Chávez and the Search for an Alternative to Neoliberalism_Parker

8/12/2019 Chvez and the Search for an Alternative to Neoliberalism_Parker

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Chvez and the Search for an Alternative to NeoliberalismAuthor(s): Dick ParkerSource: Latin American Perspectives, Vol. 32, No. 2, Venezuelan Exceptionalism Revisited: TheUnraveling of Venezuela's Model Democracy (Mar., 2005), pp. 39-50Published by: Sage Publications, Inc.Stable URL: http://www.jstor.org/stable/30040275

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Chivez and the Search for an

Alternative to Neoliberalism

by

Dick Parker

Hugo Chav6z'svictory in the 1998 presidential lections surprisedpoliti-

cal pundits and academics alike. In fact, the political scientist Luis G6mez

Calcafio(2000: 3-4) asserted hat,despite the widespreadrecognitionof the

existence of a political crisis, "the only alternativediscourse seemed to be

thatof 'modernization,' nderstoodas the replacementof political partiesby

civil society, of ideology by pragmatism, f utopiasby technocratic hinking,

and of the stateby the market. .. Veryfew thought hatthe force capableof

displacing Acci6n Democritica (AD) and COPEI [the traditionallydomi-

nant political parties] would be [Chavismo]."This virtualblindness under-

scoredthe overwhelmingweight of neoliberal hinking n intellectualcircles

during he mid-1990s. It also reflectedthe conventionalwisdom datingfrom

the 1960s that Venezuelawas differentfrom the rest of Latin America and

immune to the region's ongoing political and social turbulence. What

became known as the "exceptionalism hesis" had been based on the smug

assumption hat Venezuelareflected a showcase for Latin America and that

the abundanceof oil resources had enabled the country's political leader-

ship to discover the key to modernization.One basic positive feature was

state-sponsored ndustrializationwithin the frameworkof democratic nsti-

tutions. Another was a power-sharing arrangementbetween two multi-

class parties that were increasingly difficult to differentiate deologically,

holding uniformpositions on essential issues and investing substantialgov-

ernment resources to smooth over the social tensions inherent in rapid

"modernization."

Of course, for most Venezuelans he exceptionalism hesis had a hollow

ring. Oil abundanceundermined ndustrialdevelopmentnot only in Vene-

zuela but also in most majoroil-exportingcountries Karl, 1999). The nonoil

componentof the Venezuelaneconomy had stagnated ince 1978, with only

occasional, sluggish and short-lived nterludesof growth.By the 1990s, the

Dick Parker s a Welshhistorian ducated n England.He has taughtat the Universityof Warwick

and the Universityof Chile and s currentlya professorof LatinAmericanstudies n the Sociol-

ogy Departmentat the UniversidadCentralde Venezuela.

LATINAMERICANPERSPECTIVES, ssue 141, Vol. 32 No. 2, March2005 39-50

DOI: 10.1177/0094582X04273866

2005 Latin AmericanPerspectives

39


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40 LATINAMERICANPERSPECTIVES

evidence of growing impoverishmentand increasing inequality belied the

optimistic expectationsof the 1960s and 1970s. The credibilityof the basic

democratic nstitutionshad been progressivelyundermined ince the forced

devaluationof the local currency n 1983, and the electoral influence of the

traditionalpartiesAD and COPEIplummetedduringthe 1990s. Indeed, by

the late 1990s the social, economic, and political crisis in Venezuelaproved

comparablewith if not worse than those of other countries n the region.

