Venezuela's fork in the road: socialism or capitalism?

This election acts as a referendum on Chávez.

As the dust settles after the US presidential vote, there is another important election that the world should watch. Venezuelan citizens head to the polls Nov. 23. At stake is the selection of governors for each of the country's 22 states, as well as mayors for 338 of the largest cities.

President Hugo Chávez already controls the legislature, has stacked the Supreme Court in his favor, and now hopes to consolidate his power at the regional and local levels.

The American election appeared to serve as a referendum on two terms under George Bush. It signaled change to the rest of the world as much as it signaled it to its own people. Similarly, the vote in Venezuela provides such an opportunity for its citizens. In selecting their local officials, Venezuelans will also register their current level of approval for a decade of Mr. Chávez's policies.

Only last December a wide-ranging constitutional referendum to intensify the country's move toward socialism and enable Chávez to serve indefinitely as president was narrowly defeated.

Chávez has clearly announced his intentions – to continue transforming Venezuela into a model for socialism in the 21st century. And unlike spurious accusations in the US that an expansion in healthcare is a step away from democracy, a very real shift towards socialism is under way in Venezuela.

Major elements of the country's economy are already under state control. Through Petroleos de Venezuela (PDVSA) the government maintains a majority stake in all petroleum fields and it stands as one of the largest oil companies in the world. Its gas stations, where some consumers can fill their tank for the equivalent of $1 or less, are omnipresent, though at least a few British-owned BP stations remain.

Electricity is managed by the National Electric Corporation, which was responsible for a blackout in April that left over half of the country without power. In August, the government nationalized the largest cement producer, adding Cemex to a portfolio of businesses that includes the largest steel company and a major telephone network.

The telecommunications sector still maintains a number of private providers, but the recent launch of Venezuela's first satellite atop a Chinese rocket may give the government further control.

In addition, Chávez continues to promote a cult of personality. His government has, for example, essentially reduced expression of opposition opinion to one major national television channel. And his live talk program "Hello President" is broadcast nationwide every Sunday for six hours.

The image of Chávez in his traditional red shirt also looks out from posters of the United Socialist Party of Venezuela (PSUV in Spanish) that hang throughout the capital. Public employees are required to attend rallies in support of PSUV and records list those who voted against Chávez in the past, and who are therefore excluded from any public-sector jobs.

Despite these increasingly socialist tendencies, consumerism is alive and well among Venezuelans of all social classes. It is also estimated that on average Venezuelans use 20 percent of their income for beauty care, while plastic surgery is a booming industry that doubled the number of cosmetic operations during 2006 alone. New, oversized cars such as the Ford Explorer and Toyota Tacoma ply the streets but, like other vehicles are caught in the daily traffic jams that snake through the capital. A trip on the Metro means seeing droves of passengers in designer clothes ostensibly manufactured by Lacoste or Tommy Hilfiger, wearing Christian Dior sunglasses, or tuning to the latest reggaeton hit song on their iPods.

The question is what type of society will result from this current mixture of socialism and capitalism?

Venezuela is utterly dependent on selling oil to pay for imports, including roughly two-thirds of its food, but what social-political-economic model will it follow? Will it go the way of Cuba, which has exhibited anemic industrial capacity and recently took steps to open up parts of its controlled economy? Or will it be similar to China, whose economy has demonstrated tremendous growth since the 1990s? Either way, Venezuela appears increasingly similar to these countries in its restriction of personal liberty and expression, as well as other rights such as private property ownership.

The election this weekend will provide some hint of an answer. At issue is whether Venezuela, in particular, will become more socialist (through a seemingly unlikely landslide win by PSUV), maintain its capitalistic base (with an opposition victory indicating a rejection of Chávez's intentions), or hold onto a mixture of both (as a narrow win by either side would signal).

Many Latin Americans and their leaders sense that they have fallen off the US's radar while it focuses on fighting two overseas wars. Venezuela has often served as the locus of this region's resentment toward its northern neighbor. Its upcoming election could show whether the influence of Chávez as the most vocal critic of the US is now in decline.

In the meantime, McDonalds, Burger King, and Wendy's are located throughout Caracas and always seem jam packed with customers. It appears that the so-called socialist revolution must also have its hamburgers.

David D. Sussman is a Fulbright Scholar in Venezuela.

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