Venezuela’s Aspirations to Achieve Global Prominence: A Cautionary Tale

Venezuela’s Aspirations to Achieve Global Prominence: A Cautionary Tale

Jonathan Bissell

Introduction

Within two years of the flamboyant Venezuelan President Hugo Chávez’s death, his regionally inspired “Bolivarian Revolution” is currently facing the largest threat to its survival.[i]  Not only did Venezuela launch a bid to become a “middle power” in the late 1990s; but its initial success also inspired other rising poles of power, such as Brazil and Bolivia, to counter Latin America’s traditional acceptance of the United States’ (US) hemispheric hegemony.[ii]  The current Venezuelan President Nicolás Maduro, Chávez’s hand-picked successor, struggles to control civil unrest linked to negative domestic issues such as rampant inflation, a scarcity of basic goods, and a vastly deprecated national currency.  The path that Venezuela took to expand its regional and global power appears to be unraveling quicker than it was built.

This essay describes the evolution of Venezuela’s ambitions to become a “middle power,” not only within the Western Hemisphere, but also on the global stage.  This change started because of wide-spread internal dissatisfaction with the heavy influence of powerful national oligarchies and the extensive social disparities rampant within Venezuela.  In 1998 voters attempted to resolve these problems with the election of a populist candidate, Hugo Chávez.  What started as a fight to reduce inequality within Venezuela quickly impacted the politics of several other nation-states throughout Latin America.  Using plentiful oil revenues to “assist” other nations, Chávez led the hemispheric charge in a “shift to multi-polarity” amidst growing regional discontent with the unrealized gains of capitalism.[iii]  While doing so, this charismatic leader increasingly alienated himself from the US, and set his country up with an unsustainable governmental system.   However, Venezuela now deprived of the enormous economic benefits of high oil prices, seems to be crumbling without his leadership.

Populism as a Cure for Inequality

Although Venezuela has some of the largest oil reserves in the world, for many years its citizens suffered from massive inequality and poverty rates which nearly tripled from the 1970s through the 1990s.[iv]  Hugo Chávez, a former military officer, ran for president on a populist platform denouncing the Venezuelan government as “corrupt” and tools of a “rancid oligarchy.”[v] He eventually won the election with 56% of the vote.[vi]  Chávez then initiated large social reforms that aimed to support the impoverished and initially his popularity increased rapidly. 

Chávez chose to keep much of the traditional structure of the Venezuelan democratic system which had been in use since 1959.[vii]  However, as he consolidated power he displaced many of the traditional elites with his own political acquaintances.[viii]  This led to enormous inefficiencies in governance and doubled the public sector’s pay over the past 16 years.[ix]  Because so much of this new political structure was based on personal relationships instead of proven institutional governing capabilities, corruption levels rose significantly.  For example, an estimated $2.2 billion worth of Venezuelan fuel is smuggled away annually to its neighboring countries.[x]      

Timing and luck were also key ingredients in Chávez’s formula for success.  When he was elected in 1998, the average price of a barrel of oil was only $12.00. However, the price of oil rose quickly over the next several years from $12.00 to $60.00 by 2005, and $140.00 a barrel by 2008.[xi]  This huge influx of cash enabled Chávez to continue his enormous social spending, while simultaneously reducing the freedom of the press, reforming the constitution, and seeking to expand his own power and influence throughout the region and the world.

Chávez’s former participation in a coup attempt in 1992 combined with his harsh anti-US rhetoric on the campaign trail, initially cast him in a dubious light to the various agencies of the US’s diplomatic community.  He further alienated himself by re-writing the Venezuelan constitution and dramatically expanding his presidential authorities in 1999.[xii]  Many citizens disagreed with this power grab and large protests broke out.  These protests culminated with an attempted coup in 2002 when Chávez was temporarily removed from power.  Chávez surmised that the US had participated either actively or passively in the coup and adopted a harsher, more socialistic agenda from then onward.[xiii]  Although Venezuela continued to sell enormous amounts of oil to the US, Chávez began to build and support regional regimes and enhanced relationships with governments that had traditionally been at odds with the US, such as Cuba, Russia and Iran.