The popularuprising in 1989 known as the Caracazoand the frustrated

militarycoups in 1992 motivatedDaniel Levine, one of the U.S. political sci-

entists most identified with the exceptionalism thesis, to ask whether

"exceptionalism" ad not come to an end (1994). Despite the fact that the

assumptionsgeneratedby the thesis have been largely discredited, he litera-

tureon Venezuelastill bears he marksof its prolonged nfluence.Indeed,the

uncriticalacceptanceof neoliberal hinking-with its tendencyto pass over

social differences and conflict-has tended to encourage, albeit momen-

tarily, proponentsof exceptionalism. A large majority of Venezuelan and

U.S. academics in the social and political sciences are hostile to the

antineoliberalChaivez,whose rise to powerrepresented n implicitrefutation

of the exceptionalism hesis. These scholarshave been unwilling to address

the BolivarianRevolution's declaredgoal of building an alternative o neo-

liberalism.Those who areskepticalcan easily point out that he specific char-

acteristics of this alternativehave not been altogetherclear. It is true that

Chavismoshareswith classical populist movementsof the 1930s and 1940s

the tendency to put greateremphasis on denouncing the inequalitiesof the

prevailing system than on developing its own project. However, after six

years in power the regime has moved in the direction of sketching the

contoursof this alternative, hus opening the possibility of a debate over its

feasibility.

NEOLIBERALISM IN VENEZUELA

AND THE IMPORTANCE OF OIL

For obvious reasons, any debateover neoliberalismand its alternatives n

Venezuela requiresa discussion of oil and state energy policy. Indeed, the

debateover neoliberalism n Venezuelahas tendedto underestimate he cru-

cial importanceof the oil industry.After nationalization n 1976, the direc-

tors of Petr61leos e Venezuela (Petroleum of Venezuela-PDVSA), the

state-ownedoil company,managedto keep the problemof companypolicy

on the marginof public debate.Until the early 1990s, it was widely assumed


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Parker AN ALTERNATIVE O NEOLIBERALISM 41

that he policies established n the legislationgoverningnationalization oin-

cided with national nterests.PDVSA projectedan image that differentiated

it from the rest of the public sector, that of an efficient moderncorporation

resembling he private nternational il giants.As a result, he politicalparties

(including hose on the left) largely ost interest n oil as a topic for debateand

as a central eatureof theirprograms.At the same time, Congress,which had

closely supervised he industrywhile it was in foreign hands,also lost inter-

est. What s more significant s that he nationalexecutive tself, and particu-

larlythe Ministryof EnergyandMines, gradually ost its capacity o establish

policy and ended up as a mere rubber stamp for decisions made by the

company managers Mommer,2003).

The Venezuelanmanagersof PDVSA, who were kept on from the foreign

companiesExxon, Shell, and Gulf, resolutelypursueda policy of insulating

the company from government nterference.They argued hat by immuniz-

ing PDVSA against he notoriousclientelisticpracticesof the rest of the pub-

lic administration nd preserving t as an efficient moderncorporation, hey

were servingthe public interest.After 1982, when, to averta devaluation, he

HerreraCampins administrationdeprivedthe company of US$5.5 billion

destined for investment,the company directorsadopted measures to limit

government interference. PDVSA officials directed resources abroad,

including he purchaseof the Citgo PetroleumCompanyandvariousrefiner-

ies, on the pretext hat hese acquisitionsguaranteed market or Venezuelan

heavy crudes.It was they andnot the Venezuelangovernmentwho decidedto

transform he company nto an international onglomerate,and they pursued

the strategywithoutany majorpublic debate.Venezuelanpolitical organiza-

tions, including those that raised the urgentneed for reforms in the 1980s,

largely ignored the oil industry.

Once the second P6rezadministration1989-1993) had opted to open the

economy, PDVSA began to push the internationalization olicy with greater

audacity.The government'sproposalto open the industry o foreign invest-

ments proved controversial,since it clashed with the 1975 law governing

nationalization and the nationalist principles that had inspired it. After

PDVSA won over the SupremeCourt o a rather orced interpretation f that

legislation, foreign investorsreturned o the oil industry or the exploitation

of gas resources.However,not until the Calderaadministration1994-1999)

and under he directionof PDVSA'snew president,Luis Giusti,did the com-

pany consolidate plans and welcome foreign capital. During Giusti's presi-

dency the companypursuedan ambitiousplan to increaseproductive apac-

ity, thus contradicting he Organizationof PetroleumExportingCountries

(OPEC) policy of limiting production o maintainprice levels. The policy


5/13


was so well received in the United States that in 1998 Giusti was given the

PetroleumExecutive of the Year Award, the first to be grantedto a Latin

American or to the head of a state company. The Oil Daily explained that

"Giustiwas singled out for the leadershiprole he had played with a major

reformof Venezuela'soil sector, ncluding he reopeningof oil and gas activ-

ities to privatecompanies from home and abroad,as well as for the drive to

double the country'sproductioncapacity to 6.4 million b/d by 2007" (May

22, 1998).

