Petroleum, Politics, and Populism

The year 1999 saw the majority of the Venezuelan people revolutionize their democracy and society from a corrupt two party political system that often served only the economic interests, both Venezuelan and foreign, to a system designed to serve the poor and formerly marginalized majority of Venezuela. Hugo Chávez, the president of Venezuela elected in 1999, is the symbol of this “Bolivarian” revolution in Venezuela. Chávez symbolizes the “Bolivarian” revolution because he seeks to assist the two-thirds of the Venezuelan people who live in poverty, a level of poverty that is all the more shameful because of Venezuela’s vast oil wealth. This oil wealth is to be Chávez’s main tool in alleviating the massive poverty in Venezuela, but in order to use this wealth for his poverty programs he first had to bring the national oil company, Petroleos de Venezuela (PDVSA), under state control. Due to the independence the company had been granted after nationalization in 1976 it acted as ‘a state within a state’ where oil wealth was systematically spirited out of the country through a combination of taxing PDVSA’s income and offshore accounting practices.(1) Chávez’s efforts at bringing PDVSA under state control and his social programs aimed solely at alleviating poverty had the political ramifications of alienating the affluent elites and middle class of Venezuelan society. Thus Venezuela today can best be described as how petroleum, politics, and populism interact towards transforming the society.

The Rise of Chávez

Chávez’s election represented the death of the previous political system known as the Puntofijismo. Puntofijismo was the two party political system of Venezuela that ruled the nation from 1958-1998. The system was successful in excluding all political challengers other than the two largest parties as well as isolating the political left thus preventing any Marxist government from gaining power democratically. The collapse of the Puntofijismo began in the late 1980’s when oil prices were at a fifteen-year low of $12.50 a barrel.(2) The low oil prices forced the President at the time Carlos Pérez to institute an austerity program in exchange for a $4.5 billion dollar loan from the IMF over a three-year period. The austerity program included a raise in interest rates, removal of subsidies on staples such as bread and gasoline, and currency devaluation. The measures led to riots in Caracas after an increase in bus fares was announced in February of 1989 and the government response was brutal repression where approximately four hundred to one thousand people were killed.(3) Despite this threat of repression the tension due to the austerity measures imposed by the IMF erupted again in 1992 when ten percent of the Venezuelan military, led by Hugo Chávez, attempted a coup. Despite the coup’s failure and Chávez’s subsequent imprisonment, the attempt to overthrow a corrupt government that was indifferent to the suffering of the people made Chávez an immediate hero to many impoverished individuals in Venezuela.
Chávez’s message on national television for his revolting troops to surrender was a moment that defined the future of Venezuela. His acceptance of responsibility for the coup attempt impressed the Venezuelan people since most politicians sought to avoid responsibility for defeat. However, his message that the goals of the coup were not achievable “por ahora” (for now) indicated to the masses that the fight had only just begun.(4) Although the Puntofijismo would produce one last president the intractable economic problems of Neoliberalism would prove insurmountable for a conventional politician and with Chávez’s release from prison in 1994 he would campaign for the presidency in 1998. Chávez’s successful campaign for president in 1998 led directly to the end of the Puntofijismo system since shortly after his election he held a national referendum to rewrite the Venezuelan constitution. The new constitution known as the Bolivarian Constitution is an extremely progressive document guaranteeing among other items a right to education, human rights, indigenous rights, and other reforms designed to give the people greater avenues for participation in governance such as the recall referendum to democratically oust a sitting politician.(5) As such the constitution embodies the ideals of the Venezuelan people represented by Hugo Chávez and it marks the commitment of the Venezuelan state to social justice.

Chávez’s election as president and the reworking of the political system via the Bolivarian Constitution marked only the opening shot in the continuing struggle for control over Venezuela. This fight for the control of Venezuela involves three main factors that are inexorably intertwined in Venezuelan society. One of these factors is whether or not Chávez can control the oil industry in Venezuela. Another is how Chávez manages his political opposition both foreign and domestic, as well as his ability to manage his relations with other Latin American and OPEC nations to his advantage. The final and most important factor is whether he can continue to marshal the support of the impoverished masses that brought him to power.

