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January/February 2004
Rumblings in the South: Race, “Free” Trade, and Venezuela’s Hugo Chavez

By Greg Palast

The author and President Chavez. Photo courtesy of Greg Palast

Greg Palast is a journalist who was on assignment in Caracas last November. These entries are from Palast’s Web log, or “blog,” which are reprinted with permission from

Venezuela in Black and White
Caracas, Monday, November 24, 2003: Here’s Venezuela in a snapshot.

The matronly blonde in the stylish leopard-patterned blouse doesn’t like the President of this Latin state. Correction: Maria Christina Tortosa hates, despises, sees red when she speaks of President Hugo Chavez. “A co-moon-ist!” she avers in English.

Her polite interlocutor—red T-shirt, brown skin, eyes impatiently averted—is in a good mood. Jorge Lara has collected 6,000 signatures of local voters seeking to recall members of Congress who oppose his hero Chavez.
And that’s what it’s all about. Race and class. Whatever else you hear about Venezuela, this is the story in a single frame. Like apartheid-riven South Africa, the whites, 20 percent of the population, have the nation’s wealth under lock and key. The Rich Fifth have command of the oil wealth, the best jobs, the English language lessons, the imported clothes, the vacations in Miami, the plantations.

That is, until Hugo Chavez came along.

Now the brown people, like community activist Lara—and President Chavez himself—have a piece of the action. “Negro y indio,” Chavez calls himself. Black and Indian. And the blondes don’t like it.

In the photo’s background, there’s a guy with a gun, a soldier with an automatic weapon.

And that’s the other part of the picture in Venezuela. Our blonde, Mrs. Tortosa, is a poll-watcher for the Democratic Action Party which on Friday begins their own signature drive to recall Chavez.

If Tortosa’s party fails, “it will be civil war” says one supporter of the recall against the President. Then it’s up to the soldiers in the middle to keep the peace...or choose the winner.

And if you look closely, you’ll see in the shadows one other character with power over Venezuela’s future: George Bush. Fresh from bringing democracy to Afghanistan and Iraq, the U.S. strongman has quietly turned his sights southward.

Mr. Bush has quite a different idea of democracy than the ‘Chavistas’ in the red T-shirts. Elections don’t necessarily figure into Bush’s picture of democracy. The White House once said that Chavez’s winning a crushing majority of the vote in his 2000 election did not confer “legitimacy” on Chavez’s presidency. Hmmm.

The director of the CIA, George Tenet, testified to the U.S. Congress that Venezuela “worries” him. And that should worry the Venezuelans…except, of course, the blondes who, like the U.S. president, seem to prefer their democracy without elections.

Cruisin’ for a Bruisin’ With Hugo
Saturday, November 29: Hugo Chavez has an attitude problem. Only last April the Venezuelan president escaped a kidnapping by the Chairman of the nation’s Chamber of Commerce. This weekend, Chavez is facing a recall petition by the angry rich of Venezuela. He also faces the wrath of an angry rich American president who does not appreciate Chavez’s bad attitude toward globalization a la Rumsfeld.

Annoying the moneyed and the powerful is Chavez’s gift. And this week, at the meeting of the Congress of Andean Parliaments, he unwrapped a special surprise, a renewed proposal for PetroSur, functionally, a Latin American OPEC.

Venezuela, not Saudi Arabia, has long been the USA’s largest supplier of foreign oil. By combining Venezuela’s huge state-owned oil company with Ecuador’s, Brazil’s and Trinidad’s (all nations now headed by elected leftists), Chavez could create a bargaining hammer for hemispheric trade talks which, up to now, have been mostly a one-way lecture from the U.S.

“If Exxon and Mobil can combine, and Texaco and Phillips, why not PetroBrasil and PdVSA?” Chavez asks, referring to the Brazilian and Venezuelan government operators.

Well, Hugo, you know why not. I remember the story of Ferdinand Marcos’s proposal to the Shah of Iran some years back. The Philippines dictator suggested to the Iranian despot that Iran go around the U.S. oil giants and ship directly to the Philippines for refining and sale. The Shah pointed to his personal jet which brought him to Manila. “Do you see the plane that brought me here? Do you know who paid for it? And what do you think would happen to that plane if I were to adopt your suggestion?”

A proposal for a Latin OPEC is an invitation for a bullet. But that’s Chavez’s style. His assassins don’t have to hunt him down; he looks for them. His attitude is, “take your best shot.” And, as if to make the point, I’d noted he left the several bullet holes in the windows of the Presidential Palace from the last coup attempt (the one where he was held hostage under orders of a wannabe dictator, Pedro Carmona, chief of the nation’s business confederation).

If creating a Latin OPEC is possible, Chavez is the man to pull it off. During Venezuela’s recent turn at the Presidency of OPEC, Chavez successfully raised the world price of crude to $20 a barrel from $10.

