Protests in Venezuela: A Repeat of 1989 or 2002?

October 20, 2016

On February 12th Venezuelan opposition leader Leopoldo Lopez called on opponents of the socialist Venezuelan government to take to the streets and support student groups that had been protesting the overwhelming problem of violent crime in Tachira State the week before. Ever since protests have continued on an almost nationwide scale. Some of these protests have turned violent when security forces and Chavista Collectives have tried to dissipate them (Chavista Collectives are a Venezuelan version of the Iranian paramilitary Basij, which the government uses to repress opposition demonstration in a more forceful and even deadly manner than the regular security forces are legally allowed to). However dramatic these protests may be, an important question remains: are these protests a repeat of the Caracazo of 1989, when tens of thousands of people took to the streets to protest the implementation of drastic structural adjustment programs (economic liberalization was overturned by 1994), or are they a repeat of the massive anti-Chavez protests of 2002, which lead to a failed and very confusing coup (to say the least) and a failed oil workers’ strike? The contemporary protests have to be compared to its predecessors in order to understand where they are headed.

Analyzing the Venezuelan protests of 2014 from a socio-demographic perspective they share more in common with the events of 2002 than with the ones of 1989. This is because the leadership of the contemporary protests and the protesters themselves come predominantly from the middle classes, which was not the case during the Caracazo. The protests of 2002, along with the oil worker’s strike and the ambivalent coup that occurred that same year, failed at their goal of removing former president Chavez from office because they were unsuccessful at galvanizing the lower classes to their cause. This is a crucial point since the lower classes in Venezuela make up about three quarters of the overall population; meaning that without their support of a majority of lower class individuals, popular movements are unlikely to succeed. However, the middle classes currently have an advantage that they did not have in 2002. An important part of lower class individuals have joined the protests, most of them young students, because they are equally affected as middle class individuals by the precarious state of the country’s economy and uncontrollable violent crime.

The protests of 2014 share an important similarity with those of 1989 that was not present in 2002, the economy is suffering greatly from the second collapse of the rentier state (oil-led development). It is the second collapse because the first one occurred the years before 1989. The reason why in that year former president Perez announced El Gran Viraje  (the great turnaround, a series of drastic structural adjustment measures), was because national finances could no longer sustain a welfare state after the collapse of the international oil price bust of 1983. In other words, oil rents could no longer sustain an artificial developmental model that crowded out domestic production and favored imports by maintaining an overvalued currency (see Dutch Disease literature for more clarification about this topic). The same process has occurred in recent years.

In 2014 the Venezuelan economy finds itself in shambles for the same reason that it did in 1989. The international oil price boom of 2003 provided the Chavez administration with the possibility of pursuing an artificial developmental model that created the illusion of development amongst the impoverished sectors of society by distributing the massive oil rent through cash transfers (see Misiones in Venezuela for more specific information on cash transfer programs in that country). The revival of the rentier state once again crowded out domestic production and favored imports. This has worsened public finances to the point that the Venezuelan government is running a financial deficit as high as it was in 1988 (of about 10% of GDP) even though the international price of oil has remained at an average of about $USD100 over the past years. This along with an uncompromising stand on central economic planning, as is the case with the strict foreign exchange control, have plunged the country into a severe economic crisis where inflation is at over 56% and scarcity of basic staples at almost 30%.

There are two important contrasting points between the protests of 2014 and 1989.  The first one is that in 1989 the popular protests were caused by the structural adjustment of the rentier state, while in 2014 they are caused by the unwillingness of the socialist government to apply painful but badly needed liberalizing reforms. The second one is that in 2014 the people protesting add very high and seemingly uncontrollable rates of violent crime to their list of grievances. It is especially the second point that explains what has caused lower class individuals to join the national protests called by middle class political leaders.

        The protests of 2014 have similar and differentiating elements to the ones of 1989 and 2002. Today, the Venezuelan political opposition to the socialist regime is more organized that it was in 2002 and it counts with some important support from the lower classes. As in 1989, an economic crisis plays a central role in these new wave of protests. As the government continues its uncompromising stand on the central planning, an economic crisis is likely to soon turn into an economic collapse. Another worrying element of the current situation is an increase of criminal and political violence. Paramilitary forces may continue their violent and unchecked actions even as the government runs out of cash. This could further increase already high homicide rates and make the country ungovernable by any political faction. Finally, political scientists make terrible prophets, which is why I dare not predict the outcome of these protests. Nonetheless, the success of the current wave of protests lies on the ability of its leaders to galvanize, not a part, but the majority of individuals emanating from the lower classes. Affirming whether or not this will occur however, is more a wager than a theoretical analysis.


About Author(s)

Daniel Leon's picture
Daniel Leon
Daniel S. Leon is a Ph.D. candidate at the University of Leipzig, Germany. His doctoral thesis deals with the political economy of violence in Venezuela. He holds a M.A. in Political Science from the American University in Cairo, and a B.A. in International Relations from Florida International University. Leon has also worked as a visiting lecturer of international relations at the University of Los Andes in Merida, Venezuela.