Hari on Chavez
Earlier this week President Chavez of Venezuela was interviewed by Johann Hari in The Independent. I'm sorry to see that Johann has bought a romanticised account of the background to Chavez's unsuccessful military coup in 1992:
In 1989, the IMF demanded that the Venezuelan government slash the tiny slivers of spending that made their way out into the barrios. They ordered the government to prioritise the interests of corporations instead. Poor Venezuelans discovered that bus fares had doubled overnight, making it impossible to get to work – so for the first time in a century, they rioted. The army opened fire, and in a slaughter that trumps even Tiananmen in its kill-rate, they shot anything that moved.... Chavez chose to rebel against the corrupt parties of the rich, who had all supported the IMF assault [on poor Venezuelans]. In 1992, he attempted to stage a coup against the despised regime and prepared for death.
The IMF is a flawed institution. It does essential work in upholding the system of international payments and exchange rates, and in helping countries with balance of payments difficulties. There is every good reason also to promote sound economic policies through so-called structural adjustment programmes. But - while it's impossible to prove the counterfactual - it is likely that the conditions attaching to those programmes in the 1990s were more onerous than they need have been to establish the credibility of the recipient country's economic policies in the international financial markets. Moreover, the programmes were often pro-cyclical (i.e. more stringent in recession than in expansion) rather than countercyclical. One effect of the IMF's intervention was unnecessary hardship, inequitably borne.
The IMF's programme for Venezuela had both the justification and the flaws. The implementation of the programme was incompetent and the military crackdown on rioters that Johann refers to was despicable. Even so, it's wrong to say that reforms "prioritised the interests of corporations". In the case of the bus fares, price liberalisation meant that the price of petrol doubled, but the government attempted to spread the economic pain by stipulating (fruitlessly) a limit to fare increases of 30 per cent. It was the bus companies who ignored that limit and doubled prices, as well as ignoring concessionary rates for students.
Another point undermining Johann's morality tale is that the structural reforms, so far from being the acts of a despised regime, steadily gained support. Javier Corrales, in Presidents Without Parties: The Politics of Economic Reform in Argentina and Venezuela in the 1990s (2002, p. 55) notes that from the first quarter of 1989 (when the riots took place) to the first quarter of 1991, the number of people who wished the government to persevere with the reforms rose from 29 per cent to 45 per cent, while the economy performed strongly (a growth rate of 9.7 per cent in 1991 and a rise in investment of 81 per cent). The number of labour disputes rose in that period, but the number of actual strikes (authorised and unauthorised) declined. Mass opposition to the government's reform programme, so far from driving Chavez's failed coup attempt, was in fact driven by it. Chavez shattered a fragile consensus by showing the potential for a different form of politics, namely populist demagoguery and violence (nearly 100 people were killed in his failed coup attempt, the great majority of them civilians).
One of the things I like about Johann's journalism is that he calls people of varying degrees of nastiness - from the monster Saddam Hussein to the sly bigots of UKIP - by their proper names. On this occasion, a nasty person has slipped through his defences. President Chavez launched a military coup not because he is a patriot with a passion for justice but because he is a bully and a thug with a contempt for constitutional government. He has now left London after his two-day visit and inflicted himself on the Algerians, en route to Libya. On behalf of my readers, I say good riddance and yah boo to him.
