Imperial cocaine bandits

Chávez has, apparently, accused the US of selling cocaine at "below-market prices" in the barrios of Caracas as a means of destabilising Venezuela. This accusation is bizarre as it gives the impression that the US is muscling in on his territory - as if Chávez wants to be the only coke-dealing big daddy in THIS neighbourhood!

Of all the extreme accusation he's come out with, this has to be one of the more unusual ones. It undermines the credibility of his rhetoric and means people are more willing to dismiss what he says, even when he is in fact right.

Just take the whole Farc issue. Chávez had a real opportunity to denounce the many human rights abuses of the Uribe administration by staying as neutral as possible and pressing for a peaceful solution, thus highlighting the failure of the Colombian government to resolve the country's problems.

But instead he has affiliated himself with the Farc rebels and opened himself up to criticism that he aids and abets terrorists. This in itself is an exaggerated claim from hysterical rightwingers but why give your opponents the opportunity to label you in this way if it can be so easily avoided?

As I have always said, Chávez is his own worst enemy.

Heating up...

The debate is getting interesting following the publication of the New Statesman article. It hasn't stooped to name-calling (yet!) which is good, as people are engaging with some interesting issues. Check it out here.

Uribe's commitment to peace

Check out this article and this one about how the Colombian military attacked the convoy releasing the hostages from Farc imprisonment. It was clearly an attempt to undermine the release effort in order to humiliate Hugo Chávez, who brokered the deal.


As you will see from my articles I'm not a massive fan of Chávez and believe he deserves most of the criticism he receives, but it's stories like this that make me think that (US-backed) leaders who are just as dastardly as he is - if not moreso - aren't getting the media haranguing they deserve too.

$12 billion oil squabble - truth or dare?

An interesting story is brewing in the hazy world of international business law.

Venezuelan state oil company PDVSA has, according to Exxon Mobil, been ordered to freeze $12 billion of its overseas assets by a UK court. The case arose last year, when president Chávez's nationalisation drive forced foreign oil operators in Venezuela to either hand over majority control of their operations or leave for good. All companies concerned came to an agreement except Exxon Mobil, which chose to pull out of Venezuela and sought recompense in the international courts.

Friday's ruling has been widely reported but I am yet to read a definitive explanation of what it means for PDVSA. Rafael Ramirez, the PDVSA boss and oil minister, has denied that any ruling has been made against PDVSA and has dismissed the whole episode as some sort of gringo PR conspiracy to destabilise the Venezuelan economy. (I know the Chávez government always comes out with this kind of reasoning, but part of me often thinks, "it's not totally out of the question...")

So was there a ruling or not? If there was, how can Ramirez credibly claim that there wasn't? And if there wasn't, what is Exxon making such a hullabaloo about?

Either way, the announcement has managed to undermine the value of PDVSA's bonds, which fell to an all-time low on Friday, which certainly establishes a clear motive for any Exxon-Bush destabilisation conspiracy.

But then again, could it be the Chávez government once again playing the "external forces" card to justify its own incompetence?

Watch this space.

Show of strength

Martin Markovits and Sebastian Kennedy

Hugo Chávez says he wants to bring peace to the warring factions in Colombia's cocaine wars but his increasing militarism could destabilise the region.

Squinting into the glare of the late-afternoon Caribbean sun, hundreds of pleated khaki-dressed soldiers and military dignitaries form orderly rows facing their chief of staff and head of state, Venezuelan president Hugo Chávez.

Positioned on stage and flanked by a few lines of tanks and helicopters in a military training ground in the provincial city of Valencia, western Venezuela, President Chávez waits for the roaring fighter jets to pass overhead before addressing the assembly.

"From Colombia, Venezuela is threatened," Chávez says, dismissing as "inventions" widespread allegations that his government has colluded with drug trafficking and arms sales to Colombian guerrillas.

The speech is being delivered to mark the 16th anniversary of the attempted coup led by the then-young Lieutenant Colonel Chávez on 4 February 1992. Although it ended in failure and Chávez and his cohorts were imprisoned, many believe the event - now commonly referred to as 4F - paved the way for his eventual democratic election to the presidency in 1998.

