- The Washington Times - Thursday, January 6, 2000

CARACAS, Venezuela - Two weeks ago rivers of mud cascaded down from Avila to devastate much of Venezuela's central Caribbean coast and flood parts of this capital. Many thousands died estimates range from 5,000 to 30,000 and hundreds of thousands are homeless in one of the worst natural disasters in the history of Latin America. President Hugo Chavez, a former paratrooper, now has special wartime powers to conduct rescue efforts.
Mr. Chavez expected Dec. 15 to be an historic day in Venezuela, but for a different reason. He and most other Venezuelan leaders ignored the rainfall, which in December was 9 times the average level, because all attention was focused on a national referendum that day that is central to the president's reform program. Almost 72 percent of Venezuelans who voted more than half, typically, did not approved a new constitution that in the long run may prove people can do as much damage to themselves as Mother Nature.
Latin American history teaches that the populism of Hugo Chavez, like the 1950s authoritarian demagoguery of Juan Peron in Argentina, is the natural historical consequence when the majority of the people in a country feel disenfranchised and experience previous governments of entrenched and corrupt elites abusing power.
Mr. Chavez was elected president last December with a strong mandate to end self-serving political cronyism in Venezuela. A substantial majority of Venezuelans then and now believe Mr. Chavez will end corruption, "democratize" the government and make life better for the destitute, some 80 percent of the population, living mainly in the "ranchos" on the hills and in the valleys around Caracas.
The underlying contradiction in Venezuelan politics, however, is that, while most Venezuelans say they want change, their votes in the last two Decembers demonstrate just the opposite. Anibal Romero, a professor at Simon Bolivar University in Caracas, says Venezuelans are in fact demanding more of the statism that is largely responsible for their current frustrations.
Venezuelans will not get fundamental change by simply dumping the old political elite for a charismatic caudillo with a subservient, now unicameral, legislature, and increased military involvement in national affairs, the latter enhanced by the post-flood rescue efforts. Venezuelans are turning their back on the world and modernization through an open economy. If frustrations with market reforms grow in other countries, even if Mr. Chavez has little success, the Venezuelan experience may become a bad example for other countries.
The new constitution, which spliced in some work done by others in recent years, was drafted in just a couple months with very little discussion. The delegates to the National Constituent Assembly were elected, but with excessive moral and other support from the executive. Mr. Chavez and his aides controlled the selection and promotion of just the right number of pro-Chavez candidates while, as noted by Caracas Chamber of Commerce Chief Executive Vladimir Chelminski, the opposition was totally disorganized, underfunded and dissipated its vote by fielding several times too many candidates.
The new constitution is an almost interminable document (350 articles), though parts of it are better than the previous one, at least on paper. One of Venezuela's foremost experts in penal law, Fernando Fernandez, notes that this begins with but is not limited to the introduction of the critical legal concept of "innocent until proven guilty."
But many of the extensive socioeconomic articles health, education, social security are Utopian. Mr. Chavez has said that God is on his side and he seems to have drawn up the new constitution on the expectation he can produce bread and fishes for the multitudes like Jesus. But Venezuela is a poor country in an almost unprecedented recession, in large part because of concerns over where Mr. Chavez is going. The Central Bank reported last week that the economy contracted by 7.2 percent in 1999, foreign investment fell by $1.7 billion and capital flight reached $4.6 billion. Now suddenly Venezuela needs something like $20 billion more to rebuild after the floods.
Venezuela has received substantial short-term international aid since the floods. But in the longer run, there are two things Mr. Chavez needs even more than money because they would get the economy moving: productive ideas and aides. He has talked to Venezuelans and others who understand development, but it is hard to see much of their influence in the new constitution or the government's recent socioeconomic policies.
Some foreign companies assume that Venezuela's continuing dependence on oil will force Mr. Chavez to comply with international standards. Many others, however, have withdrawn or put new programs on hold and investments generally are at a several decades low.
Mr. Chavez has given several nationally televised speeches since the natural disaster struck, saying among other things that at least the floods may help bring unity to a very divided land. They may if, but only if, the president really wants it. Right now, as Mr. Romero says, Mr. Chavez "holds all the cards."
Venezuela could benefit from Mr. Chavez's popular leadership if he would learn from Carlos Menem, Argentina's recently retired president. Though he campaigned as a populist, Mr. Menem immediately turned without losing his popular support to market reforms and inserted Argentina into the world economy.
But time is passing in Venezuela and Mr. Chavez has not yet chosen to work with the political and economic leaders who know how to expand rather than stifle the productive potential of the Venezuelan people and investors from abroad. Tragically, if Mr. Chavez persists in his internally contradictory populist programs and processes the nation will stagnate and he himself will be buried in the mudslide of reality, a well-meaning demagogue who wound up as another of history's false heroes.

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