When riots broke out in Venezuela
on February 27, the government of-
fered explanations that were as numer-
ous as they were contradictory. The
governor of the state of Miranda
(which includes part of the capital,
Caracas) and the minister of defense
blamed “subversive elements.” The
secretary general of the ruling Demo-
cratic Action party (AD) insisted that
foreigners “have penetrated the slums
with a style of struggle which is not
typical of Venezuelans.” Carlos Lan-
der, acting president of the principal
union confederation and a leader of
AD, maintained that ordinary people
were not involved, only “loafers,
thieves and vagabonds who have never
worked in their lives.”
A more realistic analysis was pre-
sented by the country’s new president,
Carlos Andrds P6rez, who described
the disorders as “an action of the poor
against the rich.” Yet he also said the
riots were “not an action against the
government.” As proof, P6rez pointed
out that not one of AD’s headquarters
had been targeted by the rioters.
The number of deaths was offi-
cially set at 247 but reporters who vis-
ited Caracas’ central morgue gave
higher estimates. The press reported
that the violence had erupted in the
wake of the new government’s auster-
ity measures, including price increases
on basic goods and services, imple-
mented as part of an agreement with
the International Monetary Fund
(IMF). However, resentment in Vene-
zuela’s slums had been building for
some time, particularly in response to
the illegal hoarding of products by
merchants waiting for official authori-
zation to increase prices. Foods such
as spaghetti, sardines and corn flour,
basic staples in the diet of the poor,
disappeared from the shelves for
weeks. When government measures
increased the price of gasoline, reset
maximum interest rates and eliminated
cheap “preferential” dollars for cer-
tain basic imports (which in effect
amounted to a devaluation of the local
currency), the price of public transpor-
tation increased by as much as 100%,
far in excess of the government-ap-
proved hike of 30%.
The first reaction to the news of
higher bus fares was not violent. Com-
munity leaders-including those of
AD-participated in spontaneous but
peaceful marches in Caracas and else-
where. These protests quickly got out
of hand and commercial establish-
ments, especially grocery stores and
supermarkets, were ransacked. The
government’s effort to recuperate sto-
len goods and make mass arrests was
met with gunfire in slum dwellings
where, under normal circumstances,
neither police nor soldiers dare enter.
The riots came at a time of growing
popular discontent. In the last year
Venezuela has seen a sharp upsurge in
student and worker unrest, and a mili-
tary massacre at Amparo, a town on
the Colombian border, outraged many
throughout the country. The last time
that Venezuela witnessed such turmoil
was after the overthrow of dictator
Marcos P6rez Jim6nez in 1958. On that
occasion the organized Left played a
leadership role and the violence was
concentrated in Caracas. In contrast,
the recent disorders shook all major
urban areas and took everyone by sur-
prise, including the Left which has not
promoted armed actions in over a dec-
ade. Moreover, the behavior of the
military was in marked contrast to its
image as a “popular” and “non-elit-
ist” force. Witnesses saw soldiers
shoot people who were merely walk-
ing on the street or who happened to
look out their windows.
Six days later, the United States
and private banks sent a $450 million
bridge loan to tide the government
over until the IMF could approve loans
of $450 million, and $1.2 billion for
the rest of 1989. Other foreign lenders
quickly sent $600 million in short-term
financing until permanent loans could
be arranged. Michel Camdessus, presi-
dent of the IMF, wrote to President
P6rez, saying he was “profoundly
moved” by the many deaths that oc-
curred during the five days of rioting.
Nevertheless, he “confirmed that the
economic policies were well-con-
ceived; we back them and will con-
tinue to back them.”
Stable Democracy?
This sort of violence is not sup-
posed to happen in Venezuela, a coun-
try that regards itself as an exception
in Latin America due to its vaunted
democracy and economic prosperity.