This year Chavez successfully rebuilt Venezuela’s oil company after a devastating management strike and campaign of widespread sabotage at PdVSA plants and pumps. It has to infuriate Bush’s oil patch buddies that Chavez restored Venezuela’s output from near zero to 2-1/2 million barrels a day while, after the same eight month period, Generalissimo Paul Bremer still can’t pump enough oil out of Iraq to fill a Humvee.

Chavez Versus the Free Trade Zombies of the Americas
Saturday, November 29: It’s as if they were locked in a crypt for the last ten years. The finance ministers of every Latin American nation last week signed on to a resolution in principle to join the Free Trade Area of the Americas (FTAA), the hemispheric expansion of NAFTA.

The walking corpse of Argentina’s economy was there, as well as the long-deceased body of Ecuador and several other South American nations whose economies were long ago murdered and buried by the free trade and free market nostrums of the World Bank and the International Monetary Fund.

Yet on they came. Stiff-legged, covered in rotting bandages, the official zombies marched to Miami to pledge, one and all, to sign on for their next dose of free market poison.

Every nation but one: Venezuela, the single and solitary nation to say “no thanks” at Miami’s treaty of the living dead economies. Today, I met up with Venezuela’s chief FTAA negotiator. Victor Alvarez was saved from zombification by his sense of humor. He noted that while the Bush Administration was preaching free trade to their dark-skinned compatriots south of the border, the U.S. itself was facing one of the largest penalties in World Trade Organization history for raising tariffs on steel products. He would have laughed out loud in Miami if it didn’t hurt so much: the illegal U.S. trade barriers have closed two steel plants in Venezuela.

Venezuela’s ‘negociador jefe’ Alvarez went through the well-known data: in ten years of free market free-for-all, industrialization in Venezuela dropped from 18 percent of GNP to 13 percent. And Venezuela fared best. Elsewhere in Latin America, economies simply imploded. And NAFTA created employment only in a fetid trench along the Rio Grande, the ‘maquiladora’ sweatshops which suck down wages on both sides of the Mexico-U.S. border.

We finished our conversation as the President walked in. Hugo Chavez is not one for subtleties. “FTAA is the PATH TO HELL,” said Chavez.

He meant this in the deepest theological sense. What is at stake for Chavez is Latin America’s mortal soul. “I have seen children shot to death,” said the president, “not by an invading Army but by our own nation’s soldiers.”

Chavez was referring to February 27, 1989. While the Northern Hemisphere was celebrating the impending fall of the Berlin Wall, “another wall was going up,” he explained, “the wall of globalization.” That day, the army massacred Venezuelans, young and old, during a demonstration against diktats of the IMF imposed on that nation.

The President raced through a dozen more examples, from Bolivia to Chiapas, Mexico, where the miracle of the marketplace came out of the barrel of a gun.

FTAA is far more than a trade document. It’s not just about fruit and cars that we sell across borders. FTAA is an entire new multi-state government in the making, with courts and executives, unelected, with the power to bless or damn any one nation’s laws which impede foreign investment, foreign sales or even foreign pollution.

FTAA is revolutionary in the sense that governments are overthrown. And the easiest way to do that, of course, is to convince governments to overthrow themselves. Hence, the zombification process.

Chavez offers an alternative to FTAA. Following a numbing one-hour discourse on the philosophy of the 19th century founding fathers of South America (I could sympathize with this former history professor’s students), he dropped the Big One. Instead of ALCA [the Spanish acronym for FTAA], he proposes ALBA, standing for the Bolivarian Alternative for America. Named after his hero Simon Bolivar, Chavez would create a “compensation” fund, in which the wealthier nations of North and South America would fund development in the poorer states.

If that sounds like an Andean pipe dream, he reminds us that the European Union created just such a redistribution fund to jump-start the economies of its poorest nations. (To the anger of the English, I should add, who saw Ireland use the funds to zoom past their former lords to a higher standard of living today.) If Chavez’s proposal appears at first to have a snowball’s chance in NAFTA hell, I remember when, in fact, it was accepted gospel: John Kennedy’s Alliance for Progress.

In those years when JFK’s Alliance was promising northern capital for southern development, a strange group of well-heeled and well-armed revolutionaries in Chicago under Milton Friedman were plotting to overthrow Kennedy’s vision. They succeeded.

Over three decades, the Chicago Boys and their neo-liberal cohort have ridden history’s pendulum to the top, announcing that history itself has come to an end in a free market consensus.

But when the pendulum swings back, the history professor in Caracas will be waiting with his Bolivarian elixir to make the economic dead rise again.

Greg Palast is an award winning journalist and author of the groundbreaking bestseller
The Best Democracy Money Can Buy (Penguin 2003). Palast can be heard on the new spoken-word CD from Alternative Tentacles, Weapon of Mass Instruction—Palast Live and Uncensored. To order, or for more on Palast or Venezuela, visit To keep up with what’s going on in Venezuela, visit


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