Venezuela: 1950-1980

Two party system: Democratic Action (AD, center-left) and COPEI (center-right) High economic growth; political stability Partyarchy: parties dominate political life, civil society, Patronage: cultivating support through jobs, goods, services, subsidies, etc..

Governability was promoted in many ways:

Parties were broadly representative of society (labor, peasants, etc.) Parties controlled civil society organizations Parties practiced consensus-building (policies made in consultation) Good relations with military and business (via patronage)

1980s: decline begins

Debt crisis 1980s: 29% decline in per capita income. Returning the country to 1953 levels! President Perez installs economic shock program: 8% GDP contraction in 1989 Caracazo: rioting in the streets of Caracas, looting of major cities

Why the decline?

Popular reasoning: corruption Truth:
massive overspending in the 70s = debt Decline in the price of oil = lower economic growth Lack of economic reforms; non-diversified economy

Why was this possible?

Courts, bureaucracy, universities, etc.. politicized along party lines. Complicity b/w AD and COPEI (the establishment); civil society co-opted,

In sum: no checks and balances.

Why>?
No reform of the political system, to deepen democracy Citizens grew distant from the establishment: abstention 3% in 1973; 39% in 1993! The few independent organizations become anti-party, anti-establishment. 1992: Chavez tries a coup detat; hes jailed

Why the parties lost support

1. Economic decline
Per capita oil revenues from $1700 in 1981 to $382 in 1992

2. Popular perceptions of the decline

A rich country made poor by corruption Political parties are to blame: stole oil wealth

3. Incapacity of the AD and COPEI to adapt to new realities

Highly disciplined and hierarchical No new leadership, no new ideas or policies

Why Chavez?
1. Why military plots to overthrow govt in 1992?
Movimiento Bolivariano Revolucionario founded in 1983 Goals: to end impunity, restore prosperity, redistribute wealth Movimiento saw itself as the people in uniform

Why Chavez?
Had gained publicity in 2-minute TV address after failed coup Skillful public speaker, message that resonates strongly with many Venezuelans

Myth #1: Venezuela is rich

Oil only contributes $200 per person to govt revenues 68% of people under poverty line Economic performance: one of worst in Latin America in last 20 years Lack of human and physical capital Why is the myth is politically explosive? It fosters populism, easy, magic solutions

Myth # 2: corruption is THE problem

Not the only problem and not the most important Corruption is a not a cause but a symptom of problems: of partyarchy and flawed democracy, co-opted civil society Development is about institutions and policies: reforms are the key! Populist demagoguery wins over reformminded agendas

1988 election
Carlos Andres Perez elected (AD)
Enacts a IMF-type shock therapy program: cutting govt spending, etc.. Result: Caracazomassive student protests

Chavez attempts coup detat, fails and is jailed. Perez impeached in 1992

Venezuela in 1990s
Political vacuum; 60% of people under poverty line 1998 presidential elections: AD and COPEI 11% of vote Populist Hugo Chavez: 56% of vote His message: down with the corrupt oligarchy; we need to save Venezuela class-based politics; his message (though simplistic) struck a cord!!

Chavez
1998: Elected with a strong mandate: 56% of vote 1999: calls for referendum on Constituent Assembly July 99: legislative elections held (Chavez wins 90% of seats) Nov. 99: new constitution drafted Constitution popularly ratified in Dec.

Democratic Legitimacy
1. Popular democracy:
based on popular sovereignty

2. Liberal democracy (true democracy):

assumes majorities cannot be trusted; institutions needed to limit govts authority

Majorities can be tyrannical!

Checks and balances provide insurance against possible abuse of power

1999 Constituent Assembly

1961 Venezuelan Constitution: standard in Latin America, surely not the cause of corruption and economic decline. Why did Chavez call for a Constituent Assembly (ANC)?
Not because 1961 constitution was poorly designed 1961 Constitution allowed for changes Reason: To change the makeup of institutions controlled by opposition; to accumulate power in his hands Pro-Chavez Aliance (Polo) won 122 out of 131 seats in new ANC!!

