The Chavez Distraction

Ven

ezuela proves that oil is too often a curse. The South American nation has the hemisphere's largest crude reserves, yet 80% of its 25 million people live in poverty, thanks largely to los cogollos, the oligarchy chieftains who looted the wealth of the wells for decades until populist President Hugo Chavez won a 1998 landslide election. But Chavez, as drunk with power as the cogollos had been on high-priced Scotch (Venezuela was the No. 1 per capita importer of the stuff under their rule), declared a left-wing "revolution" that put inept socialists in charge of Venezuela's state-run oil company and tipped the economy into depression. The cogollos and their lieutenants have twice tried to oust Chavez. This time they've put the entire country at risk by leading a seven-week-old nationwide strike that has left five people dead and the oil industry paralyzed.

The strike, which costs Venezuela's economy $50 million a day as it spreads to sectors like banking, seems as bottomless as a Lake Maracaibo drilling well. "My opponents," Chavez recently told TIME, "are like tired athletes who need dope to stay in the race." But the middle-class voters who backed him in '98 and now call for his exit don't seem to need any special incentive to march in ever growing numbers through a capital filled each day with blasts of tear gas.

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Venezuela's escalating chaos comes at an especially bad time for the U.S. To make war in Iraq without the threat of surging oil prices, George W. Bush needs the close and secure flow of crude usually supplied by Venezuela's national oil firm. Petroleos de Venezuela provides 15% of America's oil imports, or 1.5 million bbl. a day; but now its exports to the U.S. have plunged by at least 75%.

That's no doubt why the Bush Administration has suddenly taken an interest in ending the political conflict. After accusations that it covertly encouraged a failed coup against Chavez last April, the U.S. has stood back in recent weeks, hoping the Organization of American States could defuse Venezuela's crisis. Now the White House has decided it can't wait and plans to sponsor efforts toward a political compromise — primarily on whether early elections or a referendum on Chavez's tenure should be held this year — that could end the strike and restore oil exports.

Chavez is one of Bush's least favorite heads of state. He is an acolyte of Fidel Castro's — last week a pair of Miami radio DJs tricked Chavez into taking a prank phone call he thought was from Castro — and he once called Saddam Hussein "my brother" on a state visit to Baghdad. But last summer, when Iraq became a U.S. invasion target, Chavez's politics became less important than his oil. As a U.S. official admits, "We have little alternative for now but to deal with this guy." The White House has warned the cogollos that it won't accept the President's unconstitutional overthrow. Chavez, who himself led a failed coup 11 years ago, has in turn softened his disdain for the U.S. "I want the Americans to know," he says, "that our revolution is about their ideals."

That's debatable, given his authoritarian style and the class-warfare thuggery of some Chavista militants, like those caught on video last April shooting at opposition marchers in Caracas. "I'll strike all year if that's what it takes to get rid of this dictator," says William Lopez, 47, a Caracas construction foreman who voted for Chavez but last week marched with the opposition.

Chavez backers point out that he hasn't thrown one opposition leader, journalist or striking oil engineer into jail during this crisis. While polls indicate that two-thirds of the nation is fed up with him, he retains the support of a sizable swath of the poor, who never had a voice in political or economic life until his election. He was ushered back into office last April precisely because, during the two days he was in military custody, Venezuelans grew nauseated watching TV images of cogollos romping in the palace, cocktails in hand, as if it were their private country club again.

Such is the dismal level of leadership in Venezuela, a country that has always functioned as if oil could substitute for government. For now, the best the U.S. can hope for is the recovery of the national oil company, which Venezuelan Energy Minister Rafael Ramirez insists "can be accomplished by the middle of February" if the strike ends soon. But this crisis, like most curses, won't lift so easily.