VENEZUELA: A COMING OF AGE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001100130098-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 15
• Document Creation Date: December 21, 2016
• Document Release Date: November 18, 2008
• Sequence Number: 98
• Publication Date: September 7, 1972
• Content Type: IM

 /-.XNNI VvCU rVl RCICQJC LVVO/ I I/ 10 . L I/1-RVrO J I `VO : ;~ VV I IUU IQUU O- 9.0c. G/7;,
Secret
DIREI, 'ORATE OF
INTELLIGENCE
Intelligence Memorandum
Ven "zuela: A Corning of Age
C I A
DCUMNT SRVIS fl4!'iiCH
DO NOT DESTROY ,
Secret
88
7 September 1972
No. 2066/72
Approved For Release 2008/11/18: CIA-RDP85T00875RO01100130098-5
 Approved For Release 2008/11/18: CIA-RDP85T00875RO01100130098-5
Approved For Release 2008/11/18: CIA-RDP85T00875RO01100130098-5
 Approved For Release 2008/11/18: CIA-RDP85T00875R001100130098-5
SFC;R FT
CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
7 September 1972
INTELLIGENCE MEMORANDUM
Venezuela: A Coming of Age
The campaign leading to presidential elections
in December 1973, already in its early stages, should
provide a test for a new political generation. Vene-
zuela has succeeded in its first experiments in de-
mocracy, having for practical purposes tamed the mil-
itary establishment, buried the insurgency, and vali-
dated a multiparty political system. Unlike its
lesser developed neighbors, Venezuela has the where-
withal to move ahead. The country's wealth is ?vast,
and its population of 10 million is small enough
that it has a real possibility of providing an af-
fluent society for all. But Venezuela has yet to
set a long term policy regarding the source of its
riches, oil. Without further development of the
industry, which almost certainly will require an
accommodation with foreign investors, oil revenues
will soon dwindle and the country's economic ad-
vance will slow down.
The realization that serious decisions have
to be made, the availability of a real choice among
presidential candidates, and a general disappoint-
ment in the democratic process have reawakened a
sense of national inadequacy bred by years of vio-
lent dictatorship. The democratic parties are wor-
ried that the voters will not face up to the future,
but will instead seek security by opting for a re-
run of "the good old days" offered by former dicta-
tor Marcos Perez Jimenez.
Note: This memorandum was prepared by the Office
of Current Intelligence and coordinated with the
Office of National Estimates.
Approved For Release 2008/11/18: CIA-RDP85T00875R001100130098-5
 Approved For Release 2008/11/18: CIA-RDP85T00875RO01100130098-5
SECRET
The Changing Scene
In one way, the opening of the election cam-
paign typifies the vigorous competitive politics
that Venezuela developed after more than a century
of political despotism under dictator after dicta-
tor. Although the money at this early point is on
the two establishment parties, the ruling Christian
Democrats (Copei) or the opposition Democratic Ac-
tion Party, the outcome of the election is very
much in doubt. There is a possibility of a swing
to one extreme or the other; a series of polls shows
a huge bloc of uncommitted and disenchanted voters,
all of whom by law must cast a ballot. Uncertainty
is underlined by a continuing rise in the popular-
ity of the country's most recent dictator, Marcos
Perez Jimenez, who--unlike aged counterparts in
Colombia and Argentina--is a healthy 58 years of
age.
Much of the electorate has soured on the demo-
cratic experiment. For most people the lifting of
the political dictatorship has been irrelevant.
They are too young to have been personally touched
by the Perez years, but are well aware of the re-
lentless tyranny of poverty. Ten years of social
reform under Democratic Action (1958-68) govern-
ments improved the lot of relatively few. The
Copei promise of a "change"' in* 1968 also remains
largely unfulfilled. The common impression that
only the rich get richer is borne out by statistics.
In addition, a rise in crime and delinquency con-
tributes to and feeds on the social malaise gener-
ated by inadequate housing, health facilities, nu-
trition, and employment opportunities.
The economic elite is also worried about what
the politicians have wrought. Witnessing an about
face on the part of Copei, which they lavishly
funded in the last election, wealthy families have
begun a clandestine do-it-yourself political action
campaign. They are by various tactics trying to
discredit those who threaten their privileged eco-
nomic position and to persuade the man-in-the-street
that his interests are their interests. Behind
this growing politicization of the rich is a seri-
ous lack of confidence in the abilities of the
Approved For Release 2008/11/18: CIA-RDP85T00875RO01100130098-5
 Approved For Release 2008/11/18: CIA-RDP85T00875RO01100130098-5
SF.(:R F.T
THE COMPETITION
NEW FORCE
PEREZJIMENISTAS
The incumbent Christian
Democrats, who came to
power with less than 30
percent of the vote.
