Hurricane Hugo: Venezuela's populist President, Hugo Chavez, has begun to back up his anti-American and socialist bluster with action. Is he turning into an old-style Latin American strongman?

BACKGROUND

President Hugo Chavez has moved Venezuela further toward socialism, with heated anti-U.S. rhetoric, plans to nationalize Large foreign companies, and rule by decree. Washington sees Chavez's anti-democratic moves as potential threats to peace and stability in the Americas.

When Venezuelan President Hugo Chavez was sworn in to his second six-year term last month, the ceremony included a lot of the fiery pronouncements for which the controversial leader has become famous: He called Jesus Christ "the greatest socialist in history" and he promised to transform Venezuela into a Socialist state.

During the January 10 ceremony Chavez shouted, "Fatherland! Socialism or death, I swear it!"

A few days earlier, Chavez announced plans to nationalize companies in the telecommunications and electricity industries, and called for greater government control over natural-gas projects and the media.

For years, Chavez has been known around the world for his anti-American and socialist bluster, but until now it's been mostly talk. While Chavez made headlines last September by calling President Bush "the devil" during a speech at the United Nations, until now he has generally let most of Venezuela's private companies go about their business. But his plans to nationalize key industries--both of which happen to be controlled by American companies--seem to signal Chavez's intention to follow through on his promises of socialism.

"Chavez is to be taken seriously in what he says, and he's been explicit in talking about 21st-century socialism for a long time," says Ian Vasquez of the Cato Institute, a Washington think tank.

Since he was re-elected in December by a wide margin, Chavez's policies have turned sharply to the left. In the tradition of many Latin American strongmen before him, he seems to be consolidating his power and moving to suppress any opposition, including refusing to renew the license of a TV station that has criticized him.

This shift, which Chavez is calling the "new era," has alarmed American officials and some of Venezuela's neighbors. (Only 28 percent of Latin Americans have a positive image of Chavez, according to a 2006 poll of 18 countries; President Bush had a 30 percent positive rating.)

Chavez intensified worries by persuading Venezuela's Congress to give him vastly enhanced authority. He now has the power (for 18 months) to make laws by decree, bypassing any debate in the legislature. He is also seeking to abolish the autonomy of Venezuela's central bank, which would give him more control of the economy.

CASTRO AS ROLE MODEL

And all the while, Chavez has kept up his antagonistic talk toward the U.S. After American officials voiced concern about his moves to increase presidential power, Chavez told U.S. officials, "Go to hell, Gringos!" and referred to Secretary of State Condoleezza Rice as "missy."

Chavez seems to be styling himself after longtime Cuban leader Fidel Castro, who has spent decades preaching radicalism across Latin America and defying the U.S. The two countries, and the two men, have forged close ties. With Castro gravely ill, Chavez seems to see himself as Castro's heir in his role as the leading Latin American radical.

There are, however, other left-leaning Latin American leaders, especially after some recent elections (see map, facing page). So why do Washington, and the world, seem to pay so much attention to Chavez?

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His headline-grabbing rhetoric aside, Chavez heads a country that has 7 percent of the world's oil reserves (about 80 billion barrels worth) and is the fourth-largest oil supplier to the United States. Oil exports provide more than 50 percent of Venezuela's federal budget.

Higher oil prices have funded an array of social-welfare programs for Venezuela's poor, including health care, education, and food subsidies. The impact has been significant, and helps explain Chavez's broad support at home: Ten years ago, 67 percent of the population lived below the poverty line. Today, 38 percent live in poverty, and a large middle class has developed.

To wield more influence outside Venezuela, Chavez has been conducting "oil diplomacy"--making deals with Bolivia, Cuba, and Nicaragua to supply cheap oil and support their socialist governments.

"Venezuela is not just any Latin American country," says Vasquez of the Cato Institute. "It's a country that is rich in resources--not just natural resources--I mean cash. So it carries a lot of weight in the region. It has disproportionate influence in the region because of the money they're receiving from oil."

To promote his socialist ideology, and some say to spite President Bush, Chavez has even supplied sharply discounted heating oil to poor neighborhoods in Boston and New York. He has also aligned Venezuela with other countries which the U.S. considers rogue nations. In addition to visiting Syria, Chavez has been to Iran five times, and President Ahmadinejad came to Caracas last month.

The nationalization announcements have prompted alarm among international investors, who worry about which industries Chavez might target next and whether they'll be compensated. (Chavez is also eyeing foreign oil-company assets.)

