Grupo La Colina

Hugo Chávez’s rotten legacy

The appeal of populist autocracy has been weakened but not extinguished

Mar 9th 2013

The Economist

BACK in the 1990s Latin America seemed to have turned the page on military rule and embraced democracy and free-market economics, with the sole, beleaguered exception of communist Cuba. And then along came Hugo Chávez, a bumptious Venezuelan former lieutenant-colonel who, having staged a failed military coup against a democratic government, got himself elected as president in 1998.

Mr Chávez proceeded to dominate his country for more than 14 years until his death this week from cancer. His secret was to invent a hybrid regime. He preserved the outward forms of democracy, but behind them he concentrated power in his own hands and manipulated the law to further his own ends. He bullied opponents, and encouraged the middle class to emigrate. He hollowed out the economy by mixing state socialism and populist redistribution with a residue of capitalism. And he glued it all together with the crude but potent rhetoric of Latin American nationalism. Mr Chávez claimed to be leading a “Bolivarian revolution” against the “empire” (ie, the United States). It did not seem to matter that Simón Bolívar, the Venezuelan hero who liberated much of South America from Spanish colonial rule, was an Anglophile conservative turned out to be a remarkably successful formula: Mr Chávez won four elections by margins ranging from sweeping to comfortable and lost only one of his six referendums. In October he won a new six-year term even though campaigning was restricted by his illness, which was graver than he admitted. He spawned imitators elsewhere in Latin America, financing an anti-American alliance of like-minded leaders and client states. And he was the saviour of communism in Cuba, his aid keeping the Castros in power while slowing the transition to capitalism in a bankrupt island.

Theatre, cunning and oil

Two things lay at the heart of Mr Chávez’s success. The first was his own political talent. Born in provincial obscurity, he proved to be a natural performer and communicator, with an unmatched ability to empathise with ordinary Venezuelans, combined with plenty of cunning. If Nicolás Maduro, his appointed vice-president and anointed successor, possesses any of these skills, he has yet to reveal them.

The second and bigger factor was that Mr Chávez had the immense good fortune to come to power just as an unprecedented commodity boom was about to get under way. As the oil price soared the dollars rolled in, without the Bolivarian revolution having to work for them. Mr Chávez used this windfall to buy himself popular support, with social programmes and handouts. The oil-fuelled bounty seemed to vindicate his claim that before his advent, Venezuelans had been impoverished by “neo-liberalism”.

But the writing on the wall for Venezuela is no longer just Bolivarian slogans. Although commodity prices may not be about to fall, they are no longer rising as they did in the 2000s. After ramping up spending ahead of October’s election, the government posted a fiscal deficit of 8.5% of GDP last year, financed in part by mortgaging some of its future oil output to China. Last month it devalued the currency by 32%.

As acting president since December, Mr Maduro has continued in his boss’s vein, issuing threats against the opposition and private business and expelling a couple of American diplomats. No doubt Mr Chávez’s death will prompt a sympathy vote that will help Mr Maduro win the election that the constitution now demands. Latin Americans have a necrophiliac streak, and the opposition, though stronger than in the past, is reeling from defeat in presidential and regional elections last year. But Mr Maduro lacks Mr Chávez’s authority. Assuming he wins, he will have to stabilise the economy while imposing his will on his faction-ridden party. The place may unravel.

Behind the propaganda, Venezuela’s ugly reality is that of a corrupt, cynical and incompetent regime (see article). It is regrettable that Mr Chávez will not be around to reap the whirlwind he has sown: perversely, the worse things now get in Venezuela, the more this will flatter his memory. So despite its malign effect on Venezuela, chavismo will survive its creator’s demise, much as Peronism has outlived Colonel Juan Perón in Argentina.

The venom behind the bear hugs

Elsewhere in Latin America, Mr Chávez’s influence has waned in recent years. Ecuador’s Rafael Correa is best placed to inherit his mantle: in power since 2007, he romped to another four-year term at an election in February—and he has oil. But Ecuador, like Bolivia, where Evo Morales, a fellow socialist, remains unchallenged, lacks Venezuela’s size, wealth and clout. Argentina’s Cristina Fernández, a semi-detached ally, has mounting problems of her own. As for Cuba, which gets around $6 billion a year from Venezuela, the Castros have manoeuvred to put Mr Maduro, their closest Venezuelan ally, in power. Cuban communism and the Bolivarian revolution have swum together; if Mr Maduro falters, they may sink together.

Mr Chávez’s fans claim that, thanks to him, Latin America freed itself from subjection to the United States. The continent certainly grew in confidence while he was in power, but that happened because of better economic management and rising trade with China, not because of anything Mr Chávez did. His scarlet beret may look good on bourgeois T-shirts in Greenwich Village and Islington, but Latin America’s real working-class hero has been Brazil’s Lula. And despite all the bear hugs at Latin American summits, Mr Chávez did not further the continent’s cause. Although Latin America’s leaders—including Lula—have been reluctant to denounce Mr Chávez, they know that he prevented it from fulfilling its potential and uniting behind democracy and open markets.

With luck, chavismo will now have lost much of its sting. His death could help break the deadlock that has stalled Latin American integration. The Chávez formula—exploiting inequality and social grievances to demonise the opposition—will remain a powerful one. But now that the man has gone Latin America’s democrats have an easier task.