Regional Alliance Building and Influence

Building a strong relationship with Cuba, Chávez initiated the Alianza Bolivariana para los Pueblos de Nuestra América (ALBA) in 2004.[xiv]  ALBA was founded on the ideals of social justice and began with only Cuba and Venezuela as its initial members, but rapidly grew to 11 member states.  Most of the ALBA states, along with other like-minded regimes in the region, began to emulate Chávez’s anti-West rhetoric and policies.  In return they received large economic assistance benefits from Venezuela.[xv] Venezuela relished its new role and embraced the “radical governments that emerged in…Bolivia, Ecuador, Nicaragua and Argentina.”[xvi]

It was with these other allies, along with center-left allies such as President Luis Inacio Lula de Silva of Brazil and President Manuel Zelaya of Honduras, that Chávez expanded his country’s influence through the construction or support of several regional political and trade regimes such as: the Caribbean oil alliance – Petrocaribe, the Mercado Común del Sur (MERCOSUR), the União de Nações Sul-Americanas (UNASUR), and the Comunidad de Estados Latinoamericanos y Caribeños (CELAC).  These regional, intergovernmental institutions shared the common bond of shaking off US “imperialism” and sought greater integration and regional cooperation.[xvii]  Many of their member states also shared a common aid partner – Venezuela – and Venezuela outspent the US in regional aid in oil subsidies and cash at a 5:1 ratio; doling out $10 billion a year in aid to Latin American allies from 2005 forward.[xviii]

A Global Reach and Tough Realities

Bolstered by this hemispheric success, Chávez sought greater leadership positions on the world stage and received support from many of the developing world states within the General Assembly of the United Nations (UN) – the G-77 block.[xix] Venezuela also established and strengthened diplomatic and financial ties with authoritarian regimes in Russia, China, Cuba and Iran.  Using these regional and global support relationships, Venezuela attempted to obtain a seat on the UN Security Council in 2006.[xx]  It seems to be here however, that the extent of Chávez’s populism, which had served him so well within Latin America, began to wane. 

His harsh speech at the UN in 2006, which personally attacked the President of the US, George W. Bush, looked amateurish and damaged the Venezuelan agenda – the UN Security Council seat eventually went to Panama.[xxi]  Less than a year later he was asked to “shut up” by the King of Spain, King Juan Carlos I, during an summit in Chile.[xxii]  Soon, other leaders began to distance themselves from him as well.  The oil revenue that had provided so much of the lubricant for the political machinations of the “Bolivarian Revolution” began to experience liberal market fluctuations with prices behaving inconsistently over the next three years.[xxiii]

There was also regional political backlash.  Brazil’s President Lula continued to embrace free-market capitalism – rejecting socialism.  Additionally, a coup in Honduras in 2009 ousted the pro-ALBA President Zelaya, and in 2012 Paraguay’s left-leaning President Fernando Lugo was impeached.[xxiv]  With so much of the reform movement based on his personality, Chávez’s diagnosis of cancer in 2012 and his subsequent death in 2013 left the coalition with the leadership of the unremarkable Nicolás Maduro.[xxv]  The 2014 declaration by the US’s Obama Administration to begin the normalization of diplomatic relations with Cuba took away an enormous “straw man” that populist leaders in Latin America had successfully used for years.  A nation that had experienced such a fast rise became the punchline of jokes, as its citizens struggled to find basic goods such as toilet paper, with an unstable economy that had frittered away so much of its own wealth.

Conclusion

The recent discovery of “fracking,” technology in the US, a diversity of energy options, and higher efficiencies in fuel consumption for automobiles (amongst other international economic factors) led to a global drop in oil prices, shrinking Venezuela’s profit margins, which are based almost exclusively on this global commodity.  Although there is little doubt that Venezuela indeed enhanced its position in the region, with poor economic policies such as the nationalization of many departmental and grocery stores, a fixed-exchange rate, and fiscally irresponsible price controls, the government struggles to maintain its solvency with significantly reduced oil revenue.[xxvi]  The once proud lender state has been reduced to asking China and Russia for bail-outs, and its regional influence has significantly diminished.  Although levels of domestic inequality have fallen, the substantial inefficiencies of corrupt governmental bureaucracies, the flight of both monetary and human capital, and the shaky alliances built primarily on aid contributions have left Venezuela in an unsustainable geo-political position.

It appears as if Venezuela’s socialism experiment will end soon; political analysts hope peacefully.  In its wake will be several semi-functional regional institutions attempting to pick up the various remnants of the “South-South” regional integration aspirations.  In retrospect, it seems that the process of tearing apart a functioning, liberal democracy through popular rhetoric and unfulfilled promises was much easier than the tasks for rebuilding it will be.

