Carlos Blanco provided detailed political commentary on recent events in Venezuela. Support for Chavez had eroded as his regime became more authoritarian and the economy deteriorated. On April 11, Chavez was ousted by democratic means. The president had planned to suppress an anti-Chavez demonstration, but several military officers refused to obey. Chavez then resigned. When other officials sought to establish a new government by undemocratic means, the military returned Chavez to power. However, Chavez has limited political clout and is weaker than before. He has many opponents, including international agencies like the OAS. Due to his limited ability to control the legislative process, his only recourse is radical rhetoric about imperialists and conspiracies.

Ana Julia Jatar said Chavez lost support when he used his strong mandate from the election to push major changes to the oil industry, property ownership and education through Congress. The subsequent outrage, demonstrations and work stoppages led to April 11. Currently many pressures exist, and something has to give. Political parties are working on a referendum to reduce the president’s power; the military remains divided on how to handle Chavez. Officials are also investigating allegations on the misappropriation of $3 billion.

Ricardo Hausmann said the fragile economy is putting added pressure on Chavez. Despite rising world oil prices, the economy contracted 4.5% in the first quarter, and will likely fall further. When the central bank abandoned fixed exchange rates in February, the bolivar depreciated 45%. Chavez plans to increase the VAT by 1% and increase the financial transactions tax to 1%, the highest in the world., further weakening the banking system. Monetary policy would be eased and interest rates lowered. Hausmann estimated that by the end of the year, the bolivar could sink to 1400 to the dollar.

Bottom line: Chavez is now an ex-president; he and society are figuring out the best way to get him out of office.

To read summaries of this program from The WorldPaper, Vertigo in Venezuela, go to website: http://www.worldpaper.com/enewsletters/061902.html.