Candidate, Lorenzo
Fernandez.
Democratic Action, the party
of internationally renowned
ex-president liomulo
Betancourt. Ruled Venezuela
from 1958-68 and has
continued to enjoy the
largest bloc in congress.
Candidate, Carlos Andres
Perez.
Uneasy coalition of
pragmatic leftist Democratic
Republican Union (URD); tine
Peoples Electoral Movement
(MED); which split from AD
in 1967; and the Venezuelan
Communist Party (PCV).
Candiiate, Jesus Paz
Gallaraga.
Independent Nationalist
Communist group. Movement
to Socialism, which split
from Soviet-run PCV in
1970. Candidate, Jose
Vicente Rangel.
The diffuse followers of
ex-dictator Marcos Perez
Jimenez, who may be a
candidate or for whom a
surrogate candidate may be
chosen.
Approved For Release 2008/11/18: CIA-RDP85T00875RO01100130098-5
 Approved For Release 2008/11/18: CIA-RDP85T00875R001100130098-5
political leaders. The impact these manipulators
will have on the political scene represents-yet an-
other unknown in this season's political mix.
The upsurge of nationalism over the last
couple of years produces still other political
variables. Venezuela is no longer regarded as the
safehaven for US investment it once was. On the
contrary, the capital needed for its flagging pe-
troleum industry will not be forthcoming unless
the next government re-creates a climate favorable
to outside investment. This may not be politically
feasible given the popularity of anti-US nationalism.
On the other hand, the two establishment par-
ties, which together claim a clear majority of, the
vote, have agreed that petroleum policy and certain
other basic factors of national development should
not be involved i.-i partisan politics. If it lasts,
this understanding could'constitute a stable keel
for holding the country to a rational course.
The Party Lineup
The Ins
All the parties have shifted their stand since
the last election. Perhaps one of the strongest
signs that the political system has matured, for
better or worse, is the diminished role ideology
plays in the quest for power. The reign of Copei
has been the key to the transition from experi-
mental democracy to a system based on a cool, ob-
jective interpretation of self-interest. Every
party, left, right, or center, recognizes that the
nation has reached a crossroads and believes the
jtakes in the election next year are especially
high. Every party also recognizes that the coun-
try's financial dependence on oil in the foresee-
able future is a built-in monitor of how far the
nationalist game should be pushed. In essence,
all the important political groups, rhetoric not-
withstanding, are fairly well rooted in reality.
Copei's victory in the last election of 1968
invigorated the multiparty character of Venezuelan
politics. It provided a test of the country's
Approved For Release 2008/11/18: CIA-RDP85T00875R001100130098-5
 Approved For Release 2008/11/18: CIA-RDP85T00875RO01100130098-5
SECRET
ability to get along with Betancourt and his party,
the architects of Venezuelan democracy, at the
sidelines. Copei has its ration of "ideologues,"
but the administration has acted in highly prag-
matic ways in its search for an effective way to
govern.
At first, the Copei government had the look
of a political disaster. Copei held the presi-
dency, but it did not control the congress and
lacked experience. Cald.era's first year in office
was one of frustration. It was marked by economic
difficulties, harassment by the opposition, labor
and student problems, and military jitters. Cal-
dera's astuteness and dignity nevertheless finally
won him a high degree of Popular respect, an agree-
ment from the major opposition party to cooperate
on matters of national interest, and, at last, a
government on the move.
Under Caldera, Venezuela is playing a new
game in foreign affairs. The country is no longer
bound by Betancourt's strict recognition doctrine
under which relations were severed with governments
not based on democratic principle. Caldera has
greatly expanded Venezuela's official contacts.
The country now has diplomatic ties with African
and Communist countries, and has played a greater
role in regional affairs. Unlike its Andean-ori-
ented predecessor, Copei has looked north as well
as south and has worked hard at intensifying Vene-
zuela's influence in the Caribbean nations. The
two serious border disputes--with Colombia and
Guyana--have been put on ice.
