The Gradual Erosion of European Sovereignty - Brian Safran

            Since the end of World War II, foreigners and Europeans alike have believed that an integrated Europe is essential to ensure economic, social, and political progress in the region. The 1951 Treaty of Paris created the European Coal and Steel Community (“ECSC”), and was a significant step toward European integration. The creation of ECSC institutions allowed for debate and discussion on issues of economic concern on a supranational level amongst its earliest six members. Such dialogue was seen as a path to solving the complex issues facing states, and their union served to mark the starting point for the slow and steady decay of the sovereignty of the national governments involved. These governments were now placed in a position where they had to work for the common good rather than for their individual needs.

            At each step since its earliest inception, the European Union (“EU”) and its associated incarnations have served to unite Europe; but many of its member states have felt that such integration has been at the expense of their autonomy. Maximum authority over their people and territory were no longer held at the national level, but instead, power had been shifted to the larger integrated community. This loss of control has not always been perceived as positive, and disagreement and conflict have often reigned over harmony and concordance. This discord has, in many respects, impeded the EU’s decision-making process, making it difficult to achieve its initial goals.

Many recent occurrences have exemplified the conflict surrounding the loss of sovereignty of the individual countries of the European Union to the supranational level. One such issue corresponds to the ten-member accession of 2004, in which many of the less industrialized, poorer countries in Eastern Europe became full-fledged members of the common market. Of concern to the wealthier, more developed Western European countries was the perceived notion that if barriers to labor were removed, an influx of Eastern Europeans into the job markets of Western European countries would result. The redistribution of wealth from Western Europe to Eastern Europe would have the potential to harm Western European economies. As a concession to Western European concerns, when the ten members acceded in 2004, the previously existing fifteen members were given the option to delay the free movement of labor by up to seven years. (1 Laitner)

 While most EU countries have postponed the free movement of labor to newly acceded states, Britain, Ireland, and Sweden have chosen to open their borders ahead of the required date. This has placed extreme pressure on the remaining Western European countries from a variety of trade organizations and businesses to open their doors to eastern workers. While the arguments made by Western European countries were once seen as valid concerns, recent studies regarding the change in economic performance in Britain, Ireland, and Sweden have demonstrated the contrary. They have suggested that the vast movement of people looking for jobs has been extremely limited, and furthermore, find that many of these migrants have “fill[ed] gaps” in local job markets, in which they take the jobs that local citizens would not want (1 Financial Times). Despite this evidence, the remaining Western European countries are hesitant to open their job markets to international penetration. These recent attempts to influence Western European governments are aimed at speeding up the integration process.  The fact remains that the European Union has final jurisdiction over the free movement of labor, and national governments will be forced to allow eastern laborers into their workforces at some point within the time limits set by the EU. Therefore, whether or not the introduction of eastern laborers is harmful or not to local economies, this decision has been made and is out of the hands of national governments, thus demonstrating their loss of sovereign power in relation to the free movement of labor.

Issues surrounding driving regulations tend to be of concern to the European Union as they are tied to the notion of the free movement of capital, labor, and services across the Union. A variety of changes have been proposed in relation to driving regulations within the European Union. An interesting suggestion made by the transport ministers of the Council of the European Union is to begin to integrate the driving regulations of the twenty-five member states by issuing a “European Union” drivers license. (1 Minder B) Such a change would strongly impede upon the sovereignty of member states, as national governments would be forced to alter their driving regulations to adhere to the supranational standards set by the European Union. In addition, the European Union is planning to crack down upon drivers who violate traffic regulations, as recent studies have shown an increase in traffic related fatalities, a decrease in traffic law compliance, and a lack of enforcement by national governments against international drivers. (1 Minder C) As a response, the EU transport commissioner has recently written a proposal aimed at curtailing driving problems within the EU, to ensure that national governments properly fine violators. Not only will the member states have to uphold the EU imposed regulations, but will also have to punish their own people accordingly for violating them. This prospect impedes upon the sovereignty of member states, as the European Union would be acting within its supranational capacity to force member states to enforce traffic laws as the larger EU deems fit.

