by Scott B. MacDonald

NEW YORK (KWR) Having survived a coup attempt, a major strike by the country’s most powerful union (oil workers at PDSVA), and a referendum to constitutionally oust him from office, President Hugo Chavez remains firmly in control of Venezuela, the world’s fifth largest oil exporter. In many regards, the President has extended his control over the nation’s body politick to such an extent that it is dubious that any opposition movement can oust him – legally or through a coup. Through suasion and coercion, Chavez has created a government, which in some ways a state akin to Mexico’s old PRI regimes, where an opposition was tolerated (to a point), the politically ambitious were channeled into the system (or life became very complicated), and the spoils of the economic system were guided to the key bases of support. The economy is increasingly bearing the mark of mixing command economics with what is left of the country’s private sector. And for now, Chavez’s government is enjoying the benefits of higher oil prices, which helps cover up considerable economic mismanagement.

The latest consolidation of power for President Chavez and his Bolivarian revolution came with the October 31, 2004 gubernatorial and mayoral elections. The outcome was a massive sweep for the Chavistas. According to the official count, pro-Chavez candidates won 270 out of 334 mayor’s offices and 20 out of 22 governor’s mansions. The latter included seven states that were previously held by opponents. Among the defeated were two of the most prominent anti-Chavezista leaders, Miranda Governor Enrique Mendoza and Carabobo Governor Henrique Salas Feo. The only two states that did not fall before the Chavezista electoral juggernaut were in Zulia in the west and Nueva Esparta in the north.

Chavez clearly recognized the significance of the election results, stating: “This is a giant victory. Venezuela has changed forever. The revolution has arrived, and there is no going back.”

Maybe. The elections were not without controversy. The National Electoral Council (CNE) was quick to call results, leaving some of the outcome for a number of tight elections questionable. In addition, there was no independent oversight of the vote and opposition parties were clearly not welcome as observers. Moreover, CNE officials claimed that voter abstention was 55 percent; independent sources dispute that number, indicating it was closer to 70 percent. The fundamental reason for the high level of voter apathy was that many Venezuelans regard the electoral process as fraudulent.

The opposition also managed to survive. Despite the failure to provide a more unified front, the opposition managed to hold on to Zulia, one of the major oil-producing states and Maracaibo, its capital. This turn of events came even after a very concerted push by pro-Chavez forces to unseat Manuel Rosales, Zulia’s governor. Rosales could emerge as a challenger in the 2006 presidential elections.

What is next for Chavez? With the military largely under his control, a majority of the electorate in his favor (or just plain apathetic), the judiciary packed with his followers, Cuban advisors, and oil prices still high, he is now gearing up for the congressional elections in 2005 and the presidential contest in 2006. Clearly having either members of his Fifth Republic Movement (Movimiento Quinto Republica) and its ally, the Fatherland for All Party, along with smaller parties (including the Communists), sitting in mayor’s halls and gubernatorial mansions, gives Chavez dominance over the country’s political system, both nationally and locally.

Chavez is also benefiting from the oil bonanza. After the economy contracted by 7.5 percent in 2003, real GDP growth is expected to be over 12 percent in 2004. According to the IMF, real GDP growth for next year will be a more moderate 3.5 percent, reflecting the assumption that oil prices will moderate. The government is more bullish, looking to 5 percent growth. If oil prices plunge (which we do not expect), the government will have to scramble to make ends meet – or opt to use the printing press and inflation be damned. It should also be noted that Chavez is using the oil wealth to pay for social programs, reinforcing his support among the population’s working class sectors.

Hugo Chavez is clearly leaving his mark on Venezuela’s history. He assumed control of a country long troubled by economic mismanagement, substantial socioeconomic inequalities, and massive corruption. The old republic’s political elite was popularly regarded as inept, corrupt and self-serving. Under Chavez, the former political elite has been defeated and left grappling with how to re-invent itself. In its place, Chavez has advanced his political agenda of reshaping Venezuela’s political life – along the lines of a liberal Cuban model, where political control is well-defined and there is a little more openness in terms of the private sector and foreign involvement in the economy. All the same, Chavez is the dominant political figure and without a credible and more cohesive opposition, he is likely to remain the left-leaning strongman well into the next decade.