Venezuela's most important bilateral relations
are with the US, and Copei has taken what has had
the appearance of a brave and daring road. Caldera's
critics believe he has led the country unnecessarily
far from the safe and tested way of dealing with
the US, on which Venezuela still depends for markets
and for capital and technology. Copei decrees and
legislation in the last two yea.cs have greatly nar-
rowed the profits of US and other foreign oil com-
panies and have interfered with their operations
to such an extent that the companies claim they
can no longer function. The circuitious route
SS=
Approved For Release 2008/11/18: CIA-RDP85T00875RO01100130098-5
 Approved For Release 2008/11/18: CIA-RDP85T00875R001100130098-5
SECRET 25X1
Caldera has taken in developing his polic',es toward
the US has moved his critics to say he had no plan
and whimsically acted and reacted in fits and starts.
Anti-US harangues and other expressions of "national-
ism" and "statism" have frightened not only foreign
investors but Venezuelan businessmen and other local
conservatives as well.
While, in his dealings with the US, he has
taken serious risks with Venezuela's future, he may
come out all right. Current signs point to an ac-
commodation between Venezuela and the US. If so,
Caldera would be able to reap the political harvest
of having taken on the locally despised oil compa-
nies and the US Government without, in the end,
jeopardizing Venezuela's vital economic ties or
much else. Caldera's government seems to feel very
confident that Venezuelan oil is important enough
to US security that Washington will tolerate some
tweaking from Venezuelan nationalists. Caracas
seems confident, too, that the oil companies will
continue to find enough profit in Venezuela to
stay on for the next phase of development of the
industry there. As the Venezuelans see it, the
companies predictably sound the death rattle when
the host government tries to squeeze an extra few
pennies per barrel out of their profits; then, hav-
ing passed price increases on to the consumer, just
as predictably go on operating with ever larger
profits.
On the domestic scene, the Copei government
has turned out to be something of a relief after
years of turmoil: no loud saber rattling from the
military, no real guerrilla threat, a relatively
calm labor scene, and a relaxation of border ten-
sions. Although the continual student street dis-
ruptions are hard to gloss over, some progress has
been made against the formidable student problem,
at least on the university level. Copei has a
word for the new tranquility, "pacification," and
the copeyanos are proud of it, particularly since
the author of the policy is their nominee to suc-
ceed Caldera, Lorenzo Fernandez, corner minister
of interior.
SECRET
Approved For Release 2008/11/18: CIA-RDP85T00875R001100130098-5
 Approved For Release 2008/11/18: CIA-RDP85T00875R001100130098-5
gVc,R rT
Copei is entering the election contest with
confidence. The party recognizes that it has lost
some of its 1968 constituency, most conspicuously
its wealthy backers. But the sew iousness of the
loss is softened by party access, this time around,
to the government coffers. The party will try to
keep its losses among the lower classes to a mini-
mum with c big public works effort in the poor and
crowded barrios. Even though its candidate is a
far from mai;rnetic figure, his affable and concili-
atory nature may have an appeal of its own in the
turmoil of the campaign. Copei is not making a
good showing in current polls, but its leaders feel
they have the skills, the organization, and the
money to win in 1973.
...And the Outs
Democratic Action, the other centrist party,
ha,.-3 been the largest party and may be again in
1;,73. Among the myriad reasons for its failure to
collect the presidency along with the congress in
1968, one stands out: the party split of 1.967.
When the 1968 elections roiled around, the party
had made a phenomenal recovery, but short of the
mark. The party's candidate was only 30,000 votes
behind Caldera. Of course, in 1968, Democratic
Action had the advantage of controlling the govern-
ment--the source of campaign funds which permitted
last-minute voter-oriented public works on a scale
not seen even during the free-spending days of
Perez Jimenez.
This'time around, the party is united. Its
image of strength, decisiveness and effectiveness
is intact. Although it comes across as highly con-
servative and does not appeal much to the youth,
it does attract the middle and upper classes who
have been alarmed by Caldera's leftward swing.
