Poor Venezuelans sold on change

On a boulevard blocked off to traffic in decaying central Caracas, thousands of Venezuelans dance to Salsa bands and press bright round stickers exclaiming simply "S!" - "Yes" - to the foreheads, arms, and clothing of any unmarked passersby.

The happy crowd is part of the army of Venezuelans, many of them impoverished by decades of poor management of the country's vast oil wealth, expected to give an overwhelming s today to a new constitution fashioned by the populist former Army officer, President Hugo Chvez.

The downtown crowd - kids in knockoff Tommy Hilfiger fashions, adults in Chvez T-shirts - pushes through piles of campaign detritus and makeshift sausage stands, cheering when a rally leader proclaims that Venezuelans are about to approve "the best constitution in the world."

The rally and constitution it supports mark the revenge of the 80 percent of the population that has sunk below the country's poverty line over more than a decade of inefficient government, corruption scandals, and concentrating wealth. "This is a big party, because after 40 years of corruption and deception, the poor and middle classes are finally saying 'enough' to the politicians who robbed too much and left Venezuela in rags," says Manuel Hamilton, a Caracas municipal government administrator. "People voting 'no' are simply afraid of losing their illicit privileges."

Venezuelans opposed to the new constitution say it is at best ambiguous and opens the door to a concentration of power under President Chvez, reduces civil oversight of the military, and promotes a centralization of power when the rest of the world is decentralizing government. At worst, they say, it puts the country on the road to dictatorship and a statist economy doomed to Cuban-style economic ruin.

But the country's "no" forces are apparently resigned to the fact that a year after taking office, the red-bereted Chvez still commands a religious-like faith among the majority.

Across Caracas in the Altamira neighborhood's elegant Plaza Francia, families toting fine leather accessories, enjoy the square's tasteful red, green, and white miniature lights and listen to children in red-velvet gowns with white-lace collars sing Christmas carols. At the foot of a Christmas tree rivaling Rockefeller Center's own, the Perozo family laments Venezuela's direction but says the decline will continue as long as Chvez is president.

"With or without this constitution we are going toward a dictatorship," says Luis Perozo, a Caracas lawyer. "We all knew deep changes were needed, but this constitution serves the country's least educated and least productive forces." Adds Luis Jr., a Caracas law student, "The constitution is very divisive. It splits us among civilians and the military and Indians, with different rights for each."

That sense of uncertainty results from the new constitution's many ambiguities. In recent days, such ambiguity has prompted financial powerhouses such as Lehman Brothers, JP Morgan, and Morgan Stanley to recommend that international investors be cautious in new Venezuelan ventures. Some observers say the real direction the new "magna carta" will take will become clear only after clarifying laws are written.

"This is not the best constitution in the world, but it is not guaranteed chaos or the death of the private sector either," says Pedro Palma, a Caracas investments adviser. "Much depends on the legislation that will be written to define it."

Mr. Palma notes that the constitution's social-security articles could leave the country bankrupt. The section on the operation of the Central Bank could be interpreted to end the bank's independence - or could simply mean US-style oversight, as when Alan Greenspan goes before Congress. "The section on the right to employment could be interpreted to mean that layoffs are now illegal, but will there be a law to that effect?" he adds. "Right now we don't know."

While proponents say the constitution's improvements in human rights and environmental protection augur well for its success, opponents say its risks are already clear.

"Not only does this constitution not change what was wrong with the current one - the political parties' monopoly on power ... but it includes new threats that are very grave," says Allan Brewer-Carias, a leading constitutionalist. A longtime proponent of a new constitution to rid the country of its "partiocracy," Mr. Brewer says the document being voted on today "opens the door to authoritarianism, a militarized state, and a paternalistic economic system."

The new constitution calls for a six-year presidential term

and the possibility of one reelection - Chvez is already talking about 12 more years as president. The Senate would be eliminated, while taking away some of Congress's powers. For example it takes responsibility for military promotions from Congress and gives them solely to the president.

Yet despite the back-and-forth between the constitution's supporters and detractors, the biggest risk may be that it does nothing to address the problems that have put Venezuela on a downward course for more than a decade.

Luis Vicente Len, a director of the Caracas polling firm Datanalisis, says years of oil wealth and a state charged with providing prosperity have created a dependent population, and nothing in the new constitution suggests changing that is part of Chvez's self-described "revolution."

"The surveying we do tells us there are two Venezuelas: one made up of about 83 percent of the population that believes in destiny and puts little stock in individual responsibility, and 17 percent that believes one's future is built with individual effort," says Mr. Len.

As disconcerting as that might sound, Len says he tries to assuage concerned friends. "I tell them ... they can take some terrible comfort in the idea that all this constitution will do is reinforce traditional tendencies towards populism, centralism, and the all-providing state."

(c) Copyright 1999. The Christian Science Publishing Society