Hugo Chavez's revolution came to the hillside slum of San Juan one recent
night in the glare of a solitary lightbulb and with puddles from a recent
thunderstorm still underfoot.
Two dozen people clustered on a rooftop to debate the money and power that
suddenly seemed within their grasp -- everything from home construction to
bank loans, street repairs, and after-school and vacation recreation programs
Workers take a break from building a waterline in the San Juan neighborhood in Caracas. (Photo by Heather Sarantis, special to the Chronicle)
It was the first meeting of San Juan's communal council, an example of a
new grassroots governing structure that is spreading across Venezuela. Like
thousands of other such newly elected councils, the San Juan group will soon be
given previously unheard of sums of money by the central government in what
Chavez calls "a revolution within the revolution."
While the Venezuelan president has caused international controversy with
his angry denunciations of the Bush administration, this is where the rubber
meets the road for Chavez's radical rhetoric. He is spending billions of
dollars on anti-poverty programs, in what experts say may amount to the largest
such effort in a developing nation.
And in a gamble that turns part of his own government's power structure on
its head, he is handing a large degree of authority over these spending
programs to thousands of these elected local councils.
"The issues in these neighborhoods are very old fights -- water, land,
decent housing," said Andres Antillano, a professor of social psychology and
criminology at the Central University of Venezuela in Caracas who has been an
adviser to many neighborhood groups.
"For many years, the only relationship with the state was the police. They
came here and put everyone against the wall," Antillano said. "Chavez has
chosen to gamble on legitimizing these issues. The communal councils are a very
serious attempt at grassroots organizing."
The policy appears especially popular in the hard-bitten slums of Caracas
-- although as is true elsewhere around the country, the electorate seems
divided between a strongly pro-Chavez minority and an apathetic majority. San
Juan's new council was chosen in local voting a week previously, with only 330
of the neighborhood's 916 eligible adult residents casting ballots.
"We like Chavez because he's giving us control," said Leomar Aquino, who
had just been chosen head of the Education, Culture, Recreation and Sports
Committee, one of a half-dozen such panels on the council. "If you don't want
to participate in it, hey papito, that's your problem."
On this night, nobody seemed to know exactly how much their neighborhood
would receive. Nor, the next day, did anyone at the offices of the local
district government or in the central government buildings downtown.
What is certain, however, is that Venezuela's petroleum export earnings
are rising rapidly, and the government is spending the money with abandon.
The government initially budgeted $857 million for social spending in
2006. But as oil money floods in, officials keep increasing the amount. It now
stands at $7 billion, although many experts view that figure as a guesstimate
of money being spent on the fly.
Public works projects are everywhere, ranging from subway lines in Caracas
and Valencia to bridges over the Orinoco River. New medical clinics -- mostly
staffed by Cuban doctors provided under Chavez's oil aid program to Fidel
Castro -- are within reach of almost everyone in this nation of 25 million
people. Illiteracy, formerly at 10 percent of the population, has been
completely eliminated, and infant mortality has been cut from 21 deaths per
1,000 births to 16 per 1,000.
Another initiative that could change the lives of millions of poor
Venezuelans is a new program aimed at increasing land ownership.
Venezuela is the most urbanized nation in Latin America, with about 86
percent of its people living in cities, but about one-third of those urban
dwellers have no title to their land. In legal terms they are squatters, and
thus cannot access many government programs.
Over the past year, 57 cooperatives of land surveyors have been formed to
scour Caracas' hillside slums, measuring the sprawling neighborhoods that
previously were merely blank spaces on official maps.
Ivan Martinez, director of the Urban Land Committee titling office for
Caracas, said that more than 200,000 titles had been given out, involving about
1 million people.
"People now can get basic services," he said. "We can hook them up to
water, electricity. We can help rebuild their houses. It's a huge change."
In San Juan, people are already hard at work.
Down the hillside from where the communal council was meeting, another
council had already put its new powers to work. Using money and technical
assistance from the state-owned oil company, PDVSA, and the water utility,
Hidrocapital, it has hired local residents to install more than a mile of pipes
in nearby streets.