But while the Venezuelan president was commemorating his failed putsch, over a million protesters took to the streets in neighbouring Colombia and in cities across the world to voice their opposition to Chávez's hostage-taking rebel allies, the Revolutionary Armed Forces of Colombia (Farc).

In an almost implausible coincidence, anti-Farc campaigners chose 4 February to mobilise a global protest against the Marxist insurgents. They maintain that the event was entirely apolitical and directed only at the rebel fighters, but in a statement on their website they denounce Chávez's "interventions in the internal matters of Colombia and, particularly, his declarations which seek to justify the Farc as a representation of the Colombian people".

Chávez's inflammatory comments about the threat from Colombia came two days after he declared that the Venezuelan armed forces were "on alert" against possible aggressions from the neighbouring country. In a televised broadcast, the president had warned: "We don't know how far it could go. We don't want to hurt anybody, but no one should make a mistake with us."

He added: "One day things will change in Colombia," referring to the cocaine-fuelled civil war that has raged across the border for almost 60 years. "Theirs is a war in which we cannot participate except as peacemakers."

His words have further aggravated the deepening diplomatic crisis with Bogotá. After successfully negotiating the release of two hostages held by the Farc, he requested that these narco-rebels be removed from lists of international terrorist organisations and expressed an ideological affinity with their insurgent cause.

"The Farc and [National Liberation Army] ELN are not terrorist bodies. They are real armies that occupy space in Colombia. That must be recognised. They are insurgent forces with a Bolivarian political project, which here we respect," Chávez said in his yearly address to the National Assembly on 11 January.

As the anti-Farc movement gathered global momentum through social networking sites such as Facebook, it was quickly seized upon by the Colombian government. On the day of protest, Colombian president Álvaro Uribe even delivered a message of thanks to marchers in the city of Valledupar. "Our gratitude goes to all Colombians who today expressed with dignity and strength their rejection of kidnapping and kidnappers," Reuters reported him as saying.

Back at the Valencia barracks, Venezuelan officials reacted truculently. Jesús González, the strat egic commander of the armed forces, rejected it as a "political ploy to try to identify 4 February with opposition to the Farc".

President Chávez reminded his army and onlookers of the history behind the day's celebrations. "The events of 4 February [1992] swept Venezuela into the 21st century. It was when the Bolivarian revolution truly began," he declared.

In recent years, the flamboyant Venezuelan president has used 4F to demonstrate his increasing regional influence and to launch stinging verbal attacks on his enemies.

While critics maintain that it is hypocritical for a democratic country to celebrate a coup, albeit a failed one, Chávez's supporters see it as the day that planted the seeds for Venezuela's ongoing socialist transformation. Chavistas call it the "Dawn of Hope" and regard it as a stepping-stone to true democracy for the poverty-stricken masses.

"It was the lightning bolt that illuminated the darkness," Chávez said in an interview with the Chilean author Marta Harnecker in 2005.

Continuing his speech to the military, the president maintains that 4F is not finished. "It reminds us we need to be even more revolutionary. My government is a child of 4F," he says.

After two years in prison, Chávez and his allies were released by presidential pardon in 1994 and began a new effort to take over the government, this time through democratic means.

"We realised that another military insurrection would have been crazy," Chávez said in 2005. "A large part of the population did not want violence, but rather they expected that we would organise a political movement structured to take the country on the right path." He came to believe, he has said, that the Bolivarian revolution had to be a peaceful one.

However, some scholars consider the Venez uelan government's decision to actively celebrate 4F a rewriting of history intended to indoctrinate the population.

Néstor Luis Luengo, a professor of sociology and head of research at the Andrés Bello Catholic University in south-west Caracas, believes commemorating the failed coup is a key element in Chávez's broader socialist agenda. "There is an ideological battle taking place in this country. If [the government is] going to push for more reforms, they have to change the ideology of the country and the historical events celebrated." It is in their interests, he says, to make 4 February a patriotic day.

