The long slide

• Rory Carroll
• The Guardian,
• Saturday May 17 2008
• Article history

Hugo Chavez, president of Venezuela, talks to the press as he arrives at the Santa Clara airport, Cuba in October 2007. Photograph: Sven Creutzmann/Getty Images

It was Sunday morning and Hugo Chávez was in full flow, speaking to the nation from a Caribbean beach. His tone was not unpleasant, but at this moment he was outing me as a representative of western colonialism and explaining my role in Africa's holocaust. It was not all my fault, he said, I had been caught up in the currents of history and globalisation. "The destiny of the African people matters to us. The destiny of everyone matters to us." Chávez dropped his voice to a dramatic whisper. "We all live on this planet, Rory."

This was episode 291 of Aló Presidente, his weekly live TV show, and in Fleet Street parlance I had just been monstered. The show was being broadcast from Valle Seco, a coastal hamlet east of Caracas. Told that a Guardian correspondent was in the audience, Chávez had directed the microphone in my direction and invited a question. I asked why he wanted to change the constitution so he could run for office indefinitely, a controversial move which, if he went on winning elections, could see him rule for life. Chávez grimaced, scribbled a note, paused, then launched into a freewheeling narrative involving Christopher Columbus, colonialism, slave ships sailing from Africa to the Caribbean, Britain's monarchy, Britain's navy and the pro-capitalist bias of modern media organisations which echoed old world vices.

There was a dream-like quality to the scene. The blistering sun, the audience of government officials in red T-shirts nodding solemnly, the group of village women supporters waist-deep in the ocean blowing kisses to the president, the TV cameras zooming in on my perspiring face. I was transcribing the harangue into my notebook but at one point I paused - he was back to Columbus - and jotted down an observation. Losing it? The thought struck me hard. Was Hugo Chávez, the sublimely gifted communicator who put Latin American revolution back on the world's agenda, losing it? Not his marbles, for clearly the man was rational and intelligent, but was he losing his political touch?

This wasn't umbrage at being rebuked. Chávez was relatively gracious, and the harangue did have a point. It injected nationalist passion into the show and reminded supporters they were part of a historic fight against western hegemony. In the absence of US marines storming the beach, a reporter for a British newspaper could fill in as the villain. Nothing personal.

Still, it was baffling. Chávez was campaigning for a referendum to change the constitution and needed to mobilise the barrios, the vast slums where most Venezuelans lived. Their main concerns were violent crime, inflation and shortages of basic foodstuffs such as milk and eggs. So why invest valuable TV time assailing a foreign reporter for past atrocities on the other side of the Atlantic? To dodge the question he was asked, obviously, but it fitted a pattern of lengthy segues into the abstract and esoteric. Over the course of the seven-hour show, he dwelt on the Marxist insights of the Italian theorist Antonio Gramsci, the "geometry of power" of 21st-century socialism and the need to build a security barrier of artificial islands in the Caribbean. In Chávez's 10th year in office, the question arose, was he drifting away from ordinary Venezuelans.

A few months later, in December 2007, came the answer: Chávez lost the referendum. His first electoral defeat, a narrow one, after nine years of consecutive landslides. It was shocking. This was the land of Hurricane Hugo, of a political phenomenon with a visceral, almost mystical connection to el pueblo, the people. In the slums they called him not "el presidente" but "mi presidente", my president. Yet in the referendum millions abandoned him. They stayed at home and let a resurgent opposition derail his ambition for further terms in office. When the result was announced the government cancelled its victory rally in downtown Caracas and a giant Chávez doll was deflated with a long, sharp hiss. It captured the mood.

The question now is whether Chávez will recover and reconnect with voters, giving him another shot at changing the constitution so he can run again when his term ends in 2012, or whether the referendum was the start of a long goodbye. The stakes are high. Chávez leads a surge of leftist Latin American governments which have reawoken interest in the region by squeezing western corporations and thumbing their noses at the World Bank and the White House, a dramatic departure from the days of kowtowing to the gringos and their bagmen.