Local political figures includingHugo Chaivez aisedtheir voices in pro-

test. They pointed to guarantees or foreign petroleum nvestors hat proved

extremelyonerousfor the Venezuelan tate and to the fact thatPDVSA plans

for expanding the nation's productivecapacity sought to obtain a greater

shareof the NorthAmericanmarketand implied a breakwith OPEC.Critics

of PDVSA and its opening to foreign capital raised other points related to

nationalpolitics. They accusedthe PDVSA executives of having contributed

decisively to the fiscal crisis of the state,pointing out thatthe company'sfis-

cal contributionshad fallen considerablyover the previous two decades.

Once established as an international orporation,PDVSA assumed the

attitude oward he state and its fiscal requirements ypical of any large pri-

vate corporation.Transfer-pricingimited ts fiscal obligations.Furthermore,

the profits generatedby the increasinglyabundant nvestmentsabroadwere

never repatriated o the parentcompany and thus contributednothing to the

state.In addition o these manipulations, he company obbiedfor a reduction

of the prevailing axationrates,arguing hatthey undermined he company's

capacity o investandoperatecompetitively n an industry ubject o continu-

ous technological advances.Legislativereforms ntroduced n 1993 signifi-

cantly reduced the tax burden.The result, according to Chiivez's Finance

MinisterTobiasN6brega,was that"in 1991, fiscal income was equivalent o

16%of GNP but declined to less than 10%during he course of the decade,

plummeting o less than5% n 1998, beforerecovering o an averageof 8.5%

in 1999-2000" (N6brega, 2002).

PDVSA also came underattack or being less efficient than its carefully

nurturedmage suggested.Its criticswere hamperedby the company'spolicy

of restricting he informationon the industryavailable o the public and even

to the government tself. Nevertheless, nternationalbusiness statistics sug-

gested in 2000 thatthe internalproblemsof the firm were even more serious

than its most outspoken critics had asserted. Estimates indicated that the

labor productivityof Texaco generated an income of US$1.9 million per

employee per year, that of Exxon US$1.8 million, that of Shell US$1.6 mil-

lion, and that of BP-Amoco US$1.3 million, but the PDVSA employee


6/13


produced no more than US$770,000 (Aharonian, 2003). These figures

revealedthe extent to which PDVSA had inflated ts costs.

CHAVEZ'S OIL REFORMS

The experience of six years of the Chavez government n the areas of oil

reform, social policy, and developmentmodels puts in evidence the broad

outlines of an alternative o neoliberalism.From the beginning, the Chaivez

movement has linked its new development model to oil policy (Chavez,

1996). The Chavez government ontributed o a rapidrecoveryof oil prices

by strengtheningOPEC. This achievement depended on one of the few

aspects of oil policy that still remained irmly in the hands of the national

executive,namely, ntergovernment greements.The revitalization f OPEC

made possible the search for feasible social and economic alternatives n

Venezuela.

Since the governmentconsidereda degree of macroeconomicstabilitya

prerequisite or structural hanges, t rejected he optionof directlyconfront-

ing the international inancial institutions.Nonpaymentof the foreign debt

was ruledout, currencyreserveswere maintainedhigh, and macroeconomic

policy was designed to bring nflationundercontrol.Indeed, t was precisely

these "orthodox" spects of economic policy that led some analyststo con-

clude that the balance was neoliberal (Vera, 2001). Other academics sug-

gested thateconomic policy, far from responding o Chivez's antineoliberal

rhetoric, simply retained the measures previously implementedunder the

recommendationsof international inancial institutions, and on this basis

they expressed earsthat he regimemightbe heading n the same directionas

Fujimori'sand Menem's (G6mez and Arenas, 2001: 108). These criticisms,

however, ailed to considersufficiently he government'spressing mmediate

objectives.The fact is thatduring he firsttwo years, the government'sprior-

ity had to be increasingoil revenuesto previous evels to avoid an economic

disaster.

