Venezuela’s Referendum Resolves Leadership Crisis

• The overwhelming turnout of Venezuelans on August 15 reaffirms the country’s democratic process, while providing President Hugo Chávez with a reinvigorated populist mandate for his social spending programs.

• The opposition parties’ claims of fraud have seriously undermined its own credibility and democratic credentials, as both the National Elections Council and impartial international observers have upheld Chávez’ recall victory.

• An incoherent and self-absorbed policy agenda that had failed to address lower class needs fatally weakened the opposition’s political platform to justify the recall of Venezuela’s populist president.

• President Chávez’ referendum victory strengthens his welfare strategy that is dependent upon Venezuela’s continued economic bonanza resulting from a booming oil market.

• Venezuela’s politicized society must overcome deep-rooted social issues, curb its current political infighting and provide sustainable solutions for the country’s socio-economic problems.

In a reaffirmation of Latin American democracy, the Venezuelan populace turned out en masse on August 15 in a contentious nation-wide referendum to decide whether to recall President Hugo Chávez from office. From the early hours of the morning, people lined the streets, awaiting the opportunity to determine the fate of the country’s populist president whose confrontational leadership style has won him both adoration and hatred within Venezuela’s polarized society. His victory, however, has been marred by repeated calls of electoral fraud from the middle-class opposition that sees the leftist president as an autocrat bent on molding Venezuela into a Cuban-style communist state. While certain irregularities have been noted, both the Organization of American States (OAS) and the Carter Center have categorically endorsed Chávez’ victory, calling upon all Venezuelans “to accept the results and work together for the future.” By failing to accept the ruling of both the National Elections Council and international observers, Chávez’ critics have shown themselves to be a disloyal political opposition as they continue to flout Venezuela’s democratic institutions and undermine the nation’s domestic stability. These desperate antics will considerably damage the opposition’s prestige and standing for the foreseeable future.

After his decisive referendum victory reaffirmed his populist mandate, President Chávez must now seek to address deep-seated concerns over his autocratic governing style, while further expanding the increasingly popular social spending programs. In the coming months, both sides of the country’s political spectrum will be challenged to promote an environment of cooperation and improve the welfare of the Venezuelan populace. This policy will involve the country’s oil revenue being spent on, among other things, the diversification of the economy for the first time in the nation’s history. Chávez has already announced that this will be his intention, while the opposition has remained uncharacteristically silent on the subject.

The Opposition’s Defiance of Democracy

By vehemently disputing Chávez’ August 15 victory, Venezuela’s political opposition has once again refused to voice its discontent with government policy through legal means. Such anti-social practices originated even before the unsuccessful April 2002 opposition-led coup that dissolved the country’s congress and resulted in the deaths of activists from both sides of the political spectrum. Despite $4 million of covert Washington aid, the opposition could not sustain its anti-Chávez movement because its traditionally pro-business policies had catered to elite interests and ignored the needs of the country’s impoverished majority. Due to these policies, Chávez was returned to office after Venezuela’s lower class took to the streets brandishing machetes and calling for the reinstatement of their populist leader.

The 2004 referendum reaffirmed this support as 58% of Venezuelan voters chose to retain President Chávez after a bruising election campaign. This victory, however, has incited claims of electoral fraud by the opposition, an unsubstantiated charge that has elicited international ridicule as it has not been credibly proven. “We categorically and absolutely reject these results,” said Henry Ramos Allup, leader of the Democratic Coordinator coalition of opposition parties. “The National Elections Council has committed a gigantic fraud.” Such claims are based upon the results of an opposition endorsed exit poll which contends that Chávez was recalled by a 60% majority. This allegation is contradicted by both the OAS and the Carter Center and is further undermined by the role of the civic organization Súmate in the exit polling. This partisan group helped organize the August 15 referendum and has obtained funding from the National Endowment for Democracy, a Washington-based organization that supports right-wing programs throughout Latin America and receives substantial public funds from the U.S. Congress.

Washington and the Opposition

The link between opposition parties and Washington should not come as a surprise. Since Chávez took office in 1999, the White House has consistently attempted to undermine the populist leader by claiming that his social spending programs have increased economic and political instability within Venezuela. Even after Chávez’ August 15 landslide victory, the State Department was slow to endorse his improved electoral mandate and has repeatedly called for Caracas to answer the opposition’s claims of widespread electoral fraud. In an August 17 statement, Deputy State Department spokesman Adam Ereli explained, “there are issues related to [voting] irregularities… We call on the National Electoral Council to allow a transparent audit.” While Washington has supported a review of the voting procedures, the increasingly desperate opposition has rejected the electoral inspection because “the results of this audit cannot be considered valid to satisfy the opposition’s demands.” Even after such an audit was staged, and the results confirmed, the opposition has continued to categorically deny its electoral defeat.

