At the fifth Summit of the Americas in Trinidad in 2009, Hugo Chavez greeted Barack Obama and handed him a copy of Eduardo Galeano’s book The Open Veins of Latin America. The U.S. media never forgave Obama for shaking Chavez’s hand, smiling at him and accepting the present. This was an unforgivable sin — to meet and greet one of the Latin American heads of state the U.S. president had gone to, well, meet and greet at that summit. As it happens, the version of Galeano’s book Chavez gave Obama was in Spanish, a language Obama does not speak.
Few incidents reflect as well who Chavez was — getting some of the big things right but the crucial details wrong. A dark-skinned man of humble origins, born in Sabaneta in the Venezuelan prairies, brought up by his grandmother in a house with a dirt floor, Chavez became president of Venezuela in 1999 at age 44.
At the time of his death from cancer on Tuesday, he was the longest-serving president in Latin America. And not long after taking office, he became the best known of Latin American leaders. He won four presidential elections in a row, going from 3.6 million votes in 1998 to 8.1 million in 2012. According to the latest polls, his political movement enjoys the support of 68 per cent of Venezuelans. His successor, Vice-President Nicolas Maduro, goes into the upcoming presidential election as the front-runner.
How did Chavez manage to have such a remarkable impact on his country (whose very name he changed and to which he gave a new constitution, among other things) and on the region?
The standard response of his detractors, of which he had many, was that he lucked out because of Venezuela’s petrodollars. This would have funded his chequebook diplomacy and generous handouts at home. A key criticism of the “mess” he supposedly left the Venezuelan economy in is the fact that oil production fell from 3.5 million barrels per day in 1999 to 2.5 million today. The hard line he took with many oil companies and the tough deals he struck with them have also been criticized, as has the nationalization of many private businesses.
Yet this displays a misunderstanding of the economics of oil in the country with the largest oil reserves in the world. When Chavez came into office, oil was at $9 a barrel and the country was in dire straits. Some 50 per cent of the population lived below the poverty line. The standard of living was the equivalent of what it had been in 1963.
One of the first things Chavez did was to liaise with his fellow members of the OPEC cartel. In 2000, the second-ever OPEC summit was held in Caracas (the first had been held in Algeria way back in 1975) and the cartel got its act together — to control production, firm up prices and maximize income for producers. Events like 9/11 and the Iraq war helped to push up the price as well. But it was Chavez’s understanding of the oil market and how to make the most of it that allowed him to enjoy the prices that he did — up to $150 a barrel in the last decade.
It also explains his strong ties with Middle East leaders, from Libya’s Moammar Gadhafi to Iran’s Mahmoud Ahmadinejad, for which he received so much flak in the West. His restructuring of PDVSA, the state oil company, provided him with the resources needed for his social programs. It has also allowed Venezuela to deliver oil at subsidized prices to fellow members of the Bolivarian Alliance for the Peoples of Our America (ALBA), a regional entity launched by Chavez.
Yes, inflation and shortages are a problem in today’s Venezuela, and nobody would hold up the country’s economic management as a model for anybody else. But oil economies are unlike any other. Poverty has been cut in half (to 27 per cent), illiteracy has been severely reduced, health indicators are much better than they were 14 years ago, and the country’s democracy, though tattered at the edges, is very much in place. The vast majority of Venezuelans today are better off than they were in 1999.
Jorge Heine is CIGI Professor of Global Governance at the Balsillie School of International Affairs, Wilfrid Laurier University. His Oxford Handbook of Modern Diplomacy, co-edited with Andrew F. Cooper and Ramesh Thakur, is published by Oxford University Press.