Venezuela Hands Narrow Defeat to Socialist Reforms

President Hugo Chavez speaks to the Venezuelan masses. He won by a landslide the national elections on Sunday, December 3, 2006.
Originally uploaded by Pan-African News Wire Photo File

Venezuela Hands Narrow Defeat to Chávez Plan

By SIMON ROMERO
New York Times

CARACAS, Venezuela, Monday, Dec. 3 — Voters in this country narrowly defeated a proposed overhaul to the constitution in a contentious referendum over granting President Hugo Chávez sweeping new powers, the Election Commission announced early Monday.

It was the first major electoral defeat in the nine years of his presidency. Voters rejected the 69 proposed amendments 51 to 49 percent.

The political opposition erupted into celebration, shooting fireworks into the air and honking car horns, when electoral officials announced the results at 1:20 a.m. The nation had remained on edge since polls closed Sunday afternoon and the wait for results began.

The outcome is a stunning development in a country where Mr. Chávez and his supporters control nearly all of the levers of power. Almost immediately after the results were broadcast on state television, Mr. Chávez conceded defeat, describing the results as a “photo finish.”

“I congratulate my adversaries for this victory,” he said. “For now, we could not do it.”

Opposition leaders were ecstatic. “Tonight, Venezuela has won,” said Manuel Rosales, governor of Zulia State and the opposition’s candidate in presidential elections last year.

In recent weeks, members of previously splintered opposition movements joined disillusioned Chávez supporters in an attempt to defeat the referendum on constitutional changes. The plan would abolish term limits, allow Mr. Chávez to declare states of emergency for unlimited periods and increase the state’s role in the economy, among other measures.

The defeat slows Mr. Chávez’s socialist-inspired transformation of the country. Venezuela, once a staunch ally of the United States, has become a leading opponent of the Bush administration’s policies in the developing world. It has also taken the most profound leftward turn of any large Latin American nation in decades.

The referendum followed several weeks of street protests and frenetic campaigning over the amendments to the Constitution proposed by Mr. Chávez and his supporters. It caps a year of bold moves by the president, who forged a single Socialist party among his followers, forced a television network critical of the government off the public airwaves, and nationalized oil, telephone and electricity companies.

In Caracas on Sunday, turnout in poorer neighborhoods, where support for Mr. Chávez is strong, indicated that the referendum was drawing a mixed response. Lines were long in some areas and nonexistent in others.

“The whole proposal is marvelous,” said Francis Veracierta, 52, a treasurer at a communal council here, one of thousands of local governing entities loyal to Mr. Chávez that he created this year. After awakening to predawn fireworks, she said she joined a line at 6 a.m. to vote at a school in Petare, an area of sprawling hillside slums here.

“The power is for us in the community,” said Ms. Veracierta, wearing a red shirt, red cap and belt with Che Guevara’s face on it. She said she credited Mr. Chávez’s government for giving her a $3,800 loan to start a small clothing business.

Some of Mr. Chávez’s populist proposals, including an increase in social security benefits for some workers, have been praised even by his critics.

Turnout in some poor districts was unexpectedly low, indicating that even the president’s backers were willing to follow him only so far. Some Chávez supporters expressed concern that if they voted against the measures they might be retaliated against. Turnout of registed voters was just 56 percent.

There was no line in front of the voting center at the Cecilio Acosta school in Petare on Sunday morning, as a few dozen people who had already voted milled about the street. Some volunteers working the voting machines sat idle, waiting for more voters to arrive. Other voting centers in Petare had lines outside, but they were less than half a block long.

“I’m impressed by the lack of voters,” said Ninoska González, 37, who sells cigarettes on the street. “This was full last year.” She described herself as a “Chavista” who voted for the president in last year’s presidential elections, but said she voted against his proposed changes on Sunday.

“I don’t agree with some articles,” Ms. González said. Asked about the measure to pay social security benefits to workers in the informal economy like her, she said, “That’s a lie.”

Confusion persisted Sunday over the amendments, with a major complaint among the president’s supporters and critics that they had too little time to study the proposals.

Unlike in past votes here, this time the government did not invite observers from the Organization of American States or the European Union, opening itself to potential claims of fraud.

The voting seemed to unfold largely without irregularities, though there were isolated reports of fraud and violence in parts of the country. Recounts are allowed under Venezuelan law, but would have to be approved by the Supreme Court, which is controlled by Mr. Chávez’s supporters.

In recent weeks, Mr. Chávez has adopted an increasingly confrontational tone with critics abroad, who have been multiplying even in friendly countries with moderate leftist governments like Brazil and Chile.

In the days before the referendum, Mr. Chávez recalled his ambassador from Colombia and threatened to nationalize the Venezuelan operations of Spanish banks after Spain’s king told him to shut up during a meeting. Mr. Chávez said he would cut off oil exports to the United States in the event of American interference in the vote.

The United States remains the largest buyer of Venezuela’s oil, despite deteriorating political ties, but that long commercial relationship is starting to change as Mr. Chávez increases exports of oil to China and other countries while gradually selling off the oil refineries owned by Venezuela’s government in the United States.

Venezuela’s political opposition, normally divided among several small political parties, found common cause in calling on its members to vote against the amendments. An increasingly defiant student movement also protested here and in other large interior cities against the proposed charter.

In a move that alarmed the opposition, electoral officials over the weekend revoked the observer credentials of Jorge Quiroga, a former president of Bolivia and an outspoken critic of Mr. Chávez. Mr. Quiroga accused security forces here of following him after his arrival in Caracas. “They’ve taken my credential but not my tongue,” Mr. Quiroga said.

Mr. Chávez, whose followers already control many powerful institutions — the National Assembly, the federal bureaucracy, the national oil company, the Supreme Court and all but a handful of state governments — relied on an unrivaled political machine to gather support for the measures.

Uncertainty over Mr. Chávez’s reforms, meanwhile, has led to accelerating capital flight as rich Venezuelans and private companies rush to buy assets abroad denominated in dollars or euros. The currency, the bolívar, currently trades at about 6,100 to the dollar in street trading, compared with an official rate of 2,150.

Venezuela’s state-controlled oil industry is also showing signs of strain, grappling with a purge of opposition management by Mr. Chávez and a retooling of the state oil company to focus on social welfare projects while aging oil fields need maintenance.

Petróleos de Venezuela, the state oil company, says it produces 3.3 million barrels a day, but OPEC places its output at just 2.4 million barrels. And private economists estimate that a third of oil production goes to meet domestic consumption, which is surging because of a subsidy that keeps gasoline prices at about seven cents a gallon.

Still, Mr. Chávez already has unprecedented discretionary control over Venezuela’s oil revenues, valued at more than $60 billion a year. “Because of its oil, Venezuela has global reach in OPEC and the rest of Latin America,” said Kenneth R. Maxwell, a professor of Latin American history at Harvard University.

Jens Erik Gould contributed reporting.