With several thousand people chanting "Freedom! Freedom!" a previously unknown Venezuelan airforce colonel called on President Hugo Chavez to resign and make way for a new, democratic government in Venezuela. The scene, reminiscent of the protests that brought Chavez to power, saw Col. Pedro Soto lead a crowd to the president's residence.
Soto, who quickly was discharged from the military for his trouble, made blistering public attacks on Chavez, proclaiming him a tyrant who was using the presidency for personal aggrandizement while bankrupting the country. Other senior Venezuelan air-force and naval officers have since called on Chavez to resign. But, so far, no army officers have yet broken ranks.
These bizarre, almost comical, developments come as little surprise to people who have followed Venezuela under Chavez. His approval ratings were 80 percent when he took office in February 1999, but Chavez's support has dropped to just 30 percent today. Opinion polls suggest two-thirds of Venezuelans blame Chavez's rhetoric for their own economic problems. While there is some doubt as to whether he will stay in power through the end of his term in 2006, his ability to effect radical change in Venezuela is greatly reduced.
Chavez's weakening political support is ultimately a result of incoherent economic policies and a weak economy. On Feb. 13, Venezuela's currency plunged 20 percent when Chavez suddenly abandoned exchange controls, ostensibly to stem capital flight and restore investor confidence, causing a collapse in the value of the bolivar. Venezuela had spent more than $3 billion via currency-market intervention to prop up the bolivar since November 2001. Business groups wanted the currency devalued to make exports more competitive, reports Fabiola Sanchez of the Associated Press in Caracas. The International Monetary Fund and Wall Street applauded the move, but Venezuelans, 80 percent of whom live in poverty, were unimpressed.
"The economic policies that helped to maintain the overvalued bolivar during the past three years reduced the competitiveness of Venezuelan producers, driving many local manufacturers out of business," says Walter Molano of BCP Securities, who adds that the official unemployment rate is 15 percent. Venezuelans import an enormous array of products, thus the inflationary pressures from the devaluation could be strong. "Unfortunately, President Chavez has a new set of problems on his hands if the inflation rate increases sharply and real wages decline," says Molano, who reckons that the bolivar was 40 percent overvalued prior to the Feb. 13 devaluation. He expects the currency to stabilize below 1,000 per dollar.
Upon taking office, Chavez declared a new "Bolivarian revolution" and installed a National Assembly and Supreme Court controlled by his cronies. But now even these supporters are turning on this avowed protege of Cuban dictator Fidel Castro as the economy continues to slide.
Indeed, the most vociferous opponents of Chavez are coming from the left. Gabriel Puerta Aponte of the publication Bandera Roja (Red Banner) observes: "This process [begun by Chavez] bears no resemblance to an authentic revolution. He has only presented some changes in the political hegemony and the structure of the corrupt system, but this is not a revolution. There is no possibility of having a dialog with this regime. Chavez is a threat to public order and civil society."
The very sectors that supported Chavez's rise to power increasingly are unhappy with his threats of land seizures, expropriation of private businesses and banks and attacks on the Catholic Church. But above all it is Chavez's inability to provide employment and reduce corruption that has gained him the wrath of most Venezuelans. Public discontent grows each day with the center-right opposition, the business community and an increasing number of military officers publicly calling for strikes and other public protests. …