The Bush administration condemned the nationalization plans. "Nationalization has a long and inglorious history of failure around the world," says White House spokesman Tony Snow. "We support the Venezuelan people and think this is an unhappy day for them."

TREND ACROSS THE REGION

Chavez's recent left turn in Venezuela seems to be part of a trend across the region:

* IN NICARAGUA, Daniel Ortega was re-elected President after 16 years out of power. (In the 1980s, President Ronald Reagan funded an opposition group known as the Contras, who tried to overthrow Ortega's left-wing government.)

* IN BOLIVIA, Evo Morales, the country's first indigenous President, was elected in 2005. Morales has partially nationalized Bolivia's energy industry and, like Chavez, has been an outspoken critic of the U.S.

* BRAZIL recently re elected Luis Inacio Lula da Silva, a former labor leader. Lula's anti poverty programs have won him support among the poor, but his overall approach to Brazil's economy, South America's largest, has been moderate.

Chavez's effort to transform Venezuela into a Socialist state is a setback for the U.S. policy of promoting democracy and open markets across Latin America. But the U.S. may have limited options. "It's not clear," Vasquez says, "other than protest, what the United States can do to convince someone as determined as Chavez."

LESSON PLAN 2: INTERNATIONAL

VENEZUELA: HURRICANE HUGO 

CRITICAL THINKING 1

* Nationalizing electric and telecommunications companies may seem abstract to many students. Ask them to imagine that the U.S. government seized control of Ford, General Motors, and other Large American companies.

* How would such a move affect investors in these companies, American consumers, and our free-market economy? Would government control stifle the entrepreneurial spirit that drives the U.S. economy?

CRITICAL THINKING 2

* Note that the percentage of Venezuelans living in poverty has dropped from 67 percent to 38 percent in the last decade. Ask students to balance Chavez's social-welfare programs against his anti-democratic moves. Is it necessary to worry about democracy if Living standards are improved?

DISCUSSION QUESTION

* If your family received low-cost heating oil from Venezuela, how might that influence your impression of Venezuela, and the United States?

WRITING PROMPT

* Have students write five-paragraph essays about why it is important for Americans to Learn about Venezuela at this time.

FAST FACT

** One reason for Chavez's hostility toward the U.S. is a 2002 coup against him, which he said the U.S. backed. The Bush administration denied being involved.

WEB WATCH

www.cia.gov The Central Intelligence Agency provides economic, social, and political data on Venezuela. Click on World Factbook on lower left. Scroll to Venezuela.

QUIZ 2

1. A key part of President Hugo Chavez's economic program is

a increasing trade with the U.S.

b cutting trade with the U.S.

c closing Venezuelan banks.

d nationalizing large foreign companies.

2. Chavez now has the power to

a write his re-election into the constitution.

b make laws by decree, bypassing debate in the national legislature.

c form unions with other countries.

d lower the voting age to 16.

3. Chavez is appealing directly to some Americans by

a inviting U.S. citizens to visit Venezuela.

b offering to speak at American colleges.

c expanding the number of U.S.-Venezuela student exchanges

d selling low-cost oil to poor communities.

4. The best description of the economic situation in Venezuela today is.

a Oil money has helped the great majority of people to live well.

b Venezuelan society is split about evenly between those who are wealthy and those who are poor.

c There is an elite and a large middle class (largely the result of oil revenue), with more than a third of Venezuelans living in poverty.

d The economic status of all classes of Venezuelans changes frequently and dramatically with the constant shift in oil prices.

5. In Nicaragua, leftist leader Daniel Ortega was re-elected President after 16 years out of power. In the 1980s, U.S. President Ronald Reagan

a was Ortega's ally.

b kept the U.S. out of Nicaraguan affairs.

c funded Contra rebels to overthrow Ortega.

d asked for U.N. sanctions on Nicaragua.

IN-DEPTH QUESTIONS

1. The article speaks of the U.S. policy of promoting democracy across Latin America. Does the U.S. have a responsibility to promote democracy? Why or why not?

2. Which one or two key points about American democracy would you emphasize if you had the opportunity to meet and talk with Hugo Chavez about government and the rule of law?

ANSWER KEY

1. [d] nationalizing large foreign companies.

2. [b] make Laws by decree, bypassing debate in the national legislature.

3. [d] selling low-cost oil to poor communities.

4. [c] There is an elite and a Large middLe class, with more than a third of Venezuelans living in poverty.

5. [c] funded Contra rebels to overthrow Ortega.

Simon Romero is The Nero York Times bureau chief in Caracas.