PDVSA

The first factor is the petroleum industry, which accounts for the vast majority of Venezuela’s national income. Although the oil industry began as the operations of foreign owned oil companies in 1976 the oil industry in Venezuela was nationalized to form Petróleos de Venezuela, Sociedad Anónima (PDVSA). However, despite the state takeover the only real change that occurred in the aftermath of nationalization was an absence of oversight and in that situation PDVSA operated autonomously of the state until the arrival of Hugo Chávez.

The nationalization was merely the final outcome of the policy by which the Venezuelan state maximized revenues generated from the oil industry. This heavy handed approach to the oil industry meant that the foreign companies received little profit from their operations in Venezuela and thus the program of nationalization met with little opposition from the foreign oil companies. However, the nationalization of the oil industry did little more change the ownership of the industry because in the years preceding nationalization the foreign oil companies had been pressured into selecting Venezuelans for executive and managerial positions within their Venezuelan operations.(6)

The high returns on oil production during the 1970’s encouraged the president at the time, Carlos Pérez, to embark on the ‘La Gran Venezuela’ program, which was meant to ‘sow the oil’ by fighting poverty and encouraging industrialization.(7) The combination of an ambitious social program and high oil prices led to inflation and government debt since the revenues generated by the oil industry could not completely finance the Great Venezuela program. When oil prices collapsed in the mid 1980’s the Great Venezuela program was in shambles and massive amounts of capital left Venezuela to finance the debt incurred during the 1970’s.

Furthermore, after nationalization the government relaxed its vigilance over the oil industry and gave PDVSA a great deal of autonomy in operations, a critical mistake that would directly contribute to the downfall of the Puntofijismo.(8)

The period after the failure of the Great Venezuela program saw the executives of PDVSA take actions that would minimize the company’s financial obligations to the state. Therefore instead of seeking to maximize profits that would enter government coffers the leaders of PDVSA sought to maximize production and sales regardless of the financial implications of such decisions.(9) The actions of the PDVSA management in maximizing production led to constant violations of OPEC quotas that in turn kept oil prices low.

These results were meant to restructure the government in such a way that the state would never again control the oil industry as it did in the past. Furthermore the management of PDVSA during the 1980’s sought to keep its liquid assets from being seized by the government by investing in foreign petroleum endeavors.

These endeavors included a German refinery that was sold oil at a discounted rate as to keep a portion of the company’s profits out of the government’s reach, and the purchase of petroleum refineries and distribution networks in the U.S. under the name Citgo.(10) These actions served to drain the Venezuelan state of badly needed funds at the time and contributed to the civil unrest that racked Venezuela during the late 1980’s and early 90’s. Even after the downfall of the Pérez government in 1993 PDVSA continued to shift liquid assets to its foreign subsidiaries to keep the funds out of state hands.(11) The PDVSA effort to keep funds out of government coffers and maximize oil production to spite OPEC was successful until the arrival of Hugo Chávez.

Chávez’s first priority as president was to revitalize OPEC since oil was trading at slightly more than $10 a barrel in 1998 due in large part to the over production by PDVSA.(12) This effort was largely successful as Chávez managed to reign in oil production at PDVSA and oil prices rebounded significantly in 1999. Another effort made to reign in PDVSA was the passage of the oil reform law of 2001 that provided for royalty payments of 30% of the price of each barrel sold. There are two reasons such a law was implemented. First royalties are far simpler to calculate than income taxes since royalty payments are determined by level of production and oil prices.

Second royalties also discouraged the practice of sending profits overseas since PDVSA was required to pay the government whether or not they made a profit.(13) An added bonus to the royalties was that it forced PDVSA to improve their efficiency since they could no longer use unproductive facilities as a means of lowering tax burden.