REPORT ON THE AMERICAS
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Steve Ellner teaches economic history
at the Universidad de Oriente in
Puerto La Cruz, Venezuela.Following P6rez’s victory in the presi-
dential elections in December of last
year, some observers remarked that the
mandate to return Democratic Action
to power for another five years dem-
onstrated the solidity of the political
party system and the stability of the
nation. This belief that Venezuela is
different from its Latin neighbors, even
superior, has influenced and often mis-
guided government policy.
On the foreign debt, Pdrez’s prede-
cessor, Jaime Lusinchi (1984-89),
played down proposals to draw close
to other Third World debtors on
grounds that any association with them
would tarnish Venezuela’s image as a
“responsible payer.” Under Lusinchi,
Venezuela was the only Latin Ameri-
can nation to dutifully pay interest and
principle on its $35 billion foreign
debt. Such rigorous adherence to credi-
tors inevitably left its mark on the
population. In 1981, 22.5% of Vene-
zuelans lived in acute poverty. Just six
years later, that number was up to 54%.
The December election of the
populist Perez, whose campaign gen-
erated support among Venezuela’s
poor, was greeted with suspicion by
business and foreign creditors. Many
remember Perez for extending mas-
sive material support to the Sandinista
guerrillas during his first presidency
(1974-1979) and for his efforts to play
a leadership role in the Third World.
During the campaign, P6rez commit-
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ted himself to reversing Lusinchi’s
consistently pro-United States foreign
policy and to hardening Venezuela’s
position toward foreign creditors. He
pledged to limit payment on the debt
to 20% of the nation’s annual foreign
exchange earnings.
Under the guise of evenhanded-
ness, Perez also harshly criticized the
Sandinista government and the con-
frontational debt stance of Peru’s Alan
Garcia. PNrez’s talk of Latin American
solidarity is tempered by his adher-
ence to bilateral debt negotiations and
rejection of a Third World “debtors
club.” Under P6rez, Venezuela will
most likely promote international
meetings to discuss the problem, but
will not support collective negotiations
with the banks.
The occasional gap between
P6rez’s rhetoric and actions was dem-
onstrated by the austerity plan and
concurrent “letter of intention” which
his administration drew up with the
IMF. Over the years, P6rez had been a
harsh critic, referring to the IMF as
“the bomb that kills people, not prop-
erty; it does not kill with explosive
chemicals but with hunger.” Just prior
to the riots, members of the Perez
administration argued that the IMF-
recommended measures would not
produce the traumas that they have in
other Latin American nations due to
the basic soundness of the Venezuelan
economy. Even after the riots, P6rez
refused to reconsider his dealings with
the agency, commenting: “Going to
the IMF is not one option; it is the only
option for a country that has exhausted
its international reserves.”
Domestic Reform
Beyond the debt and foreign pol-
icy, perhaps the most far-reaching
change which P6rez promises to im-
plement is in the area of political re-
form. A blue-ribbon presidential com-
mission set up in 1984 advocated a
series of modifications in government
structure and electoral practices. Its
recommendations, which have re-
ceived widespread acclaim, include
election of state governors (who up to
now have been appointed by the presi-
dent) and nominal voting for congress
and municipal councils rather than se-
lection by party slates. P6rez supports
Causa R challenges the old Left
these proposals but he faces opposi-
tion from his own party machine.
A group of the president’s closest
followers has been particularly vocal
in support of applying the political re-
forms to the party itself, particularly
by organizing primary elections. The
most prominent member of this group
is national deputy Carlos Canache
Mata who is in the running for the
1993 presidential contest. Canache
believes that AD’s status as a multi-
class party was never meant to take in
economically powerful groups. If his
views were to prevail, a number of top
AD leaders who are part of the busi-
ness elite would be forced out of the
party. P6rez himself, however, is un-
likely to favor severing AD’s ties with
wealthy individuals.
