Bloomberg News

Hugo Chávez, R.I.P.: He Empowered the Poor and Gutted Venezuela

March 05, 2013

March 5 (Bloomberg BusinessWeek) -- Even before his death, Hugo Chávez had joined Fidel Castro and Ernesto “Che” Guevara in the pantheon of Latin American leaders who enjoy instant global recognition. And, like Castro and Guevara, Chávez is more than controversial. He is the subject of deep admiration that easily morphs into passionate worship, and antagonism that often mutates into equally intense hatred. Chávez, 58, died Tuesday, after two years of cancer treatments, according to Venezuelan Vice President Nicolás Maduro.

Inevitably, his legacy will be as hard to assess objectively as that of all other deeply polarizing leaders—from Mao to Perón. Nonetheless, even if Chávez’s deeds will be the fodder of endless debate, there are some incontrovertible aspects of his legacy.

The Good Chávez’s most enduring and positive legacy is his shattering of Venezuela’s peaceful coexistence with poverty, inequality, and social exclusion. He was not the first political leader who placed the poor at the center of the national conversation. Nor was he the first to use a spike in oil revenue to help the poor. But none of his predecessors did it so aggressively and with such a passionate sense of urgency as Chávez did. And no one was more successful in planting this priority into the nation’s psyche and even exporting it to neighboring countries and beyond. Moreover, his ability to make the poor feel that one of them was in charge has no precedent.

Another positive aspect of his legacy is that he ended the widespread political indifference and apathy nurtured over decades by a system dominated by decaying and out-of-touch political parties. The political awakening of the nation sparked by Chávez has engulfed people in the barrios, workers, university students, the middle class, and, unfortunately, even the military. And here is where Chávez’s negative legacy begins.

The Bad After 14 years in power, Chávez did not leave the nation a stronger democracy or a more prosperous economy. This despite his constant reminders that he had finally empowered the long-excluded poor and the fact that he presided over the longest and most exuberant increase in oil revenue in Venezuela’s history.

Chávez and his supporters claim that during his tenure 15 national elections and referenda took place and that his social programs promoted participation and “direct” or “radical democracy.” Yet, as Scott Mainwaring, a respected U.S. academic has noted, democracy requires “free and fair elections for the executive and legislature, nearly universal adult enfranchisement in the contemporary period, the protection of political rights and civil liberties, and civilian control of the military. The Chávez regime falls far short on the first and third of these defining characteristics of democracy. The electoral playing field is highly skewed, and respect for opposition rights has eroded seriously. The military is much more politicized and more involved in politics than it was before Chávez.”

In fact, President Chávez was a pioneer and one of the most adroit practitioners of a political strategy that became common after the Cold War in many countries that political scientists call competitive authoritarian regimes. These are regimes where leaders gain power through democratic elections and then change the constitution and other laws to weaken checks and balances on the executive, thus ensuring the regime’s continuity and its almost total autonomy while still retaining a patina of democratic legitimacy. It is not accidental that Chávez was the longest-serving head of state in the Americas.

The other paradoxical—and bad—legacy of Hugo Chávez is an economy in shambles. It is paradoxical because his term in office coincided with a boom in commodity prices and the presence of an international financial system flush with cash and willing to lend to countries like Venezuela. In addition, the president was free to adopt any economic policy he chose without any domestic or international constraints or institutional limitations. Yet, at the time of his death, few other countries had the economic distortions that besieged Venezuela.

It has one of the world’s largest fiscal deficits, highest inflation rates, worst misalignment of the exchange rate, fastest-growing debt, and one of the most precipitous drops in productive capacity—including that of the critical oil sector. Moreover, during the Chávez era the nation fell to the bottom of the rankings that measure international competitiveness, ease of doing business, or attractiveness to foreign investors, while rising to the top of the list of the world’s most corrupt countries. The latter is another paradox of a leader whose rise to power rested on the promise to stamp out corruption and crush the oligarchy. The Bolivarian bourgeoisie—the boliburgueses , as Venezuelans call the new oligarchy formed by close allies of the regime’s leaders, their families, and friends—have amassed enormous wealth through corrupt deals with the government. This, too, is part of the unfortunate legacy Chávez has left.

The Ugly President Chávez leaves a fiercely polarized society. While social divisions always existed, Chávez’s brand of politics depended too much on stoking resentment, rage, and revenge to levels previously unknown. It will take a long time and immense effort to heal the wounds left by the massive doses of social conflict that the president promoted and on which he thrived.

Another ugly facet of Chávez’s tenure is that under his watch Venezuela became one of the world’s most murderous countries. Kabul or Baghdad is safer than Caracas, where homicides and kidnappings have become part of daily life. The country is also considered by international law enforcement agencies as a haven for counterfeiters, money launderers, and traffickers in persons, weapons, and, of course, drugs. According to the United Nations, Venezuela has become the main supplier of drugs to Europe. The U.S. Treasury has named eight high-ranking members of the Chávez government, including the former head of intelligence and the minister of defense, as drug kingpins.

Through it all Chávez was uncharacteristically silent and passive. His complacency as he watched his nation fall into a vortex of murder and criminality will be one of the most ugly and unforgivable aspects of his years in power.

The Missed Opportunity The Venezuelan people gave Chávez a political blank check and thanks to the prolonged boom in oil prices he also had a financial blank check. Few other heads of state had the combination of vast popular support and immense financial resources enjoyed by Chávez for 14 years. His total control of all the levers of power ensured that he could do whatever he wanted. And he did. From changing the name of the country to changing its flag to imposing a new and unique time zone on his nation. And much more. What he did not do was leave the country better off than when he became president. Hugo Chávez deserves to be remembered as a missed opportunity.


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