In addition to the reforming the taxation system Chávez also replaced the president of PDVSA and he appointed five new board members from outside PDVSA in February of 2002. This created uproar in PDVSA since board members had always been appointed from within the company. When the board members viewed their appointment as a promotion from the ranks of management it meant those running PDVSA were more likely to be sympathetic to the interests of the company’s management rather than the company’s owners.(14)

Chávez’s appointments were more likely to be sympathetic to the state’s interests as opposed to management’s interests.

Due to the conflict between the government and PDVSA over taxation and the appointment of executives the management of the company chose to support the strike that led to the short lived coup of 2002 and the two-month long oil workers lockout from December 2002 to February 2003 that paralyzed the Venezuelan economy.(15) This lockout caused Venezuela’s GDP to contract by more than 25% and it was the main reason as to why inflation was 60% during the beginning of 2003.(16) Although these actions harmed Venezuela immensely they did not cause enough instability to overthrow Chávez, in fact the oil lockout gave the government grounds to dismiss 18,000 striking workers as well as firing managers and executives who were working to subvert the government’s goals with PDVSA.

Thus the strike enabled Chávez to gain firmer control over PDVSA and because Chávez’s government is reliant upon oil revenues to fund his social programs this victory will enable Chávez to carry out his social reforms and programs.

The control over PDVSA will almost certainly prove to be a pivotal moment in Venezuelan, if not world, history because in doing so Chávez not only neutralized some of his most powerful enemies in the former managers and executives of PDVSA but he retains almost total control of Venezuela’s sizeable oil reserves as well. This control over the oil reserves will prove to be critical in the near future because as the economies of China and other developing nations begin to demand greater supplies of energy the ability of oil producing nations to meet this increased demand grows uncertain due to a lack of spare production capacity in OPEC and other oil producing nations. This uncertainty will most likely result in higher oil prices that will directly benefit the Venezuelan state. When world oil production will actually peak is uncertain but it is likely to occur within the next ten to fifteen years.(17)

Having control over the large Venezuelan reserves when production does peak will give Chávez or any subsequent Venezuelan government an immense strategic advantage.

Domestic Opposition and Foreign Relations

The second factor is the domestic opposition against Chávez as well as the relations between the Chávez government and foreign nations, especially the U.S., OPEC (Organization of Petroleum Exporting Countries) nations and other Latin American nations.

The domestic opposition consists mainly of Venezuelan elites and the majority of the Venezuelan middle class. They did succeed in ousting Chávez in April of 2002 in a coup but the masses took to the streets and the Venezuelan military ensured Chávez’s safe return to the presidency. Also they were instrumental the previously described lockout at PDVSA that devastated the Venezuelan economy in 2003. Despite the havoc wreaked upon the oil industry Chávez survived the lockout and within months oil production had nearly returned to pre-lockout levels.

The middle class opposition initially supported Chávez in 1998 due to his potential for reforming Venezuela’s notoriously corrupt government. The middle class’s opinion of Chávez changed due to an economic situation that harmed the middle class, government policies that favored the poor and ignored the middle class, and a virulently anti-Chávez mass media.(18) During late 2001 a drop in oil prices combined with a renewed effort by the opposition to destabilize Venezuela force the central bank to devalue the currency.

The action led to a spike in inflation from 16% in 2001 to 35% in 2002.(19) Inflation in Venezuela tends to impact the middle class to a greater extent than the poor because the poor tend to work in the informal economy and can adjust their wages and price rapidly to the level of inflation.(20) The middle class has their salaries fixed at the beginning of the year and when the inflation rate reached 35% the middle class suddenly found that they has lost over a third of their income. In addition to the loss of income due to inflation the middle class saw little benefit from Chávez’s social programs because they tend to use private schools and health care and as such the government programs promoting such measure have no impact of the middle class. Also issues such as land reform and the inclusion of formerly marginalized groups such as women and indigenous peoples in the constitution generally did not concern the middle class. The recent efforts to collect taxes from the top 20% of incomes has also contributed to the evaporation of support for Chávez among the middle class.(21)