Opposition leaders also criticise Chávez for using the commemoration of the failed coup as an attempt to politicise the military. "For us, the important thing is to have an armed force that is apolitical, modern and at the service of the Venezuelan people, and one that does not become a political party," said Julio Borges, leader of the opposition party Primero Justicia.

Other Chávez opponents are concerned at the militarism: "This government prefers to celebrate a day of violence. They should instead be celebrating the day he was democratically elected president," said Armando Briquet, secretary general of Primero Justicia.

A violent act

Chávez's supporters obviously disagree. Cruz Elena Peligrón, a civilian participant in the 1992 coup and friend and neighbour of Chávez in the 1990s, says: "We have always celebrated our independence day and that was a violent act. The US military commemorates wars like Vietnam and the Second World War. They say you have to fight for peace and unfortunately that's true."

Since Chávez took office in 1999, he has survived an attempted coup, oil strikes and referendums on his presidency. Last December, a package of proposed reforms to the constitution, which would have allowed him to stand for indefinite re-election, was defeated at the polls - his first political loss in nine years.
With Chávez's opponents invigorated by their poll success, this year's 4F festivities were notably restrained, taking place in a small pro vincial barracks instead of the grand military base at Fuerte Tiuna.

Venezuela's ambassador to the UN and former coup plotter, Francisco Javier Arias Cárdenas, said political priorities have changed: "We are no longer going to support unconditionally any segment of the Colombian military that has the objective of destroying either the Farc or the peace process in Colombia. Venezuela is just a third party in the civil war."

He concluded: "Of course we don't support guerrilla warfare, kidnapping or drug trafficking. But to end the war you don't necessarily need to end the Farc - just end the poverty, misery and violence that occur in Colombia every day. Both sides should go to the table and talk peace."

President Uribe maintains an unwavering zero-tolerance stance against the Marxist rebels and has shown much support for paramilitary forces that have been responsible for a catalogue of human rights abuses throughout Colombia's intractable civil war.

Meanwhile, Chávez's flamboyant militarism and allegiances with the Farc make dialogue between Colombia's warring factions seem less and less likely.

Cruising for a bruising

There is no denying that the whole Venezuela/Chavez issue provokes heated debate, but the New Statesman's feedback forums on this topic often end up shamefully unreadable and nauseous. Just cast your eye over the comments following this article.

What do "contributors" achieve by engaging in this sort of mudslinging? And why doesn't the NS vet its forums more effectively? I've never seen it this bad on any other site, even when debating Venezuela.

Lets wait and see what kind of reaction my latest article on Mr. Chavez's hypocritical antagonism towards Colombia receives. I reckon I'm once again cruising for a bruising in the blogosphere.

FARCing politics

Today's anti-FARC march has sparked plenty of discussion in the Colombian media. The rally has been organised as a supposedly anti-political demonstration against the narco-terrorist outfit Revolutionary Armed Forces of Colombia, but of course has been hijacked by the Colombian government as a pro-State media blitz.

At first it appears to be a fairly innocuous event which most right-(and left-?)minded people should support. But when you cast your eye over this Colombian site, you realise that by excluding any other forms of violence it becomes somehow complicit in crimes committed by other institutions - especially those of the State-backed renegade mercenary Colombian paramilitaries.

I emailed one of the organisers of the march, asking if the choice of date was significant. The reason I asked was that on February 4th 1992, Venezuela president Hugo Chávez led an unsuccessful coup attempt which ended with the imprisonment of the head-of-state-to-be and his cohorts. Since around 2005 Chávez has celebrated this day as the "Dawn of Hope" when, according to his "Bolivarian" rewriting of history, the Venezuelan people decided to stand up to the corrupt, incompetent and oppressive regime of Carlos Andrés Pérez.
I wondered, with Chávez's recent declaration of shared ideology with the FARC, whether holding an anti-FARC protest on this date was a sly way of undermining his attempts to steal the media limelight with another display of his military prowess.

The organiser responded that it was entirely coincidental and that they only realised a week into January when it was too late to do anything about it.

