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An Update from Venezuela

By Alexandra Beech,

July 29, 2004 - I arrived in Caracas two days ago, and have spoken to leading economists and pollsters. Thus far, this referendum is too close to call, no matter what anyone says. One of the reasons that polls vary is because the voter registry has changed so dramatically in the last few weeks. Some voters are also afraid to admit to pollsters their preferences.

At this point, no one really knows how many Venezuelans are registered. The latest number was expected on Thursday evening. (About 800K new voters are recently nationalized Venezuelans.) Through social programs, Chavez has managed to increase his popularity. The voters who could swing the vote in either direction are those who donīt know whether they will vote yes or no. This seems to be the greatest number of voters in the country...

The government is investing heavily in its campaign - pro-Chavez NO posters and ads are prominent. I think that the opposition is under-estimating the governmentīs popularity, and certainly its ability to win the referendum. I need to emphasize that the government is giving away millions in social programs and benefits, and regardless what many say, this is going to have an impact on the referendum results.

I still donīt have a sense that the opposition has appropriately addressed the issue of poverty. I have spoken to poor people (a healthy percentage of Venezuelans - about 85% - approve of the programs) who fear that the opposition will eliminate these benefits if it takes power. The opposition should be on TV and radio all day long discussing their plans for the poor. Ultimately, they should assure the poor that the current social programs will continue, no matter what. A leading analyst told me today that the great failure of the opposition has been to refuse to highlight the governmentīs success with the missions, while describing how it would build on them. Another failure, in my opinion, has been to rely on a written transition program to spread their message. That transition program, while extremely commendable, will gather dust on shelves. They should be describing it 24/7...

Incredible that this late in the game, the opposition still doesnīt have an obvious leader. Chavez polls high. On a personal level, he polls higher than his governmentīs performance. Next to opposition candidates, he polls about 30%, while the closest second, Enrique Mendoza, polls at 11%. Added together, the opposition candidates still donīt add up to Chavez. Some think that Enrique Mendozaīs greatest weakness is that he knows nothing about economics, but I think that leaders such as Reagan proved that knowing about economics is less important that surrounding yourself with competent economists.

Either way, the opposition still insists that it will go to primaries, a decision that some in Washington donīt consider too wise. Still, their willingness to go to primaries bumped them up a bit in the polls, along with the signing of the governability pact.

There is a growing concern that if the opposition wins, violent Chavistas will reject the results and revolt. The opposition would likely accept a fair and square Chavez win, though a preferable outcome would be an ample margin. That margin is 10%, says JP Morgan, or 500,000 voters, says Veneconomy. 70,000 to 80,000 votes would create conflict, according to IESAīs economist Gustavo Garcia.

On the oil front, I have seen credible evidence that the government is only producing 2.6 million barrels a day, and not the 3.2 million it claims. Furthermore, through sheer incompetence, PDVSA is destroying potentially lucrative fields. In one area, the damage is "as if youīd dropped a bomb on the private sector" said former Energy Minister Humberto Calderon Berti at a Veneconomy panel this morning.

Needless to say, there is a lot of fishy stuff going on at the National Elections Council. Over a million people donīt know where theyīre voting, and are considered "in limbo" while the authorities fix the problem. There is also the issue of the thousands of Venezuelans abroad who will not be able to vote, either because their names simply didnīt appear on the voter registry, or because the government claims that they must prove their legal status...

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