How Chavez Does Business: Twenty-First-Century Socialism and Venezuela’s Soaring Stock Market
After almost 14 years in office, and with an impressive record of electoral victories behind him, Venezuelan President Hugo Chávez now faces the most challenging campaign of his political career. Venezuela’s economy is weak, and, for the first time since 1998, Chávez, who has cancer, could suffer defeat when the country goes to the polls, on October 7.
The conventional wisdom is that Chávez’s prospects will depend, as they have in the past, on his strong support from the country’s poor. He has spent years developing social programs to dole out state funds to those in need, and the tactic has made him wildly popular. But that strategy alone might not work this time around. Chávez’s electoral fortune today depends not so much on his connections to the poor but on his approach to Venezuela’s private sector.
Chávez has long undercut private enterprise, which has resulted in a weak economy that is hurting his appeal to voters. But he can also use economic troubles to demonize the private sector and rally ideological voters. This complicated relationship to the private sector explains why, this this time around, Chávez’s candidacy is damaged but still afloat.
PROBLEMS TO THE PEOPLE
This round of voting is especially significant, because more than at any point in recent memory, stability is an issue: the ruling party is heavily armed, and the opposition is highly charged. (Last weekend, three followers of the opposition were killed; Neither side trusts the other, nor the rules by which the other plays. The outcome could be close — the numbers vary, but two reputable pollsters have shown the opposition candidate, Henrique Capriles Radonski, to be closing the gap — and there is a risk that neither party will recognize unfavorable results. In other words, the threat of violence is very real in a country that is the fourth most important source of oil for the United States.
At least in theory, Chávez shouldn’t be having so many problems. In Latin America, incumbents have a huge advantage because the office of the president is often the most powerful branch of government; the fact is all the more true in Caracas. More, Chávez has presided over one of the most extraordinary oil booms in history, generating nearly $1 trillion since the early 2000s. Yet the president’s political prospects look very much like his physical health: he is not quite dying, but he is not thriving either.