Surplus petroleum revenue stokes Chavez's 'revolution'

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CARACAS, Venezuela -- A surge in oil revenues is funding President Hugo Chavez's "Bolivarian revolution" of social-welfare spending in this country known for its vast gap between the rich and the poor.

Having survived a recall attempt last month by winning 58 percent of the vote in a nationwide referendum, Mr. Chavez says he plans to deepen "the revolutionary process."

The government has initiated a gamut of programs for the poor, including subsidized food markets and soup kitchens, health clinics run by Cuban doctors, and education programs ranging from literacy classes to university scholarships.

Though opponents accuse Mr. Chavez of undertaking a Cuban-style revolution, there has been no attempt in Venezuela to confiscate private property or create state-owned enterprises as on the communist island.

Instead, the government is giving property titles to hundreds of thousands of slum dwellers and offering micro-credits to small-scale entrepreneurs -- measures that have been championed by free-market economists as keys to growth in developing nations.

Meanwhile, oil money is gushing in like never before, helped by the commodity's soaring prices and the continued inflow of investment from multinational companies such as Exxon Mobil, ChevronTexaco and ConocoPhillips.

Despite antagonism in Washington toward Mr. Chavez -- the administration appeared to endorse an April 2002 coup attempt, and U.S. funds have helped subsidize opposition efforts -- Venezuela remains the fourth-largest supplier of crude oil to the United States.

"That this is a Cuban-style project is an exaggeration," said Patricia Marquez, a columnist for the opposition daily El Nacional. "Part of the confusion is because we've got I don't know how many thousands of Cuban doctors in the [slums] and the doors are wide open to all the multinational oil companies. We're selling oil to the United States, and at the same time giving it to [Cuban leader] Fidel [Castro]."

Miguel Perez Abab, president of Fedeindustria, an organization he says represents 4,600 small and medium-sized businesses, said support for Mr. Chavez among the group's members climbed from 37 percent in 2001 to 78 percent in 2003.

Mr. Abab praised several measures, including the creation of four lending agencies specializing in small loans, and a law passed in 2001 requiring private banks to dedicate 3 percent of their portfolios to micro-finance.

"This government without a doubt has given more support to small and medium-sized companies than any other since Fedeindustria was founded 30 years ago," Mr. Ababsaid.

"The amount of micro-credit has increased exponentially ... . This is no communist or socialist model. It's simply a government that is recuperating the role of the state."

Ivan Martinez, who leads the land-giveaway program, said the government has handed out more than 35,000 property titles to slum dwellers and aims to give more than 530,000 by 2006.

Programs to give land to the urban poor have been operating throughout Latin America, but what is novel in Venezuela, Mr. Martinez said, is that slum dwellers play a central role in the distribution process.

Communities can obtain their titles only after they have formed land committees, which must conduct a census of their neighborhoods and participate in surveying the properties.

Likewise, the social programs rely heavily on volunteers from the slums, leading some social workers and analysts to question their sustainability.

"The government is creating a fictitious economy that will function as long as there's oil money," said Armando Janssens, a Catholic priest and founder of BanGente, a private bank specializing in micro-finance.

"And what happens to these programs when the volunteers get tired? There's a lot of enthusiasm and money, but little capacity and no institutional structure for these programs to be maintained."