Venezuela’s Deepening Economic Woes Put Heavy Stress on Seams of Democracy

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Times Staff Writer

In 1958, as Fidel Castro’s Cuban revolution raged on the other side of the Caribbean, a new democracy was dawning here in Venezuela. Elias Santana was a baby then. He grew up under an increasingly stable, two-party system that often was cited as a democratic model for Latin America.

Today, Santana is a dissident. He says he believes in democracy--but also believes that Venezuelan democracy must undergo “revolutionary” change.

And Santana is not alone. While celebrating their democracy’s 30th anniversary this year, many of Venezuela’s 18 million people are clearly disappointed in the results.


Discontent Fuels Criticism

Economic problems in Venezuela, as in many Latin American countries, are straining the seams of democracy. Discontent over inflation, unemployment and lower living standards fuels criticism of the political system.

By most accounts, official corruption is rampant, government mismanagement is widespread and bureaucratic red tape is monumental. Party machines, greased by patronage, control all branches of government as well as many other institutions.

To get a public job or to study at a state university, applicants often need a recommendation from a local boss of the party currently in power, Santana said. Even in some local contests for carnival queen, he said, candidates are sponsored by political parties.

“That is totalitarianism,” he protested. “The party model in Venezuela is a Leninist model, where the parties rule all levels of society.”

Santana and other critics say local, state and national legislators respond to party bosses rather than to voters because the elections are for party slates rather than individual candidates. The number of votes each party wins determines how many of its candidates are elected, starting with those at the top of the slate.

“Those elected don’t feel they owe anything to the voters,” Santana said. “Their first loyalty is to whoever got them on the slate.”


Santana, a high school teacher with thin-rimmed glasses and a tidy mustache, is president of the Federation of Urban Community Assns. The 200 or so neighborhood associations in Caracas that make up the federation are, at least in part, a manifestation of discontent over unresponsive government.

Similar associations have spread in other Venezuelan cities. Santana estimated that 2 million families throughout the country belong to neighborhood associations.

Push for Reforms

About half of the associations are dominated by political parties, he said, but the other half are independent and active in efforts aimed at political reform. Last year, in a brief national campaign, neighborhood associations collected 140,000 signatures on petitions demanding reforms in election procedures and municipal administration.

“We think this movement is going to bring many changes to this society, but from the bottom up,” Santana said.

Demands for political change have been backed in the past three years by the Presidential Commission for State Reform. The 35-member panel has recommended deep transformations in the country’s electoral, administrative and economic systems.

But the national Congress, dominated by the two main political parties, Democratic Action and Social Christian, has postponed action on the main proposals. Carlos Blanco, the commission’s executive secretary, said many proposals are regarded by politicians as utopian.


‘Great Resistance’

“There has been great resistance by the different party nucleuses,” said Blanco, “resistance that is not expressed openly, but that takes the form of delays.”

Blanco predicted that major changes eventually will come because increasing numbers of people both inside and outside of the parties are unhappy with the way democracy is working.

“Inside the parties, there is a process of discontent and, in some cases, even rebellion,” he said. “So the political map of Venezuela is changing.”

The state of the economy adds fuel to that discontent. The harder times are a shocking letdown for a country that once seemed securely prosperous on an enormous cushion of petroleum wealth. During the middle and late 1970s, petrodollars gave Venezuela the highest per-capita income in Latin America. A growing middle class filled deep glasses with premium Scotch and new freeways with sleek sedans. Oil revenues and borrowed money from abroad financed lavish government spending programs.

After the bottom fell out of the world petroleum market early in the 1980s and foreign loans dried up, it soon became clear that Venezuela had not invested its windfall wisely.

“They missed a golden opportunity,” said a foreign economist. “After having tremendous amounts of petrodollars in the 1970s, they have very little to show for it.”


“Mistakes were covered up with lots of money,” said Rafael Salvatierra, an official of the Social Christian Party, the main opposition group. “Now there is no money to cover them up.”