I'm not convinced. It does seem awfully convenient for Colombian president Uribe to outshine Chávez on a day like today.

Despite defeat at polls, Venezuela's Chavez holds all the cards

Sebastian Kennedy and Martin Markovits

Caracas, Venezuela -- The political opposition's elation after Sunday's referendum that denied President Hugo Chavez the sweeping new powers he needed to accelerate his socialist revolution is evaporating quickly.

Despite a narrow victory that rejected 69 proposed constitutional reforms that would have allowed Chavez to stand for re-election indefinitely, create new forms of communal property, handpick local leaders under a redrawn political map and suspend civil liberties under extended states of emergency, those changes could still be implemented through a series of California-style voter propositions, Chavez noted this week.

"Prepare yourselves, because a new offensive is coming," Chavez told viewers of the state-run VTV television station Wednesday. "These reforms are not dead."Chavez then explained that although current law prohibits him from attempting another referendum to change the Constitution, he could still achieve his reforms via a series of "popular initiatives" by which each reform would be voted on by the Chavez-controlled congress after acquiring signatures of 15 percent of the electorate, or 2.4 million voters. If approved by the congress - known as the National Assembly - it would become law if passed by a majority of voters.

Analysts also say Chavez could push through many of the rejected reforms by presidential decree, which he can exercise for another six months as stipulated by a previous decree issued in January.

The political opposition had hoped to use the momentum of its marginal victory to galvanize popular support against Chavez. With 90 percent of the ballots counted, official figures stand at 50.7 percent against the reforms and 49.3 percent for the yes vote.

But Greg Wilpert, director of a left-leaning news Web site, Venezuelanalysis.com, predicts that not much will change. "The opposition is celebrating right now, but the fact is they are still as powerless as ever," he said. "They have no seats in the National Assembly, and they only have one governor. They will probably gain some seats in the gubernatorial elections in 2007, but that won't make much difference, because real power lies with the federal government. The next election for the National Assembly is in 2010, and that is still a long time away."

Jorge Perez, a member of a pro-Chavez political radio cooperative called First Free Black Radio, also points out that the opposition lacks credible leadership and policies to attract the masses."The opposition has yet to find a leader that can match Chavez's magnetic personality and charisma," Perez said. "They are united and energized only when they stand against him. They need to start developing their own policies and solutions to Venezuela's problems."

Any chance of increased cooperation between government and its political opposition appeared to disappear Wednesday when a defiant Chavez dismissed the "no" vote victory with several expletives. "You should administer your victory properly, but already you are covering it in s-. It's a s- victory, and ours - call it, defeat - is one of courage, of valor, of dignity," he said at a news conference at the presidential palace. "We haven't moved a millimeter, and we won't. ... They have nothing to celebrate, and we have lost nothing."

Some analysts have also described the proposed use of popular initiatives to achieve change after losing the referendum a violation of the Constitution that would eventually involve a Supreme Court decision. Even though the court is stacked with Chavez loyalists, it has occasionally shown a streak of independence. Popular initiatives "would be fraudulent," said constitutional lawyer Rafael Chavero.

Elenis Rodriguez, national secretary for the opposition party Justice First, says Chavez's insistence on pushing through his reforms reveals his true desire: to stay in power indefinitely."He doesn't really need a new Constitution to implement most of his socialist principles - he can do so using decree powers and the legislature," she said. "But the only way he can stand for re-election is to change the Constitution, and the only way to do that is to encourage his supporters to implement proposals of their own (popular) initiative. It's a very underhanded strategy."

On Thursday, Chavez's ex-wife said she will propose her own popular initiative to shorten presidential terms from six to four years and allow presidents one chance for re-election. Marisabel Rodriguez, who divorced Chavez in 2004, said her ex-husband, who assumed power in 1999, has been in office long enough.

This article appeared on page A - 15 of the San Francisco Chronicle on 7th December 2007

Chávez loses - for now

Sebastian Kennedy and Martin Markovits

Caracas, Venezuela -- By a majority of just 150,000 votes, the Venezuelan electorate rejected a complex package of reforms to the constitution which would have allowed President Hugo Chávez to stand for indefinite re-election. The 2 December vote was Chávez's first setback, suggesting that some of his usual support peeled away.

