David Frum

03.09.13

Hugo Chavez: Great Timing, Awful Leadership

JUAN BARRETO/AFP/Getty Images ()

My National Post column ponders Hugo Chavez's legacy in Venezuela:

Venezuela won’t bury Hugo Chavez. It will embalm him and put him on display. The old autocrat wouldn’t have wanted it any other way. Chavez lived his life as a performance piece, starring himself as the hero of a global melodrama, battling an array of super-villains: oligarchs, bourgeois, Americans and Jews.

Chavez was not a dictator, exactly. Like Vladimir Putin in Russia, Chavez could claim genuine support. Also like Vladimir Putin, Chavez carefully controlled the country’s institutions — courts, media, bureaucracy — to ensure his rule. Chavez mimicked Putin in one final way: His power ultimately rested on his control of his nation’s oil.

Venezuela is an oil-producing society that unfortunately has lost the ability to produce much else. The local economy — and local politicians’ careers — rise and fall with the price of oil.

Chavez, a career military officer, attempted a violent seizure of power in 1992. Bad timing: The price of oil was high in 1992, and the existing authorities had the strength to resist. Soon after, however, the price of oil collapsed, tumbling in 1998 to the lowest price since the Great Depression (adjusting for inflation). The Venezuelan economy suffered proportionally. Released from prison in 1994, Chavez now tried to gain power legally. He was elected president in 1998.

That time, Chavez got the timing right. He had bought at the market bottom. Over the 14 years of his presidency, the world price of oil would increase 900%.

Much of that money stuck to the fingers of Chavez and his cronies. But much flowed through to an array of costly social-welfare measures, that enabled the regime to buy considerable support from Venezuela’s poor. These programs were typically very badly managed. A study by two Venezuelan economists published in 2008 found that Chavez’s flagship adult literacy program costs between 200 and 400 times more than the adult literacy program in Brazil. Not 200% more. Two hundred times more.

There wasn’t much to show for the money, either. As Foreign Policy noted when reporting the study, “Even using the most favorable estimate, [the economists] could identify no more than 92,000 people who were taught to read and write by the program, a shocking number considering the Education Ministry claimed to have hired over 210,000 literacy trainers in that time.”

Other programs deformed and stunted the nation’s economy: The state energy monopoly sells gasoline to Venezuelan motorists at 9¢ a gallon. This subsidy costs the Venezuelan treasury more than $20-billion a year — double the national budget for health and education programs combined.

Still other programs served as tools of power, like Chavez’s housing program. Downtown Caracas is ringed by slums. Chavez promised to build 2 million homes for the poor. That promise has gone miserably awry: The regime has managed an average of only 30,000 units per year since Chavez took power. But the very scarcity of housing has served Chavez well. Chavez delivers scarce apartments as a personal gift to slum-dwellers who demonstrate their loyalty to the regime — by, for example, joining the “divine mobs” that break up the political meetings of his opponents. In July, 2012, he awarded a house to his three-millionth Twitter follower.

Read the rest at the National Post