The Venezuelan leader's charisma and oil revenues are crucial, as supporters see it, to this trend. Not only a champion of the poor, as his supporters around the world believe, he is the best chance of forging an alternative to neo-liberal capitalism. That is why descendants of the western leftists who visited Cuba in the 60s and Nicaragua in the 80s today flock to Venezuela.

If the 54-year-old president loses his touch there will be a lot of disappointed people. Views on Chávez are utterly polarised: one side sees a daring and charismatic democrat fighting for the underclass, the other a power-crazed megalomaniac who stifles dissent. Such extreme partisanship would be understandable if Venezuela were a police state, but it is not. This is an Americanised country with an urbanised population keen on baseball, cars, cosmetic surgery and shopping. A midnight knock on the door is more likely to be a pizza delivery than secret police. Nineteen people died during a 2002 coup which briefly ousted Chávez, the one serious bloodletting since he came to power in 1998, but it was never established which side did the shooting.

Facts which should be straightforward shimmer in the tropical haze. It remains disputed, for example, whether Chávez publicly called George W Bush an "asshole" back in 2004. The Spanish word used was "pendejo", a strong insult derived from an expression for pubic hair which some translate as "asshole". Chávez defenders say a more accurate translation is "jerk" and that "asshole" is an attempt to smear their man as vulgar.

There is not even consensus on whether Venezuela recently mobilised troops on its border with Colombia. On his Aló Presidente programme, Chávez ordered 10 army battalions and tanks to deter possible Colombian incursions. Journalists who scoured the frontier in vain for meaningful deployments concluded it was bluster. But the authorities insisted otherwise. "They're out there," the mayor of San Antonio del Táchira told me, gesturing out of his window. I couldn't see anything. "Camouflage," he said.

How, then, to determine something as nebulous as whether a leader is losing touch? Let us start in December 2006. Chávez had just been thumpingly elected to another six-year term. Oil prices were soaring, flooding Venezuela's coffers with an estimated $1bn in petro-dollars every week, and health, education and social programmes were being lavished on the barrios. The opposition was flatlining, the president was electric. At a rally in Caracas you could almost feel the current when Chávez took the stage and thousands of students in red T-shirts screamed in unison, "Uh, ah, Chávez no se va." Chávez was here to stay. After he finished speaking four hours later they were even more fired up. The man does not know when to shut up - I've seen him speak for eight hours straight - but he is a superb orator with a compulsion to communicate, to seduce.

That election victory, with 63% of the vote, was a high-water mark. Just a year later, in the December 2007 constitutional referendum, his support collapsed to 49% on a lower turnout. For the first time the barrios began to ignore his call to the polling booths. In hindsight it seems the trouble started with the 2006 triumph. Chávez interpreted it as a mandate for more ideology, for a deepening of the socialist side of the revolution. For the first time he called himself a communist. Billboards appeared across the country proclaiming five "motors" of the revolution and a new "geometry of power". There were increasing references to Cuba, Che Guevara and Marxism. The rhetoric fired up some supporters but left others puzzled and uneasy. Geometry? Dialectics?

In May, Chávez refused to renew the terrestrial broadcasting licence of an opposition TV station, RCTV. It had supported the 2002 coup against him and sustained a hostile propaganda barrage ever since, unlike other private stations which toned down criticism. Justified or not, banishing the channel to satellite proved extremely unpopular. Student protesters took to the streets and revived the moribund opposition. More seriously for Chávez, the decision upset many of his supporters. They may not have liked RCTV's politics but they missed the soaps and quiz shows.

