Venezuela Muscles Out a Strongman


Hugo Chávez's "peaceful revolution" ended in a bloodbath. Chávez, a onetime coup leader who was elected President of Venezuela in a landslide election three years ago, was forced to resign in the early hours of Apr. 12, following street riots that left 20 people dead and as many as 100 wounded. In what seems to be emerging as a pattern in Latin America, a region that has seen more than its share of military regimes, Venezuela's top brass played a key role in forcing out the increasingly unpopular Chávez before quickly handing over power to civilian authorities.

The head of the country's largest business federation, Pedro Carmona Estanga, was named to head a transitional government made up of representatives of various sectors until presidential elections are held, possibly in December. "The path of investment and jobs is the way to lead Venezuelans out of poverty," Carmona said on television as he accepted the post.

FREE-MARKET FOE. The appointment of Carmona, an economist who is president of chemical company Venoco, appears to signal Venezuela's return to a more liberal economic course. In particular, analysts are hoping for more favorable policies toward private investment in the country's all-important oil sector, which Chávez had actively discouraged while pushing for higher petroleum prices. Oil accounts for one-third of Venezuela's gross domestic product and about 80% of exports. "If someone comes in that is friendlier to...development, that could have a very positive impact," says Kyle Cooper, an oil analyst at Salomon Smith Barney in Houston.

The mercurial Chávez, 47, had gained international attention for his aversion to free-market philosophies and for often speaking out against the developed world, in particular the U.S. A cashiered lieutenant-colonel who, in 1992, led a failed coup against then-President Carlos Andres Pérez, Chávez took office in February, 1999, after winning a landslide election. Chávez's so-called peaceful revolution succeeded in marginalizing much of the country's discredited political elite, but it failed to deliver prosperity to the estimated 80% of Venezuelans who live in poverty.

What's more, Chávez's authoritarian style and vitriolic rhetoric alienated many sectors of Venezuelan society, including the Catholic Church, the media, business, and labor unions, as well as sectors of the army, while dividing the population along class lines. In the eyes of many poor and working-class people, the paratrooper turned President was a messiah (Chávez likened himself to the Latin American independence hero Simón Bolívar). But in the view of middle-class professionals and intellectuals, he was a new incarnation of Cuba's Fidel Castro.

SADDAM AND CASTRO. With Chávez out of the picture, Venezuela will likely resume its role as one of Washington's most dependable political allies in Latin America. The South American country is the third-largest oil supplier to the U.S. Yet Chávez had often irritated Washington by consorting with the likes of Saddam Hussein and Castro, campaigning for higher oil prices through the Organization of Petroleum Exporting Countries, and preaching an end to U.S. "hegemony" around the world.

"Relations with Washington can only improve as people who have spent half their lives attacking the U.S. are now discredited or gone," says Antonio Herrera-Vaillant, vice-president of the Venezuelan-American Chamber of Commerce in Caracas.

Chávez's defeat will resonate across Latin America, whose impoverished masses have often fallen for populist strongmen. "This is a lesson for all of Latin America not to believe in messiahs," said Vilma Petrash, professor of international relations at Simón Bolívar University in Caracas.

Opposition to Chávez had been building since last November, when he adopted by decree a set of 49 laws that affected many business interests. The laws bolstered government control over land, hydrocarbons, and commercial fishing. As a result, business became a leading voice in the growing clamor to oust Chávez. Carmona's organization, Fedecamaras, played a key role in organizing street marches, along with a Dec. 10 general strike.

HORRIFIC SCENES. The sequence of events that led to Chávez's downfall began in late February at state-run oil monopoly Petroleos de Venezuela (PDVSA). The outfit's upper management protested Chávez's promotion of five middle managers to the company's board of directors, alleging the appointments were based on political favoritism and that they violated the company's merit-based promotion system. To vent their anger, white-collar employees began a strike on Apr. 5 that disrupted operations at key oil installations, including refineries and tanker terminals. Business and labor unions proceeded to call another general strike on Apr. 9 and 10, followed by a massive march to demand Chávez's resignation.

In the late afternoon of Apr. 11, the National Guard began to lob tear gas into the crowd as protesters neared the presidential palace in downtown Caracas. Chávez preempted live television coverage of the unfolding violence with a rambling, 90-minute speech, in which he blamed the media for inciting the mayhem and announced a commission to mediate the PDVSA conflict. Following the address, two television stations were permitted to resume broadcasting. The scenes were of bleeding bodies on the ground, hospital emergency rooms filled with victims, and Chávez's supporters firing guns from an overpass at demonstrators below.

Events swiftly unfolded in the hours that followed as the different branches of the military publicly renounced support for the President. Around 3 a.m. on Friday, the military high command asked him to resign, said National Guard Gen. Luis Albert Camacho. "He requested that he be permitted to go abroad, but he was detained," he said. Reports are that Chávez intended to travel to Cuba and join his ally Castro. Instead, he now sits imprisoned at a Caracas army base. And while Venezuela's political and economic future remains uncertain, there is hope in the business community that Chávez's ouster will put the nation back on the track to free-market reform. By Christina Hoag in Caracas


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