A night of high drama saw the Venezuelan president concede victory by the slimmest of margins. The result means he will have to stand down when his term of office expires in January 2013.

It was the president's first defeat since he took office in 1998 and the first opposition election victory in 12 public votes. Until now, public support for the government has seemed insurmountable. Analysts believe that Chávez was partly let down by the high percentage (44 per cent) who chose to stay home rather than endorse or reject the wide-ranging reforms, but also say that moderate Chavistas had become alienated by their president's extreme rhetoric.

"Chávez waged a very confrontational campaign that turned off a lot of voters," says Elenis Rodríguez, national secretary for the opposition party Justice First. "He said if you do not vote for the reform, you are a traitor."

Rodríguez also believes that some people stayed home because they were worried about voter privacy. "Many did not agree with the reforms but were scared to vote for fear of losing their jobs." Jorge Pérez, a Chavista member of a political radio co-operative, notes that Chávez lost the media war: "The Chavistas did a very poor job of informing the public on the more positive aspects of the constitutional reform, like social security for the informal economy and the right for decent housing.

"The opposition did a very effective job of highlighting the most controversial articles, like indefinite re-election and the status of private property. If you read the proposed constitution you would see that the right to private property is guaranteed, but if you followed the media campaigns you would think that the government wanted to confiscate all property," he says.

The Chávez campaign focused on international disputes, a strategy that would have appealed only to dedicated supporters whose votes were already guaranteed. At his closing rally, the president declared that "a vote against these reforms is a vote for George W Bush" and threatened to cut off oil supplies to the US if it attempted to "destabilise" the country after the elections.

There were also threats that Spanish banks in Venezuela would be nationalised if the King of Spain did not apologise for telling Chávez to shut up, and that diplomatic relations with Colombia might be cut off after President Álvaro Uribe's interference in his mediations with Colombia's FARC guerrillas. "Many in the barrios are Colombian immigrants who felt that Chávez disrespected their entire country, not just its president," says Rodríguez.

But the main problem with the reforms, according to Luis Eduard Monsano, a student activist, was that they did not offer solutions to the pressing issues of crime and unemployment. "Our groups went to a lot of barrios and many people told us, 'Chávez yes, reform no.' We got the sense that a lot of these communities felt abandoned by him. They had supported him because of the social programmes he has implemented, but many were asking, 'What's next?'"

In fact, the reforms did include popular measures to guarantee housing rights for families and to implement a 36-hour working week, but the bulk of the 69 amendments consisted of wordy clauses on restructuring state power and administering finance - in such detail that they failed to strike a chord with the less ideologically orientated moderate Chavistas.

Many felt that instead of tackling the main problems of 21st-century Venezuela, where gun crime and corruption are rife, Chávez had attempted to enshrine socialism in the country's constitution. According to Monsano, the schism between the president and his core voters started to emerge back in May when he chose not to renew the broadcasting licence of the opposition-aligned channel Radio Caracas TV.

"Four million people in the barrios and shanty towns watched RCTV's news programmes and soap operas. In the aftermath of the closure, the student movement sprang up out of nowhere, demonstrating that the young were not with the revolution. This is significant because throughout history all successful revolutions depended on, or were led by, the young."

Although students had been involved in isolated incidents of violence in the run-up to Sunday's vote, their passion and determination appear to have electrified Chávez's floundering political opponents.

"The opposition up to that point was demoralised after repeated election defeats. But suddenly the students felt democracy slipping away and decided to take action," says Monsano. Out of the referendum is emerging a consensus between the government and opposition leaders that now is the time for reflection and the start of the long journey towards reconciliation. "Chávez has done a lot of good things. He has given the poor an outlet to express themselves. We need to recognise that and build on it," says Monsano.

