The current Venezuelan government is the result of a process of transformation and change in society. Societal changes started to occur when people themselves started to search for a way out of a system of oppression and corruption that prevailed in Venezuela for forty years from 1958 until 1998. Many people pinpoint to February 27, 1989 as the date that this change started. For us this change started earlier, in 1975 when the oil industry which is the main provider of income for the country was "nationalized." Contrary to all expectations, the much-celebrated nationalization--because of the way that it was carried out--had a tremendous negative impact in the economy. The other red flag in the recent history of the country is the "1983 black Friday," which we will explain later. The so-called "Caracazo," of February 27, 1989" was the response of the poor to a crisis that affected them the most. A crisis that had no exit, no escape under the rigid scheme of the 1961 constitution. The Caracazo was nothing else but the explosion of an accumulated and insolvable crisis, a significant one indeed.

SOME HISTORY

In 1975, the oil industry, which was in the hands of Exxon, Shell and BP was "nationalized" in such a way that the presidents of these foreign companies in Venezuela remained as presidents of three different PDVSA-affiliated companies Maraven, Lagoven and Corpoven--that were created after the nationalization. PDVSA (Petroleos de Venezuela Sociedad Anonima) became the main oil company that was going to provide for the benefit of all Venezuelans. Instead, the main focus of the "nationalized" Venezuelan oil industry was set to be the benefit of foreign corporations and Venezuelan potens(1). It is not happenstance that we have a situation where by 2002 the oil industry was generating US$52 billion dollars a year and the government was obtaining only around US$10 billion a year.(2)

But problems went beyond the oil industry itself. The mismanagement of the 70's oil boom and the fact that the government did not know what to do with the money it was getting from selling high-priced oil, led it to put the money in foreign banks to keep it in dollars. These foreign banks did not know what to do with the money either, so they in turn lent the money back to Venezuela and other countries. A few Venezuelans became multimillionaire as a direct result of PDVSA's distorted set of priorities, and by appropriating and mismanaging the loans that the country was obtaining from foreign banks. But the Venezuelan economy started to suffer and more and more people started to fall into poverty. By 1998, the percentage of Venezuelans living at or below poverty levels grew to be 80% of the population.(3)

BLACK FRIDAY AND THE "CARACAZO"

Up until February 18, 1983, the U.S. dollar exchange rate in Venezuela was of 4.30 bolivars per dollar,(4) but the payment of the external debt, corruption, a reduction in oil-income, capital flow and a the rising cost of the internal bureaucracy led to the devaluation of the currency. In a country so heavily dependent on imports, where 60%, and in some periods of the years up to 80% of the food is imported,(5) the permanent loss of value of the Venezuelan currency started to seriously affect the Venezuelan economy. Poverty was reaching dangerous levels and people were not able to provide for their families. In 1989, after the government of Carlos Andres Perez implemented IMF-recommended austerity measures, poor people took the streets. A riot erupted and the army was called to confront them; the number of deaths ranges anywhere between four hundred and three thousand civilians. This genocide will mark Venezuela forever and the country will never be the same.

After the massacre of 1989, people in poor barrios, some leftist political movements and a few young military started conspiring to overthrow the Perez's regime. Finally an attempt was made and in February 4, 1992, Hugo Chavez Frias emerged as the leader of the civic-military movement . They failed. Hugo Chavez surrendered and went to jail.

HUGO CHAVEZ EMERGES

Hugo Chavez came back to the political scene in 1998, after granted amnesty for the events in 1992. He decided to run for president with no money and no aspirations of winning. It was really more a way of opening the space for a political movement he started even before getting out of jail. But soon his popularity became evident and to everybody's surprise he won the presidential election of December 6, 1998 with 56% of the votes. He was reelected two years later with 57% of the votes.

As a president, Hugo Chavez created a government with a wide spectrum of political participation. After all, at this time he did not have a consolidated political party supporting him. Alliances with other parties were the norm. Venezuelan potens, initially ferociously opposing him, decided to bring him to their side and deep in their heart both, politicians and potens, considered Chavez the man who was going to provide them with a new way to continue going the old ways. They started to exercise pressure to obtain multi-million dollar loans at a very low interest rate if any at all, and the pressure was also in the sense of "suggesting" candidates for key government posts. But Chavez and the majority of the Venezuelan people did not want to follow the old ways, and the honeymoon between the powerful, the old forces and the new government started to slowly fall apart.

POLITICAL CONFRONTATIONS

The confrontation between Chavez and the opposition became more and more the way of doing politics in the country. Potens, through their control of the mass media, started a campaign to undermine the prestige and reputation of the president, emphasizing his manners reflecting a condition of people from humble conditions. The short-tempered president Chavez did not help his own cause either because he started openly attacking potens and their allies in public appearances and in his popular program "Alo Presidente," where he talks to people directly about the country's problems, government accomplishements and plans for the future.

