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Venezuela: Back to the Future, a Comparison with Chile's Transition to Democracy

By Seth Antiles

Lessons from History

Commonly, pivotal events in history are more clearly understood years after the events unfold. Typically the actors and observers analyzing the events in real time do not have sufficient distance or the hindsight necessary to fully comprehend the significance of the moment. The great virtue of history and of most social sciences is that analysis is done with the benefit of hindsight. An unavoidable flaw of news reporting and real time analysis is that such analysis is surrounded by the day-to-day struggle of the time-bound participants, leaving the analyst without sufficient resources to obtain perspective.

In this article I attempt to gain some distance from the daily fray of events in Venezuela by relying on historical analysis. Drawing on experiences from the transition to democracy in Chile, this analysis will hopefully breathe some objectivity and insight into the case of Venezuela, and punch some holes in the pessimistic current conventional wisdom about Venezuela reflected in almost all news reports and real time analyses. The parallels between current day Venezuela and Chile’s experience with authoritarianism and the struggle back to democracy some twenty years ago are striking.

The Conventional Wisdom

The conventional wisdom about Venezuela can be summarized as follows:

1. Chavez will never allow a recall referendum to proceed against him because he would never run the risk of defeat. If he does allow the referendum to proceed, it is because he controls the relevant institutions that give him wide scope to manipulate the referendum process.

2. The opposition is divided and incompetent, making it difficult to put together a coherent referendum strategy let alone a coherent governing strategy.

3. The country is in ruins, politically, socially, and economically, making it ungovernable in a post Chavez world.

This was precisely the conventional wisdom toward Chile in the run-up to the 1988 plebiscite on Pinochet’s continued rule. Yet as Paul Drake, author of The Struggle for Democracy in Chile points out “to the astonishment of the world, a dictator allowed his opponents to win an honest referendum and accepted the resulting transition to democracy” Now let’s make some comparisons between the Chilean and the Venezuelan experiences in an attempt to better assess the future of Venezuela.

The Arrival of Authoritarian Politics

In Latin America, authoritarians are brought to power during times of national desperation that often comes from a rejection of the ruling political elite. An authoritarian obtains his legitimacy directly from the popular will to destroy what is widely perceived to be a failed political system. While Pinochet was brought to power through force and Chavez was brought to power through democratic elections, both were brought to power due to a popular rejection of traditional politics and desperation for change. In both Chile and Venezuela, society demanded rapid and profound political change that could only come from the power of an iron hand. Pinochet and Chavez invoked the will of the people to justify their decision to destroy checks and balances and to concentrate extreme powers in the hands of the executive.

In the case of Chile, Pinochet’s rise to power was a direct result of two factors: 1) a widespread fear of Marxism that was embodied in the Allende government; and 2) desperation for a return to social order which had unravelled with the mass protests against the Allende government. Chileans had come to believe that traditional politics had failed and politicians were incapable of resolving the country’s problems. Only someone capable of rising above politics, endowed with great powers could bring stability to the country.

In the case of Venezuela, Chavez’s rise to power was a result of a deeply held belief among the population that Venezuela was among the wealthiest countries in the world and traditional politicians had stolen the wealth. The old political system was bankrupt and traditional politicians could not be trusted to responsibly manage the oil wealth. Like in the case of Chile, only someone capable of rising above politics, endowed with great powers, could be entrusted to manage Venezuela’s natural resource wealth. The most successful and sometimes the most ruthless authoritarians are capable of manipulating national fears and turning common passions into national hatred against a domestic enemy. In the 1970s and 1980s, authoritarians justified their hard-handed tactics as necessary to destroy the threat of a dangerous internal enemy--communism. Authoritarian leaders often spoke of being on a war footing to root out and conquer the enemy “within our borders.” Pinochet manipulated the widespread fear of Marxism to eliminate all possible forms of political opposition. The repression was brutal and complete. Aside from dissolving the entire democratic political apparatus (congress, all elected authorities, and the courts), the press, television, and radio were either closed or censured. Opposition leaders were killed (both at home and in some cases abroad) and opposition parties were eliminated. An efficient spy network was established to quickly detect and eliminate any potential opposition movement. Power had to be concentrated on Pinochet personally, so he could defeat the enemy.

