The Washington Post �����������������August 23, 2004 Monday  ������������������A15



Contained Revolution

Michael Shifter


  It's easy to interpret Venezuelan President Hugo Chavez's big win at the polls as a sure sign that leftist radicalism is about to sweep the rest of Latin America. So far, though, there is little evidence to support that view.

 Chavez's victory in the Aug. 15 recalls referendum can be attributed to reasons unique to Venezuela. Record-high oil prices enabled Chavez to employ preelection gimmicks reflected in spectacular social spending in poor barrios. There is nothing radical about such a practice; rather, it is blatantly old-fashioned patronage politics of the sort Chavez has, ironically, often railed against. Chavez also benefited handsomely from turmoil over the U.S. Iraq policy that he so vehemently attacked. 

And despite Venezuela's dismal performance under Chavez's rule -- all key indicators point to deterioration -- the economy is expected to grow  roughly 10 percent this year, up from rock-bottom levels. Understandably, many poor Venezuelans extrapolated from Chavez's record over the past six months, not six years. For Chavez, the timing of the vote was exquisite and the circumstances exceptional.

 Will he now use his enhanced legitimacy to deepen his "revolution" in Venezuela and throughout Latin America? It's futile to try to predict his behavior, but one does have to wonder what commentators -- and Chavez himself -- mean by "revolution." Chavez's own 1999 constitution is practically indistinguishable from the previous one, of 1961. The much-touted land reform has been marginal to Chavez's agenda and carried out in a lax fashion at best. Most notably, Chavez, though hostile to the Venezuelan private sector, has vigorously and successfully courted foreign investment in petroleum. One does not hear strong complaints about Chavez from Wall Street.

 If this is a revolution it is, by Latin American standards, a peculiar one. Even Chavez's rhetoric, albeit emotionally appealing, is unlikely to find much resonance in the rest of Latin America. To be sure, in some countries there is a backlash against market reforms. Yet governments are pursuing, not jettisoning, fiscal discipline. This is not only sensible policy but smart politics. According to the recent 2004 Latinobarometro poll, most Latin Americans favor a market economy.

Brazil, Latin America's largest country and regional bellwether, is a striking case. President Luis Ignacio Lula Da Silva of the Workers' Party embodied hopes of a leftist experiment and a sweeping social reform agenda. But his macroeconomic policies have been a model of orthodoxy. The resulting rebound is yielding political dividends. Further, Leonel Fernandez, the Dominican Republic's new president, recently proposed a fiscal adjustment of some 20 percent. With limited options (not everyone has oil reserves), leaders are wisely leveling with their constituencies.

 Peru, Ecuador and Colombia -- Venezuela's Andean neighbors -- have joined Mexico, Chile and, most recently, the Central American countries in seeking bilateral trade agreements with the United States. Though anti-trade sentiment is high in some quarters  of the region, governments are nonetheless pressing for greater access to U.S. markets. 

Even Bolivia, where protests forced a president to resign  in October, hasn't given up on market recipes. The new government, sensitive to further tremors, is an observer at the Andean bilateral talks. The government's victory in a national referendum last month on oil and gas sectors helped reassure foreign investors. And it wasn't just economic measures but opposition to the U.S.-backed policy of coca eradication that contributed to the previous government's collapse.

 In short, most Latin Americans are disinclined to follow Hugo Chavez's way. The region is looking for answers and ideas, and Chavez doesn't have them. So far a combination of unprecedented oil prices -- he does have money -- and an opposition lacking a political strategy has allowed Chavez to avoid making tough decisions. The opposition should let him prove he can govern -- and then take advantage of his predictable failures. This is, after all, what political oppositions typically do.

 The United States, too, should not give Chavez any further excuses to avoid governing. In the past it has done so -- through clumsy moves or unnecessarily charged rhetoric -- and only increased Chavez's appeal in Venezuela and the rest of the region. Chavez no doubt gives voice to rising anti-Americanism in Latin America. After all, the United States is widely seen as having tried to subvert his rule at every turn. By working closely with other Latin American governments on the continuing challenge posed by Venezuela, Washington can reduce the risk that leftist radicalism in Latin America will become a self-fulfilling prophecy. 

The writer is vice president for policy at the Inter-American Dialogue and adjunct professor of Latin American studies at Georgetown University.