Jan 11/07 | An article worth reading!!

The Economist
Venezuela

With Marx, Lenin and Jesus Christ

Jan 11th 2007 | CARACAS
From The Economist print edition

Hugo Chávez's "21st-century socialism" starts to look even more like old-fashioned autocracy

THE story of Hugo Chávez's presidency in Venezuela since he first arrived in office in 1999 has been a bit like the dance of the seven veils. This week, as he began a new six-year term after winning 63% of the vote in an election last month, the leftist former army officer cast aside some of his "democratic socialist" clothing to reveal more radical and authoritarian plans. "The transition is over," Mr Chávez declared, and a "new era" has begun.

Seemingly unable to restrain his enthusiasm, the president sketched this era's outline in surprise announcements in the days before the formal inauguration of the new term on January 10th. He said that he planned to nationalise the telecommunications and electricity industries. He rang a television show to say that he was replacing the vice-president, José Vicente Rangel, who was one of the few remaining figures in the government with his own political clout. Earlier, Mr Chávez had announced that the government would not renew the broadcasting licence of RCTV, the largest opposition-run television channel, meaning it will be off the air by June.

The president said that the main telecoms company—Compañia Anónima Nacional Teléfonos de Venezuela (CANTV), privatised in 1991—and energy were "strategic" businesses that should be in state hands. Verizon, an American telecoms firm, had been planning to sell its 28.5% stake in CANTV to a consortium controlled by a Mexican businessman, Carlos Slim. Another candidate for nationalisation is Electricidad de Caracas, the country's largest electricity company which was bought for $1.7 billion in 2000 by AES, a Virginia-based power company.

CANTV's shares plunged: its American Depository Receipts, traded on the New York Stock Exchange, lost almost 40% of their value in two days. They recovered after the finance minister said that the nationalisation would follow the law, which requires that compensation be paid.

Also deemed "strategic" were refineries which upgrade the heavy oil from the Orinoco belt, operated by multinationals including BP, Exxon Mobil and Total. Hitherto, the government had merely said that the companies should cede a 51% stake in the oilfields themselves, not the refineries. In his inaugural speech, Mr Chávez said he wanted to change the constitution to give the state control over natural-gas operations as well.

The telecoms and electricity takeovers would be the first outright nationalisations by Mr Chávez. Private business in his Venezuela has profited from economic growth, which is running at 10% a year because of a huge windfall from high oil prices. But it is hedged in with price and exchange controls. It co-exists with an expanding state sector and a host of government-funded co-operatives.

What unites the various elements of the "new era" is the relentless centralisation of all power in Mr Chávez's hands. His supporters already hold all the seats in the National Assembly, because the opposition boycotted a legislative election in December 2005. He also controls the courts.

Now, he says, the central bank will lose its constitutional autonomy (though in practice this had already become a fiction). Other proposed constitutional changes will curb the powers of state governors and mayors, and remove the bar on the indefinite re-election of the president.

Mr Chávez also said that he would ask the assembly to approve an enabling law empowering him to introduce a raft of socialist measures by decree. These, he said, would be much more radical than a similar package in 2001, which sparked a three-year opposition campaign to unseat the president that included a failed coup attempt and a two-month general strike.

Many of these announcements came at a ceremony on January 8th to swear in the new cabinet. Behind Mr Chávez as he spoke was a 10-metre-high close-up of his own face and hands, reminiscent of a bishop blessing his flock. Along with the mounting personality cult is a change of language. The president sneered at those, including Catholic church leaders, who have wondered aloud what his much-trumpeted plan for "21st century socialism" really consists of.

The bishops, he said, should read Marx, Lenin and the Bible. "Christ was an authentic communist, anti-imperialist and enemy of the oligarchy," he said. He added that he himself had been a "communist" since at least 2002 (at the time he claimed to want to "improve capitalism".) It is the first time that he has publicly assumed that description. He signed off with a slogan ("fatherland or death, we shall prevail") coined by his friend, Cuba's Communist president, Fidel Castro.

As always with Mr Chávez, the rhetoric may run ahead of the reality. But the direction of travel seems clear. The "new era" will see less scope for dissent. A law already going through parliament will restrict the ability of non-governmental organisations to receive money from abroad. By closing down RCTV, which he dislikes because it supported the coup against him in 2002, Mr Chávez is sending a message to the rest of the media that they need to toe the line, or else.

The departure of Mr Rangel from the government may also mark a turning point. A veteran leftist, he had been in government uninterruptedly since 1999. He was a moderating influence. He convinced Mr Chávez, who led a failed coup of his own against a democratic government in 1992, to adopt electoral politics.

Mr Chávez can claim an electoral mandate for "socialism". Yet many Venezuelans equate this with the social-welfare programmes that he has implemented, thanks to oil money and Cuban know-how. There is much polling evidence that they value democracy and do not want Cuban-style communism.

Of all his announcements, the closure of RCTV raised most concern abroad. José Miguel Insulza, the secretary-general of the Organisation of American States, said this appeared to be "a form of censorship" and "a warning" to others. That brought an intemperate outburst from Mr Chávez, who had backed Mr Insulza, a respected Chilean, for the job against opposition from the United States in 2005. He called on Mr Insulza to resign, saying he was an "idiot" who was acting like a "viceroy of the empire" (ie, the United States).

At a session of the OAS permanent council, Mr Insulza was backed by many governments including those of Brazil and Chile. But there is little sign that these moderate left-wing governments, which claim to stand for democracy and capitalism, are prepared to distance themselves more generally from the newly unveiled "communist" in Caracas.

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