Political parties
COPEI becomes almost extinct AD internally fractured from its loses Traditional politicians leave politics or run as independents New taxi parties appear: IRENE (Irene Saez), Sala Romer (Projecto Venezuela) Chavezs party: Movimiento V Republica Conclusion: Venezuelas party system is extremely weak, fails in its basic functions

The Executive
Democracy requires an executive that
1. faithfully executes the law 2. maintains autonomy from unelected actors 3. remains accountable to legislature and judiciary

Chavez based his legitimacy from 1 and 2, but not 3. Expansion of the role of the army
Appointment to high govt jobs; increased budget New constitution grants military role over public order, economic development, some police activities

The legislature
New 1999 Constituent Assembly declared itself legally all-powerful
Not bound by 1961 Constitution or existing institutions Opposition: charges of a coup detat ANC closed down Congress and dissolved Supreme Court Members to all state institutions appointed by an Assembly that is 95% Chavista.

The Judiciary
New Supreme Tribunal of Justice created
Hardly independent of executive power Example: STJ dismissals of well-documented charges of corruption against Chavezs cronies.

Justice system stacked with Chavistas

By 2000: 294 judges suspended, 47 fired, and 101 new judges appointed

Previous judges corrupt, but new judges clearly partisan

Other measures to undermine opposition

State financing for political parties cut Largest labor union intervened, another chavista union created National Electoral Council is not independent: made up of chavistas New law against freedom of speech Government gives public jobs only to chavistas Govt consents to corruption by chavista businesses

Democracy the Chavez way

Aims for participatory democracy Denies the opposition legitimacy: all belong to the corrupt oligarchy Radio Television Caracas closed Creation of Bolivarian circles: have evolved into paramilitary forces to harass opposition

 Undermining of the rule of law Example 1: Boliarchy, major corruption in his circle. Example 2: new Caracas mayor (won by opposition)
Mayors budget massively cut Denied entry into mayors office Relegated to minor status Denied legitimacy: labeled corrupt, etc.

Venezuela a democracy?
Nowadays, it fulfills the definition of a hybrid regime: electoral authoritarianism
Institutional faade of democracy, but authoritarian governance Absence of a level playing field for opposition No horizontal accountability (no independent judiciary and legislature) Steady concentration of power in hands of president through: Co-optation, bribery, subtle forms of persecution

Opposition against Chavez

Fragmented, disorganized Main tactics against Chavez: 1. Nation-wide strike 2. Coup detat of 2002 Had the implicit support of the US 3. Recall Referendum of 2004
Chavez creates his social missions as a response

4. Boycott of 2006 parliamentary elections All of these tactics failed!

Economic performance under Chavez

Between 1998-2003:
Economy (GDP) down 20% Per capita income down 27% Unemployment up from: 14 to 18% One million people moved from poverty to extreme poverty

Why?
Political instability and economic policy erratic FDI absent; capital flight Property rights not ensured (=no new investment)

Economic performance under Chavez: not good

Negative econ growth Increased poverty and inequality Why is he still popular?
Main reason: Gives a voice to the voiceless (poor) Strikes a cord with popular conceptions Clientelistic policies (basic health care and education in poor neighborhoods) Trump issues: border disputes with Guyana, conflict with Colombia Increased oil prices allows for patronage

Indefinite reelection referendum

Rejected by popular vote in Dec 2008
First electoral defeat for Chavez Abstention high = disenchantment

Chavez raised the stakes, tried again

Increased effort to mobilize his followers Increased clientelism

Approved by another popular vote in 2009

Growing Domestic problems

1. Rising crime and public insecurity 2. high inflation 3. shortage of some basic goods
Why? Price controls (incentives for lower supply) 4. Massive devaluation of the currency 50% devaluation! Official exchange rate 4.30 bolivares / $ Market: 7 bolivares / $ Consequence: more inflation!

 5. Price of oil has declined

Economic expansion was based on increased in public spending .this is not sustainable After years of oil-fueled partying.the hangover has begun. 6. The non-oil sectors of the economy have virtually disappeared.
Mono-export economy

Economy contracted by 3% in 2009

Defections from his ruling coalition

Vice-president resigned Labor minister resigned Defense minister resigned Issues:
growing authoritarianism Presence of Cubans in security apparatus

Chavezs Foreign Policy

Strong alliance with Cuba Provides Cuba with oil in exchange for Cuban doctors Strong anti-US rhetoric Calling Bush the devil at UN Rejects free trade agreements with US But Venezuela remains a main oil supplier to US To buy influence: provides cheap oil to Central America, Caribbean Strong alliances with Ecuador, Bolivia, Nicaragua: all led be left-wing presidents

Foreign policy
Problems with Colombia
Laptop of FARC commander Raul Reyes
Venezuelan financing of FARC Links with the guerilla group Laptop content verified by Interpol

Strong links with authoritarian countries

Putins Russia Iran Belorussia