Another interesting concern came to light when the French government was denied its application to lower its value-added tax rate on restaurant bills. (1 Parker C) An argument has been put forth against EU involvement in certain tax related issues, as such issues do not properly comply with the “principle of subsidiary” when decided at the EU level. As enshrined in the Maastricht Treaty, the principle of subsidiary states that decisions should be made at the lowest possible level, and closest to those directly effected by them. France has claimed that tax policy in relation to value added taxes should be legislated at the national rather than at the supranational level, as states have strong differences of opinion amongst each other, and value added taxes should be tailored to the specific needs of individual countries. While such an alteration would require a revision to the existing treaties, this request by France shows how the conflict between sovereignty and supranationalism is extremely intense and that issues of relinquishing the powers of the EU back to that of national governments continue to surface.

European Union leaders recently met to discuss the heated issue of protectionism, in which national governments attempt to curtail the ability of foreign countries to take over major domestic companies. In one case, France attempted to merge two of its powerful energy suppliers to prevent the Italian takeover of one of them. (1 Parker E) This issue has been the cause of great concern, and some ministers feel that the disagreements similar to the situation in France and Italy regarding protectionism serve to decrease the credibility of the European Union when brokering deals based on the opening of markets with the international community. The discouragement of protectionism by the European Union is based on the argument that its enforcement acts as a barrier to the free movement of capital within the EU. According to Angela Merkel, the chancellor of Germany, protectionism “make[s] nonsense of the EU’s single market” (1 Parker B).

In a related story, EU Commissioners are vowing to propose legislation that would create a single market for the regulation of electricity and gas by 2007. (1 Bounds) Commissioners, who represent the interests of the greater Europe, believe that Europe’s common market would function more fluidly and with widespread economic growth if its member states did not adhere to protectionist measures in relation to energy. While this issue remains highly contested between those affected, the EU has done what it can to harness the spread of protectionism, thus eroding the decision-making capacity or sovereignty of the member states in relation to their “monopoly” on the ownership of major companies. Despite the reluctance of national governments to relinquish their controls of business, they must adhere to the agreements set forth by the European Union regarding the operations of the common market, and therefore, no longer have supreme authority to restrict the flow of capital outside of their territory.

Concerns exist amongst the member states regarding the operation of the European Union, where the inability of the EU to enact policy in a timely manner has created apprehension. This is exemplified by the situation in which birds infected with Avian Influenza were found in multiple European countries. In order to curb the spread of the disease, EU members have discussed a variety of protective measures that could be enforced. Unfortunately, each member state of the European Union has come forth with an original plan for curtailing the bird flu, resulting in a deadlock and slowing down the decision making process. One concern surrounds the distribution of Avian Influenza vaccines to member states if a human outbreak were to occur. Some EU leaders believe that vaccines should be distributed to countries in relation to the rates of seasonal flu vaccination requests. (1 Braithwaite) While this proposal had been brought up in Brussels as long as ago as two years, little progress has been made to date in deciding upon a resolution. In addition, the EU has been faulted for failing to set consistent standards and methods of containing the disease and preventing its spread across the Union. Some have called for the creation of a new agency to increase the level of cooperation between member states in relation to issues regarding health.  (1 Minder A) Health related disasters often require urgent attention and decisions, and the preliminary stages of the Avian Influenza outbreak have demonstrated an inability of the European Union to come to decisions and cooperate with its member states within a timely fashion, thus furthering their discontent and desire to maintain sovereignty.

While many national governments might otherwise feel a need to restrict the trade of poultry from countries in which bird flu has been identified, they are prevented from doing so. In keeping with the “spirit of the treaties,” free trade must be maintained within all EU member states. Therefore, the European Union has supranational authority and the final say when it comes to the restriction of free trade. Although Avian Influenza is a major health concern within Europe, the national governments are limited in how they can go about tackling the issue, thus exemplifying a loss of sovereign power.

A plethora of ideas have come forth over the past few months to restructure the controversial Constitutional Treaty that failed during its ratification process in 2005. Many of the concerns surround issues of enlargement, as each time new states accede to the Union; it becomes more difficult to reach compromise on matters of importance. In order to decrease the time required for the EU to come to decisions, EU leaders have proposed an increase in the usage of Qualified Majority Voting in the Council of the European Union within the areas of foreign policy and the budget. (1 Parker A) This would serve to further erode the sovereignty of member states, as these new policy areas would no longer require unanimous decisions to be approved by the Council. Therefore, if this version of the Constitutional Treaty were to be passed, national governments would no longer have the supreme authority to override the decisions of other member states in the context of foreign policy and EU budgetary issues. Some EU leaders have even criticized the very title of the treaty, as they see the word “constitutional” to be associated with the United States system of governance, the French connection to their strong constitution, as well as the British “symbolism” associated with its non-existent constitution, all of which make a “constitution” for Europe seem out of place (1 Parker D). This controversy demonstrates EU member states unwillingness to integrate to the level of the United States federal system, and also exemplifies their desire to maintain their own national identities, separate from that of the EU. “The Treaty establishing a Constitution for Europe” and its associated proposals surely illustrate how the tension between supranationalism and sovereignty remains rampant within the context of the European Union.