The campaign to overthrow Chavez started soon after he became president. Economic sabotage, strikes, and propaganda were being used to predispose people against him. It is no wonder that Chavez started attacking them publicly. In April 11, 2002 a coup d'etat successfully overthrew the president. The president was detained without charges and kept incommunicado (in violation of his rights). But forty-seven hours later a people's uprising and the support of the most important sectors of the military led to Chavez's comeback. But in spite of their defeat potens continue conspiring against Chavez. Potens' disgruntlement with Chavez's government has remain high, partly because they are not anymore the main beneficiaries of government policies, but also because the government has implemented a system of participatory democracy where people can form groups and participate directly in their communities' decision-making process regarding local-government budgets and plans. A system such as this undermines the power of local officials and puts the power in the hands of the community, furthermore, a system such as this, undermines the old way of doing politics where government officials used to prioritize potens' interests and their own over those of the community.

MAIN ACHIEVEMENTS

The main achievements of the current Venezuelan government go beyond popular direct participation in democracy and the country's Constitution, approved in December 17, 1999 with an 86% of the popular vote, is considered one of the most advanced constitutions in the world. The Venezuelan government has provided more than a million and a half children with the opportunity to go back to school for free, while the government supplies them with shoes, uniform, books and two daily meals. Ninety-two thousand houses have been built by and for the poor by mid-2002, more than in the twenty-year period previous to 1998; more than a million people have obtained access to potable water; thousands of peasant families have obtained land, credit and material resources. The infant mortality rate dropped from 22% to 17% and is expected to reach record lows by the end of the government period in 2006. The government is carrying out four subway projects in four different cities and has started the construction of a national railroad system. The Women's Bank has given thousand of women credits that have allowed them to start their own businesses and cooperatives. The Bank of the People and other financial institutions created to support the poor financially, psychologically, and socially are also great achievements in a vision of development that prioritizes people over capital. They are not just lending institutions, they provide counseling, peer support, and help in the development and implementation of projects.

LOOKING AHEAD

But not everything is working fine in the government. The sudden arrival of Chavez to the presidency and the powerful forces the government is confronting has led the people in government to have to reinvent themselves while dealing with institutions that are still trying to keep the old ways of doing things or that are still controlled at their core by opposition forces. The judicial system is still controlled by judges with strong connections to the two political parties of the IV republic as the forty-year period previous to Chavez is known. The well-seeded culture of doing things after forty-years of heavy corruption and the continuous attempts on the part of potens to use kickbacks to get government officials to agree to their requirements are still dangers to overcome.

The opposition to the government has grown, in part as result of the sabotage that the opposition leaders are carrying out in the country. People, mostly professionals and technicians, who are losing their jobs or who are not able to find the proper job or any job at all, usually blame the president of the country. They do not understand that private businesses are trying to sabotage the government by closing operations and taking their money elsewhere. The opposition has also been able to carry out marches and rallies predominantly in the capital. Opposition marches have often not only interrupted the free transit of people and vehicles affecting the economy even more, but have been involved in violent confrontation with government supporters that at times have resulted in injuries and deaths. The recent signature of an agreement to avoid violence and to pursue the peaceful solution of the societal conflict provides hope for a better future. But the agreement was the result of the failure on the part of the opposition in their last attempt to oust Chavez, this time through a business strike that lasted two months. The strike devastated the economy, by sabotaging the production and transportation of oil and its derivatives, the transportation and importation of food, and the internal distribution of gasoline. The opposition that had rejected previous suggestions to sign a peace agreement finally decided to do so on Friday, February 21, 2003.

The failure of the strike did much more. It made Chavez stronger, and his popularity actually increased. The government is presenting charges against the leaders of the business strike because of the people who died as result of sabotages, because of the considerable loss of income due to the stoppage of oil production and the subsequent sabotage when workers were trying to put the industry back in service, and because of the illegal attempt to overthrow the government.

The government of president Chavez is now confronting an opposition divided in two sectors, one that is convinced that they cannot defeat the government by undemocratic means and is searching for a way to position themselves into a situation of leadership, and another one advocating the use of force and terrorism to overthrow it. Chavez, nevertheless, seems confident that the most difficult times of his government have been left behind.

FOOTNOTES

(1) Potens: people who have enough societal power to influence decisions and how other people interpret or understand their own reality. They are usually wealthy individuals who control resources, technologies and connections that make them influencial on societal affairs.
(2) http://www.soberania.info/, January 27, 2003.
(3) http://www.ine.gov.ve/ine/indexine.asp, February 25, 2003.
(4) El Nacional A1, Saturday, February 19, 1983.
(5) Christopher Toothaker. ASSOCIATED PRESS. February 18, 2003. Several US newspapers.