The Chavez experiment heads towards to the failure it was frankly doomed towards the start. It is quite likely that having torn out of the guts of most of his opposition in his more then a decade long rule that he will win 2012 however.Getting to Jesus Cerezo's neighborhood in the hilltop barrio of El Valle, one of the poorest areas in Caracas, requires a four-wheel-drive vehicle capable of navigating the steep, narrow curves up the side of the hill, past piles of garbage and tire-eating potholes.
But home offers no sigh of relief for Mr. Cerezo, the owner of a small grocery store. He works behind a locked gate out of fear of robbery and general violence. And, he says, he knows who's to blame: Venezuela President Hugo Chávez.
"Despite all their promises, the government is not attacking the problems at their origin," he says.
Prior to the 2006 presidential elections in Venezuela, El Valle was overflowing with Venezuelans who backed Mr. Chávez. Residents spoke with a sense of hope, of their new "missions": literacy programs, health clinics, and low-priced food. Chávez won that election in a landslide.
Today, his support is still strong here, as well as in many places throughout the country, especially marginalized areas. But many of the benefits from the social missions are being overshadowed by the larger problems afflicting Venezuelan society now, such as crime and inflation. And Chávez's support ahead of crucial legislative elections in September is waning.
"Chávez still has an important level of popularity," says José Vicente Carrasquero, a political analyst at the Central University of Venezuela in Caracas. But there are significant numbers of people who "feel Chávez does not have the capacity to resolve the problems in the country. The fervor for him has diminished. It has been 11 years, and people still have the same problems."
Overreliance on oil revenues
In creating his brand of "21st-century socialism," which is redistributing wealth to the poor from the "oligarchy," as Chávez dubs the elite, the president has relied on oil revenues, and he has reduced poverty and illiteracy.
But as oil prices dropped and the world sank into financial crisis, Chávez's problems mounted. In local elections in 2008, his party lost many top posts throughout the country. Perhaps most stunning was his party's mayoral candidate's loss to the opposition in a Caracas municipality that includes the Petare slum, a traditional Chávez stronghold. Residents cited crime and inflation as their No. 1 concerns.
The economy shrank by 3.3 percent last year, and this year it is forecast to do the same. That makes it the only economy in Latin America expected to contract. Inflation hovers at around 30 percent. And Chávez has contended with a drought-induced electricity crisis, which for six months meant forced blackouts throughout the country.
Chávez responded to the economic woes by devaluing the currency this year. He has carried out a series of expropriations, too, the most recent a supermarket chain, after a string of nationalizations, including everything from the steel to telecommunication industries. All of this has paralyzed the private sector.
"They are only investing enough to maintain operations," says Asdrubal Oliveros, an economist in Caracas. "Any business feels it can be the next victim, so it will not make big investments."
Chávez has dismissed talk that his socialist project, known as "the process," is at risk. "The economy that's falling in Venezuela is the capitalist economy," Chávez replied when Venezuela's central bank reported the economy shrank 5.8 percent in the first quarter of the year. He said his opponents are "celebrating, but they don't realize that what they're celebrating is the wake of capitalism.… Let them continue celebrating. Put out candles at the funeral because we're going to bury Venezuelan capitalism."
Such rhetoric resonates with many Venezuelans, one reason Chávez's popularity remains relatively high (48 percent approval in May) after 11 years in office. Still, Jose Vicente Leon, a pollster in Caracas, says that Chávez's popularity had fallen considerably, from 61 percent in February 2009 to 42 percent the same month a year later.
That's what makes El Valle such an important bellwether. On a recent morning, a half-dozen men are sweating as they hammer out new tin roofs and reinforce crumbling walls. It is part of a government program called TriColor that hires locals to renovate housing. "He is the only one who has ever helped us out," says Carolina Espinoza, contracted as the coordinator for TriColor on her street. Her house was one of the first renovated. "As long as he keeps supporting the people, the people will keep supporting him," Ms. Espinoza says.
Aside from Chávez, who else could lead?
And yet, such sentiments of support that seemed so universal just 3-1/2 years ago now appear to represent only part of the neighborhood.
Edgar Santos, a driver of one of the vehicles that make the slow passage to the neighborhood, says that violence, inflation, and shortages of basic items such as butter or sugar have caused him to turn from the president. "Everything Chávez does is for other countries," says Mr. Santos. "I don't think his missions have really changed lives here."
Adds Cerezo: "I thought, like so many other Venezuelans, that he would create a new country."
What this erosion of support means for elections in September – and the presidential elections in 2012 – remains a question. Judging from the past, Chávez could do something radical to garner votes. And his followers, even those who may be tiring of his presidency, see no viable alternative, which has always been Chávez's strength.
"The real battle in the upcoming election is between Chávez: the one who has a government incapable of solving problems, versus Chávez with money, Chávez with charisma," says Mr. Leon. "It is not between Chávez and the opposition."
Why Chavez's experiment was doomed:
Because, bluntly it was the same old thing with a new twist. Much like how Central Americans Nations in the early 1900s pegged their wealth and economies on commodity export (fruit or coffee being the main two) Chavez pegged his gamble on oil. Like Dubai, he didn't really push that hard to versify his economy (which is ridiculous, Venezuela is a nation with a wealth of resources including a educated population, it should have been fairly easy) instead oil sales funded his social programs and weapon buys.
Oil was at the base of his foreign policy as well, using free or cut price oil as a diplomatic tool, Chavez used it to gain allies and prop up others. It also has previously mentioned funded his support for rebel terrorists groups like FARC (acceptable to Chavez because they occasionally mutter some Marxist phrases despiting being a feudal criminal gang in practice) and weapon buys from Russia and diplomatic deals with Iran. Chavez grand dream was a multi-national anti-American alliance and today we see that dream fading. Venezuela is fading and Iran is withdrawn and moody having to deal with a restive and disillusioned population. Russia still stands strong but also rests on the shaky foundation of oil.
What was different about Chavez's experiment was instead of hording the wealth in a small oligarchical group, he spent it on the lower classes using them as his support base to win election after election and more power. His spending however as we can see does not have any real lasting impact and therefore as it dries up, so does his support.
Add in problems like rampant nationalization which made it hard to attract foreign capital (look if a bunch of foreigners come up to you and want to spend money on your country... LET THEM!). Price controls when hard times hit, leaving local private industries no zone to actually make a profit and fund themselves (I'm not saying price controls will always fail, I haven't read enough for that, but I will say that most of the time they seem to hurt more then they help) and well... It's an economic and political policy designed to shoot yourself in the face. Which we're in the process of seeing in slow motion.