Marisol Torres, matriarch of a family I visited regularly in Petare, a warren of homes clinging to a Caracas hillside which counts as one of Latin America's biggest slums, had until then resolutely defended the president, largely because Cuban doctors treated her for free at a nearby clinic. But taking away her favourite programmes felt like an invasion of her living room. All the more annoying was that its replacement, a new state channel with fuzzy reception, broadcast a bizarre mix of 70s US trash, eastern bloc films (including a Soviet Union version of Bambi in which men in tights pretended to be deer) and marathon sessions of folk music. "Who can watch that stuff?" groaned Marisol. Chávez himself admitted the new channel was a flop.

Around the same time the president started promoting quixotic changes. In the name of increased productivity he moved the clocks forward by 30 minutes. "It's about the metabolic effect, where the human brain is conditioned by sunlight," he explained, to widespread bemusement. In the name of combating inflation, three zeros were to be cut from the currency, the bolivar, which was to be renamed the bolivar fuerte, "strong bolivar". But no effort was made to rein in the fiscal splurge which had driven inflation up to 23%, the highest rate in Latin America. Rising prices hit the poor hardest. Chávez had won kudos for a network of government-run stores which sold subsidised groceries but, like several other progressive initiatives, the system atrophied. Corruption and mismanagement led many stores to close and left others with bare shelves.

The system was under strain partly because of shortages in basic foodstuffs such as milk, eggs and chicken. Government price controls deterred production and currency controls impeded imports. My local supermarket had no milk - not fresh, long life or powdered - for seven months. For me it was an irritant, for mothers with young children it was a nightmare. Venezuela was not hungry, let alone starving - there was plenty of yogurt, ham and bread, not to mention salmon and whisky: opposition comparisons to Zimbabwe were absurd - but the shortages of staples were a grievance which Chávez appeared to underestimate.

It was the same with crime. According to some estimates, murder rates had tripled to 13,200 per year, a horrendous figure (in the UK, with a population at least twice the size of Venezuela's, the rate is usually less than 1,000 per year). The government claimed that was a gross exaggeration but stopped publishing regular statistics, presumably because they were so grim. Surveys named fear of crime as a top concern, especially in the barrios. At night time gunfire rang out over Petare. Chávez seldom mentioned the issue.

Aides hesitated to give the boss bad news. Cabinet heavyweights such as vice president Vicente Rangel and defence minister Raúl Baduel, who spoke out, were replaced with sycophants. Congressional allies such as Luis Tascón and Ismael Rodríguez, who criticised government policy, were branded traitors and banished from the ruling coalition. Heinz Dieterich, a Mexico-based political scientist and Chávez adviser, worried that his protege was trapped in a bubble. "Revolutionary leaders, when they convert themselves into unilateral conductors, devour their revolutions," he said.

Aló Presidente is instructive. The show is billed as a chance for ordinary people to speak directly to power, with lengthy exchanges between Chávez and the audience plus phone-ins from around the country. The show I attended appeared endearingly spontaneous. A stray dog sniffed the host, a thunderstorm almost blew down the marquee. It was a deceptively freewheeling atmosphere. There may not have been a script but the narrative was tightly controlled. There was not a hint of criticism of Chávez. Those who put questions to him were obsequious and triumphal in detailing the revolution's progress: a new factory here, a rehabilitated school there. Occasional setbacks were blamed on capitalist malfeasance. Nobody asked about RCTV, inflation, food shortages or murder rates.

It was a shock to Chávez when voters rejected the referendum in December 2007. He accepted defeat, confounding those who depicted him as a would-be dictator, but raged at the "shit" result and promised to plough ahead with the revolution. Five months later his slide is continuing. Opinion polls peg Chávez's approval rating at 35%, his lowest level in five years, and 60% say they oppose his policies. There is a question mark over the methodology and independence of the polls, but they fit anecdotal evidence of haemorrhaging popularity.