Chávez conceded defeat magnanimously, congratulating the victors and admitting that it was too soon to introduce such radical reforms - though his message was more one of calm determination than humbled compromise. In 1992, the year of his failed coup attempt, he quipped on live television that he had only failed "por ahora" - for now. Last weekend he reassured his devastated supporters: "This is not a defeat, but another por ahora."

This article appeared in the 10th December 2007 edition of the New Statesman

Chávez and the students

Sebastian Kennedy and Martin Markovits

Caracas, Venezuela -- Skirmishes in major Venezuelan cities in recent weeks have culminated in a shoot-out in Caracas at the Central University on 7 November, leaving nine people injured.

The violence follows a series of student-led protests, which have ranged from calm to brutally violent in the run-up to a referendum due to be held on 2 December on President Hugo Chávez's constitutional reforms. Under these, the president can stand for indefinite re-election.

Startling footage from the scene showed masked bikers wielding shotguns, students in gas masks hurling Molotov cocktails through clouds of tear-gas, and general chaos as terrified groups scattered at the piercing cracks of semi-automatic gunfire.

Fighting broke out after students returned from a peaceful march to the Supreme Court, where they had been calling for the referendum to be delayed to allow more time for discussion on the reforms. The courts are unlikely to grant that demand.

What happened next depends on whom you talk to - or which television station you watch.

Globovisión, the only public access channel to remain critical of the government after the forced closure of Radio Caracas TV in April this year, blamed pro-Chávez troublemakers for instigating the violence. It reported that a bus full of students was pulled over, emptied and then torched by "Bolivarian Circles" - Chavista loyalists, who the opposition has branded a "militia" armed by the government, a charge denied by the president.

Globovisión went on to report that the Bolivarians entered the campus on motorbikes and opened fire on students, who retaliated in "self-defence". Venezuelan newspapers, which are generally hostile towards Chávez, reported similar stories.

News channels sympathetic to the government, which now make up the majority of broadcasters, reported that "fascist" students attempted to "lynch" an innocent group of Chavista loyalists holed up in the social studies faculty - the only pro-government stronghold on a campus hostile to Chávez.

Zarida Seijar, a 25-year-old pro-Chávez student who was among those trapped inside the building, maintained that the anti-Chávez protesters were the aggressors. "They were shouting that all Chavistas were going to die; we were terrified. When we realised the police weren't going to come, we started texting our friends who came with guns to save us," she said.

Whatever the precise sequence, it is clear the student movement has become the most powerful and well-co-ordinated resistance group against President Chávez. Born during the closure of Radio Caracas TV and spurred on by the defection of the former defence minister Raú Baduel, the angry students have no single figurehead or well-defined agenda. But their increasing militancy and the strong-arm measures taken to quell them is taking their message of defiance to an international audience.

Speaking to Latin American leaders at a summit held in Chile two days after the protests, Chávez claimed that the students are part of a "fascist offensive" under direct control from Washington. "The United States organised the 2002 coup and now it is doing the same in Caracas, supported by the media and CNN," he said, which was denied by the US embassy in Caracas. Brandishing copies of newspapers portraying his supporters as the instigators of 7 November violence, Chávez insisted: "It's the other way round; it was the rich kids [who where responsible]."

By the time Chávez delivered these words, an eerie calm had descended amid the charred detritus around the campus. But feelings still run high. Those who oppose the reforms - which would grant yet more powers to the executive and president - see this as their final opportunity to thwart Chávez's ambitions before Venezuela undergoes irrevocable change.

"We don't know what we will do after this; it really could be our last chance. These reforms centralise all control," said 19-year-old Veronica Brito. "Universities have always been places where federal politics have been off the table. Under this new constitution, they would lose their autonomy."

Other controversial measures include granting the president direct control over the Central Bank, eliminating freedom of information in "exceptional" circumstances, and a loosening of the state's obligation to adhere to human-rights legislation. Intellectual property would be abolished, monopolies prohibited, and the president would assume the right to appoint regional vice-presidents, reducing elected governors to ceremonial positions. The military would be redefined as an "anti-imperialist popular entity", and the threshold number of signatures necessary to trigger further referenda or elections would be raised across the board.

