In August 2004, President Hugo Chavez won a recall referendum allowing him to retain the presidency of Venezuela, an office he has held since 1998. Ironically, however, his popularity has caused tremendous conflict in Venezuela, and Chavez finds himself in the midst of severe instability--a crisis derived from the extremely polarized state of the social classes in Venezuela and the government's inability or unwillingness to reform civil systems.
After many years as a remarkably stable democracy, Venezuela began a trend of economic deterioration in the 1980's that had a serious effect on the social structure of the nation. Former presidents Carlos Perez and Rafael Caldera, whose tenures spanned the emergence of the economic crisis and the election of 1998, were unable to improve the economic conditions or assuage the sharp division between the lower and upper classes; the Venezuelan people began to lose faith in their democratic and economic institutions, which had failed to supply the expected relief.
In the 1998 election, Chavez took advantage of the poor conditions in Venezuela and launched a populist campaign aimed at the lower classes, promising to renew the republic by ending corruption and social inequality. Chavez gained support among this large segment of voters, and his promises gave him his first presidential victory.
Instead of uniting the country, however, Chavez' victory caused greater friction between the upper and lower classes. As the new government's projects were aimed mostly at the poor--the core of Chavez's support--they alienated the upper and middle classes, increasing their bitterness towards Chavez and strengthening the barriers between classes.
The worsening state of Venezuela's economy has become a vicious cycle. Venezuelan businesses refuse to invest in their country, where the risks are high and the government portrays business as the cause of the nation's poor economy. This has alarmed the upper and middle classes who, along with foreign investors, now take their business and investments elsewhere, where they can find political stability and a government willing to protect their capital. Because Chavez and his government hold the businesses and their upper and middle-class associates responsible for poverty, they have increased their own support from the lower class.
This creates polarization between the country's classes, as the lower class turns against business' supporters while the upper and middle classes try to fight against the government. …