CLAI Commentary

A series of occasional commentaries on important
policy issues affecting
Latin America and the Caribbean.
January 24, 2003

Is the OAS Up to the Venezuelan Crisis?
By Dr. James Ferrer, Jr. and Eduardo Segatore1


 In a recent interview with TV Globo News of Brazil, President Chávez admitted that his country is in a virtual state of war. After a little more than four years in power, Chávez is under increasing pressure as the opposition demands early elections or his resignation.

    In late 1998, the former army paratrooper Coronel Hugo Chávez, who in 1992 gained notoriety as the leader of a failed military coup, won the presidential election with an overwhelming majority. He took office promising to reform the corrupt political system and to bring prosperity to the nation. In 2000, the Chávez government held a referendum which readily approved a series of political reforms and constitutional changes, including the lengthening of the president’s term. Chávez’s popularity and authority appeared secure.

   Now, only two years later, the President and his “Bolivarian Revolution” face serious problems. Opposition has grown to the administration’s actions that, at times, have appeared rather autocratic. For instance, in 2001 Chavez announced 49 presidential decrees to tighten state control over various industries and to give the government the power to confiscate “unused” property. In addition, the economic situation has not been improving as promised. In fact, unemployment hovers around 20 percent and some 60 percent of the people live at or below the poverty line (compared to 27 percent in the 1980s). On April 12, 2002, after a series of intense public demonstrations and general strikes marked by violence and several deaths, the military forced President Chávez to resign. However, interim President Carmona (former head of the business federation Fedecamaras) failed to quickly stabilize the chaotic situation and Chávez returned to power after only a 36-hour absence. The tension in the country diminished but certainly did not disappear, as demonstrations against and for the government continued. In fact, passions have been rising sharply, and notably so after Chavez’s decision to order the National Guard to take control of the Caracas Metropolitan police on November 16.

   The current general strike against the government has been dragging on since December 2, 2002. Initial preparations for this strike apparently began early in November even though the opposition Democratic Coordinator group, on November 4, submitted to the National Electoral Council (CNE) a petition asking for a nation-wide, non-binding referendum on whether President Chávez should call early elections or leave office. The opposition claimed that the president had the support of less than 30 percent of the population and that the referendum would oblige Chávez to resign. On November 28, the five-member CNE decided, by a 3-1 vote, that the referendum would be held on February 3, 2003. The Supreme Court overturned the CNE’s vote, stating that at least a four-vote majority is needed to approve a referendum. The CNE voted again and a fourth vote was obtained on December 3. However, on January 22, 2003, the Supreme Court handed down an injunction ordering the CNE to “abstain” from organizing a referendum. The injunction disqualifies Leonardo Pizzani (whose role on the CNE has been challenged by the government and whose vote for the referendum was decisive) from being a member of the CNE and declares null and void any decision made during his tenure.

   The strike that began on December 2 initially attracted little participation and, therefore, had little economic impact. This situation changed radically when the workers of the state-owned oil company, Petróleos de Venezuela, S.A. (PDVSA), joined the strike. Venezuela’s oil production dropped precipitously and its petroleum exports essentially ceased. The PDVSA strike is especially important because the oil industry provides approximately 80 percent of Venezuela’s exports and about half of the government revenues. In early January, the Minister of Energy and Mines claimed that the oil strike had cost Venezuela $4 billion. The strike’s economic consequences for the already impoverished country are enormous. By mid-January, some foodstuffs and other necessities were becoming difficult to find in the stores.

   The international community, in part because Venezuela is the world’s fifth-largest exporter of oil and the fourth-largest supplier to the United States, has become increasingly concerned and involved in the Venezuela situation. The role of the Secretary General of the Organization of American States (OAS), Dr. César Gaviria, has been especially important. The OAS has urged a peaceful, constitutional and democratic resolution of the crisis, and Dr. Gaviria has actively sought to promote negotiations between the government and the opposition political forces. Former President Jimmy Carter also has sought to play a role in the negotiations, meeting with the opposition as well as with President Chávez. The formation of the Friends of Venezuela Group of Countries, which includes Brazil, Chile, Mexico, Portugal, Spain, and the United States, seems like a promising step toward a negotiated solution. The Group met on Friday, January 24, at the OAS headquarters in Washington and decided to dispatch a team to Caracas.

   The situation in Venezuela borders on the catastrophic. Reports are that GDP contracted by almost 8 percent in 2002 and, if the strike is not resolved soon, could easily fall by 10 to 15 percent in 2003. The country’s crisis is sparking a sharp decline in the exchange rate, a rise in bankruptcies and an upsurge in unemployment. Opposition to the Chavez government’s increasingly oppressive tone and actions is becoming more strident. For its part, the government is unwilling to budge from its stated willingness to schedule the referendum for mid-August.

   The Organization of American States, firmly supported by all its members and especially the Friends of Venezuela Group, must press forcefully for a quick and constitutional resolution to this crisis. It should present a viable solution and then convince both the government and the opposition to accept it. Above all, the OAS must remain deeply engaged until the issues are fully resolved. It must strive to avoid a total breakdown of democratic processes, the installation of authoritarian rule, or the implementation of a solution that leaves Venezuela severely divided. The Venezuela crisis has become the first major test of the OAS and of its Democratic Charter. Hopefully the organization (and its member states) will pass the test with flying colors.


1 The views expressed in this article are the authors’ and do not necessarily reflect the views of the Center for Latin American Issues or The George Washington University