In addition o strengthening inks to OPEC,the government mmediately

attempted o reestablish he role of the EnergyandMines Ministry n the for-

mulationof oil policy. Under Ali RodriguezAraqueand his successors, the

ministrybegan to prepare egislation designed to promotenational nterests.

The governmentwas hardly reverting o previous policies. It is true that it

honored contracts with foreign investors, despite their unfavorable erms,

and continuedto accept foreign investments o expandproductioncapacity,

but it modified the terms underwhich foreign capital would be accepted n


7/13


the future.At the same time, the plans for expandingproductionwere refor-

mulatednot as an alternative o OPECbut to strengthenVenezuela'sposition

during he periodicadjustments f the organization'smember-nation uotas.

The administrationdesigned a major legislative initiative to undermine

PDVSA'scapacity o manipulate ts records o minimizefiscal contributions.

The OrganicLaw of Hydrocarbons, romulgated s partof the controversial

packageof 49 laws in November2001, reduced axes and ncreasedroyalties

because the latterwere easier to calculate hanthe former.The law also man-

datedstatepossession of a majorityof stocks in all mixed companiesengaged

in primaryactivity in the oil industry.

Initiating reforms within PDVSA proved much more difficult. The

PDVSA executives inheritedfrom the Giusti era had been invested with a

"corporate pirit"and were accustomedto absolute control of the industry.

The successive PDVSA presidentsappointedby Chavezduring he firstthree

years of his administration id little to modify the company's unctioning; ts

thirdpresident,GeneralGuaicaipuroLameda, actually became the spokes-

man for the executives who criticized the government'snew Hydrocarbon

Law. Indeed, the executives, organizedas Gente de Petr6leo,played a major

role in the opposition'ssubsequentattempts o overthrowChaivez.They par-

ticipateddiscreetly n the one-day strikecalled by the Federaci6nVenezolana

de Cimaras y Asociaciones de Comercio y Producci6n (VenezuelanFed-

eration of Chambers and Associations of Commerce and Production-

FEDECAMARAS) and the Confederaci6nde Trabajadores e Venezuela

(VenezuelanWorkers'Confederation-CTV) on December 10, 2001, which

set the stage for the workstoppage hatpreceded he coup in April 2002. They

also played a central ole in the December2002 lockout, which resulted n the

dismissal of 18,000 mostly white-collar employees. The relative ease with

which production levels were restored after the two-month lockout sug-

gested that the industrydid, in fact, maintainan inflated labor force.

Once the governmentassumedcontrolof the industry,new changes were

introduced.PDVSA went aheadwith plans to increaseproductionand facili-

tate the participation of foreign capital. PDVSA's new president, Ali

Rodriguez,announced hat he companywould spendUS$40 billion by 2007

to increase ts potentialoutput rom threeto five million barrelsper day and

that more than US$18 billion was expected from foreign investors. These

plans were moremodest than hose proposedby Giusti.At the same time, the

terms of foreign participationwere modified.

The governmentrevampedPDVSA's organizationand introducedmea-

sures designed to favor local entrepreneurs, specially small and medium-

sized firms. In the aftermathof the two-month strike, workercooperatives

and community organizations provided services in areas such as the


8/13


distributionof gasoline, maintenance, and the supply of food and work

clothes in order o generateemploymentbeyondthe confines of the oil indus-

try. At the same time, PDVSA extended ts social programsparticularly or

neighboringcommunities.Nevertheless, it remains to be seen whether the

governmentwill be able to combine its ambitious nvestmentplans with a

surplus sufficient to finance its social agenda and whether t will resist the

temptation o subject he industry o the clientelisticpractices hatopposition

spokesmenhave anticipated.