Unlike Pinochet, Chavez has not relied a repressive military apparatus to kill and intimidate opposition members. But he has relied on the language of the authoritarian regimes of the Southern Cone, and he too has justified his hard-handed approach as representing the will of the people. His reliance on the popular will has been more explicit than that of Pinochet through his use of the national referendum. As in the case of Chile, Chavez identified a domestic enemy to justify his hard handed tactics --the “oligarchy” -traditional political parties (AD and Copei), the national labour union that had close ties to the parties, and big business. The oligarchs needed to be rooted out and destroyed, but to do the work efficiently the institutions needed to be cleansed. Capitalizing on the overwhelming rejection of the old political elites, Chavez introduced the national plebiscite to Venezuela, an instrument that did not previously exist. He used the plebiscite as a weapon to demolish all checks and balances on presidential power. Through the referendum, Chavez dissolved congress, the Supreme Court and all other lower level courts. He then packed these institutions with loyalists in order to maximize his power. Though Chavez was elected democratically, Venezuelans understood that they were voting for an authoritarian. The broad appeal of his election campaign was his promise to destroy the old political system, and the history of his 1992 coup attempt lent credibility to his pledge. Over time, the definition of oligarch, or enemy, has evolved to mean anyone that has sought to impose checks on his power or oppose his rule.

Legitimacy Ultimately Depends on a Return to Institutions

Aside from Cuba, all authoritarian regimes in Latin America have been transitory. To survive, authoritarians need crises to legitimize and sustain the extraordinary nature of their regimes. In the absence of an imminent threat to stability or national sovereignty, the population begins to demand a return to political normalcy. Both Pinochet and Chavez understood the relevance of the long democratic traditions of their countries. With the imminent threat of communism no longer so apparent and the economy entering into crisis, by the early 1980s Pinochet realized that he needed to refresh the legitimacy of his regime. He responded by opening a path toward a return to political normalcy. Not only did Pinochet gradually restore certain civil liberties, but he also created a constitution that offered the possibility of a plebiscite on his rule in October 1988. While Chavez amassed power in his own hands and extended his term in office through changes to the constitution, he understood that he needed to leave a certain amount of democratic space open to maintain legitimacy. In his constitution that was written in 1999, he allowed for a referendum on his extended presidency (the new constitution effectively extended his term from five years to eight years) after the midpoint of his presidential term.

At the time they wrote their respective constitutions, Pinochet and Chavez were convinced that they personally embodied the national will, and therefore a plebiscite on their rule was not seen as a risky strategy but rather as a way to refresh the legitimacy of their rule.

The Emergence of an Opposition through Mobilizations

In both Chile and Venezuela the opposition believed that the promise of a plebiscite was too far away and lacked credibility. In the case of Chile, the opposition did not believe that a ruthless dictator would ever agree to a referendum on his presidency. The opposition was convinced that even if he did permit a referendum, it was impossible that someone who possessed complete personal control over all public institutions would allow himself to lose. The logic of the Venezuelan opposition from late 2001 through the first quarter of 2003 was precisely the same.

In the case of Chile, an unorganized opposition movement, led by civic groups and NGOs, made a decision in 1981-1982 to take advantage of a severe economic crisis to launch massive street protests in an attempt to demonstrate to the armed forces that Pinochet no longer represented the will of the people, and that calm would only be restored through a change in political regime. Opposition political parties did not take a leading role in the mobilization strategy, but instead followed the lead of civil society. The mobilization strategy continued on and off through the mid 1980s.

Similarly, in late 2001 an unorganized Venezuelan opposition movement began a mobilization strategy, led by civil society, that persisted on and off until early February of 2003. As in Chile, political parties were involved, but played a secondary role. Like in Chile, the strategy of the opposition was to demonstrate to the armed forces that Chavez no longer embodied the will of the people and the calm would only be restored if Chavez were removed. By contrast, the Venezuelan military actually complied, and temporarily removed Chavez from power in April 2002. However, those in the opposition who seized power demonstrated to the military, by their authoritarian actions, that they too did
not represent the national will. Chavez was quickly brought back to power.

In Chile and Venezuela the mobilization strategy had positive and negative consequences. On the positive side, the mass mobilizations gave the opposition a voice that had been completely lost. In both countries institutional channels to express opposition had previously been blocked. The only mechanism to make regime supporters, the military, and the world aware of the presence of a massive opposition to the government was through street protest. Toward this end, the mobilizations were successful. Equally important, the mobilizations energized and empowered an opposition that had been previously dormant.

On the negative side, the mobilizations brought back a feeling of crisis to the countries, which in turn gave renewed legitimacy to Pinochet and Chavez. Both men depicted the opposition movements as radical, and both could point to a tangible enemy that was trying to destabilize the country. In both countries, the mobilizations brought a sense of fear to large segments of the population that were either supporters of the regime, moderate, or undecided. In Venezuela, polls demonstrated that the coup attempt of April 2002 and the massive mobilizations of late 2002 and early 2003 turned the undecided into regime supporters.