The existence of the European Union has long been seen as a path toward greater cooperation within European countries with its goal of achieving internal and external harmony, pushing for economic growth, and attaining political and social stability for all involved. The achievement of these objectives has required a remarkable level of collaboration between national governments that very often have different ways of performing governmental functions, as well as distinctive national identities, values, and beliefs. During this process, national governments have been forced to compromise with others, sometimes against their will, and have had to give up some of their decision-making capacity to the supranational European Union. Numerous recent occurrences exemplify the ongoing dispute between national sovereignty and supranational subjugation, and this debate will likely continue to be a prominent focal point of discussion within European Union politics in the future.

Works Cited:

Bounds, Andrew, George Parker, and Chris Smyth. "EU Promises a Single Energy Market by 2007." Financial Times 25 Mar. 2006: 3. LexisNexis Academic Universe. Hofstra University, Hempstead, NY. 12 Apr. 2006. Keyword: European Union or EU.

Braithwaite, Tom, and Andrew Jack. "EU Urged to Agree Flu Vaccines Strategy." Financial Times 7 Feb. 2006: 11. LexisNexis Academic Universe. Hofstra University, Hempstead, NY. 12 Apr. 2006. Keyword: European Union or EU.

Laitner, Sarah, and George Parker. "'Old' Europe Under Pressure to Open Its Doors." Financial Times 3 Feb. 2006: 6. LexisNexis Academic Universe. Hofstra University, Hempstead, NY. 12 Apr. 2006. Keyword: European Union or EU.

Minder, Raphael. "EU Divided on Response to Threat From Avian Flu." Financial Times 14 Feb. 2006: 6. LexisNexis Academic Universe. Hofstra University, Hempstead, NY. 12 Apr. 2006. Keyword: European Union or EU. [Cited in text as “Minder A”]

Minder, Raphael. "EU Driving Licence to Replace 80 Others." Financial Times 4 Mar. 2006: 5. LexisNexis Academic Universe. Hofstra University, Hempstead, NY. 12 Apr. 2006. Keyword: European Union or EU. [Cited in text as “Minder B”]

Minder, Raphael. "EU to Tackle Transit Drivers Who Flout Rules." Financial Times 4 Mar. 2006: 6. LexisNexis Academic Universe. Hofstra University, Hempstead, NY. 12 Apr. 2006. Keyword: European Union or EU. [Cited in text as “Minder C”]

Parker, George. "Bigger Not Really Better as the EU Heads for Log Jam." Financial Times 7 Feb. 2006: 8. LexisNexis Academic Universe. Hofstra University, Hempstead, NY. 12 Apr. 2006. Keyword: European Union or EU. [Cited in text as “Parker A”]

Parker, George, and Gareth Smyth. "Chirac Walks Out on EU Leaders as Tensions Mount." Financial Times 24 Mar. 2006: 8. LexisNexis Academic Universe. Hofstra University, Hempstead, NY. 12 Apr. 2006. Keyword: European Union or EU. [Cited in text as “Parker B”]

Parker, George. "France Wants EU to Hand Back Some Tax Powers." Financial Times 27 Feb. 2006: 6. LexisNexis Academic Universe. Hofstra University, Hempstead, NY. 12 Apr. 2006. Keyword: European Union or EU. [Cited in text as “Parker C”]

Parker, George, and John Thornhill. "Germany Aims to Rebrand Rejected Treaty." Financial Times 17 Mar. 2006: 6. LexisNexis Academic Universe. Hofstra University, Hempstead, NY. 12 Apr. 2006. Keyword: European Union or EU. [Cited in text as “Parker D”]

