toro

There’s one positive side to this whole Carlos Fernández incarceration hubbub: the foreign press is finally taking the gloves off. After months of not quite knowing how to deal with the crisis, of not being entirely sure whether to treat Chávez like a normal democratic president or an autocrat, the Fernández episode seems to have tipped the scales. It’s the Mugabization of Hugo Chávez in the court of world public opinion. It’s still far from complete, but now it’s definitely on the way.

Consider this remarkable story by Scott Wilson in the Washington Post. I’ve been friends with Scott for a long time and consider him one of the best journalists around. I understand the pressure he’s under – both from his editors and his personal sense of journalistic ethics – not to write any further than the facts will allow. Whatever, intimately, he might have thought or felt about Chávez, for a long time the facts were just too nebulous and contradictory for him to give Chávez the full Mugabe treatment. I had the feeling he understood, at a gut level, how dangerous Chávez was. But Scott doesn’t draw a paycheck to tell the world how his gut is feeling – his job is to tell the world what happened. And it hadn’t happened, yet.

Now it’s happened, and his treatment in the Post is absolutely brutal. I’ve never seen the government take it this hard in a reputable foreign news story before. I think a lot of foreign journalists were, in a sense, waiting for a big stink-up to pounce – and now the stink-up is here, the government's heavy autocratic character is in plain for all to see, and the pouncing has started.

Good.

Reuter's is just as harsh as the Post - they played that papaya quote for all its worth - and AP is just acerbic – I can’t think of a lead anywhere near as biting as this one in any AP story I've ever read out of Venezuela. The NYT is flying in David González tonight, and while I only know him superficially, he’s a fantastically talented reporter and can be expected to write some good stuff.

Is it the Full Mugabe yet? Not quite. But the treatment Chávez is getting now is far, far closer to it. My fear is that he’ll use the international media blackout that will come with the start of the war on Iraq for cover – people will be very nervous here the day the war starts. Specifically, it’s easy to foresee that he’ll move against the independent TV stations within minutes of the start of the war. Under normal circumstances – and the stories of the last few days bear this out – he’d be pilloried abroad for a stunt like that. But with the green lights streaking over the skies of Baghdad on CNN, who can tell?

www.msnbc.com Glenn Reynolds does get it:        Hugo Chavez of Venezuela — after failing in a coup attempt some years ago — was legitimately elected president of Venezuela. But many now consider him a dictator. Is that fair?                Well, yes. Many dictators were originally elected (look at Zimbabwe’s Robert Mugabe — whom few besides Jacques Chirac would deny is a dictator today — or Peru’s Alberto Fujimori) and, in fact, the original source of the term is with the Roman Dictator, an “elected magistrate” who gave dictators a bad name by abusing the powers of that office. Amusingly, though some on the left call President Bush a “dictator” they seem inclined to dispute the term’s application to Chavez, whose friendliness to Fidel Castro apparently establishes his democratic bona fides.                As far as I’m concerned, though, a dictator is as a dictator does, and by that standard Chavez is looking pretty dictatorial lately. According to reports in the New York Times, Chavez opponents are being assassinated:                Venezuela was still reeling today after the weekend killings of three dissident soldiers and a protester opposed to President Hugo Chávez, and the police and grieving relatives split over whether the killings were politically motivated.        According to police investigations, about 12 armed men kidnapped the four victims on Saturday night as they were leaving a protest. They were bound and gagged, and some were tortured before the gunmen executed them, the police said.                Meanwhile, according to an Associated Press report, other opposition leaders are being arrested by secret police. And even some of Chavez’s former allies have been subjected to abduction, rape and torture.                Partly because the war is distracting people, and partly because human-rights abuses by Friends of Fidel seem to inspire less indignation among many in the human-rights community, Chavez’s behavior isn’t getting the attention it probably deserves. But it’s being covered by bloggers. Two Venezuelan weblogs worth keeping tabs on are The Devil’s Excrement, by Miguel Octavio, and Caracas Chronicles, by a former New York Times stringer who quit his position so that he could report more extensively on his weblog.                If you follow the news from Venezuela, I think you’ll probably conclude that Chavez is, indeed, a dictator, one whose people have been demonstrating against him in numbers that dwarf the recent antiwar protests in the United States, but with far less media attention.

