Chavez has benefited a lot from higher oil prices in recent years. Venezuela, being the 4th largest oil producer in the world, is very dependent on strong prices to keep the economy going strong. Had oil prices remained low like they did in the 1990's, Chavez wouldn't likely be in power today. His instincts are fundamentally undemocratic and socialistic in nature. Of course, his brand of socialism only benefits those who are in Chavez's political graces. Chavez enriches his supporters at the expense of all others. Venezuela's poverty rates have not improved significantly at all, despite Chavez's socialism and oil wealth.
Now this Sunday, Chavez's government will be holding a referendum on a series of "reform" proposals which will only serve to solidify his grip on power. In fact, should the voters approve these reforms; they will have essentially voted themselves out of a democracy, paradoxically. These constitutional changes will give Chavez the power to declare states of emergency in order to suspend freedom of expression and arrest people without charges; eliminate laws that prohibit Chavez from serving as President indefinitely; and it would abolish the Central Bank's political independence. Therefore, Chavez will have effective control over the media, military, the electoral tribunal, and the legislature and the judiciary. The only bulwarks against Chavez are the provincial governors, but their powers will be weakened by Chavez's proposals.
Chavez's new proposals are nothing more than a coup d'etat, an attempt to take political power for himself, while establishing a Castro-style political system. His goal is turn Venezuela into an ideologically socialist state. The only difference is that Chavez is sitting on top of massive oil reserves to fuel his power. Any student of history will see that Chavez is modeling his rise to power in the same style as Fidel Castro. I suspect that the upcoming constitutional proposals may pass, especially given how Chavez uses voter intimidation to get his way. Yes there is still democracy in Venezuela, that is, if you think that holding elections is the only criteria for having a democracy. Remember that Cuba and Saddam Hussein's Iraq all held elections as well--do these countries count as democracies? Troubling times for Venezuela indeed.
UPDATE: Well, Chavez's constitutional amendments didn't pass, by a narrow 51-49% margin. Chavez for his part conceded defeat, but claimed that he will return. In his eyes, the people were not ready for a ideologically socialist-Marxist state. People in Venezuela are clearly amenable towards having a welfare state, which is what Chavez has always run on, but not an ideologically Marxist state similiar to communist Cuba. There is a big difference between regular "free market" socialism, common in parts of Latin America and Europe, and the communist variety. That was the message Chavez got from the people. Let's see if he listens.