Parker, George, Wolfgang Proissl, and Gareth Smyth. "Protectionism Fireworks to Dominate EU Leaders' Talks." Financial Times 20 Mar. 2006: 9. LexisNexis Academic Universe. Hofstra University, Hempstead, NY. 12 Apr. 2006. Keyword: European Union or EU. [Cited in text as “Parker E”]

"Time to Tear Down the EU's Eastern Barriers: Workers From Accession Countries Bring Economic Benefits." Financial Times 6 Feb. 2006: 16. LexisNexis Academic Universe. Hofstra University, Hempstead, NY. 12 Apr. 2006. Keyword: European Union or EU. [Cited in text as “Financial Times”]

           

Venezuelan Oil and Its Debilitative Political Culture

Brian Safran - 28 April 2006

           Venezuela is perceived to have achieved a significant degree of economic growth as a result of its association with the oil industry. Unfortunately it is that very relationship, coupled with the political culture of the region that has actually prevented the country from reaching its peak prosperity and has placed Venezuela in its current state of crisis. In 1922, Venezuela had the distinct fortune to be the only country in South America to uncover vast amounts of oil beneath its surface (Hellinger, 2006). Since its discovery, economic development in Venezuela has shifted away from agriculture, and has virtually aligned itself with the ability of the oil industry to generate profit.

Political culture refers to the aggregate beliefs of individuals in their perception of government, politics, and economics. Throughout time, Venezuelan political culture has markedly influenced the course of its history. Contributing to public perception over time has been a leadership that has been plagued by a series of corrupt, self-indulgent rulers. Venezuela has witnessed the decay of traditional institutions and the alienation of its people from the government. This has affected its economy as a whole, its impact on the growth of the oil industry not withstanding. As a result, the political and economic policies adopted by the country have incorporated changes that promote short-term economic profit at the expense of lasting investments that could propagate long-term economic growth. The amount of revenue generated by the oil industry in Venezuela, if it had been managed efficiently, should have placed the country in the position of an economic superpower (Garner, 2006). However, by failing to use oil profits to promote industrialization and build up businesses unrelated to oil, the Venezuelan government has handicapped itself from attaining maximum economic achievement. By analyzing Venezuelan political and economic history, one can gain insight into a political culture that held on to its traditional ways of thinking and has resisted reform. The political climate has served to foster instability through social exclusion, political polarization and misperceptions (Escudero, 2003). The resultant state of political indifference and lack of foresight have prevented the country from charting a steady course towards maximum economic prosperity.

            Early Venezuelan political history was marked by a series of authoritarian, quasi-dictatorships. These governments were often run with a disregard for public opinion, and political culture was characterized by a lack of citizen involvement, as many took part in the rural agricultural lifestyle, which was distanced from the workings of the government. (Fox, 1982)  Furthermore, people felt that the government did not represent their interests (Hellinger, 2006). Government only benefited the privileged few and gave little concern to the poor majority (Escudaro, 2003). But shortly after the discovery of oil, the political culture of Venezuelan politics began to shift, as people began to criticize their leaders, organize into interest groups, and promote their beliefs. Juan Vicente Gómez came into power in 1908. He was a tyrannical dictator who struck fear in his subjects by imprisoning, starving and killing his opponents. He benefited greatly from the discovery of oil, having absorbed much of the original profits for himself and his family. (Hellinger, 2006) That which he did not take for himself, he dedicated to the reduction of the national debt, failing to use the newfound revenue to directly invigorate the economy. (Garner, 2006) Although people disapproved of Gómez’s policies, his authoritarian practices prevented many from speaking out. However, a group of Caracas University students known as the “Generation of 1928” could no longer remain idle, and led a revolt to oust Gómez. (Hellinger, 2006) Their efforts failed, but clearly, the new political culture of Venezuela could not be defined by passiveness.

Changes were occurring that were propagated in part by massive urbanization, the development of a middle class, a newly educated set of workers, and other forms of infrastructure that followed the growth of the oil industry. (Garner, 2006) By the time the explosive oil business had begun to take hold, democratic reforms had begun to sprout. People began to voice their concerns against the actions of the government, which perpetually continued to pay off foreign debt, rather than invest it back into the country. Critics felt that Venezuela had failed to “sow its oil,” or use its profits to develop other sectors of its economy (Wilpert 2003). This came to exemplify what is known as a “Dutch Disease,” an economic problem that occurs in economies that focus their resources on the development of a single commodity, at the expense of a lack of growth in other sectors (Wilpert 2003). The Venezuelan’s delighted in their newfound wealth, and the political culture at the time was defined by a society that was focused on ways to reap the maximum immediate satisfaction, rather than planning for the future. Unfortunately, it is this very predicament that would continue to plague the Venezuelan economy for much of its history.