P6rez takes power at a time when
the country’s political structures, es-
pecially of the old Left, are under pres-
sure from the grass-roots. Although a
majority of organized workers voted
for Pdrez, he will not have an easy
alliance with the labor movement. AD
has dominated the Venezuelan Con-
federation of Workers (CTV)-the
nation’s largest labor
organization-since its founding in
1947, never tolerating open challenges
to the party. But CTV president Juin
Jos6 Delpino broke with this tradition
during Lusinchi’s administration and
became one of the government’s
harshest critics. Even though AD-la-
9bor backed P6rez’s wing over that of
Lusinchi’s, the CTV is not about to go
back to the role of party handmaiden.
At the annually televised “CTV New
Year’s Message to the Nation,” Delp-
ino declared, “We defend the inde-
pendence and autonomy of the labor
movement vis-a-vis the bosses, politi-
cal parties, the government and reli-
gious denominations.”
One sign that times are slowly
changing in the labor movement is the
determination of the nation’s largest
union-the steelworkers of the Guay-
ana region-to resist outside interfer-
ence. In 1981 their union was taken
over by affiliates of the CTV, and its
leaders were thrown out. These be-
longed to “Causa R,” a small leftist
party which has harshly criticized the
rest of the Left for placing ideology
ahead of concrete worker demands.
Last year the CTV finally sponsored
new elections which Causa R won, in
spite of the inclusion of upper echelon
employees in the roster of voters.
Venezuela’s enduring two-party
system is also under revision, as was
evident in the recent national elections.
Although between them P6rez and his
principal rival from the Social Chris-
tian Party (COPEI) polled 96% of the
vote, AD and COPEI’s combined con-
gressional vote declined to 75%. Much
of the remaining vote went to the Left,
with the Movement Toward Socialism
(MAS) drawing 10%. Causa R ran the
former head of the steelworkers union,
Andr6s Veldsquez, as presidential can-
didate and drew 13% in the Guayana
region. MAS’ and Causa R’s strong
showing at the state level augurs well
for the Left’s chances in the guberna-
torial elections later this year.
Perhaps the most telling indication
of popular discontent with the nation’s
political system is that 22% of the elec-
torate did not vote at all despite man-
datory voting laws. Up until now the
abstention rate has always been under
12%, even in 1963 when the Left car-
ried out armed actions in support of an
electoral boycott.
Bolivar’s Ideal
All Venezuelans venerate Sim6n
Bolivar, the country’s “Liberator,”
but many ignore his essential argument
for Latin American unity in the face of
the long-term danger posed by U.S.
expansionism. In the December elec-
tions, P6rez’s principal rival catered to
provincial nationalism by harping on
the Colombian threat to Venezuelan
territorial claims, while he failed to
question U.S. policy in Central Amer-
ica. In contrast, P6rez’s rhetoric is an
affirmation of the holivariano ideal of
Latin American solidarity and a rejec-
tion of the view that Venezuela is in a
special category unto itself.
P6rez’s most fervent detractors say
he is a demagogue who cannot deliver
on his campaign promises, especially
since resources are scarcer and prob-
lems are greater than during his first
administration. Venezuela’s oil boom
period ended in 1986, shortly after
P6rez left office, and was already de-
clining before then. Perhaps the most
stark evidence of the persistence of
dire poverty and deplorable health fa-
cilities is the recent outbreak of ma-
laria, reaching nearly epidemic pro-
portions in certain areas, decades after
the government announced that the
scourge had been forever eradicated.
With an economy in decline, sec-
tors of the Left suspicious of him and a
Republican administration in Wash-
ington hostile to Third World asser-
tions of autonomy and schemes of in-
ternational cooperation, President
P6rez will have difficulty translating
his militant slogans into effective pro-
grams. His strategy of avoiding con-
flict with foreign creditors is a disap-
pointment to many voters who be-
lieved he would follow a more mili-
tant course. And, as was vividly dem-
onstrated by the people in the barrios
during the week of February 27, Vene-
zuelans are no longer satisfied with
hollow rhetoric.
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