The commercial media is the means by which the elites in Venezuela managed to solidify middle class support for the opposition. Also it is in the media where a latent racism tends to manifest itself as a discrimination against the poor in Venezuela where Chávistas are referred to as ‘lumpen’ or societal dregs and are implied to be drunken vagabonds.(22) The elites also use their media outlets to vilify Chávez as a dictator or authoritarian. The evidence used to back up these claims are generally statements from opposition politicians or instances where opposition marches clashed with state security forces where rubber bullets and tear gas were fired upon protestors.(23) Considering that Western democracies often use similar tactics to combat organized protests such actions on their own do not justify the claim the Chávez is a dictator. The fact that the commercial media is under the control of the opposition means that most foreign news outlets will repeat the message the Chávez is a dictator because most international news that is published in the U.S. and Western society is usually gleaned from the local newspapers in the country being written about. The level of bias in the commercial media was so blatant and inflammatory that the union at Venezuela’s largest daily newspaper cried out “no more manipulation and confrontation.”(24) This statement went so far as to accuse the commercial media of “distorted and intolerant news slants” concerning the Chávez government. Despite the role of the Venezuelan press in the coup and lockout, the Chávez government allowed the owners of the media to retain possession of their media outlets. Thus demonstrating Chávez’s tolerance for dissent but it also lets the opposition retain their most effective and dangerous weapon.

This control over the media proved to be the catalyst that sparked the failed coup of April 2002. The April coup began when the largest union, the CTV (Worker’s Confederation of Venezuela), began a general strike in conjunction with the employer’s association, Fedecámaras. Two days after the strike began the demonstrators were encouraged to march on Miraflores Palace, the presidential offices. When the strikers reached the palace they encountered a pro-Chávez demonstration and soon afterwards gunshots were fired and approximately fifteen people were killed.(25)

The Venezuelan mass media, and soon after the U.S. media, blamed Chávez for the deaths claiming he ordered soldiers to fire into the crowds. However, an eyewitness claims the media never reported that the majority of those killed were pro-Chávez supporters and that the most likely shooters were an extremist opposition group called Bandera Roja.(26) Despite the confused nature of the shooting the media continued to argue Chávez was responsible for the shootings and soon afterwards Chávez was taken into custody at gunpoint by a group of military officers. After Chávez was taken into custody Pedro Carmona, head of the Fedecámaras, announced he would head a transitional government and his first action, as president was the dissolution of the legislature and Supreme Court. The day after the coup began ‘the poor came down from the hills’ to depose this illegitimate regime and return Chávez to power.(27)

This massive demonstration of poor Venezuelans led to the surrounding of Miraflores Palace and it encouraged the army to not support the coup. The decisive factor that led to Chávez’s reinstatement was a combination of protestors who surrounded Miraflores and paratroops from Chávez’s old army unit in the basement of the palace.(28) This led directly to Carmona’s resignation and Chávez’s return because Carmona could not flee from the paratroops due to the crowd outside the palace and if Chávez had been assassinated the paratroops would have executed Carmona. Thus a combination of the masses and loyal troops saved Chávez’s life and enabled him to return to power.

The failure to oust Chávez illegally has forced the opposition to try to recall Chávez. The recall effort needed to gather the signatures of 2.4 million registered voters. The process by which the opposition gathered signatures had several irregularities especially with numerous dead people signing the recall and similar handwriting on many of the forms. As such the National Electoral Council invalidated 200,000 signatures and required the validation of another 1.2 million signatures. Validation meant that the person who signed the petition needed to confirm at a polling location that he or she did in fact sign. The opposition needed 600,000 people to validate their signatures for the recall to go to a general vote. The opposition managed to have 614,00 people revalidate their signatures and as such the recall will go to the Venezuelan people.(29) Although the opposition has managed to recall Chávez they face a more difficult task in actually ousting him, as they will need more people to vote against Chávez in the recall election than voted for him in his last election. This means the opposition will need more than 3.75 million people to vote against Chávez for him to be ousted.(30)

Considering that oil prices are high and fueling the Venezuelan economy, and the majority of the voters are poor who have benefited from Chávez’s social programs the opposition is highly unlikely to get the necessary votes to oust Chávez.

