The pact of Punto Fijo after the overthrow of dictator General Marcos Perez Jimenez in 1958 effectively placed power of state institutions in the hands of the social democratic AD and the Christian Democratic COPEI. Kenneth Roberts notes in chapter three that the supposedly radical policies of the AD government between 1945-48 had played a role in the seizure of power in 1948 of General Jiminez supported by the Venezuelan elite. The AD at Punto Fijo promised to engage in no serious egalitarian policies. An oil boom in the 1970's raised the standard of living of the country a great deal though serious poverty still remained. Declining oil prices and increasing debt in the country compelled the government to engage in a series of austerity measures at the beginning of the eighties beginning with the devaluation of its currency.
But trouble really began with the 1988 election of Carlos Andres Perez of the AD who had been president previously from 1974 to 1979 at the height of the country's oil boom. He explicitly promised not to enact massive cuts in social spending and privatization in government owned industries. Shortly after assuming power in February 1989, he announced that he had reached an agreement with international lending institutions to do exactly that. The ensuing weeklong protests, riots and clashes with police may have killed thousands. Daniel Hellinger in Chapter three quotes a statistic that the percentage of the population living below the poverty line went from 36 percent in 1984 to 66 percent in 1995. In 1981, the bottom forty percent of the population had 19.1 percent of the wealth where as in 1997 it had only 14.7 percent of the wealth. The top ten percent of the country saw its wealth increase from 1981-97 from 21.8 to 32.8 percent. Tariffs were eliminated that protected key domestic industries from foreign competition. Presumably this played a role in the ruining of the agriculture sector. 600,000 people left the countryside for the cities between 1989 and 1992. The percentage of the workforce employed in the precarious informal sector of the economy jumped from 34.5 percent in 1980 to 53 percent in 1999. Rafael Caldera won the 1994 elections after Perez was impeached, running on an anti-neoliberal platform but he decided to continue Perez's privatization policies in 1996.
Chavez set out to democratize the country's main trade federation the CTV, long controlled by the AD. Direct elections were ordered for its leadership, which had previously been handpicked. However, writes Steve Ellner in chapter nine, these elections in late 2001 were marked by disruption and accusations of fraud. Carlos Ortega, the AD's candidate, was declared to be elected as CTV leader in spite of only four of the members of the new electoral commission for union elections certifying his victory.
Chavez's health, education and credit programs for the general population seemed to improve their plight by 2000, much of it carried out by the military. This was particularly the case in the region of Vargas, wracked by severe floods and mudslides in late 1999, The army was accused of engaging in extra-judicial executions in attempts to restore order there. These accusations were repeated in early 2000, notes Deborah Norden in Chapter 5, by the foreign minister and the interior minister (both civilians), which resulted in a split in much of the military officers in Chavez's movement as Chavez refused to condemn the accusations.
Chavez's key principle of "participatory democracy" has been given small attention in practice. Chavez's congress has avoided handing over to committees of citizens to choose candidates for the supreme court, the attorney general and other positions. Maria Pilar Garcia Guadilla in chapter ten notes that Chavez denounced opponents in the Grand Sabana region who objected to a plan he had to deliver energy across their region to Brazil. They objected on ground of its violation of indigenous people's rights and environmental principles and their feelings should have led to the calling of public assemblies on the issue but Chavez condemned them as "traitors, spies and foreigners."
Julia Buxton describes Chavez's land reform law which limited the amount of hectares in land one could hold (ranging from 100 to 5000 hectares) and set a tax on landowners who let more than 20 percent of their land sit idle. Presumably land exceeding the former provision would be redistributed (under government trusteeship) to the landless. This really made the elite crazy and dire predicitons of impending communist dictatorship intensified. All Chavez was actually doing was taking mild steps towards rectifying the severely unequal distribution of land in Venezuela (3 percent of the people own 70 percent of the land).
The writers note that it has been pre-dominantly the upper and middle class minority of the country which has engaged in the protests against Chavez. As Steve Ellner notes in Chapter nine it was difficult to tell exactly what the workers thought of engaging in strikes to protest Chavez since companies in FEDECAMERAS, the country's main business federation, all induced work stoppages by giving their workers days off with pay. Nonetheless, the CTV, notes Ellner, had great trouble bring out workers in the streets to support the U.S. backed coup attempt of April 2002. Many unions condemned the CTV for seeking an alliance with the country's main business federation FEDECAMARAS. The U.S. backed coup placed FEDECAMARAS head Pedro Carmona in power for two days but he was removed by a mass uprising of Caracas's poor. The coup leaders, Buxton notes in chapter six, were "overwhelmingly white, elite...[they] represented a return to the exclusion and inequality of the fourth republic."
Patricia Marquez in Chapter 11 discusses Chavez's persona of being a dashing caudillo devoting his life to the poor. Chavez receives thousands of requests every day from ordinary people. Marques gives the example of Chavez paying for the repairs of the motorcycle of a slum-dweller who called up his radio show.
Chavez will no doubt become an official U.S. bugaboo if covert action dosen't work against him and the Venezuelan elite is not able to overthrow him.