SOCIAL POLICY AND THE

PLANS FOR ENDOGENOUS DEVELOPMENT

Critics of the governmenthave argued hat, far from embracinga policy

favorable o local entrepreneurs nd particularly o small and medium-sized

firms as was promised, the governmenthas adoptedmeasuresfavorable o

foreign capital. Thus, Carlos Blanco, a prominentopposition intellectual,

argued that the government's "confrontationwith the most conspicuous

nationalbusiness sectors ed it to privilegeforeign capital" 2002: 139). Sim-

ilar argumentshave been used to demonstrate hat the governmenthas pur-

sued "neoliberal"policies. Inconsistencies in governmentpolicy, together

with the tendency of local capital to play it safe when faced with risks or

uncertainty, have encouraged this sector to transfer its profits abroad.

According to one estimate,between 1999 and 2001 the net flight of capital

amountedto US$26.2 billion, about 40 percent of oil earnings during the

same period (Blanco, 2002: 375). Relations between the governmentand

multinational orporations aveundoubtedly een easier,not so muchbecause

of governmentpreferenceas because foreign capitalhas a longer time hori-

zon and confidence that ts diplomaticrepresentations capableof enforcing

contracts.

Nevertheless, stated governmentpolicy emphasizes the need to regulate

foreign capital and stimulate nvestmentby local businessmen.One recent

documentof the Productionand TradeMinistrydescribes its policy as fol-

lows (Ministeriode Producci6ny Comercio, 2003):

Publicpolicyshould oncentraten the creation f a competitive ndstable

environmentnd timulate rivatenitiatives s themotor f productivectiv-

ity,without bandoningheroleof state nterventionnthose ases nwhich he

market rovesdeficient r where such ntervention]s justifiedby conflicts

betweenprivate nterestsand social benefits.Furthermore,s the current

dynamic of capitalism creates little employment there is justification for


9/13


import-substitutingndustrialpolicies in those sectorsthatgenerate ubstantial

employmentand are dedicatedto meeting the needs of low-income groups.

The government'sgeneralpolicy, as in the case of PDVSA, is to look to the

local market o provide the goods needed in the public sector. The Chavez

government'spreference or local over foreign capital s clearly revealedby

its reaction to the Washington-promoted ree TradeArea of the Americas

(FTAA). This position also reveals the Chivez government'sviews on the

role of the state n the defense of nationalsovereignty. n the opinion of Vene-

zuela's Vice MinisterVictorAlvarez (2003: 282),

Thecommitmentsnddisciplines ssumed nderheAgreement ill severely

restrict he abilityof countrieso implement, s nationalnterestswarrant,

many f their ublic olicies n a sovereign nddemocratic anner. he mpli-

cations f the ollowing ouldbeparticularlyevastating:rohibitionsegard-

ingperformanceequirements,estrictionsn usinggovernmentrocurement

to promote ational evelopmentoals, he iberalizationf allpublic ervices

(which, in Venezuela'scase, would make it difficult to comply with constitu-

tional obligations o citizens in the critical areasof social policy and access to

public services) and the issue of regulationsbeing discussed in the context of

liberalizingagriculture,which could also hinderVenezuela'sabilityto comply

with the constitutionalmandateto promote policies aimed at ensuring food

securityorthecountry.

After the failure of the World TradeOrganization'sCancfinmeeting in

September2003, LatinAmericangovernmentsbecame more criticalof U.S.

proposals on hemispheric ntegration, hus encouragingChavez to coordi-

natepolicies amongvariousLatinAmericangovernments.His initialprogram,

the Agenda AlternativaBolivariana, ncluded a vague proposalto stimulate

what was called a "humanist elf-managingeconomy,"promotingcoopera-

tives, family businesses, and, in general, small and medium-sized firms as

part of an effort to encourage "solidarity": While the neoliberalplans are

based on the inhumanpremisethatthe best social policy is a good economic

policy, the Agenda AlternativaBolivarianaaffirms he principle hatthe best

socialpolicy is thatwhichresponds o thepopulation's eeds" Chavez,1996).