Another aspect of the political factor is the relationship between Chávez and the U.S., OPEC nations, and the rest of Latin America. The relationship between Chávez and the U.S. is strained to say the least. The U.S. dislikes Chávez due to his reinvigoration of OPEC, his refusal to cooperate with Plan Colombia, and his animosity for Neoliberal economic policies. Chávez himself has a strong mistrust of the U.S. due to their support for his opposition and a strong likelihood of U.S. support if not involvement in the actions taken against his government by the opposition. The reinvigoration of OPEC by Chávez resulted in steadily rising oil prices starting in 1999.(31) This simply demonstrates where the U.S. and Venezuela have opposing interests concerning oil prices and because Chávez would have the courage to defend his country’s interests at the expense of the U.S. partially explains why the current Bush administration has such animosity towards Chávez. Another source of antagonism between Chávez and the Bush administration is Chávez’s refusal to provide any support for the U.S. financed counter-insurgency program in Colombia called Plan Colombia. (32) Chávez’s rationale for that decision was that Colombia’s insurgency is an internal matter for the Colombian nation to deal with and foreign nations should not get involved. Also Chávez opposed the Neoliberal economic model promoted by the U.S. arguing that it caused great hardship for the impoverished in Latin America.(33) Chávez is suspicious of the U.S. as well because of the recognition the Bush Administration gave to the coup regime during its thirty-six hour reign. Also he believes that the U.S. is funding his opposition based on recently released documents from the National Endowment for Democracy.(34)

His relations with other OPEC nations consisted of repairing Venezuela’s standing within the organization to ensure higher oil prices on the world market. During the first one hundred days of his presidency Chávez sent his Minister of Energy and Mines, Alí Rodríguez, to most of the OPEC and non-OPEC oil producing nations of the world and the minister returned with a commitment from most of these countries to reduce oil production. The impact of the diplomatic mission was immediate and dramatic as oil prices increased over 25% from 1998 to 1999.(35) The next year in 2000 Chávez himself visited these same nations to reinforce the commitment to lower oil production and convince the heads of the OPEC states to attend a summit to be held in Caracas. These state visits gave Chávez’s enemies grounds for criticism as he visited both Libya and Iraq as part of the diplomatic mission. Despite this the OPEC meeting was a resounding success, as oil prices have remained fairly high since the meeting and Venezuela has improved her standing within the organization due to the discipline with which the government has abided by the production quotas.(36)

Thus Chávez has led a revival of OPEC by the persistent diplomacy and disciplined oil production.

His relations with other Latin American nations comprises of promoting a sense of solidarity among Latin American nations for the purpose of forming some sort of economic and perhaps political bloc to resist the hegemony of the U.S. Chávez has made significant efforts towards generating solidarity among Latin American nations by using Venezuela’s oil reserves as a tool for generating good will.

One nation Chávez sold oil to at a reduced rate was Cuba and in exchange for this oil Cuban doctors and educators came to Venezuela to provide health care in the shanty towns and teach adult literacy and high school equivalency programs.(37) Another nation with which Chávez has used oil as a political tool is Argentina when he exchanged oil for food in a deal valued at $200 million dollars.

Considering Venezuela imports most of its food from either the U.S. or Europe and Argentina is in the midst of an energy crisis the deal makes sense on both sides.(38) These oil swaps serve to generate a sense of solidarity and goodwill towards the Chávez government from his fellow Latin American leaders. As such they will be more inclined to assist him politically in the face of U.S. machinations towards his rule should the U.S. try to isolate him politically in preparation for some sort of power play. Also the goodwill serves to encourage other Latin American nations to strengthen the Mercosur common market as a means of standing up to the U.S. in trade negotiations.