The Pull of Democracy versus the Authoritarian’s Search for Crisis

The experience of Latin America’s transitions to democracy in the 1980s shows that authoritarians are not brought down by revolution or mass protest; rather transitions typically occur when the opposition exploits small institutional or democratic spaces that are opened by the regime in order to maintain their legitimacy over the long run. The Chilean transition to democracy shares this institutional characteristic common to all recent democratic transitions in Latin America.

By 1987 the majority of the Chilean opposition came to the realization that the mobilization strategy had failed. Yet the opposition remained deeply divided across the political spectrum. The Christian Democrats (PDC) represented the centre; the moderate left was represented by the Socialists (PS); and the more extreme left was divided three ways between the Party for Democracy (PPD), the Communists (PC), and the Movement for the Revolutionary Left (MIR). The only thread that united the opposition was the common goal of removing Pinochet from power and returning the country to democracy. Beyond that immediate and uncertain objective, the opposition did not share a specific strategy to bring about a political transition let alone a common vision of the future. It was not until February 1988 that all opposition parties (with the exception of the communists and some smaller groups who continued to advocate a more radical approach) agreed to try to confront the government in a plebiscite scheduled for October 1988. Only eight months before the plebiscite, opposition parties entered into a coalition, what eventually became known as the Concertacion. The Chilean opposition remained divided, but was able to unite for the sole purpose of the plebiscite.

The Concertacion was similar to Venezuela’s Coordinadora Democratica CD), which has also been able to unite for the purpose of the recall referendum. As in the case of the Concertacion, the CD has shown signs of greater cohesion as the referendum process has progressed. Most recently, the CD has signaled that it will soon announce a mechanism for selecting one presidential candidate to enter into presidential elections after the recall referendum. The opposition’s realization that the plebiscite presented an opportunity for precipitating the transition process, independent of the outcome, was a very important step.

At the time of the decision, many in the opposition and most observers around the world did not believe Pinochet would enter into a referendum, let alone allow himself to lose a referendum. While it was not apparent to the actors or observer at the time, with the benefit of hindsight we can better understand why he let the referendum go forward. Chile had been the longest standing democracy in Latin America at the time of the 1973 coup. Pinochet imposed a dictatorship, claiming to represent the will of the people. While Pinochet was able to rule in an arbitrary fashion through the 1970s, by the early 1980s he felt compelled to abide by a rule of law, and he wrote a constitution. With the 1988 referendum approaching, Pinochet wanted to retain his authoritarian powers in a country where democratic principles were still valued. The only way he could justify his hold on authoritarian powers was to demonstrate that his rule was not arbitrary, but was guided by the constitution. Furthermore, in the absence of a national crisis, Pinochet needed to prove to regime supporters, including the military, that his authoritarian leadership still represented the will of the people. In his campaign, Pinochet made every effort to bring a sense urgency and crisis to his campaign, playing on historical fears associated with the political left. He warned that a vote to remove him was a vote to bring back the communist threat, which would inevitably lead to chaos and instability.

Similar to Pinochet’s campaign strategy, Chavez’s campaign strategy is filled with a sense of crisis and urgency. He claims that the opposition is working with United States intelligence agencies to destabilize the country. Like Pinochet, he claims that a vote against him is a vote to bring back the oligarchy. His chances of victory are dependent on his ability to create a sense of national crisis. Aside from their own internal divisions and the risk that Pinochet would simply cancel or steal the plebiscite, concerns which persisted until the day he was defeated, the Chilean opposition confronted three additional campaign obstacles:

First, similar to Venezuela today, there was widespread concern that voter turnout against Pinochet would be stifled due to intimidation tactics by the Pinochet regime. Since Pinochet controlled all public sector institutions including the electoral apparatus, there were no assurances that the voting process would be secret, leading to widespread concerns that a vote against Pinochet would bring official reprisals and persecution.

Second, the opposition confronted a regime that had established a reasonably good recent track record in terms of recent economic performance. From 1986 through 1988 the economy grew at an average rate of 6.5%. In contrast, the opposition did not present an economic program to the country in its referendum campaign. This compares with the average growth rate under Chavez over the past two years of –10.5%.

Third, Pinochet relied on a large fiscal expansion to boost his political support in the run up to the plebiscite. The fiscal stance went from an average surplus of 2% of GDP in the 1983 to 1986 period to an average deficit of 1.3% of GDP in the 1987 to 1988 period, representing a fiscal expansion of 3.3% of GDP for the referendum. Chavez has also increased spending significantly, but not with the efficiency seen under Pinochet.