The Chavezgovernment as appliedmeasuresdesigned o stimulate oop-

eratives,and as a resultthe cooperativemovement,originallysmall in Vene-

zuela, has grownconsiderably.The government as also granted onsiderable

credits to small family businesses. Neither cooperatives nor government-

sponsoredcreditsfor the informaleconomy, however,are ncompatiblewith

neoliberalism. ndeed, similarprograms nspiredby proposalsby the Peru-

vian Hernandode Soto (2000) have been incorporatednto the mainstream f

neoliberalpolicy for underdevelopednations.


10/13


The differencesbetween Chivez's policy and the neoliberalapproachare

evident n the debateover the grantingof property ightsto squatters n slum

areas. The opposition party Primero Justicia (Justice First-PJ) proposed

legislation supporting ecognitionof property ights on the ground hatthey

would providepoorersectorsof the populationwith an opportunity o obtain

credit(by mortgaging heirproperty)andthus stimulate he establishment f

the small-scale enterprisesenvisioned by de Soto. At the same time, it pro-

posed five-year ail sentences for futuresquatters.PresidentChivez ignored

the proposaland issued a decree on February4, 2002, that offered different

solutions. To discourage future land invasions, the option of formalizing

propertyrights was limited to those who had occupied land prior to the

decree.Therewas no suggestionof new legal instruments o repress nvaders.

At the same time, instead of a simple propertydeed as proposedby PJ, the

governmentestablishedmechanismsto involve the respectivecommunities

in all decisions. Governmentpolicy not only addressed ndividualproperty

rights but also took in communityservices in those areas. While individual

propertydeeds obviously increased he possibilitiesof obtainingcredit as PJ

proposed), the Chavez administration mphasizedthe role of cooperatives

and neighborhoodgroups (Wilpert,2004).

To discuss social policy, it is necessary to grasp the dimensions of the

problem.The exceptionalism hesis explainedVenezuela'spolitical stability

as a result both of the trickling down of oil revenues and of the conscious

efforts of "responsible" olitical eaders o create he basis of a welfare state.

However, by the 1990s little evidence of either existed. Indeed, since the

early 1980s, the country had undergone accelerated impoverishmentand

deterioration f social services. According to the UN's Economic Commis-

sion on Latin America (ECLA), in 1990-1991 the proportionof the gross

domestic product(GDP) dedicatedto governmentsocial expenditureswas

below the average or LatinAmerica(9 percentagainst 10.1 percent),andby

1996-1997 the contrastwas even less favorable 8.4 percentagainst 12.4 per-

cent). While all the other Latin Americancountries (except Honduras)had

increasedthe proportionof GDP dedicated o social expenditureduring he

1990s, Venezuelahad reduced t. GarciaLarralde 2000) reports hatexpen-

dituresper capita n educationand healthfell from 1,100 bolivares(constant

prices of 1984) in 1977-1982 to about one-thirdof that amountduringthe

Calderaadministration1994-1999). Expenditures n public educationhad

fallen from almost 4 percentof the gross nationalproduct GNP) to less than

2 percent n the same period and expenditureson health from almost 1 per-

cent to 0.21 percent.Privatehealth and education services had expanded o

respond to the requirementsof those capable of paying for them while the


11/13


needs of the overwhelmingmajorityof the populationhad been increasingly

ignored.

CONCLUSIONS

On balance, the attempts of the Chivez administration o solve acute

social problemshave not yet borne fruit,and structural eformsare not com-

pletely underway. Nevertheless,there are clear indicationsof its priorities.

The progressivereductionof social expenditurehas been reversed.Between

1998 and 2001, these allocationsas a proportionof GDP rose from 8.4 per-

cent to 11.3 percent.Educationexpenditures ncreasedfrom 3.2 percent to

4.3 percentand social securityexpenditures rom 1.6 percent o 3.1 percent

(Parraand Lacruz,2003; Wilpert,2004). The governmentprohibited nroll-

ment fees for public schools and initiated a programof free meals. These

measurescontributed o the reincorporation f manychildrenwho had opted

out of the system for economic reasons. Nevertheless, neither n education

nor in social security were structural hanges introducedduring the first

years of the administration. ndeed,during2002 and early 2003 violent con-

frontationwith the opposition forces (includingthe frustrated oup in April

2002 and the lockout from December 2002 to February 2003) stymied

government nitiatives n social policy.