Chávez has tried to tone down ideology and emphasise bread and butter issues but still heads into areas where few want to follow. He called Colombia's Farc guerrillas, who are loathed in Venezuela for their drug trafficking and kidnapping, a legitimate insurgent army and held a silent tribute for a slain commander. He made an extraordinary claim about his idol, Simón Bolívar. The liberator did not die from tuberculosis in 1830, as recorded by his physician and historians. No, said Chávez, a personal investigation convinced him Bolívar was murdered by backstabbing Colombian allies. A high-powered inquiry has been given the task of moving "heaven and earth" to confirm the truth. One senior official rolled his eyes when I asked if anyone had protested this idiosyncrasy. "To get yelled at and sidelined? Yeah, sure."

On top of all this, Chávez's family has been accused of turning their home state of Barinas into a fiefdom. His father, Hugo de los Reyes Chávez, who is the governor, and four brothers, Argenis, Aníbal, Adelis and Narciso, have business and political interests in the rural plains. (A fifth, Adán, is the education minister.) They are accused of buying huge estates and concealing their ownership, possibly because they dipped into public funds. The National Assembly has launched an investigation. The family has denied wrongdoing and the claims remain unproven.

Chávez is not doomed. He has weathered crises before; in fact, he revels in them. A third of the country still adores him, another third could be won back and he retains control of the national assembly, the central bank, the state oil company, the armed forces and a powerful state media empire. Oil prices remain sky-high, he has five years left in office and the opposition remains fractious.

Chávez exploded into national consciousness on February 4 1992 when, as an unknown lieutenant colonel, he attempted a coup against the deeply unpopular government of Carlos Andrés Pérez. The insurrection failed and Chávez surrendered, but the government then made a serious mistake. It put the young officer on TV to tell his men to lay down their arms. It created a sensation. Ramrod straight in crisp uniform and beret, composed and eloquent, even dashing, Chávez said the coup's objectives had not been met "for now" and accepted full responsibility. It was a brief, mesmerising performance and made him a star.

Venezuela was supposed to be a democracy and success story. The discovery of huge oil reserves had by the 60s turned a rural South American backwater of cattle and scrub into a petro-state with futurist architecture and the region's highest per capita income. Military dictatorship had yielded to a two-party system and regular elections. Then, in the 80s, it all went wrong. Corruption, waste and bad policies squandered the bonanza and left most of the population languishing in hillside slums while the elite shopped in Miami. When oil prices tumbled there were no longer even crumbs for the poor. The government was hated, the system untenable. And then came Chávez. The coup failed but tapped widespread disenchantment. The "for now" in his TV address signalled a resolve to rescue the nation.

In 1998 he roared back. Released after a few years in jail, he built a political movement from scratch and crushed the old discredited political establishment at the polls. It was the start of Hurricane Hugo and a new Venezuela. Chávez hailed from humble origins in Barinas, way out in the plains, and his boyhood ambition was to be a baseball pitcher. He joined the army for its sports programme but discovered politics. A voracious reader, he felt that aloof oligarchs had betrayed the nationalism and social justice of South America's liberator, Simón Bolívar. Elected president, he would lead a peaceful "Bolívarian" revolution.

Since then, things have never been dull. In his first year Chávez won a referendum on a new constitution which enshrined human rights and beefed up presidential powers. Setting an aggressive rhetorical tone which continues to this day, he called the opposition a "truckload of squealing pigs" and "vampires". They called him a "monkey" and worse. In 2002, business, church and army leaders briefly ousted Chávez in a coup tacitly backed by the Bush administration. Massive street demonstrations triumphantly restored "mi presidente" to power. In 2003, oil workers tried and failed to topple him with a crippling strike. A year later the opposition tried again, this time with a recall referendum. The barrios, grateful for newly created health and education programmes, voted in huge numbers to keep their benefactor in office.

He was making friends abroad, too. He criss-crossed the globe and took delight in upsetting protocol everywhere he landed. Unlike Fidel Castro, his Cuban ally, he was democratically elected, sang, wisecracked and offered discounted oil to the poor in Africa, the Caribbean, Alaska, the Bronx and even London. He was also deliciously rude about Bush, calling him an alcoholic, a donkey, Mr Danger, the devil.

