Venezuela - Leadership

Chávez came to office at a difficult time. Venezuelans, whose standard of living has been steadily declining for more than 15 years, saw consumer prices rise 33% in 1998. Chávez's opponent had received the endorsement of Venezuela's political establishment, including the two traditional parties and 15 of the 23 state governors. The Patriotic Pole coalition, which united around Chávez's criticisms of neo-liberalism and its standard package of free-market economic prescriptions, won a plurality (35%) of the 208 congressional seats in the November 1998 regional elections, breaking the 40-year political stranglehold of the two traditional parties.

In July 1999, voters gave Chávez's supporters 121 of 131 seats in the Constitutional Assembly, which was given the task of rewriting the Constitution. In December 1999, 47% of the country's 11 million voters went to the polls to vote on the new document. Of those who voted, 71% approved the reforms. With his supporters holding the majority of seats, the new Constitution reflected the agenda of President Chávez. New presidential and congressional elections were held in 2000 and Chávez won the election for a fresh six-year term. His supporters also won a majority of seats in the unicameral Congress, with Chávez's own Fifth Republic Party getting 46% of the seats. Chávez's cabinet, announced on the eve of his inauguration, included the same broad spectrum as his Patriotic Pole: soldiers, leftist intellectuals, business and labor leaders, and a native Wayu Indian activist. Yet, high concentration of power in the office of the president and Chávez's overexposure in television and radio quickly hurt the president's popularity. An economic crisis and the government's inability to deliver on its promises of more jobs and economic development soon turned high levels of support into growing discontent.

Massive public-initiated, military-backed anti-Chávez demonstrations turned violent, triggering political instability, during the week of 8 April 2002. Shots were fired on 11 April, killing at least 17, including a Caracas police officer, while demonstrators called for Chávez to be removed from office. By 12 April, prominent military officers attempted to force Chávez to resign. Chávez conceded to a different procedure in which he would "abandon his duties." A general of the armed forces publicly stated that Chávez had resigned. At that time Pedro Carmona Estanga claimed the presidency of a transitional government. After taking office, Carmona made bold steps by removing the Supreme Court from office, suspending the National Assembly, and calling for a presidential election to be held within the next year. These moves upset many civilians, who took to the streets by the thousands in attempts to reinstate Chávez. On the following day Carmona resigned office while the National Assembly placed Chávez's former vice president, Diosdado Cabella, into the presidency. On 14 April, Chávez was released from custody and was reinstated as president.

Public opinion was mixed. Chávez enjoys the support of the country's poor, but he is fiercely opposed by many business and military leaders. Chávez's return to power did not put an end to the political impasse. His opponents have vowed to remove him by peaceful or forceful means. Because the new Constitution authorizes a midterm presidential plebiscite, the most likely solution is that the conflict will linger until late 2003 when a referendum decides Chávez's fate.

Throughout the political turmoil, Chávez sought to assure Venezuela's business class and foreign investors that his election would pursue prudent economic policies. Local investors had taken their money out of the country before the December 1998 election, but brought it back after they saw the results. The retention of Maritza Izaguirre as finance minister was viewed by business leaders, investors, and international financial institutions as an indication of his seriousness in pursuing a market-oriented approach to his economic reform measures.

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