Havingsurvived he lockout,the Chaivez overnment ounterattacked nd

for the first time placed its social priorities n the forefrontof its political

strategy.Aided by buoyantoil prices, it increasingly assigned resources to

the resolutionof basic problemsrelated o healthand education.The govern-

ment set up a series of "missions" inanced argely from ministerialbudgets

and state-ownedenterprises above all PDVSA) and carriedout by parallel

structuresrather than the notoriously inefficient public administration.'

While receiving some logistical supportfrom the ministries, the missions

also tapped the resources of the popularmovement and organizations hat

had flourished n the wake of the coup attemptand the lockout. The missions

contributed o a marked ncrease in support or the government.The emer-

gency social measures introducedat the outset of the administration Plan

Bolivar,Fondo Unico Social, etc.) were conceived as stopgapmeasures hat

would last only untilstructural hangesoccurred,butthe programshave been

prolongedfar beyond what had been anticipated.Even the currentmissions

are emergencymeasuresand, f successful, will eventuallybe integrated nto

a cohesive administrative tructure.

Legislation aying the basis for a long-term dentificationof social priori-

ties has been scarce.None of the 49 laws passed simultaneously n November


12/13


2001 addressed he problem,and at least until December2002 therewere no

clear guidelines for overall policy. However,duringthe 2002-2003 lockout

the governmentpromulgated he much-delayedOrganicLaw of the Social

Security System, which is clearly antineoliberal.The new state-run ystem

will be financedcollectively and will provideuniversalcoverage. The oppo-

sition dismisses the law as demagoguerybecause of its cost. Undoubtedly,

the "renationalized" DVSA will have to provide substantialresources in

orderto make the system work. So far the necessary complementary egis-

lation has not been forthcoming.What is neverthelessclear is that the law

marksa radicalbreakwith the neoliberalmodel.

I have argued hat n the current nternational ontextthere s room for ini-

tiatives designed to breakwith neoliberalhegemony and that, despite its in-

consistencies and other shortcomings, he Chavez administration as finally

moved decisively in the directionof alternatives hat may be feasible. How-

ever, the lingering assumption that additional resources are forthcoming

could lead to the underestimation f the importanceof radicalchanges. Karl

(1999) has convincingly demonstrated hat oil rent has perverted he very

basis of the social and political textureof the nation.What s clear,however,

is thatan eventual ailurewill lead to a forceful return o neoliberal ormulas,

as happenedduringthe short-livedCarmona egime and as is generally the

case when an energetic searchfor a popularalternative uns out of steam.

NOTE

1. The most importantof these programshave been the round-the-clockprimarymedical

attention n poor areas,staffedby more than 11,000 Cubandoctors Misi6n BarrioAdentro), he

literacycampaign Misi6n Robinson),and programsofferingthe completionof secondaryedu-

cation for adults (Misi6n Rivas).

REFERENCES

Aharonian,Aran

2003 "Venezuela:a re-nacionalizaci6n e PDVSA."ALAI:AmericaLatinaen Movimiento,

January6.

Alvarez, Victor

2003 "Venezuelaante las negociaciones del ALCA: documento presentadopor la repre-

sentaci6n venezolana ante la XIII reuni6n del Comitd de Negociaciones Comerciales del

ALCA."Revista Venezolanade Economiay Ciencias Sociales 9 (May-August):279-286.

Blanco, Carlos

2002 Revolucidny desilusidn:La Venezuela e Hugo Chdvez.Madrid:Catarata.


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ChaivezFrias, Hugo

1996 "Introduccion,"n Agenda AlternativaBolivariana. Caracas.

de Soto, Hernando

2000 The Mysteryof Capitalism: WhyCapitalism Triumphs n the Westand Fails Every-

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Documents

Chávez and the Search for an Alternative to Neoliberalism_Parker