Frontline World

VENEZUELA, A Critical Turning Point, August 2003
a FRONTLINE/World Fellows project
Venezuela: A Critical Turning Point
Introduction
My Country's Rise and Fall
Hugo Chavez Comes to Power
The President's Foes Strike Back
Tapping a Nationalist Vein
Chavez's Remarkable Staying Power
A Clash Between Rich and Poor
Venzuela's Next Chapter
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My Country's Rise and Fall

The First Shock: Hugo Chavez's Sudden Coup Attempt Rattles the Middle Class

Angel Gonzalez at age 6, with his mother, Dr. Gladys Perez de Gonzalez, and brother Miguel Angel, 3.

Angel Gonzalez at age 6, with his mother, Dr. Gladys Perez de Gonzalez, and brother Miguel Angel, 3. This picture was taken in the comfort of middle-class Caracas in 1982, just as oil prices began to collapse.
Caracas rests in a long valley at 3,000 feet. This can make mornings quite chilly, especially for a tropical city. On just such a morning on February 4, 1992, I awoke at 5am to the sounds of the coffee pot bubbling and the television blaring. It was odd to find my parents watching television at that hour. I padded down the hallway of our home to watch with them while then-President Carlos Andres Perez announced a coup attempt against his government.

I was only in middle school, but I felt as surprised as anybody else from my generation to hear of a possible military revolt in our country. Venezuela, the world's fifth-largest oil producer, after all, was supposed to be Latin America's most unshakable democracy. For the entire middle class, this revolt was the beginning of a painful awakening. After a full day of televised battles between loyal and rebel troops, the coup leader, a little-known lieutenant colonel named Hugo Chavez, surrendered. He gave up only on the condition that he be allowed to speak to the cameras live. This became Chavez's first nationwide address -- and his first public relations master stroke.

Most Venezuelans, including my parents and me, watched as Chavez introduced himself to the country. He wore a paratrooper's uniform topped by a red beret. Surrounded by other military men and besieged by reporters, he called upon his troops to surrender. Before being hustled off to prison for his role in the rebellion Chavez also added tellingly: "The fight against corruption is over -- for now." He may have seemed then like an aberrant flash-in-the-pan. Few predicted that the future of the country would become so entwined with his political career. But his brief, no-nonsense address cast the die.

Perhaps a more prescient observer would have understood that Chavez's coup attempt was no throwback, but rather was the beginning of something new. Chavez had placed his finger on an irresistible issue -- the widespread corruption imbedded in Venezuela's neoliberal government. And in the coming years, this criticism took on added luster. To understand why requires a slight detour through contemporary Venezuelan history.

Saudi Venezuela: An Economic Boom, Fueled by High Oil Prices, Leads to a Bust

Natural gas pipes in the Moron refinery.

Natural gas pipes in the Moron refinery. The complex -- one of the largest in the world -- came to a standstill during the December 2002 strike, but was restarted by retired PDVSA workers.
Modern Venezuela -- or Venezuela Saudita, as we jokingly used to call it -- emerged in the 1950s after a century and a half of instability following independence from Spain. The last military dictatorship was overthrown in 1958. Two broad-based middle-class political parties that had organized against successive dictatorships -- Acción Democrática and COPEI (Social Christian Party) -- reached a power-sharing agreement with one another to usher in a social democracy styled after those of Western Europe. The new order was designed, among other things, to keep Communism at bay. And although Cuban-inspired guerrillas roamed the countryside in the 1960s, they had little success in expanding their ranks, primarily because they offered Venezuelans little in exchange for the dream of a fortune built on the oil boom.

This was the country my father, a 22-year-old refugee fleeing the Cuban Revolution, came to in 1961. He was one of millions of new immigrants who flocked to Venezuela from Europe and the Americas in successive waves. The country my father adopted had one of the fastest-growing economies in the world. Professionals and unionized workers alike prospered in what was fast turning into a consumer paradise. After the 1973 oil boom, the national budget quadrupled. Venezuela seemed poised to join the ranks of industrialized countries. Skyscrapers bloomed. Caracas grew into a city of 2 million, and for all its daunting verticality -- its jungles of tall buildings, modern subways and multilevel highways -- it remained immensely livable.

For anybody who doubted whether this good fortune could last, there was one apparent trump card: We Venezuelans sat on the world's third-largest reserves of oil. When I was growing up, it didn't seem possible that destiny could be reversed. But what nature bestowed and entrepreneurial zeal built upon was rather suddenly threatened in the 1980s by falling oil prices

By the late 1980s, the two dominant political parties faced what proved to be an insuperable challenge. The bloated government's fat budgets had fostered corruption, deindustrialization, and excessive borrowing at low interest rates from international banks. Vast amounts of money had been frittered away on luxurious government buildings, costly subsidized factories, Florida real estate and the premium Scotch that had fueled the orgiastic parties of the newly rich.

None of these excesses seemed important while prices soared and the economy boomed. But when oil prices fell in 1983, earnings could not support the rapidly growing population. Now a different kind of growth took off -- the burgeoning size of the shantytowns that ring Caracas. By 1989, the number of Venezuelans in poverty had more than doubled, to 60 percent. Efforts by two presidents to strike the right balance between a reformed economy at home and workable agreements with the International Monetary Fund faltered. Four years of economic and political instability followed. Hugo Chavez watched, from prison, while the system he'd decried crumbled under its own weight.

NEXT: Hugo Chavez Comes to Power