Chávez has a genius for connecting. On his way to meet a dignitary he will stop and chat to the doorman, or the waiter, or the receptionist. A father of four, he is brilliant with children. He will visit a school, scoop up a pair of infants and have them giggling as if he was a favourite uncle. He talks about his family, baseball, the terrible Caracas traffic and a DVD he watched the night before. He mocks his own efforts to pronounce English. That master of empathy Bill Clinton can work a room and make everyone in it feel special. The Venezuelan does it better.

After almost a decade in power he can still play the outsider who is battling entrenched oligarchs and centuries of oppression. It works. Cela Reino, a 39-year-old mother of three, told me how police used to stop her family driving through posh parts of Caracas because their car was an old banger. A decade later the family still had the banger and still lived in a slum but the humiliation was history. Police no longer brazenly harassed the poor and Reino, now the head of a communal council, a new form of grassroots government, felt empowered. "Before they tried to keep us invisible. Never again."

You find the same spirit in Barinas where the great plains lead to the Andes. Agricultural cooperative 65410, at the end of a dirt track, is a patchwork of maize and yukka fields with 91 cows, 60 chickens, six pigs and an unfinished barn. Conditions are primitive: no toilet or electricity, no mechanised farm equipment. The 15 workers, all young men, go barefoot. It could be the 19th century. But when I met them, they were cheerful, they feel part of the future. The government had taken over a large private estate, which was said to be idle, and parcelled it out to newly-formed cooperatives such as theirs.

"We're building something," said Oscar Olachea, the group's unofficial spokesman, inspecting rows of lettuce. "This is going to be our home. It's more than that. This is part of something bigger, we're building up the country." The cooperative had been founded a year earlier with a low-cost government loan. "Everybody here is equal, and thanks to that we feel richer as human beings," said Olachea. "We share and care for each other. What is that if not socialism?" To talk to them is inspiring, but the sums do not add up.

Officially land reform was a big success. More than two million hectares of supposedly idle land had been transferred to the poor, of which 90% was now in "full production". Chávez regularly broadcast his TV show from bustling cooperatives. "The war against the large estates is the essence of the Bolívarian revolution," he said. "It's land for the peasants, land for the ones who work the land!"

There were three problems. First, nobody had a clue how much this was costing. Government agencies hum with young helpful staff in red T-shirts who consult maps of farmland with swooping arrows showing the next phase of "recovery". But queries about budgets are met with blank looks. In Barinas I visited the auditing agency Superintendencia Nacional de Cooperativas (Sunacoop), the National Land Institute, the credit agency Fondafa and the agriculture ministry. Not one could say how much money was being ploughed into the land. Was it $5m, $50m, $500m, $1bn? Shrugs. The lack of accountability is astonishing. Even petro-boom Venezuela has finite resources.

Second, many cooperatives seem to be floundering. Drive through Barinas, Yaracuy and other agricultural states targeted for land reform and the landscape is of straggly, abandoned fields. Jaracoa, for instance, a flagship project inaugurated with fanfare in 2003, looks moribund. Wrong crops were planted, funding went astray and relations between members broke down. Variations of those complaints were repeated elsewhere. None of the six cooperatives I visited had started repaying their government loans.

Third, productive private estates are being dismantled. The group at cooperative 65410, for instance, is farming land which previously belonged to a man named Victor Espinoza. Before being chased off the land he had crops and 5,000 cows which produced 50 tonnes of beef and 240,000 litres of milk per month. The 21 cooperatives which have been given his fields were sucking up oil revenues to produce less than a third of that. "It's a fiasco. I challenge you, take me to one cooperative that is working, just one," said Rogelio Peña, a farmer whose 3,600 hectares were seized in 2003 - admittedly, the view you would expect from someone in his position.