Rómulo Betancourt, a revolutionary thinker at the time, designed a new political party entitled “Acción Democrática,” (AD) which focused its beliefs on “anti-imperialism” against the oil companies, using the profits to “modernize and diversify the economy,” and democracy based on direct political participation (Hellinger, 2006: 475). His party acquired knowledge of such concepts while in exile in Mexico, Europe, and the United States, and attempted to adapt them to Venezuela. However, the political culture of Venezuela was not ready for the sharp changes that Betancourt proposed, and he was unable to gain the support of the populace. Venezuelan politics have long been defined as a “zero-sum game,” with a “winner-take-all” mentality (Escudero, 2003: 1). If Betancourt were to assume leadership, a shift in political polarization, or the extremes of political thought, would have occurred in favor of the common people. But the populace was not ready for the “radical” ideas proposed by Betancourt. (Kanatsu, 2006) By opposing him early on, the Venezuelan populace forfeited their opportunity to rally in his favor, and thus obtain the early industrialization that could have brought them long-term economic stability.

Venezuela’s economic development was truncated by its persistent attention to exporting its product rather than focusing on the development of its own industries. The political culture of the region centered on an unrealistic assumption that wealth was a natural right of birth and heritage. Even as economic and political reforms began to be instituted, Venezuela was left almost entirely to the mercy of world markets. (Garner, 2006) The infrastructure that was needed to protect the Venezuelan economy did not exist, and most of Venezuela’s leaders failed to have the foresight to create it. In 1941, President Isaías Medina Angarita was able to force foreign oil companies to renegotiate their contracts, which served to increase Venezuela’s share of oil profits from about twelve percent to thirty percent. (Fox, 1982) With this major increase in earnings, the government again had the potential to reinvest in their economy and spur economic growth. Politically, Medina’s policies helped push Venezuela along a “gradual transition to full democracy” (Hellinger, 2006: 476). Public sentiment had softened and was more receptive to democratic ideals. The people were now ready to revisit the politics of Betancourt, and he returned with a more moderate stance, recognizing a need to work along side other representative organizations to accomplish his goals. In 1945, Betancourt was put into power as the result of a coup d'état, and was able to initiate a series of beneficial political and economic reforms during his party’s short three-year span of rule. (Fox, 1982) He was able to secure an even greater increase in Venezuela’s share of oil profits, by raising the ratio of profits between the Venezuelan and foreign governments to an even fifty percent. (Wilpert 2003) Betancourt then took the newfound profit from the oil industry and reinvested it in economic projects including housing, education, and even public investment. (Hellinger, 2006)

Democracy reigned when in 1947, Rómulo Gallegos, a member of Betancourt’s AD party became the first democratically elected President. (Fox, 1982) While he and Betancourt’s policies reinvigorated the economy and began to introduce methods that could have made the Venezuelan economy less dependent on oil, they were faced with powerful opposition from the Communist Party as well as the newly formed Christian Democratic Party (COPEI). (Hellinger, 2006) Despite their popularity amongst the masses, Betancourt and the members of his revolutionary party were met with extreme resistance from these other parties as well as the military, who felt excluded from the decision-making process and wanted to assume control. Eventually, the military was able to oust the AD, take over the government, and later place Marcos Pérez Jiménez, a Lieutenant Colonel, into power. (Hellinger, 2006) Over the next six years, Venezuela took a stance backwards towards its authoritarian past. This exemplified the fact that the political climate in Venezuela was so turbulent at the time that a small minority could assume control and initiate policy detrimental to the country and against the will of its people.