Failure to Create a Viable Political Platform

This blatant denial of President Chávez’ universally acknowledged electoral victory is another alarming sign that the opposition will use any means necessary to acquire political power and oust the populist president. After the unsuccessful 2002 coup and the subsequent costly opposition-led national strikes designed to undermine Venezuela’s economic base, Chávez’ critics failed through the referendum to democratically recall the populist president. This electoral defeat stems in large part from the opposition’s class-biased policies that have not addressed the nation’s historic welfare deficiencies. Unlike Chávez’ popular social “missions,” which include adult literacy programs, subsidized food campaigns and low cost housing initiatives, the opposition continues to stress a return to the free trade policies of the pre-Chávez era. Also, the opposition has had no answer to the 11,000 health workers sent by Cuba to provide free medical services to impoverished districts. The appreciation resulting from this effort may have been the single most important factor that guaranteed Chávez’ recall victory. The opposition’s unwavering support of the Free Trade Area of the Americas also precluded it from galvanizing sufficient support among the lower class, which was traditionally neglected by both the Acción Democrática and the Christian Democratic political parties which had dominated the corrupt fourth Venezuelan Republic.

After losing the referendum, the Venezuelan opposition must recognize that its defeat was not caused by electoral tampering, but by its own failures to produce a viable alternative political platform. Its consistent attempts to oust the democratically-elected president have failed because Venezuela’s poor do not believe that the opposition will better address their socio-economic needs. Until Chávez’ critics realize these policy deficiencies, Venezuela’s majority will continue to support the country’s leader.

Chávez’ New Political Mandate

While the opposition was weakened by the August 15 referendum, President Chávez’ position has been strengthened through the electoral process that saw an unprecedented number of Venezuelans participate in the nation-wide plebiscite. Such backing could not have come at a better time for the populist politician who has been beset by persistent criticisms of his leadership style since assuming office in 1999. Chávez has garnered loyal support from the nation’s lower class through his attempts to redress the socio-economic gap that has left Venezuelan society increasingly polarized. His populist “revolution,” however, has been criticized by those who see his redistributive policies and anti-imperialist rhetoric as the first step towards a communist state. While Chávez’ reforms have raised eyebrows both in Venezuela and abroad, the president’s leftist programs should be considered more as nationalist initiatives than reflections of now obsolete communist doctrines. Chávez is seen as a beacon of hope by Venezuela’s destitute citizenry who see him as the first politician to truly address their social needs. Vice-President Vicente Rangel recently stated that the government “will be more audacious, more effective [in designing] programs destined to benefit the country’s poor majority.”

The Venezuelan president, however, must also continue to address concerns over his autocratic leadership style. The Chávez-controlled congress, for example, has padded the Supreme Court with an additional 12 loyalist judges to protect the government from dissenting voices. Although the August 15 vote has fortified Chávez’ populist position, this mandate should not be used to weaken Venezuela’s civil society. Recent attempts to punish opposition media outlets can only undermine Caracas’ credibility and strengthen Washington’s surly attitude toward Chávez. Opposition accusations that the populist leader is an autocratic demagogue, however, appear to be mere adversarial rhetoric, as the August 15 referendum illustrated that the Chávez administration was willing to participate wholeheartedly in the democratic process.

Social Programs Key to Chávez Victory

Although Chávez enjoys widespread electoral support for his social spending policies, his critics assert that these projects have been a self-interested attempt to placate his lower class constituency which previously had become disenchanted by the president’s failure to implement his populist campaign pledges. Such welfare programs, however, were economically unsustainable until Venezuela was able to cash in on inflated global oil prices. As the world’s fifth largest oil exporter, Venezuela has benefited from a financial windfall which has allowed Caracas to finally implement almost $2 billion in social spending. Fears exist, however, that the government’s current ability to absorb the costs of these welfare programs will prove to be temporary, enduring only as long as the current oil boom, which itself is open to daily fluctuations. Shortly after the referendum’s result was announced, oil prices fell from their record high as international stock exchanges reacted favorably to Chávez’ victory because the populist leader is perceived as a stabilizing force in the socially divided, but economically significant, South American country.

To maintain his welfare agenda, Chávez must consolidate Venezuela’s economic position by attracting international investment and strengthening domestic growth. Recent contracts with ChevronTexaco and ExxonMobil have illustrated to the global community that Caracas is committed to improving its relationship with foreign businesses. The Venezuelan government must continue to foster such connections if it is to overcome criticisms concerning Chávez’ redistributive policies.

The Road Ahead

The August 15 referendum has provided Venezuela with an opportunity to transcend its polarized past and reconcile its historically divided political factions. Through its noteworthy participation in the democratic process, the majority of Venezuela’s populace has sent a message to both President Chávez and the opposition that political infighting must be put aside to improve the welfare of all Venezuelans. Unfortunately, post-referendum politicking already appears to be undermining any attempt to resolve the differences among the nation’s divided population. The opposition’s unwillingness to accept the internationally endorsed referendum result will not only hinder its own political future, but will also endanger Venezuela’s socio-economic development as investors become wary of the country’s continued instability. In turn, President Chávez’ controversial policies have incorporated both much-needed social spending and overtly autocratic leadership practices into an overall strategy that has further split the nation. The answer to Venezuela’s long-standing problems will not be found through protracted political struggles, but instead through a concerted attempt to reconcile the country’s polarized society.

This analysis was prepared by Mark Scott, COHA Research Associate

August 25, 2004

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