Historic Referendum to Decide Fate Of Venezuelaís Controversial President by Larry Luxner On Aug. 15, millions of Venezuelans will vote in a referendum whether to oust President Hugo Ch·vez. Itís the first recall election of its kind in Latin American history, and its outcome will determine Venezuelaís relationship with the United States for years to come. Bernardo Alvarez Herrera is sure his man will prevailóor at least thatís what heís telling the press. In a lengthy interview last month, Venezuelaís ambassador in Washington insisted that only 38 percent of Venezuelaís 26 million people favor the idea of a referendum on Ch·vez, as opposed to 60 percent in February 2003. A recent poll of 1,300 respondents reported in the July 14 issue of VenEconomy Weekly found that 26 percent of voters supported the Chavez government, 34 percent favored the opposition, and 39 percent did not like either option. ìWhen President Ch·vez accepted, as it should be, the idea of a referendum, it was a surprise for many people except us,î Alvarez said. ìIn a way, his critics didnít have anything to say because their position had been, ëThis guy will never acce pt a referendum about himself.í But it was put by us in the constitution, and this is the first constitution in the Western Hemisphere that allows people to demand a recall of any publicly elected official.î The wording of the referendum question itself is as follows: ìDo you agree with leaving without effect the popular mandate, granted through legitimate democratic elections, to citizen Hugo Rafael Ch·vez Frias as president of the Bolivarian Republic of Venezuela for the current presidential term?î The referendum will decide if Ch·vez finishes his term as scheduled in December 2006, or if early elections will be held. The text, which does not include the words ìrevokeî or ìratify,î will appear on the screens of 19,000 voting machines to be installed throughout Venezuela for 12.5 million eligible voters, who will have to decide ìyesî or ìno.î None of this would matter too much to the Bush administration except that Venezuela ranks as the fourth-largest crude oil supplier to the United States after Canada, Saudi Arabia and Mexico, providing 12 percent to 14 percent of all U.S. petroleum imports. Of the roughly 2.9 million barrels of oil produced by Venezuela every day, about 1.5 million goes to the United States, where government-owned PetrÛleos de Venezuela S.A. (PDVSA) owns a number of refineries as well as the Citgo gas station chain, in which it has a $12 billion investment. With gasoline already retailing for more than $2 a gallon in most areas of the United States, any political unrest in Venezuela that pushes oil prices even higher during the travel season is likely to have serious political repercussions in an election year. Even so, neither Democrats nor Republicans seem thrilled with Ch·vez and his antics. Last month, Ch·vez accused Washington of bankrolling the campaign for a ìyesî vote on Aug. 15 to open Venezuelaís oil industry to foreign investment. ìEvidence that has come to me that Bush is financing this plan shows once again what I have said all along, that the fight is not between us and opposition,î the Venezuelan president told supporters on July 11. ìIt is Ch·vez against Bush.î Ch·vez, a former army paratrooper who attempted to overthrow President Carlos AndrÈs PÈrez in 1992, was elected only six years later with the overwhelming support of millions of poor people who had never shared in the countryís enormous oil wealth. But Ch·vez quickly alienated the Clinton administration with his heavy-handed tactics against opposition parties at home, not to mention his well-advertised friendships with dictators such as Cubaís Fidel Castro, Libyaís Moammar Gadhafi and Saddam Hussein. As protests against Ch·vez mounted, the presidentís popularity fell from a high of 80 percent shortly after his election to around 30 percent. Relations with the United States took a further dive after the Sept. 11, 2001, terrorist attacks when Ch·vez accused Washington of ìfighting terror with terrorî during the war in Afghanistan. Bilateral ties also worsened following an April 2002 coup against Ch·vez, which Alvarez blamed on ìofficers in the Venezuelan army, financed, guided and encouraged by incredibly wealthy interests, both domestic and international, and aided by a subjective and partisan national press.î The coup lasted no more than a few days, after which Ch·vez was restored to power, although the economy shrank by 10 percent last year. The economy is now growing this year largely as a result of record high oil prices and petroleum exports that account for 85 percent of Venezuelaís foreign exchange. Nevertheless, demands for Ch·vezís resignation havenít let up. ìThe opposition is very complex,î Alvarez told The Washington Diplomat. ìIt consists of many sectorsófrom the extreme right wing to the extreme radical leftóand the only thing uniting them is that they want Ch·vez out. Some sectors of the opposition, after promoting a coup díÈtat, signed a decree that abolished the constitution and the rule of law, and tried to paralyze the economy. ìWe are optimistic,î Alvarez added, ìin the sense that we have been able to fight the non-democratic sectors of the Venezuelan opposition. So for us, itís a victory.î And what would happen in the event voters elect to boot Ch·vez from office? ìIf he loses, there will be general elections in 30 days. We have to respect the results,î Alvarez said with a smile. ìBut Iím sure he will win.î Just in case anyone doubts where the ambassadorís loyalties lie, Alvarez proudly points to a big color poster dominating his office. It shows the populist president with a group of children. On top is the slogan, ìCh·vez is the people,î and on the bottom, ìNow Venezuela is for all!