Tower of Bebel
20th January 2008, 14:03
Venezuela
Chvez slows to a trot
Jan 10th 2008 | CARACAS
From The Economist print edition
Socialism, but for a while only at the speed of a donkey
Illustration by Peter Schrank
http://www.economist.com/images/20080112/D0208AM1.jpg
SMARTING from his first-ever electoral defeat last month, Hugo Chvez has begun the year by shifting his leftist revolution into lower gear. The main motor seized up, so we'll have to go by donkey instead, he said on his weekly television show, Al Presidente (Hello President), on January 6th. The motor was a reform of the constitution aimed at turning Venezuela into a socialist state and giving the president the chance to stay in power indefinitely. By a narrow margin voters rejected this in a referendum on December 2nd, leaving the revolution coasting in neutral.
I'm obliged to apply the brakes, said the president, admitting that his mistake had been to get too far ahead of what Venezuelans were prepared to accept. With five years of his presidential term still left, he has the luxury of reconsidering the method while retaining the same goals. So he has announced a period of what he calls the three Rs the revision, rectification and relaunching of the revolution.
He might have added another requirement: rapid results. In October the country will vote again, this time for mayors and governors. With 22 out of the 24 states currently in chavista hands, the president has a lot to lose. To avoid another reverse he needs to address the problems that, by common consent, lay behind his defeat.
The first is governmental incompetence. The revolution has failed to tackle a long list of problems, from crime to the cost of living. Mr Chvez's response was to make a dozen ministerial changes in early January. Out went the vice-president, Jorge Rodrguez, an outspoken radical, who was in charge of the referendum campaign. His replacement, Ramn Carrizales, is a retired colonel who quietly ran the housing ministry. Unlike Mr Rodrguez, who was also overseeing the creation of Mr Chvez's new political party, the Unified Socialist Party of Venezuela (PSUV), Mr Carrizales will focus exclusively on government, the president said.
Another big problem is the demoralisation of Mr Chvez's own movement. Last year the president abruptly announced that he was creating the PSUV as the sole party of the revolution. But three allied parties refused to join; one of them has moved into opposition. The PSUV is due to be formally launched on January 12th. But squabbling between its factions is intensifying in the run-up to the local elections. Those with ambitions to succeed Mr Chvez after the next presidential election in 2012 know that the best launch pad is to become governor of an important state. Here, too, the president has chosen to ease up. He has acknowledged what was previously anathema: the existence of legitimate internal currents within the movement. And he has dropped his insistence that only those prepared to join the party can be part of the revolution.
The third pressing issue is the economy. Inflation soared to 22.5% last year, almost double the government's target. Staples such as milk, cooking oil and flour are in short supply. On January 1st the government launched a new currency, the strong bolvar, cutting three zeroes from its predecessor. Officials presented this as part of a plan to tame inflation. But since it has not been backed by policy changes, its main effect is just to simplify accounting.
The new finance minister, Rafael Isea, admits that the government needs to stimulate food production, which has failed to match growing demand prompted by an oil-fuelled economic boom. After the referendum his predecessor promised a more flexible approach to price controls, which the private sector sees as the main cause of the shortages. What this means in practice has yet to be spelled out.
A big shift towards more market-friendly policies is unlikely. Mr Isea is a former army lieutenant, with a limited background in economics. The new planning minister, Haiman El Troudi, is a youngish ideologue, as committed to central planning as his predecessor, the president's elderly economic guru, Jorge Giordani. Mr Chvez's call for alliances with the private sector and the middle class on Al Presidente was broadcast from a newly inaugurated socialist training school, against a backdrop featuring a portrait of Fidel Castro, Cuba's communist president.
Indeed, Mr Chvez announced that he was launching a fresh socialist offensive. He promised that applying the brakes to the revolution in no way implied surrender, moderation or conservatism. He even announced the creation of a food production and distribution division of the state oil company, Petrleos de Venezuela. Mr Chvez acknowledges going too fastbut not in the wrong direction.Opinionated as always, but I still wanted to post it.
Well, it seems like he wont end the rule of some capitalist over there in Venezuela. "We need to produce more food" they say, but they don't think of getting rid of those capitalists or imperialist interest responsible for the lack of some basic products in Venezuela's stores. Unless, of course, someone has other info.