End Notes

[i] Editorial staff, “The Revolution at Bay,” The Economist, 14 - 20 February, 2015, page 31.

[ii] David Smilde, “The End of Chavismo,” Current History: A Journal of Contemporary World Affairs, February, 2015, page 49.

[iii] Victor M. Mijares, “Venezuela’s Post-Chavez Foreign Policy,” Americas Quarterly, Winter, 2015, page 74.

[iv] Abraham F. Lowenthal, Theodore J. Piccone, and Laurence Whitehead, Shifting the Balance: Obama and the Americas, A Brookings Latin America Initiative Book (Washington, D.C.: Brookings Institution Press, 2011), page 70.

[v] Peter H. Smith, Talons of the Eagle: Latin America, the United States, and the World, fourth ed. (New York: Oxford University Press, 2013), page 272.

[vi] Ibid.

[vii] Abraham F. Lowenthal, Theodore J. Piccone, and Laurence Whitehead, Shifting the Balance: Obama and the Americas, A Brookings Latin America Initiative Book (Washington, D.C.: Brookings Institution Press, 2011), page 71.

[viii] Ibid.

[ix] Editorial staff, “The Revolution at Bay,” The Economist, 14 - 20 February, 2015, page 31.

[x] Ibid.

[xi] Peter H. Smith, Talons of the Eagle: Latin America, the United States, and the World, fourth ed. (New York: Oxford University Press, 2013), page 279.

[xii] Abraham F. Lowenthal, Theodore J. Piccone, and Laurence Whitehead, Shifting the Balance: Obama and the Americas, A Brookings Latin America Initiative Book (Washington, D.C.: Brookings Institution Press, 2011), page 70.

[xiii] Peter H. Smith, Talons of the Eagle: Latin America, the United States, and the World, fourth ed. (New York: Oxford University Press, 2013), page 279.

[xiv] Alianza Bolivariana para los Pueblos de Nuestra América, http://www.portalalba.org/index.php/, (Accessed 29 April, 2015)

[xv] William R. Keylor, The Twentieth-Century World and Beyond: An International History Since 1900, 6th ed. (Oxford: Oxford University Press, ©2011), page 557 - 558.

[xvi] Ibid, 558.

[xvii] Alianza Bolivariana para los Pueblos de Nuestra América,  http://www.portalalba.org/index.php/, (Accessed 29 April, 2015)

[xviii] Cynthia McClintock,  “Latin America’s Middle Powers: Venezuela’s Smart Power,” lecture for PSC 6484 International Relations in Latin America (presented 22 April, 2015, Washington D.C.).

[xix] Peter H. Smith, Talons of the Eagle: Latin America, the United States, and the World, fourth ed. (New York: Oxford University Press, 2013), page 280.

[xx] Ibid.

[xxi] Ibid.

[xxii] Editorial staff, British Broadcasting Corporation, “Shut up, Spain’s King tells Chávez,” 10 November, 2007, http://news.bbc.co.uk/2/hi/americas/7089131.stm, (Accessed 29 April, 2015).

[xxiii] Peter H. Smith, Talons of the Eagle: Latin America, the United States, and the World, fourth ed. (New York: Oxford University Press, 2013), page 281.

[xxiv] Cynthia McClintock,  “Latin America’s Middle Powers: Venezuela’s Smart Power,” lecture for PSC 6484 International Relations in Latin America (presented 22 April, 2015, Washington D.C.).

[xxv] Editorial staff, “Maduro’s Muzzle,” The Economist, 4 – 10th April, 2015, page 32.

[xxvi] Editorial staff, “The Revolution at Bay,” The Economist, 14 – 20th February, 2015, page 31.

Bibliography

Alianza Bolivariana para los Pueblos de Nuestra América, http://www.portalalba.org/index.php/, (Accessed 29 April, 2015)

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Keylor, William R. The Twentieth-Century World and Beyond: An International History Since1900, 6th ed. (Oxford: Oxford University Press, ©2011).

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McClintock, Cynthia.  “Latin America’s Middle Powers: Venezuela’s Smart Power,” lecture for PSC 6484 International Relations in Latin America. (Presented 22 April, 2015, Washington D.C.).

Mijares, Victor M. “Venezuela’s Post-Chavez Foreign Policy,” Americas Quarterly. Winter, 2015.

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