Chávez is heavily involved in the process of reviving Mercosur as he was involved in a summit with the leaders of Brazil, Argentina, Chile, Paraguay, Uruguay, Chile, and Bolivia discussing the prospect of expanding the organization north to include Peru, Venezuela, Ecuador and Colombia.(39) Should Mercosur expand and actually create a common Latin American market then a trading bloc that rivals NAFTA in scope would come into being and South America would be integrated to an extent unknown since colonial times.

The Power of the People

The third and most critical factor in the fight to remake Venezuela is the mass of impoverished Venezuelans and how they relate to the government that they placed into power. A key to the power of the masses in Venezuela are the “Bolivarian Circles” which are a form of autonomous grassroots organizations throughout Venezuela dedicated to defending the revolution as well as educating the people on government programs that may benefit them.(40) The power of these organizations was made clear when during the attempted coup in 2002 these groups managed to convince hundreds of thousands average Venezuelans to take to the streets to protect their revolution. These Bolivarian Circles have 2.2 million members across Venezuela and they consist of the poor who have chosen to organize and work with the government to better their lives, a sort of neighborhood watch for the barrios.(41) The Bolivarian Circles can be found in almost every barrio in Venezuela and since the Chávez government has provided financial and logistical assistance to these groups they tend to be extremely loyal to the government. Due to the intense loyalty these groups have towards the government the opposition has labeled such groups as little more than street gangs. Whether they are street gangs or not depends on each individual organization but these groups have done much to implement the social programs offered by Chávez to the poor by educating the people about the programs.(42) The importance of these groups became clear during the attempted coup in 2002 because the masses learned of the coup not from the media but the Bolivarian Circles and these same organizations rallied the masses to take to the streets to “peacefully defend” their revolution.(43) Thus the grassroots nature of the Bolivarian Circles demonstrates the immense political power of the masses when properly organized since the Bolivarian Circles alone outnumber the number of signatures the opposition gathered for the recall. Also the Bolivarian Circles do not include those who the circles are capable of mobilizing for special circumstance, which basically means the number of people the circles are capable of mobilizing would dwarf anything the opposition could hope to muster and as such the recall effort is almost doomed to defeat since the opposition has little political support among the impoverished masses.

The masses by the sheer weight of numbers and effective organizations have placed immense pressure on the Chávez government to alleviate the poverty in which these people live.

Although the economic disruption caused by the opposition attempts to oust Chávez have delayed the implementation of his antipoverty programs the government has made significant strides in alleviating the situation of those in poverty. The programs include employing the armed forces to assist the poor, expanding the education system for the poor, providing subsidized food and day care for the poor, and rural as well as urban land reform. Plan Bolivar 2000, which used the armed forces to help the poor came about because the military was the only organization capable of assisting the poor due to the recession Venezuela was mired in at the time. In this case the Army and the National Guard performed construction projects in the barrios, the Navy taught people to fish, and the Air Force provided free flights for those who needed to travel in Venezuela but could not afford to. Although there were accusations of corruption surrounding Plan Bolivar 2000 the program was an important stop gap that provided some relief to the poor while the government was sorting out its financial situation.(44)

Although fairly successful Plan Bolivar was only a temporary measure until more permanent programs could be developed. The rural land reform project provided land, credit, and technical assistance for those who would cultivate unused land for at least three years. The idea behind this program was to improve Venezuela’s agricultural production to the point where she would be self-sufficient in terms of food production. Although there are provisions to redistribute privately held uncultivated land only government owned land has been distributed. Urban land reform is also a key part of alleviating poverty since most poor people live in barrios. This program is meant to give those living in barrios on government land titles to the land. The purpose of urban land reform is to give those who live in the barrios a reason to invest in their community. Unlike rural land reform only government land can be distributed, those living in unsafe of private land must relocate to public housing. One other program aimed at alleviating the impact of poverty directly is the micro-credit program by which banks are required to set aside so much money to be loaned to small entrepreneurs. This is not only meant to alleviate poverty but it is meant to encourage solidarity among communities since a small business owner who lives and works in a community is more likely than a foreign corporation to identify with and work for the community rather than exploit the community.(45)