Per-Capita Income Sinks

In recent years, per-capita income has sunk below the level of 1972, before the oil bonanza began. The middle class has shrunk and unemployment has grown.

Some Venezuelan politicians warn that the decline could lead to political turmoil.

“When your middle class drops, you have a potential for violence, successful violence,” said Clemente Cohen, a political adviser in the ruling Democratic Action. “Revolutions are always carried out by the middle class.”

Not only the middle class is hurting. About 25% of all Venezuelan families are living in “absolute poverty,” triple the percentage of five years ago, according to sociologist Isabel Pereira. The absolute poverty line is the income needed to buy essential food supplies, currently equivalent to about $77 a month for a family of five.

Unable to Stop Inflation

Inflation last year was 40% and is expected to be about the same this year. Oil revenues last year were $9 billion, down from $19 billion in 1980. Venezuela spent 46% of its total export earnings in 1987 to service its $30-billion foreign debt.

One man taking much of the blame for the current economic difficulties is President Jaime Lusinchi, who took office at the beginning of 1984 and has been unable to stop the ravages of inflation. His prestige has suffered additional erosion from a scandal centering on a politically powerful mistress and bitter divorce proceedings.


Lusinchi is dumping his wife for the mistress, Blanca Ibanez, who is also his official secretary and unofficial political adviser. Having a mistress is hardly scandalous in Venezuela, where it is widely admired as a sign of virility. But many Venezuelans object to the power and influence that Ibanez has gained from her relationship with the president.

“Blanca practically has Cabinet status,” observed a foreign diplomat.

Engulfed in Controversy

The scandal may have cost Lusinchi points in an unsuccessful bid to get his Democratic Action party to nominate former Interior Minister Octavio Lepage Barretto as its candidate for presidential elections scheduled Dec. 4. Lusinchi is barred by the constitution from succeeding himself.

Instead of Lepage, Democratic Action nominated former President Carlos Andres Perez, 66. When Perez left office in 1979, his administration was engulfed in controversy over heavy spending and corruption, but today he holds a strong lead in opinion polls.

Perez’s only serious competition is Eduardo Fernandez, 47, a Social Christian lawyer and economist. Fernandez has adopted a nickname, “The Tiger,” to pep up his image, but he lacks the personal appeal of Perez.

Fernandez’s party, known officially by the acronym COPEI, chose him as its candidate over former President Rafael Caldera, one of Venezuela’s most prestigious politicians, and Caldera so far has done little to help in the campaign. Fernandez also is handicapped by unkind memories of COPEI’s last administration, when President Luis Herrera Campins watched helplessly as the oil-price collapse devastated the Venezuelan economy early in the 1980s.

Both Parties Tainted

While corruption is an issue that taints both parties, its stain seems darkest at the moment on the Democratic Action party. When Perez was in power, a group of cronies known as the “12 Apostles” became notorious for questionable dealings. And under Lusinchi, a bureau of the Finance Ministry has been selling dollars to importers at a “preferential” exchange rate, which is less than half the free-market rate, and charging under-the-table fees.


“Everyone knows this is going on,” said a foreign diplomat. The fees are said to go into a political slush fund that party chieftains draw from.

Analysts say both parties are ruled by what are called cogollos , powerful cliques of 10 to 15 political bosses who make decisions behind the scenes and impose them on the party membership.

“The citizens are too far from the decision-making centers,” said Teodoro Petkoff, a former guerrilla who is the presidential candidate of Movement to Socialism, a small socialist party. “The decision centers are occupied by the parties.”

Only the president is more powerful than the cogollo . Checks and balances are weak or absent, vesting king-like authority in the five-year presidency.

‘A 5-Year Monarchy’

“In Venezuela, there is no representative democracy,” said Rodolfo Schmidt, editor of a daily economic newspaper. “What there is, is a five-year monarchy.”

It is the cogollo system and the centralization of power that reformers are most intent on changing. Presidential candidates Perez and Fernandez have vowed to support reforms, evidence that the movement for change has popular support. But skeptics predict that the cogollos will use all their power to prevent any changes that would take it away.