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Venezuela under Hugo Chavez: How he marginalised powers of some big US companies

Written By Krishna on Sunday, March 24, 2013 | 11:43 PM

Some time in the mid-'90s a group of venerable elderly men walked into the modest living room of a man of similar age in Thane, a suburb of Mumbai, to persuade the latter of the need to organise, recoup and reclaim their community's pride of place in the Hindu social hierarchy.
Venezuela under Hugo Chavez: How he marginalised powers of some big US companies


The idea was essentially to buy my father-in-law's vote for a communal conference that would seek to reinvigorate the shrinking community's past dominance. The plan of action was to reaffirm old values of community connections and to work on the well-earned intellectual pride of the community to re-charge its devious, youthful prodigals.

My father-in-law is a taciturn son of a hardboiled communist. Once the visiting congregation had made its case with all passion and fury, his first response was a show-stopping one-liner. "Do you know why India lost the hockey crown in the Olympics in 1976?"

The introduction of artificial grass by the American firm, AstroTurf, in the Montreal Olympics, is often cited as the death knell of hockey. Astroturf killed the skills of the various hockey wizards of the subcontinent and the game switched to physical strength forever, cutting out artistry for power, much like tennis since Ivan Lendl.

Lighter Shade of Red

The denial of changed realities and an instinctive withdrawal into an older benchmark might be behind the way the West has reacted to Venezuelan president, Hugo Chavez, much through his political life and a little later too. I hate to use "the West" as a monolithic block, much as the more popular western assessment of Islam is, but I am referring only to the United States of America, the putative leader, if also currently tentative, of the rich and influential nations of the world. The other, more hesitant half, the European Union, already smells the coffee.

This is a situation that the social psychopathologist of colonialism, Frantz Fanon, addressed in Black Skin, White Masks as early as 1952. "Sometimes people hold a core belief that is very strong. When they are presented with evidence that works against that belief, the new evidence cannot be accepted. It would create a feeling that is extremely uncomfortable, called cognitive dissonance. And because it is so important to protect the core belief, they will rationalise, ignore and even deny anything that doesn't fit in with the core belief."

A less talked-about virtue that springs directly from the West's own project of spreading democracy, has also contributed to this cognitive dissonance. Sparsely populated countries of the North are stricken by the fact that many countries of the South are throwing up leaders with the full weight of their countrymen behind them through elections.

This muted fear of numbers, arithmophobia or numerophobia, might explain the tinge of alarm that greets the rise of the "pink tide" in Latin America. The "pink tide" is a softening of hardcore communism into an acceptable, even legal, form called socialism. The western mainstream media invests a distilled discredit into the word 'populism' that almost always carries the miasma of profligate, irresponsible spending of state money. One of its favoured epithets for Chavez being "free-spending, authoritarian populist". The scorn in that phrase is undisguised, even when the language stays parliamentary.

Power From the People

The point is, populism is pretty much the cornerstone of democracy. There is no way a legitimately elected government of a largely poor country can ignore its unwashed masses. The value of a citizen's vote being equivalent across CEOs, ministers, homeless urban wastrels and uneducated farm labourers, underlines the equality of the principle of one person, one vote.

With the wane of the colonial powers and the spread of democracy, more and more leaders from the southern hemisphere are being voted by an overwhelming army of poor citizens who do not figure in the countries' tax nets. But they make their votes count, as they did in electing Chavez continuously.

So what are Chavez's unforgivable crimes against Washington? From all accounts, it is that he is authoritarian and quells dissent. While these are credible charges, nobody would mistake Chavez's Venezuela for totalitarian North Korea. The rub is that 'he is a bastard', just not ours, in the lingo of late 20th century American foreign policy.

Chavez nationalised his country's most valuable resources, marginalising the powers of some very big American companies. He chose to ally with Cuba and started a programme to import Cuban doctors from Havana's fabled health sector to help push up rural health missions in Venezuela, raising hackles in Washington. He also reached out to Iran and other countries the US deemed untouchables. In effect, Chavez is a quintessential American hero who thumbed his nose at established power centres. He also initiated far-reaching policy shifts empowering more indigenous people in the country.
 
Check the Numbers
If these enterprises were all only cosmetic, for Venezuela also had a reputation for producing world beauties with its cosmetic surgery advances and cheap prices for such surgeries, how does one explain another set of numbers, is a question worth pondering.

About 48% of Venezuelan households lived in extreme poverty in 1997 according to the World Bank; that is the year before Chavez first came to power. A Wikipedia chart shows that the Chavez period reduced this to 21%. Chavez managed to dramatically redistribute wealth far more equitably during his reign. And this was through the 2008 collapse of the financial system and the resultant contraction of the global economy.

Galloping inflation has been the one big elephant in the Venezuelan presidential suite. It clocked 22.8% early March this year. However, inflation has been descending from more than 100% in 1990 to an excess of a mere 70% in mid-'90s. So any amount of control of the beast should be in keeping with its size before Chavez took over in 1998.

To be sure, new leaders in Venezuela will have to provide economic corrections to contain the bigger fallouts from Chavez's policies in the coming years. But they can also ride the benefits of a more equitable growth.
 
Widening Chasms
Against this, is a colourful man of some substance who played the Wall Street as a Merill Lynch employee, bearing out his number-crunching ability, and a respectable voice in the US media having covered the Martha Stewart trial for Slate.

He paid $2 million as fine and a similar amount as disgorgement fees to extricate him of charges of civil fraud, as opposed to criminal fraud, brought against him by the US Securities and Exchange Commission in 2003. Henry Blodget stays permanently banned from the security industry, as disclaimers of his articles gleefully inform you.

Blodget's blog, businessinsider.com, has an interesting and popular entry about his analysis of the brief social paroxysm in the US that suggested an upsurge in the anger of the poor and politically unattended Americans more popularly known as the Occupy Wall Street movement.

In an October 2011 entry, Blodget lays out in charts how inequity has actually increased enormously in the US. "Corporate profits as a percent of the economy are near a record all-time high. With the exception of a brief happy period in 2007 (just before the crash), profits are higher than they've been since the 1950s. And they are vastly higher than they've been for most of the intervening half-century."

More alarming data comes from another graph which shows how CEO pay "skyrocketed 300% since 1990 while corporate profits doubled. Average 'production worker' pay has increased 4%. The minimum wage has dropped. And as he says, helpfully, "all numbers adjusted for inflation".
 
It is not that the entire North, or West, is similarly cavalier about the issues at hand. Greece's recent troubles have triggered a wave of introspection in Europe. Martin Schultz, president of the European Parliament, the EU's only directly elected institution, lamented the lack of social spending in an interview to Reuters last week.
As much as E700 billion were set aside to rescue banks in Europe, "but little has been done to tackle the devastating social impact of the crisis, with more than 26 million people unemployed across the EU, including one in every two young people in Greece, Spain and parts of Italy and Portugal," the report said.

"We saved the banks but are running the risk of losing a generation," Reuters quoted Schulz, a German socialist who never went to university. That is something that he has in common with another man often said to the world's most popular politician, former Brazilian president, Lula da Silva.

In the '70s the North-South divide was best caught in the slogan that had the poorer nations lamenting western consumerism saying, "Please live simply, so we may simply live." During the Occupy Wall Street crisis a demonstrator wore cardboard flaps across her chest saying "One day the only thing left for the poor to eat will be the rich."

Ignoring the shift in tone, from imploring to the predatory, might be too costly for governments anywhere. Not only among the richer nations. Welcome to globalisation.

(The writer, a former journalist, now travels and writes)

By Harish Nambiar

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