The government claims rice and maize production has increased but people are concerned about a decline in the production of milk and meat. There are sporadic shortages in shops because the shortfall cannot be met by imports fast enough. The government has named its land reform programme Misión Che Guevara, a bold choice given his disastrous stewardship of Cuban agriculture in the early 60s. Fidel Castro's revolution survived economic meltdown but Chávez's probably would not. It requires regular electoral endorsements and Venezuelans tend to vote with their wallets. So far that has benefitted Chávez since during his time in office the price of oil has more than tripled. With heavy crude comprising 90% of exports, state coffers have bulged and the president has gleefully spent it. Government expenditure has surged from 18% of GDP to almost 30%, propelling Chinese-levels of economic growth. Per capita GDP has grown by more than 50% since 2003, leading to dramatic falls in poverty and unemployment. Some studies suggest previous oil booms delivered similar gains, albeit with less fanfare. Under Chávez the state has doubled its payroll and nationalised steel, cement, telecoms and energy companies.

Oil prices show no sign of dropping but Venezuela's giddy boom appears to be warping. Foreign investors are steering clear. Manufacturing and services are slumping. The state should be racking up huge surpluses but is barely breaking even. The golden goose, the state oil company PDVSA, is sick. Instead of ramping up production to take advantage of record prices, its output has slumped by 16%, according to Opec, prompting speculation about under-investment and mismanagement.

What this means is that Venezuela faces bumpy economic times and that Chávez will find it more difficult to throw money around when confronted with political challenges. He will need to rely more than ever on that connection to el pueblo

Last month, for the first time since our encounter on the beach at Valle Seco, I met Chávez again. I was invited to Miraflores Palace for a lunch billed as a "conversatorio", a conversation, a type of informal, freewheeling interview the president seldom does any more. It coincided with a diplomatic crisis in which Chávez was accused of supporting Colombia's Farc guerrillas. It would be a rare and welcome opportunity to talk and to determine if the leader of the Bolívarian revolution still had the pulse of the nation. At least that was the idea.

It turned out to be a mini-version of Aló Presidente. Television cameras were installed in a grand dining room with a table set for 30: journalists, cabinet ministers and our host. He turned up in a navy blue suit with a red tie and the cameras started rolling. Chávez greeted each guest with a handshake and smalltalk. "Ah, you're Irish," he said to me. "So, are you in the IRA?"

Once the lunch started it was clear there was not to be much of a conversation. Each journalist was permitted to ask one question in sequence around the table and then Chávez took over. For the next four hours the familiar baritone was the only voice. The typical criollo dish we were served, rice and black beans, came from a countryside blooming with new cooperatives - and the state would take over more sugar and milk production to increase the socialist bounty, he said, beaming as we munched.

It was a typical performance, blending politics with the personal. Chávez spoke about the economy and foreign policy as well as his days as an army captain and his recent viewing of the film The Perfect Storm. ("Very good, except for the end. I thought they were going to escape.") Evening approached, and on he talked.

Chávez was asked at one point whether anyone in his circle dared criticise him, a question which seemed to make the four cabinet ministers present squirm. There were different types of criticism, he said, an external form of "media terrorism" and a constructive, internal form. "She criticises me, every day," said Chávez, smiling at his daughter, Maria Gabriela, seated beside him. A regular companion at his public events, she did not speak but clearly doted on her father. "Just this morning you were complaining about something, weren't you?" he said.

At first, it seemed the daughter was there as a prop for fatherly tenderness, but as the hours passed and his fingers kept seeking her hand to hold, it seemed more like a need for love and affection. It is no secret that Chávez is highly sensitive and takes things personally. The people have rejected him once and the possibility that they might do so again is a torment. He has scaled the political heights, has been borne aloft as a hero and has held the passion of a nation in his palm. Now it threatens to slip from his grasp and he wants to hold on tight.