Other programs include “Plan Simoncito” that provides free daycare for single mothers who need to work. Under Chávez the number of infants in free day care doubled from 150,000 in 1998 to over 300,000 in 2002. This enables working mothers who are the sole means of support to work outside the home and not have to spend money on day care. Also Chávez provided subsidized grocery stores in poor neighborhoods that are not serviced by private grocery stores as well as bringing Cuban doctors to serve in the barrios where people receive little if any health care.(47)

Education is the section where Chávez has invested the most energy into assisting the poor. He has expanded elementary and secondary schools to the point where public education is free again in Venezuela. Also the truancy rate for children in these schools has decreased from 15% to less than 10%.(48) In addition Chávez expanded the public University system and instituted a scholarship so those who wish to attend higher education but cannot afford to do so can attend college. However, there are only enough scholarships for 100,000 people and there are over 400,000 people who qualify for these scholarships as such 300,000 people will not be able to pursue an education. In addition to regular education Chávez instituted adult education classes by which Cuban educators teach literacy classes and high school equivalency to adult Venezuelans who work.(49)

Thus Chávez has placed such a high priority on education that even those too old for a standard education can still receive an education. Should Chávez succeed in making these educational programs permanent then he would secure his legacy as a progressive leader and bequeath a promising future for Venezuela.

Conclusions

As Chávez was the first of the numerous leftist Latin American presidents democratically elected over the past seven years he sets an example for how other Latin American nations can break free of the Neoliberal economic model that has deepened the poverty level throughout Latin America. Due to his ideological opposition to the Neoliberal economic model and the fact that Chávez controls the largest oil reserves in the Western Hemisphere he represents a considerable threat to the status quo of economic exploitation in Latin America.(50)

Since Chávez represents such a threat to the powerful in this hemisphere they will employ any method possible to be rid of him. Whether or not the powerful are successful in ousting Chávez depends in large part on how Chávez manages the three factors of petroleum, politics, and populism. The fight for social justice initiated with Chávez’s election as president is by no means over but the revolutionary tendencies that he is the vanguard for has spread through much of Latin America. Since Chávez has the strategic advantage of controlling the largest oil reserves in the Americas he is correctly seen as the keystone among the leftist Latin American presidents that have been elected into office with the failure of the Neoliberal economic model. Basically this means that should Chávez fail or be ousted then the rest of the leftist presidents of Latin America would either be ousted themselves or be forced to change their oppositional policies to Neoliberalism. This is because a Chávez ouster would place the energy supplies for much of Latin America under the control of people who are against the progressive policies that these leftist presidents represent.

However, should Chávez succeed in remaking Venezuela into a more just society then he would have set an example as to how developing nations can develop without decimating social support for the impoverished masses. Should the Venezuelan experiment succeed then it would set an example that would have the potential to end the system of economic domination of developing countries by developed ones, not only in Latin America, but also throughout the globe.

1. Gregory Wilpert, “The Economics, Culture, and Politics of Oil in Venezuela”, www.venezuelanalysis.com/
   
3. http://inflationdata.com/inflation/inflation_rate/Historical_Oil_Prices_Table.asp
   
3. Benjamin Keen and Keith Haynes, A History of Latin America Vol. 2
   
4. Daniel Hellinger, “Political Overview”, Venezuelan Politics in the Chávez Era, 2003
   
5. http://www.embavenez-us.org/constitution/intro.htm, unofficial translation of Venezuela’s Constitution
   