"My street, around the corner there, was recently hooked up," said one
worker, Beyser Bernal, putting down his shovel. "Before, we had it pirated, we
hooked it to the main through a bunch of pipes that were broken, like those
electricity wires," he said, pointing to a spider's nest of wiring overhead
where residents had jury-rigged their homes into the electrical grid.
"The water just dripped out, and it was dirty. Now it comes out great, and
it's clean. My whole family is happy."
But for many, progress is not happening fast enough -- and they blame
"Chavez is working well," said Manuel Hernandez, a Caracas firefighter,
who lives in San Juan. "My aunt was sent to Cuba to get her eyes operated on.
But the people around Chavez are very bad. There is too much waste, too much
Chavez, who has been in power for seven years, often rails against the
government bureaucracy as if he were an outsider. While Venezuela's government
has long been known for its inefficiency, many people say the problem under
Chavez has worsened.
At a ceremony April 9 to inaugurate the communal council program, Chavez
acknowledged this perception.
"Many are saying that this is just Chavez's plan to corrupt the people,
that now Chavez will spread money all around so people can go party and drink
miche," he said, referring to a homemade liquor popular in the western
mountains. "They say that everything will be wasted. But we're going to
demonstrate what the Venezuelan people are capable of."
Some analysts point to the more than 100,000 cooperatives created under
Chavez, a program that has broad public support yet also is viewed as having
fostered waste and graft. They say the rules giving preference to cooperatives
in the letting of state contracts -- including more than $200 million worth
from PDVSA alone -- have prompted thousands of private companies to convert
into cooperatives in name only.
"Chavez is spending so quickly, with such a lack of oversight, through a
parallel state apparatus, that corruption easily could spin out of control,"
said Teri Karl, a political science professor and Latin America specialist at
Suspicions are so widespread that they have become the stuff of popular
legend. Virtually every Venezuelan seems to know someone who formed a bogus
cooperative in order to receive a large loan from a state-owned bank, then
declared bankruptcy and pocketed the money, only to be allowed to repeat the
process, milking the government for larger and larger sums.
"There is a problem of accountability, it's very true," said Griselda
Olvero, president of the San Juan parish council, the local government for
110,000 residents in the San Juan area.
She spoke while busily signing checks in an office decorated by posters
portraying leftist icons ranging from Yasser Arafat to Moammar Khadafy, Fidel
Castro and Patty Hearst, along with Venezuelan independence hero, Francisco
Miranda. The largesse went for public works and supply contracts, welfare
assistance of all kinds, and one-off payments to "people with special needs,
who asked for our help," she said. One of the checks was to a 10-year-old girl
who played in a band so she could replace her broken violin.
"We're doing our best, but there is no way to track all this," she added
as her assistants lined up at her desk with more checks to sign.
The result of all this spending has contributed to a red-hot economic
boom, with gross domestic product growing at 9.3 percent last year and 9.6
percent for the first half of this year. And there's plenty more money to spend
-- central bank reserves are at $36 billion, and other government rainy-day
funds hold an estimated $15 billion. Inflation is 14 percent, a relatively
moderate rate by traditional Venezuelan standards, and is held in check by
subsidized prices at state-owned stores and by government price controls.
Chavez opponents accuse him of trying to buy loyalty. "This is a colossal
waste of money," said Alberto Quiros, an oil industry analyst in Caracas. "Just
when you think Chavez couldn't get farther from the laws of the market and
common sense, he proves everyone wrong."
Stanford's Karl, who studies the development strategies of oil-producing
nations, said Chavez's push to address poverty is "truly huge, and long
overdue, but very risky."
"Because all this spending is not tied to any larger effort to increase
economic competitiveness, because it's all based on the distribution of oil
income, it's not at all sustainable," she said. "If the price of oil goes down,
there could be a crash."
Chavez has said that although international oil prices have dropped
recently, his spending programs can continue unimpeded as long as the
international price of oil stays above $50 a barrel. As of Friday, the price
was about $63.
For Chavez's supporters among the poor of San Juan, a big worry is making
sure that the money for their own neighborhood doesn't get stolen.
"We're going to get huge amounts of money, and I barely know how to manage
my own (home) budget," said the newly elected budget director, Hector Carvajal,
speaking to his fellow council members on the rooftop. "Please, I need
training. I don't want anyone to blame me for even one bolivar missing."
©2006 San Francisco Chronicle