Victor: Hugo

Victor: Hugo
Flush with petrodollars and bolstered by the support of poor citizens across the region, Hugo Chavez has succeeded in redefining the debate in Latin America.

By Joseph Contreras and Phil Gunson

Newsweek International

Oct. 31, 2005 issue - Inside a dank warehouse in the working-class Buenos Aires neighborhood of La Boca last week, young Argentines were standing cheek to cheek and swaying to the danceable rhythms of a live band. But the violins and bandoneones of a tango orchestra had been replaced by the acoustic guitars and percussion instruments of a Venezuelan folk group called Mestizo. The sweat shirts and windbreakers worn by the musicians featured the logo of Venezuela's Ministry of Energy and Petroleum, and the warehouse walls were festooned with fliers that read, toward the construction of 21st-century socialism. Mestizo was in the final stages of an eight-country tour of South America financed by the petrodollars of President Hugo Chavez to promote his pro-Cuba, anticapitalist, Bush-baiting agenda. And on this chilly Sunday evening, the propaganda found a ready audience. "With the oil money, Chavez is carrying out a social empowerment that Venezuela never had before," gushed a 23-year-old university student named Martin Zelaya. "I think it's fantastic."

Those words should be music to Hugo Chavez's ears. In recent months the 51-year-old Venezuelan president has stepped up his courtship of fellow heads of state throughout Latin America, and his oil-fueled charm offensive is yielding results. In September, Chavez signed a trade pact with nine Caribbean governments that will supply Venezuelan crude under favorable credit terms over the next 25 years; later that month, he drew some of the loudest ovations at the annual United Nations General Assembly with his ringing denunciations of the U.S. government as "a terrorist state." Bolstered by a weak internal opposition, Chavez is at the zenith of his power at home, and he is expected to occupy center stage at the fourth Summit of the Americas that gets underway next week in the Argentine resort city of Mar del Plata.

The great masses of the poor in one of the most unequal regions of the world provide a ready audience for Chavez and his populist message. His shadow will thus loom larger than any other over the 10 presidential elections scheduled around the region between now and the end of 2006. "There are movements in Latin America that look to him either as a model or as a source of financing or both," notes former Mexican foreign minister Jorge Castaneda. "And there he can exert an enormous amount of influence."

That possibility has U.S. officials deeply worried. In the nearly five years since George W. Bush first took office, voters in five South American countries have veered to the left as a way of registering anger and disenchantment with the alleged failures of the Washington-backed free-trade economic policies that so many leaders in the region embraced during the 1990s. That trend now threatens to engulf Mexico, where the leader of the left-wing Democratic Revolution Party, Andres Manuel Lopez Obrador, continues to enjoy a comfortable lead in the polls ahead of the presidential election scheduled for next July. It could emerge well before then in Bolivia, where voters will go to the polls in December and Evo Morales, the fiery head of the country's coca growers, is in a statistical dead heat with the leading center-right candidate in the presidential race. It might even extend to Nicaragua, where the veteran Sandinista leader and ex-president Daniel Ortega is hoping to regain power in 2006 after a 16-year hiatus in the ranks of the opposition. Chavez is relishing the prospect. "Daniel Ortega is a close friend... Evo Morales is my friend, another great guy," Chavez told NEWSWEEK's Lally Weymouth last month. "Latin America today is going to the left and not to the right, [and] we are together in the same revolutionary effort."

Not since Fidel Castro started cozying up to the Soviet Union in 1960 has a U.S. administration faced such a stridently anti-American firebrand in the region with the resources that Chavez has at his disposal. It wasn't always thus. Three years ago the man his supporters call El Comandante was very much on the ropes: having narrowly survived a bungled military coup in April 2002, Chavez faced an opposition-led general strike that dragged on for two months, plunging the country into its worst recession in decades. But his fortunes began to brighten as the price of oil crept upward in the first half of 2004—and ever since he survived a recall referendum organized by his political foes in August of that year, Chavez has been on a roll. He's riding particularly high among the country's urban poor, thanks to the proliferation of health, education and welfare programs known as misiones and the deployment of 23,000 Cuban doctors, teachers, physiotherapists, sports coaches and literacy experts in the squalid barrios of Caracas and other major cities.