Like Copei, Democratic Action will not be hurting
for funds, but unlike the government party, it is
picking up more votes than it is losing at this
stage. The party has almost rebuilt the solid
labor support it enjoyed before the 1967 schism and
seems to enjoy respectable support across a fairly
broad spectrum of society.
sECxE r
Approved For Release 2008/11/18: CIA-RDP85T00875R001100130098-5
 Approved For Release 2008/11/18: CIA-RDP85T00875R001100130098-5
SECRET
Whether it can convincingly parlay the role
it has adopted over the past three years into the
prasidency.;.is a question worrying the party lead-
ers. They have struggled, under Caldera's adminis-
tration, with the temptation to oppose him unrnmit-
tingly,wbut for the most part they have followed
more honorable--and pragmatic--instincts to ally
with Caldera on such legislation as served their
purposes. Now they are saddled with the tactical
problem of how to attack Copei for election pur-
poses without damaging their own credibility. The
party campaign was hampered by the prolonged inde-
cision of its eminent leader, Romulo Betancourt,
on whether to accept the presidential nomination.
After Betancourt's decision not to run, a party
convention in mid-August conferred the party stand-
ard on 50-year-old Carlos Andres Perez, whose can-
didacy marks the retirement of the patty old line
in favor of younger leaders.
Had Betancourt chosen to run, he pr;bably
would have been a somewhat stronger candidate
than Perez, who is identified nationally as a
tough anti-Communist policeman. His uncompromis-
ing methods during the late 1950s and early 1960s
in the ministry of Interior led the opposition-
controlled legislature to censure him in 1963 for
alleged violations of the constitution. While
some think this background makes him a weak can-
didate, others see it as a strength.
...and the Farther Outs
While both major parties think they can--and
deserve to--win, neither dismisses forces on the
right or left. Both are aware of an extremist tend-
ency based on the public's unhappiness that democ-
racy, like dictatorship, has principally served the
elite. Contrast between haves and have-nots in VF?:-,).e-
zuela is particularly sharp because of the extreme
opulence of the wealthy in this oil-rich land.
In contrast to the center, neither the left nor
the right has political organization as its forte.
The left has two main groups. The larger, the New
SECRET
Approved For Release 2008/11/18: CIA-RDP85T00875R001100130098-5
 "- Approved For Release 2008/11/18: CIA-RDP85T00875R001100130098-5
SECRET
Force, is an uncomfortable coalition of three par-
ties: The People's Electoral Movement, which split
from AD in 1967; the Democratic Republican Union,
the personal vehicle of erratic political perennial
Jovito Villalba; and the Venezuelan Communist Party.
The New Force has nominated Jesus Paz Gallaraga, a
less-than-popular wheeler-dealer, as its presiden-
tial candidate. Although their combined vote in
1968 was about 30 percent, all three parties have
lost considerable strength. A smaller leftist group,
but the one appearing to have greater potential, is
the Movement to Socialism. This party broke away
from the Communist Party almost two years ago, taking
with it most of the party's youth and intellectual
lights. It was to this movement that the renowned
Colombian novelist, Gabriel Garcia Marque;, (One
Hundred Years of Solitude) recently presenteds
20,000 Romulo Gallegos prize for literature. The
movement is sponsoring the candidacy of a respected
leftist independent, Jose Vicente Rangel.
The orthodox political right is small, diffused
in several elitist groups, very rich, and very un-
popular. These people are important in the polit-
ical race principally as.financial angels. They
take much of the credit for the change. of govern-
ment in 1968, and they are scrutinizing the various
nominees for another winner.
The outstanding figure on the right and the
would-be spoiler of the elections is, of course, ex-
dictator Marcos Perez Jimenez. Perez Jimenez can
claim numerous small parties as supporters; the
largest of these, the Nationalist Civic Crusade,
amazed even itself in 1968 by walking away with 11
percent of the vote. Since then, the perezjimenista
phenomenon has gained momentum, to the alarm of all
conventional political groups. Perez lives in
golden exile in Madrid, but a short visit to Vene-
zuela this summer raised his popularity still fur-
ther. Perez is a self-announced presidential can-
didate, but majoxity opinion is that the assassina-
tion risk is too high for him to conduct the cam-
paign in person and that he may run in absentia or
appoint a surrogate.
SEA
Approved For Release 2008/11/18: CIA-RDP85T00875R001100130098-5
 Approved For Release 2008/11/18: CIA-RDP85T00875RO01100130098-5
R 1 R C R I R, T
Whither the Uncommitted?
Yet the threat of Perez Jimenez haunts the po-
litical scene. Last month 90 prominent Venezuelan
intellectuals warned of the threat to democracy
posed by the "forces of a corrupt period gone by."
The signers of the document range over the entire
ideological gamut. This highly unusual show of
unity among strong individualists of widely differ-
ing convictions is a testimony to the continuing
rise in the stock of the old dictator. Professional
polls of voter sentiment over and over relay two
messages: that a third or more of the voters are
undecided about which party they favor, and that
Perez Jimenez is a favorite political personality
for many.