î It should be pointed out that Alvarez is a longtime Ch·vez supporter. Several months before the 1998 election that brought Ch·vez to power, he visited Washington in an attempt to persuade State Department officials to give the candidate a visa in the event he won the election. Following his landslide victory, Ch·vez visited President Clinton at the White House, with senior U.S. officials portraying the meeting as a success. The president also appointed Alvarez vice minister for oil and gas, a subject on which the ambassador is somewhat of an expert. Alvarez said Venezuelaís economy, which shrank 9.2 percent in 2003, is likely to grow by 10 percent this yearóthe best performance in Latin America. But thatís largely because of oil prices of nearly $40 a barrel. ìWe have had higher prices in the past,î he said. ìThe difference now is that weíve been able to channel most of this extra income into very aggressive and far-reaching social programs in education, health, food and economic production. In health, we are reaching more than 10 million people, and for the first time, we have a real professional tax collection system.î Asked why the Bush administration seems to hate Ch·vez so much, Alvarez replied that the U.S. government takes its cues from Venezuelaís privately owned newspapers and television stations, which are bitterly opposed to Ch·vez. ìWe have been subjected to the most extraordinary media campaign against us,î Alvarez complained. ìPresident Ch·vez has been called a dictator, crazy, a clone of Fidel Castro. Heís been accused of fomenting unrest in Argentina, Ecuador and Bolivia. Weíve been accused of expropriating property, although we havenít expropriated anything. The Washington Post said Ch·vez ordered the killing of demonstrators, and weíve proved that this was not true.î Ch·vez may not be a clone of Castro, but the strong camaraderie between the two leaders does concern Washington deeply. And many of Ch·vezís strongest critics at home accuse the Venezuelan president of wanting to set up a communist dictatorship modeled after Castroís Cuba. Alvarez once again defends his boss, arguing that relations between Washington and Caracas have taken a definite turn for the worse since George W. Bush moved into the White House. ìThe Clinton administration wasnít hostile, but there was a clear perception that from the very beginning, the Bush administrationódominated by ideologuesówould be very hostile to Venezuela,î the ambassador said. ìSome of these Cuban exiles in the administration see Venezuela as a consolation prize, since they have not been able to overthrow Castro.î Far from trying to sweep Venezuelaís growing friendship with Cuba under the carpet, Alvarez is eager to talk about the subject. ìWe feel proud of the relations we have with Cuba. I think itís a relationship based on mutual respect. We have been cooperating ext ensively, particularly in social issues, and we donít agree with the policy of the blockade against Cuba. This is not only Ch·vezís position, but Venezuelaís position. The isolation of Cuba is a dream of the United States.î One reason Cuba is so important to the Ch·vez government is that Cuba has sent an estimated 12,000 doctors to Venezuela. Many of them work in the worst slums of Caracas, providing medical services in areas where even Venezuelan doctors wonít venture. Cuba is also an important customer of Venezuelan oil, buying 53,000 barrels at preferential prices under the San JosÈ accord and a similar amount on the regular market. ìWe are now supplying Cuba more than 100,000 barrels a day, so Cuba is a premium market for us,î Alvarez said. ìIn fact, Cuba has become one of the best markets for Venezuelan oil over the years because theyíre a large country, and they consume a lot.î And thatís not all, said Alvarez. ìWe have been discussing investments in Cuba for a long time. We have created an important oil supply and technology sector, and there might even be some attractive opportunities for Venezuelan private companies to participate in the secondary recovery of some oilfields,î he said. ìIn the future, Cuba might start becoming a major oil producer. We think itís important for Venezuela to participate in those developments. ìWe want the public to see the reality,î the ambassador continued. ìIn Lara state [in Venezuela], we are rehabilitating an old sugar mill with Cuban technical help. We have also adopted a Cuban technique supported by UNESCO to teach thousands of people how to read and write. What can you have against two countries cooperating in social programs, economic development and technology?î Actually, quite a lot, argue critics of Ch·vez. Opponents claim the president is trying to weaken the private sector, which overwhelmingly opposes his mandate. They also accuse him of trying to replace Venezuelaís market-driven economic system with Cuban-style distribution programs run by the government. Alvarez denied charges that Cuban doctors are being sent to the barrios of Caracas to indoctrinate Venezuelans into supporting communism. ìThe best way to see how good a doctor is, is to ask the people,î he said. ìPeople are not stupid. These guys have to go there and live in the communities, and theyíre dedicated to preventive medicine. Thereís a sense of solidarity. And thousands of people have gone to Cuba for curesópeople who thought they never had a chance. We have historical ties with Cuba, and weíll never support the isolation of Cuba.î Alvarez also refused to criticize Castroís human rights record in any way. ìWe have to discuss human rights all over the hemisphere. We donít believe in countries that try to portray themselves as the judge. Cubans have their own constitution, and we respect self-determination.î Notwithstanding its friendship with Castro, Venezuela badly needs U.S. investmentóbut even Alvarez concedes thatís not likely to happen until the current political crisis is resolved, and that probably wonít happen as long as Ch·vez remains in power. In fact, in a further blow to investment relations between the two countries, the U.S. Overseas Private Investment Corp. recently ruled that Ch·vezís government illegally seized the assets of Science Applications International Corp. (SAIC), a San Diego-based company that was involved in a joint venture with Venezuelaís state-run oil company, Petroleos de Venezuela S.A., which criticized the decision, saying it was based on politics. The ambassador said the current impasse between the two countries is the fault of Washington, not Caracas. ìThe United States has to rethink its attitude toward Latin America,î said Alvarez. ìLooking only at free trade and the war against terrorism doesnít give you the tools to understand the region. Unfortunately, Iíd say that the more ideological side of the State Department has prevailed over the more pragmatic side. We hope that will change soon.î Larry Luxner is a contributing writer for The Washington Diplomat.