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Cash-and-Carry Rule
Venezuela's Hugo Chávez cements his autocracy with petrodollars and another push for 'reform.'

Friday, August 17, 2007

THE VENEZUELAN businessman told inspectors there was nothing but books and papers in his suitcase. So imagine everyone's surprise when Argentine customs officers opened the suitcase -- and found $800,000 in cash. The origin and destination of this money, which was being taken to Buenos Aires on Aug. 4, shortly before a state visit by Venezuelan President Hugo Chávez, is now the hottest mystery in South America. But what is clear is that the cash-filled suitcase is an apt metaphor for the way Mr. Chávez has been using petrodollars to build an anti-American network that includes the leaders of Cuba, Bolivia and perhaps Nicaragua.

Mr. Chávez seized the moment to unveil a long-awaited package of constitutional "reforms." As you might expect, they are self-aggrandizing and threatening to what is left of democracy in Venezuela. They would extend the presidential term and abolish term limits so that Mr. Chávez could get himself reelected every seven years, starting when his current six-year term expires in 2012. His last opponent for the presidency was a state governor; the proposed changes would weaken governors and mayors. Most menacing, Mr. Chávez wants to establish a "popular militia" alongside the regular armed forces. Perhaps this new force is the intended recipient of the 5,000 sniper rifles Mr. Chávez has just purchased from Russia.

This latest power grab is of a piece with other measures taken by Mr. Chávez since his reelection to a third term in December. He has been undermining existing governmental structures by channeling public works and welfare funds through "communal councils" under his control, a process he promises to accelerate under the revised constitution. He has nationalized telecommunications, electricity and oil enterprises and established a new socialist political party. He has forced an independent television channel off the air while plastering the public spaces of Venezuela with his own smiling portrait.

In short, Mr. Chávez's "21st-century socialism" looks depressingly like the 20th-century version: a bloated, repressive state headed by a hectoring strongman. Mr. Chávez has adjusted the model by adding certain methods of Middle Eastern petro-states, such as the use of cash to purchase popular support, or quiescence, at home -- and to buy allies abroad. Mr. Chávez's mentor, Fidel Castro, stumbled on the road to socialism for want of hard currency; Mr. Chávez can pump dollars out of the ground.

Though corrupt and corrupting, both for Venezuela and the hemisphere, Mr. Chávez's militaristic formula is undeniably potent, and no doubt he relishes demonstrating its power in polarizing combat with the weakening Venezuelan opposition. Hence the launch of yet another constitutional crusade. Since the opposition unwisely boycotted the past election, the entire National Assembly supports Mr. Chávez and is likely to approve his plan. The next step would be a national referendum this year, which might be Venezuela's last chance to prevent Mr. Chávez from setting himself up as president for life.

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