The rule of Pérez Jiménez was characterized as a time of a digression to the period of authoritarianism and repression. From 1952 to 1958, Pérez Jiménez initiated programs that wasted Venezuela’s oil profits (Fox, 1982). Some of these projects included the creation of an “impressive network of superhighways” and a never completed “massive spiral structure,” intended to house shopping malls and residential homes. (Fox, 1982: 121) Clearly, oil funds were being diverted to every possible economic sector other than competitive industry. Aside from these massive, unnecessary construction projects, the Pérez Jiménez administration was characterized by extreme amounts of governmental corruption. He ordered the torture and killing of many of his opponents, and in addition, was believed to have drained nearly two hundred and fifty million dollars from the Venezuelan treasury for personal use. (Rohter, 2001) The dictatorship of Marcos Pérez Jiménez demonstrates how the Venezuelan government’s failure to sponsor appropriate economic reforms and generate honorable leadership has served to the detriment of Venezuelan society. In addition, Pérez Jiménez’s rule exemplifies the relentless degree of political instability that Venezuela has faced, and shows how such unsteadiness has contributed to Venezuela’s inability to achieve maximum economic performance.

In January 1958, Pérez Jiménez was ousted from power via a coup d'tat, and Rómulo Betancourt and his AD party once again took control. Having learned from his prior mistakes, Betancourt entered into an agreement with the COPEI party, business organizations, and the military, and created the “Punto Fijo Pact,” in which power was to be shared amongst these privileged groups (Hellinger, 2006). The goal of the Punto Fijo Pact was to shelter democracy from the outside influences of Communism and Socialism, and to ensure consistent political control of those involved. From 1958 to 1998, the AD and COPEI parties formed a “partyocracy,” in which they sought to maintain party influence over all aspects of society (Country Watch, 2006). Under the Punto Fijo regime, the minimum wage was raised, unemployment fell, and various programs were initiated that strengthened the democracy by improving its social and industrial capacities. (Sylvia, 2003) The funding for such advancements remained dependant upon the petroleum industry, which increased its allocations after it became nationalized in 1976. (Country Watch, 2006) At this time, the country formed Petróleos de Venezuela S.A. (PDVSA), and falsely assumed that by placing the oil industry under their control, all of their economic concerns would be resolved. The then President, Carlos Andrés Pérez, wanted Venezuela to “get rich quick.” In order to do so, he borrowed against future earnings, finding the international community “eager” to lend his government money (Hellinger, 2006). Venezuela’s prevailing political culture at the time showed widespread support for the tightening of market reforms, a concept that is highly contested today.

Unfortunately, in 1982, the international oil market crashed and Venezuela found itself in crisis. The industries that were not directly connected to oil formed by Pérez during the 1970’s were not globally competitive, and worse, were inundated with corruption. (Hellinger, 2006) To compound the situation, the foreign debt had skyrocketed, and needed to be repaid. (Sylvia, 2003) Venezuela had made the mistake of relying on the international oil market to support its economy. After tapping all internal sources of revenue including the funds of the PDVSA, the country remained in crisis. On February 28, 1983, which later became known as “Black Friday,” the bolivar, the Venezuelan currency was devalued. (Hellinger, 2006) Unemployment and poverty rose exponentially. Venezuelan citizens were irate and wanted to know who was to blame (Hellinger, 2006). Since the Punto Fijo Pact became largely deemed to represent the interests of the political elite, it led to “decades of patronage,” with the majority of society feeling alienated and powerless from political affairs (Wingerter, 2006: 2). The people also felt that the leaders defined by the Punto Fijo Pact were spending more time negotiating with each other than they were directly with the people themselves. The populace became acutely aware of the depth of corruption that was occurring from the presidential level all the way down to the public employee, and they placed their blame on the elites. The prevailing sentiment was that since someone had to have benefited from the prior wealth of the country, and since it was not the poor, then the elites had to be held accountable. There was not going to be any self-reflection in this political culture.

In 1989, rioting broke out through the streets of Caracas, Venezuela. (Hellinger, 2006) The police turned against the government and assisted the people in looting businesses. The army was called in, but it only served to aggravate the situation. The politicians were shocked that the people not only opposed the current government, but also were so vocally and physically willing to overthrow it. (Hellinger, 2006) Despite the public display of opposition, the regime continued to prevail until 1998, when Chávez was elected president, marking the collapse of the Punto Fijo Pact. (Sylvia, 2003)

Enter Hugo Rafael Chávez Frías. He was born into a poor Venezuelan family, and his ancestry combined both African and European ethnicities. (Sylvia, 2003) The common Venezuelan identified with Chávez, and Chávez claims to advocate for a revolution on behalf of the poor. (Gunson, 2006) With his charismatic personality and his appeal towards the poorer citizenry, Chávez had clearly been able to gain the trust of those that had previously lost confidence in their government. Chávez’s form of politics remains polarized, but it is polarized in the opposite direction of that of the past. He claims to advocate for the masses as opposed to the elites, and his followers are a group of grass root, impoverished citizens that vow to “fight against those who stole the oil industry” from them (Hellinger, 2006: 469). Chávez’s followers like him for who he is, aside from his politics. After decades of political turmoil and alienation, the people may have found someone that they can trust as “one of their own.”