Chvez slows to a trot
Jan 10th 2008 | CARACAS
From The Economist print edition
Socialism, but for a while only at the speed of a donkey
Illustration by Peter Schrank
http://www.economist.com/images/20080112/D0208AM1.jpg
SMARTING from his first-ever electoral defeat last month, Hugo Chvez has begun the year by shifting his leftist revolution into lower gear. The main motor seized up, so we'll have to go by donkey instead, he said on his weekly television show, Al Presidente (Hello President), on January 6th. The motor was a reform of the constitution aimed at turning Venezuela into a socialist state and giving the president the chance to stay in power indefinitely. By a narrow margin voters rejected this in a referendum on December 2nd, leaving the revolution coasting in neutral.
I'm obliged to apply the brakes, said the president, admitting that his mistake had been to get too far ahead of what Venezuelans were prepared to accept. With five years of his presidential term still left, he has the luxury of reconsidering the method while retaining the same goals. So he has announced a period of what he calls the three Rs the revision, rectification and relaunching of the revolution.
He might have added another requirement: rapid results. In October the country will vote again, this time for mayors and governors. With 22 out of the 24 states currently in chavista hands, the president has a lot to lose. To avoid another reverse he needs to address the problems that, by common consent, lay behind his defeat.
The first is governmental incompetence. The revolution has failed to tackle a long list of problems, from crime to the cost of living. Mr Chvez's response was to make a dozen ministerial changes in early January. Out went the vice-president, Jorge Rodrguez, an outspoken radical, who was in charge of the referendum campaign. His replacement, Ramn Carrizales, is a retired colonel who quietly ran the housing ministry. Unlike Mr Rodrguez, who was also overseeing the creation of Mr Chvez's new political party, the Unified Socialist Party of Venezuela (PSUV), Mr Carrizales will focus exclusively on government, the president said.
Another big problem is the demoralisation of Mr Chvez's own movement. Last year the president abruptly announced that he was creating the PSUV as the sole party of the revolution. But three allied parties refused to join; one of them has moved into opposition. The PSUV is due to be formally launched on January 12th. But squabbling between its factions is intensifying in the run-up to the local elections. Those with ambitions to succeed Mr Chvez after the next presidential election in 2012 know that the best launch pad is to become governor of an important state. Here, too, the president has chosen to ease up. He has acknowledged what was previously anathema: the existence of legitimate internal currents within the movement. And he has dropped his insistence that only those prepared to join the party can be part of the revolution.
The third pressing issue is the economy. Inflation soared to 22.5% last year, almost double the government's target. Staples such as milk, cooking oil and flour are in short supply. On January 1st the government launched a new currency, the strong bolvar, cutting three zeroes from its predecessor. Officials presented this as part of a plan to tame inflation. But since it has not been backed by policy changes, its main effect is just to simplify accounting.
The new finance minister, Rafael Isea, admits that the government needs to stimulate food production, which has failed to match growing demand prompted by an oil-fuelled economic boom. After the referendum his predecessor promised a more flexible approach to price controls, which the private sector sees as the main cause of the shortages. What this means in practice has yet to be spelled out.
A big shift towards more market-friendly policies is unlikely. Mr Isea is a former army lieutenant, with a limited background in economics. The new planning minister, Haiman El Troudi, is a youngish ideologue, as committed to central planning as his predecessor, the president's elderly economic guru, Jorge Giordani. Mr Chvez's call for alliances with the private sector and the middle class on Al Presidente was broadcast from a newly inaugurated socialist training school, against a backdrop featuring a portrait of Fidel Castro, Cuba's communist president.
Indeed, Mr Chvez announced that he was launching a fresh socialist offensive. He promised that applying the brakes to the revolution in no way implied surrender, moderation or conservatism. He even announced the creation of a food production and distribution division of the state oil company, Petrleos de Venezuela. Mr Chvez acknowledges going too fastbut not in the wrong direction.Opinionated as always, but I still wanted to post it.
Well, it seems like he wont end the rule of some capitalist over there in Venezuela. "We need to produce more food" they say, but they don't think of getting rid of those capitalists or imperialist interest responsible for the lack of some basic products in Venezuela's stores. Unless, of course, someone has other info.