But support for the proposals remains strong; around 60 per cent according to one newspaper survey - thanks mainly to grass-roots loyalty and the inclusion of popular measures such as a six-hour working day and more welfare support for workers. Significantly, 5 per cent of state revenues will be set aside for a new "popular power" fund to finance projects such as Chávez's much-vaunted communal councils. The councils, expected to total around 50,000 by the end of the year, have been hailed as an innovative mechanism for devolving state power and funding.

Even though the student movement is aiming to ratchet up the pressure with further rallies, Chávez still looks set to maintain his clean sheet of electoral victories. Only a nationwide outburst of mass opposition could interrupt Venezuela's inexorable socialist metamorphosis.

This article appeared in the 15th November 2007 edition of the New Statesman

Unpopular populist?

This article is the first draft of a news/feature piece co-written by me and a friend in Caracas concerning new taxes to be imposed by Venezuelan President Hugo Chavez. It was received by the The New Statesman's editorial but was not published as the constitution referendum issue (see above) took precedence.

Caracas, Venezuela -- Miguel Romero leans against his dented old station wagon and sparks up another Belmont, his hands black from handling newspapers and ink rollers. Standing outside having finished another shift at the newsprinters in north-eastern Caracas, he inhales deeply and lets out a thick cloud of smoke. "I don't how long these price hikes can last, you know, this is our way of life," he says, savouring the nicotine rush. "We come home from work and crack open a bottle, smoke cigarettes and drink."

Romero is referring to Venezuelan President Hugo Chávez's new tax proposals. The president intends to impose heavy taxes on imports such as yachts, hummers, second homes and private aircraft, but what worries many – including regular pro-Chávez Venezuelans like Romero – is the inclusion of cigarettes and alcohol – particularly whiskey – on the tax blacklist.

The unconventional president is aiming to kill two birds with one legislative stone. Not only will this raft of new taxes hit the super-rich for indulging in luxury pursuits such as sailing big yachts and driving sports cars; Chávez hopes to create the "new man" by "freeing" ordinary Venezuelans from harmful vices like drinking, smoking and the "capitalist values" of "excessive consumption". Chávez has said all Venezuelans should aspire to be like leftist revolutionary icon Ernesto "Ché" Guevara – a man whose fans to this day insist had few vices and a complete dedication to socialism.

Taxing the rich is unlikely to meet popular opposition, but it remains to be seen how the President will square this new moral drive with the favourite pastimes of many Venezuelans, both rich and poor: spending money.

Chávez's economic reforms and social programs have reduced poverty levels in recent years, and statistics reflect this: car sales have rocketed 50 percent in the last year, and it is now estimated that Venezuelan women spend 15 percent of their income on cosmetics. But his new war on consumer spending may end up upsetting his own constituency, the vast majority of whom live in Venezuela's numerous shanty towns.

"People in the barrio prefer whisky to rum. They drink loads of beer and smoke lots of cigarettes. They spend tons of money on cosmetics imported from the U.S – they are going to see this as an attack on their way of life," said Elizabeth Zamora, a professor of sociology at the Central University of Venezuela. "Historically, spending money has become engrained in the Venezuelan psyche. As a result of years of high inflation and a lack of confidence in the banking system, most people prefer to spend money on tangible goods that increase with value over time, rather than risk losing their money altogether."

But for President Chávez, a fierce critic of US economic and foreign policy, excessive consumerism is an export of U.S economic dominance in Latin America.

"American culture has taught us if you don't have the latest car or the latest gadget you are nothing. What Chavez is trying to do is to change that mindset," said Fernando Garcia, a senior official in the Caracas mayor's office and member of the United Socialist Party of Venezuela (PSUV).

Opponents to the measures point out that taxing products out of the bargain end of the market simply denies the less well-off access to them. But official thinking is that in a country where alcoholism and heart disease are chronic problems, this could be an unpopular but necessary solution.

"You know it's funny when people attack these policies. We're not confiscating property, we're not prohibiting whisky. We are doing the same thing that Washington does to control excessive wealth," Garcia argued.