6. Bernard Mommer, “Subversive Oil”, Venezuelan Politics in the Chávez Era
   
7. Gregory Wilpert, “The Economics, Culture, and Politics of Oil in Venezuela”, www.venezuelanalysis.com/
   
8. Bernard Mommer, “Subversive Oil”, Venezuelan Politics in the Chávez Era p.132
   
9. Ibid p.134
   
10. Ibid p. 134
    
11. Ibid p. 135
    
12. http://inflationdata.com/inflation/inflation_rate/Historical_Oil_Prices_Table.asp
    
13. Gregory Wilpert, “The Economics, Culture, and Politics of Oil in Venezuela”, www.venezuelanalysis.com/
    
14. Ibid
    
15. Ibid
    
16. http://www.latin-focus.com/latinfocus/countries/venezuela/venezuela.htm#Economic%20Indicators
    
17. Tim Appenzeller, “The End of Cheap Oil”, National Geographic Magazine, June 2004
    
18. Gregory Wilpert, “Why the Venezuelan Middle Class Opposes Chávez”,http://www.zmag.org/content/showarticle.cfm?SectionID=45&ItemID=2546
    
19. http://www.latin-focus.com/latinfocus/countries/venezuela/vencpi.htm
    
20. Gregory Wilpert, “Why the Venezuelan Middle Class Opposes Chávez”, http://www.zmag.org/content/showarticle.cfm?SectionID=45&ItemID=2546
    
21. Ibid
    
22. Ibid
    
23. Gregory Wilpert, “Venezuela’s Matrix”, http://zmag.org/content/showarticle.cfm?SectionID=45&ItemID=5110
    
24. http://www.arena.org.nz/venmedia.htm, Venezuelan Media Worker’s Statement
    
25. http://de.indymedia.org/2002/04/20376.html, Chronology of the Coup, Translated by Mark McHarry
    
26. Gregory Wilpert, “Coup in Venezuela: An Eyewitness Account”, http://www.zmag.org/content/LatinAmerica/wilpertcoup.cfm
    
27. Pablo Rodriguez, “Coup d’etat in Venezuela” Pagina 12 of Bueno Aires, translated by Narconews, http://www.narconews.com/Issue19/venezuelacoup1.html
    
28. Greg Palast, “Opec Chief Warned Chavez About Coup”, The Guardian, 5/13/02
    
29. Martin Sanchez, “Venezuela Leader to Face Recall Referendum”, http://www.venezuelanalysis.com/news.php?newsno=1285
    
30. Ibid
    
31. http://inflationdata.com/inflation/inflation_rate/Historical_Oil_Prices_Table.asp
    
32. Jon Anderson, “The Revolutionary”, The New Yorker, Sept. 2001, p. 63
    
33. Ibid p. 62
    
34. http://www.venezuelafoia.info/
    
35. Gregory Wilpert, “The Economics, Culture, and Politics of Oil in Venezuela”, www.venezuelanalysis.com/
    
36. Ibid
    
37. Gregory Wilpert, “Venezuela's Mission to Fight Poverty”, www.venezuelanalysis.com/
    
38. Vinod Shreeharsha, “Venezuela, Argentina: Oil Swap that Dampens Two Crises” Buenos Aires Herald, 4/17/04
    
39. Fred Rosen, Mercosur’s Hope, NACLA July-August 2003
    
40. Rodrigo Chaves and Tom Burke, “The Bolivarian Circles”, www.zmag.org
    
41. Alvaro Sanchez, “Bolivarian Circles: A Grassroots Movement”, www.venezuelanalysis.com
    
42. Christina Hoag, “Do-Gooders or Agents of Revolution?” Businessweek, 5/6/02
    
43. Ibid
    
44. Gregory Wilpert, “Venezuela's Mission to Fight Poverty”, www.venezuelanalysis.com/
    
45. Ibid
    
46. Ibid
    
47. Ibid
    
48. Ibid
    
49. Ibid
    
50. Tim Appenzeller, “The End of Cheap Oil”, National Geographic Magazine, June 2004