Emboldened by his political comeback, Chavez proclaimed himself a born-again socialist during a visit to Havana last May and has tacked a far more radical course in domestic policy since the beginning of the year. The expropriation of large and supposedly idle ranchlands and industrial installations has been accompanied by the formation of tens of thousands of rural and urban cooperatives, many of which were launched with government seed money. Chavez has declared war on capitalism and its underlying profit motive, and has mooted the idea of paying Venezuelan workers in something other than old-fashioned wages. "Being rich is bad," he has argued. "Corruption is a product of capitalism."

The question is whether these measures add up to an exportable philosophy, as many in the region hope and many others fear. For all his talk about 21st-century socialism, Chavez has stopped well short of calling for the abolition of the Venezuelan private sector. Apart from hiking the taxes that international oil companies must pay and forcing changes in the contractual terms that govern their operations, Chavez has largely allowed these pillars of international capitalism to go about their business. That has prompted criticism and second-guessing from supporters on the president's left flank. "If we have an anti-imperialist discourse here," retired university professor Elie Habalian wondered aloud during a recent meeting at the Venezuelan Foreign Ministry, "why are we welcoming the chairman of ChevronTexaco?"

Chavez's real influence may be rhetorical. He is not about to alter economic policy in Latin American giants like Argentina and Brazil, where Presidents Nestor Kirchner and Luiz Inacio Lula da Silva have revived their economies in part with market-friendly fiscal policies. But the Venezuelan leader's demonstrated ability to defy Washington and get away with it will only encourage fellow leftists like Morales and Ortega to step up their bashing of the Bush administration on the campaign trail. If elected president in their respective countries, they may move to reduce cooperation with the U.S. government on issues like the war on drugs and endorse Chavez's unyielding opposition to a Washington-backed free-trade treaty encompassing the entire Western Hemisphere. The oil deals with governments in the Caribbean and elsewhere will likely trans-late into pro-Chavez votes on issues that come before the 35-nation Organization of American States.

Even Kirchner and Lula are constrained by the Venezuelan leader's popular clout; neither has seen fit to criticize the increasingly authoritarian tilt of the Chavez regime, which has packed the Venezuelan judiciary with pliable magistrates and enacted legislation curtailing press freedoms. To the contrary: during a visit to Brasilia last month, Chavez was hailed by Lula as a paladin of democracy, and a Kirchner government official praised him for standing "by Argentina's side during difficult times."

Unmasked hostility toward Chavez cost the Bush administration dearly in 2002 when U.S. officials gratuitously blamed the president for the coup that briefly ousted him, and the fact that nearly 15 percent of the country's oil imports come from Venezuela may also exert a restraining influence. That said, U.S. policymakers are keeping close tabs on El Comandante. "We're concerned about his efforts to expand his influence beyond his borders and Venezuelan assistance to groups with radical agendas, especially in those countries with weak institutions," said one senior State Department official who did not want to be identified by name in light of the politically sensitive timing of next month's Summit of the Americas. "He says he's a socialist, and those are the same policies that have failed not only in the region but all around the world. [But] he's a socialist with deep pockets."

Perhaps most maddening of all, Chavez has managed to shape the political agenda of the region in ways that U.S. officials couldn't have imagined a few years ago. The State Department official says Washington hopes democracy and open economies will be the main talking points at next month's Summit of the Americas. Fat chance: persistent poverty and social inequality will likely dominate the public speeches and private discussions, and much of the blame for the sorry state of America's backyard will be laid at Uncle Sam's door. Chavez will be leading the charge. "He is the most influential leader in Latin America today," says Michael Shifter of the Washington-based Inter-American Dialogue policy-research group. "That doesn't mean that everybody is a chavista or that people want to duplicate the Venezuelan model." But more and more, the region is singing his tune.

With Brian Byrnes in Buenos Aires and Mac Margolis in Rio de Janeiro

© 2005 Newsweek, Inc.

© 2005 MSNBC.com

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