After winning two presidential elections, surviving a coup and weathering a series of crippling oil strikes, tackling excessive consumption might be Chavez's hardest goal yet. Whether he will be able to control consumer spending and change damaging habits remains to be seen, as he himself freely admits. "This society would benefit from socialist values", he says, "but it is very difficult to change our culture."

Oiling the wheels

Sebastian Kennedy and Martin Markovits

Caracas, Venezuela -- President Hugo Chávez, who made diverting oil profits to the poor a hallmark of his administration, is faced with a series of corruption scandals that are threatening to undermine the state oil company Petróleos de Venezuela (PDVSA).

Earlier in September, PDVSA reported a 65 per cent loss in earnings over the previous year, prompting critics to declare the industry in crisis. They say that Venezuela, hugely dependent on oil sales, is producing less crude since Chávez expelled foreign oil companies from the country.

Government supporters, on the other hand, maintain that PDVSA is still recovering from the deeply damaging 2002 national strike organised by Chávez's opponents. Historically, the popularity of Venezuelan presidents has been determined by fluctuations in the oil prices. But it is the regularity of accusations of corruption and mismanagement that are chipping away at what would otherwise be a period of unrivalled prosperity for the country.

A few weeks ago, Venezuelan oil minister and PDVSA president Rafael Ramírez admitted that there were systematic financial irregularities dating back to 2005. One such irregularity is the ongoing scandal involving a Venezuelan-American who was caught smuggling a briefcase containing $800,000 through Argentine customs.

The businessman in question, Guido Antonini Wilson, had worked for PDVSA locating and contracting US drilling equipment for Venezuela, leading to accusations that he was attempting to launder kickbacks - an allegation his lawyer denies. Investigators have since submitted documents to the Venezuelan National Assembly amounting to what they called "a wheelbarrow of corruption charges" - 63 in total - against the state oil company.

Such accusations are not new for PDVSA, which operated with impunity throughout the 1970s and 1980s for the exclusive economic benefit of American and European multinational corporations operating there, and the Venezuelan political class. As economic disparities rocketed, resentment among Venezuela's poor majority reached a pitch that paved the way for the election of Chávez.

Chávez restructured the country's oil industry to invest profits in social programmes providing free education, health care, subsidised food and housing for the poor. Over his eight years in office, basic illiteracy has almost been eradicated, while poverty rates have declined (though the reliability of government statistics has been called into question).

This has been achieved by nationalising the abundant oil fields and massively increasing the taxes payable by multinational oil companies to operate there.

In August this year, Ramírez was fined over £4,000 for a controversial speech he made in the run-up to last December's presidential elections, in which he said that PDVSA is "revolutionary red", and that anybody who opposes the company's political alignment should quit their jobs and make way for those that support Chávez's "Bolivarian Revolution".

This statement was aimed at the dwindling minority of PDVSA workers who outwardly oppose the Chávez government. Most - over 20,000 of them, representing 30 per cent of the highly skilled workforce - were fired after the 2002 strike.

Accusations have continued to surface from inside PDVSA that those employees deemed to have a "politically unsuitable profile" are subject to discrimination and even outright dismissal.

One source who quit her position said that the political discrimination she was subjected to was "worse now than 30 years ago". She maintained that an "underhand war" is taking place between PDVSA executives and workers who express opposition to Venezuela's socialist government. Her aim now is to find work abroad, like many former PDVSA employees, whose cumulative knowledge and expertise represent a severe loss to the oil company.

Fortunately for President Chávez, the recent spike in international oil prices has provided a timely financial stop-gap for the Venezuelan economy, which is almost entirely dependent on crude exports.

With a barrel of oil selling at almost $80 on the international markets, the Chávez government can afford to paper over any cracks in the country's turbulent oil industry. But a significant fall in oil prices would reveal the depths of the difficulties afflicting PDVSA, and raise question about its ability to finance President Chávez's costly socialist revolution.

This article appeared in the 27th September 2007 edition of the New Statesman