blogs.salon.com

Detailed analysis of the status of the Venezuelan Oil Industry (In Spanish) (big document) prepared by the Union of Oil workers Unapetrol and the Civil Assiciation "People of Oil" (Gente del Petroleo). Key facts:

-Production still below 1.5 million barrels a day. -It would take at least 6 to 8 weeks to supply internal gasoline market. -Only one refinery working at 60% capacity. -No natural gas to start petrochemical industry. -Security, health and enviromental accidents up a factor of 50 over pre-December levels. -12,500 people fired. (71% of Executives, 51% of professionals and technicians) -Country's cash flow to turn negative in May. -If fired  workers return in February, country's cash flow up by US$ 4.5 billion for the year.

blogs.salon.com (The Devil's Excrement) By Miguel Octavio [moctavio@bbo.com.ve]   I have received e-mails telling me I exaggerate when I say this has become a Dictatorship. Here are the facts that make it so:   ·          All independent powers, including the Attorney General, the People’ s Ombudsman, The Supreme Court and the Comptroller were hand-picked by a transition body with no Constitutional basis. All members of this so-called  “Little Congress” were chosen by Hugo Chavez directly. ·          Due to Chavez’ control of these powers, no suit against the Government, no investigation of the April and December assassinations or the more than 700 injured in marches and demonstrations has gotten anywhere. ·          Our right to have a referendum on any important national issue was denied when the Supreme Court suspended the consultative referendum for which 2 million signatures were gathered., in accordance with the Constitution. ·          In that same decision the Court suspended any elections until a new Electoral Commission is chosen. The opposition has the signatures for over 40 recall referenda of pro-Chavez Deputies and Governors, which can already take place. None of them can take place. This includes the recall referendum for Chavez himself which may take place in August. ·          The Chavez controlled National Assembly decides the election of a new Electoral Board. If they don’t do it, there can’t be any elections. Note: No recall referendum for 30 MVR Deputies implies Chavez retains control of the Assembly, how convenient, no? ·          The Government has fired over 12,500 workers of the oil company for a simple reason: They oppose the Government. ·          The strike has been called off by the opposition, but since close to 12,500 oil workers have been fired (36,000 out of 40,000 are not working) the country is producing less than half of its usual capacity of oil production. This is the real destruction of the economy taking place, the "revolution" is above the well-being of the people. ·          In a country where most things are imported, foreign currency trading was suspended on January 23d. Not a single dollar has been approved by the discretionary currency exchange Board that will from now on decide who gets foreign currency. Chavez himself has said those that stroke in December will receive no foreign currency. ·          The Government has had the military take over private property, confiscate products and sell them. ·          The Government has fixed the exchange rate at Bs. 1600 per US$ and fixed prices of two hundred items at levels when the currency was below Bs. 1400 per US$. ·          Government opens investigation of three largest opposition TV station, charging them using 1940 law for violations. If guilty they may be shutdown temporarily. ·          Given its slim majority in the Supreme Court (despite naming it!) Chavez controlled Assembly has introduced bill to increase the number of members of the Supreme Court from twenty to thirty. ·          The Chavez controlled Assembly has introduced a bill that would make it easy to shut down TV and radio stations and remove concessions. Reasons include “disrespect” for any Government official. ·          The Interamerican Human Rights Court has issued over one hundred precautionary measures to protect reporters.  None have been fulfilled by the Chavez administration. ·          Three dissenting military officers and two female friends were forcefully taken by twelve men and “disappeared”. Two days later four of them show up dead, one lady escapes, pro-Chavez activists attempt to kidnap her from the Hospital where she is recovering. They are detained, two hours later they are freed. Head of local police that had them in detention resigns. Without investigation the police say it is a crime of passion, not political. ·          The two most important opposition leaders have been charged with treason for leading the December strike. One is in jail, one is in hiding. The strike was held in order to pressure the Government to accept the consultative referendum that was suspended on a technicality. ·          The President of Venezuela says on nationwide TV that he was asked whether to proceed or not with the detentions (no separation of power!), that this gave him such a pleasure that he smiled and that he celebrated eating a home made dessert. All of this was said with sadistic pleasure. ·          A Deputy of the National Assembly, member of Chavez party says the list of detentions has 100 names in it.   What else do you need as proof, an election where Chavez gets 100% of the votes? Concentration camps? We already have assasinations, jailing of the opposition, no elections and dissapearances.   (Update: Today an additional 1780 workers were fired by PDVSA)