Seemingly against all odds, the plebiscite on Pinochet’s rule took place peacefully, as scheduled on October 5, 1988. Pinochet hesitated before finally recognizing the result—he lost with 55% voting to remove him and 43% voting to keep him. A combination of domestic and international observers gave transparency to the process, making it more difficult for Pinochet to deny the result.

By the second quarter of 2003 the opposition in Venezuela came to the same realization that the Chilean opposition had understood in early 1988. The Venezuelan opposition decided to play within the institutional framework that Chavez created. Venezuela, like Chile, is a country with a fairly deep respect for democratic principles. If Chavez wants to maintain legitimacy, then he will have to stand by his own institutions and his own rules. If he were to block the constitution then it would be a clear admission to Venezuelans, to the world, and to the Venezuelan military that he no longer represents the will of the people. As in Chile, international and domestic election observers will be present, in order to give credibility to the entire referendum process.

Managing Polarization

Political pacts and safeguards granted to supporters of the outgoing regime proved to be key to a smooth transition to democracy in the 1980s. In the case of Chile, such safeguards were particularly important in light of the deep polarization of society. As the result of the plebiscite demonstrates, the electorate was fairly split between Pinochet supporters and Pinochet detractors. Fifty-five percent voting to throw out a dictator against forty-three percent voting to keep a dictator represented a profound difference in political preferences and managing such intense polarization successfully was not a straightforward proposition. Furthermore, the Chilean opposition remained divided across the ideological spectrum even after the plebiscite.

Unlike the case of Venezuela, the constitution allowed Pinochet to operate from a position of strength because the political transition would not take place until March 1990. In the months after he lost the plebiscite, Pinochet changed the constitution in order to safeguard the interests of those who supported his campaign, the political right. The changes to the constitution allowed him to personally retain control of the armed forces. Additionally, nine out of forty seven Senate seats were shielded from electoral politics and were given to the political right. Importantly, but informally, the opposition government that took office gave assurances to the political right that the core of Pinochet’s economic model would not be changed. In the end, the transition was successful because there were no obvious winners and losers other than Pinochet himself, who lost his grip on power. Those who pushed for the plebiscite won back democracy while those on the political right retained an important role in politics and in the economy.

To this day, Chile is a polarized society. But in the years since the political transition, Chilean society has found a way to contain what were once explosive energies into an ongoing political dialogue among the political parties. In the future, it is likely that Chile’s political tensions will play themselves out in electoral politics, with power oscillating between left, right, and centre. The political crisis that Venezuelans have lived through in recent years is likely to offer a similar kind of learning experience that the Allende and Pinochet years offered for Chileans—the importance of inclusion and compromise. As for the divisions among the Concertacion, they remain to this day. However, a desire to hang on to political power and prevent a return of the political right to power probably explains the durability of the Concertacion coalition.

A Look back to the Future

With the exception of Cuba, authoritarian regimes in Latin America have always been temporary. Authoritarians are swept into power, usually with popular support, in order to resolve a crisis. Once the crisis is resolved (or often times not resolved), the authoritarian regime is expected to restore democracy.
President Chavez was brought to power with overwhelming support and he was granted sweeping powers to remove the old politicians and bring responsible political management to the country. A look at opinion polls shows quite clearly that his mandate to rule with an iron hand has ended. The opposition has abandoned a strategy of mobilization, and has embraced Chavez’s constitution and his recall referendum. With hindsight we can see that Pinochet had no choice but to let the plebiscite on his rule go forward. All rulers, democratic or authoritarian, depend on legitimacy for survival. With the benefit of Chile’s history, we believe that Chavez has no alternative but to allow the referendum go forward or face a collapse in legitimacy.

Economic and Market Analysis November 20, 2003
Country Analysis & Commentary
Venezuela
Senior Debt Rating: Caa1/B-
Seth Antiles
(212) 816-9895
seth.antiles@citigroup.com
New York

Sources

Drake, Paul. 1995. The Struggle for Democracy in Chile.
Linz, Juan. 1978. The Breakdown of Democratic Regimes.
Stepan, Alfred. 1988. Rethinking Military Politics: Brazil and the Southern Cone.
Malloy, James and Michael Seligson. 1987. Authoritarians and Democrats: Regime Transition in Latin America.
O’Donnell, Guillermo and Philippe Schmitter. 1986. Transitions from Authoritarian Rule.
Zakaria, Fareed. 2003. The Future of Freedom: Illiberal Democracy at Home and Abroad.

Citigroup Global Markets
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