Views differ about what all th,s means. The
popular interest in a caudillo figure seems clear.
Some surveyors of public opinion detect a higher
percentage of favorable response to photos of Perez
in uniform than to those of him in mufti. This
observation coincides with an evident growing desire
for a law-and-order candidate. Most obviously,
perez,jimeni.smo is only incidentally tied to the man.
Its true source is a serious alienation of the
people from their government.
Many of the political manipulators remain un-
decided about whether their interest lies in buck-
ing Perez or in climbing on his bandwagon. The New
Force alliance is a reminder that no union is too un-
holy for Venezuelan politics. Copei leaders have
confided that some means will be found to keep Perez
out, but like many others, they maintain lines to
the Perez camp and aim to keep their options open.
This cynicism deeply disturbs Perez' archenemy, the
Democratic Action Party. Thus, in one way or an-
other, Perez has become one of the major issues in
the campaign.
The new political activism on the part of the
leading families stems from disenchantment with the
center parties and political trends. This became
evident some months ago when several industrialists
SECRET
Approved For Release 2008/11/18: CIA-RDP85T00875RO01100130098-5
 Approved For Release 2008/11/18: CIA-RDP85T00875R001100130098-5
SF _,RET
formed a semiclandestine organization called Prog-
ress in Liberty Association
Now even the biggest and most influential
association of entrepreneurs, Pedeaamarae, has open iy
expressed its intent to use political and social, as
well as economic, issues and channels to defend its
own interests. Pedecamaras' greatest concern is
the tendency to equate nationalism with state owner-
ship and government intervention. Businessmen fore-
see not only leftists but all parties vying for
leadership of this trend.
Several efforts to counter this trend are at
work. One group of about a dozen businessmen meets
weekly to plan a mainly propagandistic counterattack.
One of its projects was the publication of a large
r;cater showing the leftist candidate, Rangel, with
a machine gun concealed behind his back. A member
of this group spoke of his worry about Copei's dem-
agoguery and of his own inclination to support Dem-
ocratic Action this time. This sentiment is echoed
in other rightist groups. Adding to elitist fears
are studies of popular attitudes indicating strongly
negative feelings toward private enterprise among
the working class. Fome wealthy Venezuelans are
beginning to believe that the leftist parties may
have more appeal in the 1973 elections than has
been thought.
The Campaign: Important, Possibly Dangerous
The trend leftward, the failure of three admin-
istrations to meet public expectations of democratic
rule, and the seemingly irrational esteem for the
man whose brutality was a curse for ten years have
SECRET
25X1
25X1
25X1
Approved For Release 2008/11/18: CIA-RDP85T00875R001100130098-5
 Approved For Release 2008/11/18: CIA-RDP85T00875R001100130098-5
S1 Clt F.." t~
brought a mood of insecurity on the nation as the
election campaign opens. Only a few years ago, the
Venezuelans' pride over the survival of their democ-
racy despite years of foreign-sponsored guerrilla
harassment was unbounded. Now there Is a gnawing
sense that the competitive democratic system is both
unsuited to Venezuela's unruly politics and inef-
fective at distzibuting the country's riches more
equitably. The two major parties and other vested
interests are haunted by the idea that the centrist
competition will somehow open the field to the
menace of Perez Jimenez on the right or Rangel on
the left.
There will be many political shifts over the
next 15 months, or some unheralded event may com-
pletely alter the national mood. At stake in the
election is whether Venezuela will remain a progres-
sive, relatively prosperous nation. Venezuela's
future is tied to the oil industry, and the de-
clining oil outlook--the result of insufficient ex-
ploration in recent years--can best be offset by
opening new areas to exploration under terms reason-
able to in astors. If the decline is not reversed,
the country cannot count on oil revenues to main-
tain its past rate of growth. Given the long lead
times needed to develop additior'al reserves, delay
in deciding how to proceed will mean either less
money for national development, higher taxes for
Venezuelans, or recourse to nationalist solutions.
The question is whether felt political imperatives
will destroy possibilities for securing necessary
capital from abroad. So far the major parties seem
willing to work together on these basic matters, but
this rational approach may not withstand the heat of
a highly competitive political campaign.
Approved For Release 2008/11/18: CIA-RDP85T00875R001100130098-5