VENEZUELA: Caldera’s Third Anniversary Not a Happy Occasion

By Humberto Márquez Reprint | | Print |

Humberto Marquez

CARACAS, Feb 2 1996 (IPS) - Venezuela’s President Rafael Caldera started his third year in power Friday with a population exasperated by the high cost of living and an atmosphere of national unrest.

“In 1992, Caldera said a hungry people won’t defend democracy. We are now much hungrier than four years ago. He can’t hope that we will defend him,” said a suburban worker in a Caracas radio interview Friday.

This opinion gives Caldera’s position in a nut-shell. The 80 year old politician flourished a populist manifesto when he came to power, but two years of political success and economic miscalculations mean he entered 1996 under a cloud of uncertainty.

Good reckoning and a smattering of luck guide Caldera’s political action, for when the students and poor started to demonstrate he put their fire out with the holy water of Pope John Paul II’s visit next week.

Meanwhile, the government economic policy is riddled with contradictions and his slow reactions exasperate entrepreneurs, workers and consumers alike, suffering from a barrage of measures which are announced and never brought into action.

The International Monetary Fund (IMF), awaiting a request for a three billion dollar loan since October, are also confused by the contradictory government attitude.

The basis of the argument with the IMF is the fiscal deficit, which stands at around a third of the 15 billion dollar State budget. The government wants to impose temporary extra taxes while refusing to increase petrol prices.

This argument is strongly impregnated with “Calderism,” as the President made a big issue of describing the 1989 riots in Caracas as “smashing the window of the neoliberalism” imposed by the IMF, and he cannot afford riots during his term.

In the February 1992 coup attempt, before he came to power, Caldera opposed the parliamentary majority who condemned the attempt out of hand, declaring in a live television broadcast that “a people who are hungry cannot be expected to stand up and defend democracy.”

From then on he was the leading presidential precandidate, and he won the Dec. 1993 elections with a manifesto based on objections to the IMF, petrol price increases and value added tax.

He reached the heights of popularity in June 1994, when he imposed price, exchange and banking controls, but the support soon flagged as inflation and unemployment continued to rise, while investment and buying power kept falling.

Inflation over the last two years has reached a total of 177 percent, the bolivar has fallen from 110 to 290 per dollar, thousands of small businesses have closed, and unemployment increased from 7.8 to 10.7 percent -unofficially 15 or 20 percent- while half the population now work in the informal sector.

According to union leader Carlos Navarro, the basic basket of food for a family costs 207 dollars a month while the minimum wage, earned by half of all workers, is only 110 dollars.

A third of the population, some seven million people, live in critical poverty meaning they cannot afford to meet their basic necessities.

In January 1996, after a deep devaluation in December, official inflation stood at 8.1 percent, 85 percent of foodstuffs saw substantial price rises and the price of public transport increased by 50 percent Monday.

This has led to a renewed spate of demonstrations and civil disorder in the last two weeks, mainly near the universities in a dozen cities, while mobs from the marginal neighbourhoods have threatened riots and some people have taken pot shots at the police.

Navarro said Caldera’s economic cabinet have been holding intense meetings to decide “in a matter of days or hours” on a possible increase of the minimum salary, and 30 percent increases for public employees.

He said the government had until Feb. 7 to arrange this, as demonstrations were planned for Thursday Feb. 8, a favourite day for student protests, and the eve of the Papal visit.

The Pope’s visit is seen as a contribution to the calls for “national unity” Caldera has made, something political analyst Diego Urbaneja described as “an effort to sustain the institutions leaving the economic sector to do their part.”

Parliamentary leader Carmelo Lauria criticised this standpoint, saying “the government must govern and not settle for the role of arbiter between entrepreneurs and workers in the Gordian knot of the economy…the issue of the social contributions (redundancy payments).”

Caldera’s opponents while criticising the economic mess, praise his political success.

He has “achieved calm and the fears and rumours of a coup have stopped,” said Social Democrat deputy Paulina Gamus.

For 1996 and the rest of his five year term, Caldera recommended “neither tears nor blood, but a lot of sweat,” which is all very well, but sounds rather flat to an already exhausted population.