As a populist leader, Chávez’s domestic agenda has been characterized by an attempt to curtail the massive amounts of poverty by increasing oil profits without radically redistributing wealth away from the upper classes. (Sylvia, 2003) Some of the actions that he has taken in response to poverty have included the initiation of aid programs to help those that were affected by a series of devastating floods, a raise of the minimum wage, and a significant increase in the salaries of governmental employees. (Sylvia, 2003) In 1999, Chávez amended the Venezuelan Constitution after the voters approved the changes in a referendum. (Country Watch, 2006) Nonetheless, the new Constitution was met with criticism, as it restructured the executive, legislative, and judicial branches, and tailored them to Chávez and his policies, thus making it easier for him to accomplish his goals. In response, Chávez instituted a “Citizen’s Power,” which included the “general attorney[s] office, the general comptroller[s] office, and the defender of the people,” signifying Chávez’s attempt to offshoot criticism and bring the government closer to the people (Country Watch, 2006: 4).

Despite his courageous promises, around the turn of the millennium President Chávez brought his government into depression. The debt owed to both internal and external creditors had soared, and unemployment was on the rise. (Country Watch, 2006) In addition, Chávez had failed to provide concrete economic policies that would have brought in international business and investment. (Hellinger, 2006) Once again, the rising price of oil on the international market was the only rehabilitating occurrence that seemed to save the Venezuelan economy. In late 2000, Chávez spent much of his time defending his Presidency, as he had come up for reelection. (Country Watch, 2006)

Upon his reelection, Hugo Chávez set out to “diversify the economy” and decrease Venezuela’s dependency on oil by investing oil profits into non-productive sectors including “tourism, health, education, environment, and small business[es]” (Country Watch, 2006: 7). Unfortunately, Chávez did not utilize enough resources to develop these industries. Later that year oil revenues soared, but Chávez repeated the mistakes of Venezuela’s past by using the newfound funding to solve social concerns rather than investing in industry. By 2002, the Chávez government seemed unable to tackle the significant economic problems faced by the country, and public opinion seemed to have turned against him. (Sylvia, 2003) In April of that year, massive protests broke out calling for Chávez’s resignation, and included prominent politicians and military officers that felt that Chávez had failed to resolve economic problems, and was turning the country into a “Castro-like communist state” (Country Watch, 2006: 10). Chávez later surrendered to military officers, and for three days, the Venezuelan government was in a state of disarray. (Hellinger, 2006) It was not until millions of his angry supporters marched in rebellion to the ousting of Chávez from power that he was reinstalled. (Hellinger, 2006) In 2004, the economy again headed for an upswing with the rise of oil prices, but Chávez’s opponents remained pessimistic, as they believed that he had continued to support polices that would cause the economy to crash whenever the oil market took a nosedive. In August 2004, Chávez narrowly survived a referendum on his leadership. (Country Watch, 2006) In December 2006, Chávez will face the prospect of another election, and he has already faced tension both within his own party and from the outside. His critics feel that he has not kept up to his promises and has done nothing to truly maintain a stable economy other than “funnel billions of dollars” of the country’s oil wealth to the poor (Forero, 2006: 1). While it appears that a majority of potential voters still seem to approve of Chávez, it is clear that a significant amount of his initial supporters have been disillusioned by his inability to provide Venezuela with a stable economy that is capable of withstanding fluctuations in the oil market. Undoubtedly, political culture has played a large role in determining the progression of Venezuelan politics, and its continued instability has affected the government’s ability to tackle the complex issues facing the economy today.

