Leadership: What Vexes Venezuela


February15, 2007: In Venezuela, populist president Hugo Chavez has been rather quiet these past few weeks. Last heard from early in February, when he denounced George Bush as a "war criminal," Chavez seems to be having problems with the fall-out from some of his actions earlier this year. Following his inauguration for a new term as president in mid-January, he declared that the oil and electrical industries were to be nationalized, and that all political parties would be abolished and subsumed under one "Socialist" party, with himself as its head. Then he asked the national congress to grant him the power to rule by decree. In between, he's renewed his "friendship" with Iran's extremist President Mahmoud Ahmadinejad, made openly anti-Semitic remarks, undertaken gratuitous attacks on the Roman Catholic Church, and fired a couple of his formerly very close advisors.

Chavez' antics have led to a number of important consequences. Many political leaders, even radical leftists, are suspicious of his unified "socialist" party and his desire for more power. The announced nationalization of the oil and electrical industries, supposedly to begin in May, led to an immediate collapse in the Venezuelan stock exchange of nearly 25-percent (and still falling), as foreign investors began pulling out their money. This has worsened the country's already faltering economy.

Aided by his buddy Ahmadinejad, who has similar problems, Chavez is trying to get OPEC to boost the price of oil, which would compensate in some measure for the economic losses the country is incurring. This is unlikely given Saudi Arabia's desire to keep the price relatively low, which has the dual payoff of keeping Uncle Sam happy while injuring the already shaky Iranian economy. So Venezuelans are not likely to see any improvement in their economic situation any time soon.

Two things keep Chavez in power, his promises of "pie in the sky" to the country's poverty-stricken masses and his ultra-nationalist anti-Americanism. Sooner or later the message that the U.S. is behind all of Venezuela's problems will begin wearing thin, particularly as Chavez spends more and more money of weapons procurement and buying influence abroad. This will certainly lead to internal problems, which will spark increased police state measures. These, in turn, will only create more discontent. The optimal American policy toward Chavez should be one of amused indifference, which will probably irk him more than any active measures to unseat him.


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