Venezuela is a member of a very small club of countries that have had the privilege of striking vast amounts of oil beneath their soil. With growing worldwide markets for its product, Venezuela has taken in gigantic amounts of revenue from eager consumers around the world. Unfortunately, the country has been afflicted with severe amounts of political instability, an economic crisis, and a series of rulers that have sought personal gain through their position of authority. Furthermore, the Venezuelan government has often given into pressure and temptation by providing its impoverished masses with temporary solutions without focusing on long-term economic issues, thus perpetuating inequality. In many respects, the government has failed to achieve its objective of reinvigorating the economy by building domestic industry. But is the government solely at fault? The political culture in Venezuela has contributed substantially to the inadequacies of the government and the economy. Venezuelan’s sense of entitlement coupled with their unrealistic perception of their countries wealth has created a major obstacle for change. Public sentiment is suspicious of foreign investors and has been indoctrinated into believing that a redistribution of wealth will solve their problems. It is this mentality that keeps the Venezuelan’s in the dark and prevents them from striving for reform. While Venezuela was once seen as having the potential to become an economic superpower, it now faces many of the same economic problems that plague the rest of Latin American countries. Despite the various attempts that have been made to diversify its economy, Venezuela remains highly dependent upon the worldwide demand for its oil. Unfortunately, oil is a non-renewable commodity, and will eventually run out. The future prosperity of Venezuela lies in its ability to divert its current revenue into its internal industries. The next chapter of Venezuelan history will surely be more dependent upon the adaptation of its political culture than in any other era of its past.

Works Cited

Escudero, Maria C., Ben Kincaid, and Adam Utesch. Venezuela: Directions and Prospects. Venezuela Conference 2003, June 2003, Georgetown University. 16 Apr. 2006 <http://clas.georgetown.edu/vzlaconf2003.html>.

Forero, Juan. "Rifts Plague Anti-Chávez Venezuelans." The New York Times 31 Mar. 2006, sec. A: 3. Academic Universe. LexisNexis. Hofstra University Library, Hempstead, NY. 16 Apr. 2006. Keyword: Chávez and Venezuela.

Fox, Geoffrey. The Land and People of Venezuela. 1st ed. New York: HarperCollins Publishers, 1982.

Garner, Lydia M. "Venezuelan Economic Developments." Journal of Third World Studies XV (1998): 211-216. Academic Search Premier. EBSCO. Hofstra University, Hempstead, NY. 16 Apr. 2006. Keyword: Venezuela and Economy.

Gunson, Phil. "Chávez's Venezuela." 58-63. Academic Search Premier. EBSCO. Hofstra University Library, Hempstead, NY. 16 Apr. 2006. Keyword: Chávez and Venezuela.

Hellinger, Daniel. "Venezuela." Politics of Latin America: The Power Game. Ed. Harry E. Vanden, and Gary Prevost. New York: Oxford University Press, 2006. 469-495.

Kanatsu, Takashi. "Venezuela- Democratic Governance in Oil-Rich Country: What Went Wrong?" Dr. Takashi Kanatsu's Homepage. Hofstra University. 16 Apr. 2006 <http://people.hofstra.edu/faculty/Takashi_Kanatsu/Venezuela.htm>.

Rohter, Larry. "Marcos Pérez Jiménez, 87, Venezuela Ruler." The New York Times 22 Sept. 2001, Late ed., sec. A: 12. Academic Universe. LexisNexis. Hofstra University, Hempstead, NY. 17 Apr. 2006. Keyword: Marcos Pérez Jiménez.

Sylvia, Ronald D., and Constantine P. Danopoulos. "The Chávez Phenomenon: Political Change in Venezuela." Third World Quarterly 24 (2003): 63-76. Academic Search Premier. EBSCO. Hofstra University Library, Hempstead, NY. 16 Apr. 2006. Keyword: Chávez and Venezuela.

"Venezuela: Political Conditions." Country Watch: Country Review (2006): 1-21. Country Review. Country Watch. Hofstra University, Hempstead, NY. 15 Apr. 2006. Keyword: Venezuela and Politics. [cited in text as “Country Watch”]

Wilpert, Gregory. "The Economics, Culture, and Politics of Oil in Venezuela." Venezuelanalysis.com 1000 (2003): 1-12. 16 Apr. 2006 <http://www.venezuelanalysis.com/articles.php?artno=1000>.

Wingerter, Eric. "As Elections Loom, Venezuela's Opposition Won't Commit to Participation." People's Weekly World Newspaper 04 Apr. 2006. 16 Apr. 2006 <http://www.pww.org/article/articleprint/8915/>.