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         On the evening of his reelection on July 30, a euphoric President Hugo Chávez quoted the late Chilean poet Pablo Neruda as saying "Simón Bolívar awakes every hundred years." In his speech, which was delivered to tens of thousands of elated followers, Chávez added: "You, the Venezuelan people, have awoken as a result of this process of revolutionary change."

         The elections on July 30 put Chávez's hold over the Venezuelan people, and the poorer classes in particular, to a test. The economy was beset by a recession during Chávez's first year-and-a-half presidential period, as unemployment reached 18 percent. In spite of these difficulties, Chávez triumphed with 59 percent of the vote, 3 percentage points higher than in the previous presidential contests. In addition, his "Patriotic Pole" coalition of parties won 99 seats in the 165-person Congress.

         The "pacific revolution" that Chávez advocates is aimed at those lacking steady work known as the "marginal class," which after 2 decades of an economic downturn now constitutes 70 percent of the working population. Chávez's new constitution, which was ratified in a national referendum in December of last year, opens the social security system to the members of this marginal class.

         More recently, Chávez issued a decree prohibiting public schools from charging tuition, a common practice in recent years effecting the same marginal class. The charge is usually disguised as a "contribution," but parents invariably discover that it is a mandatory one. Chávez has encouraged people to occupy schools which violate the order and has threatened to jail their principals.

         Chávez is not only a populist but a fervid nationalist, even though he carefully eschews anti-U.S. rhetoric. He has resisted persistent State Department pressure to grant the U.S. permission to fly missions over Venezuelan territory in hot pursuit of drug traffickers. His announcement upon taking office that he would not compete with Saudi Arabia in the U.S. market and would comply with OPEC production quotas sent prices rising in 1999. In recognition of this feat, Venezuela was awarded the organization's presidency for the first time in its history.

         Foreign Minister José Vicente Rangel spelled out for me the general thrust of Venezuela's foreign policy: "We have contributed modestly toward creating a multi-polar world. Thus, for instance, Venezuela votes independently in U.N. and O.A.S. meetings. We follow no particular line." Chávez's critics at home and abroad attribute Venezuela's economic woes to the president's populism and nationalism. Former CIA member Brian Latell wrote in the Washington Post Op-Ed Page two days before the elections that Chávez's "populist" policies of overspending had produced "massive capital flight, escalating foreign investor fears, and profound economic uncertainties." Nevertheless, there is an alternative explanation for these problems. A string of elections, including three over the new constitution last year, has contributed to the uncertainty among investors.

         Chávez was not always a champion of pacific revolution. As a junior military officer in February 1992, he led an unsuccessful coup against President Carlos Andrés Pérez, who was subsequently impeached on grounds of corruption. Chávez had first begun laying the groundwork for the coup ten years earlier -- thus demonstrating his perseverance. His final decision to take up arms was made as a result of his indignation at the gunning down of an estimated thousand poor people during a week of mass disturbances in February 1989 -- putting in evidence his social compassion.

         For the coup leaders, the real enemy was Venezuela's traditional parties, which had ruled the nation for 40 years but were notorious for corruption, patronage and inefficiency. Ironically, the second in command of the 1992 coup was Francisco Arias Cárdenas, Chavez's principal rival in the July 30 elections.

         In February of this year, Arias surprised the nation by breaking with Chávez in order to run against him in the special general elections which were just held. At first, some political pundits speculated that Arias's candidacy was a ruse designed to focus electoral attention on the two ex-comrades in arms who allegedly supported similar goals, at the expense of the nation's traditional parties. In fact, Arias unwittingly cast himself in the position of defending a return to the past.

         During the campaign, Arias failed to present new proposals to build on the changes that Chávez had initiated. Furthermore, Arias's campaign was too hard-hitting to convince people that his candidacy represented minor differences within the family. In one TV ad which was widely criticized for being overly run and in bad taste, Chávez was represented as a crowing hen, while Arias called him a chicken due to his decision to surrender on the day of the 1992 coup.

         The electoral results on July 30 demonstrate the extent to which Arias is a prisoner of the traditional parties he formerly attacked. Arias's candidates for governor failed to win in any of the nation's 23 states, whereas those identified with the traditional parties triumphed in seven. The typical Venezuelan opposed to Chávez voted for Arias as president and for local candidates of the traditional parties. Indeed, the traditional parties tacitly supported Arias while refraining from extending him official endorsement, which would have been embarrassing for him and counterproductive. For those who championed Chávez's "pacific revolution," Arias represented the thermidorean reaction.

         The most important issue separating the two candidates was the most elusive, namely economic policy. On a trip to Washington, Arias told a White House representative that "only a policy of 'earn-earn' and clear rules for foreign capital can guarantee international comprehension" and attract the investments that the country badly needs. Arias claimed that Chávez's glib and indiscrete remarks about the rights of the poor encouraged land invasions, which in turn scared off private investments. Arias's advisors on economic policy were the same economists who justified the laissez faire or free market policies known as "neoliberalism" implemented by the nation's last two elected presidents, one of whom Arias had attempted to overthrow in 1992.

         Chávez has lashed out at neoliberalism, although he stops short of the traditional left model in which the state runs the economy. Nowhere in the world has an alternative blueprint been fully developed, but Chávez's policies may be a step in that direction.

         Thus, for instance, Chávez's new constitution scraps his predecessor's legislation which turned over the social security system lock stock and barrel to private interests. Indeed, Chávez warned the nation against "those who want to get their hands on the goodies, because for some time extremely strong capitalist sectors here in Venezuela and abroad have been eyeing our social security system." He added that private investments would be welcome for the system of pension funds, but the state would have the final word in decision making in order to avoid capital flight and guarantee coverage for the very poor.

         Upon assuming power, Chávez set aside some of his radical plans. For instance, during his first presidential campaign in 1997 and 1998, he forcefully called for a "negotiated moratorium" of the foreign debt. Since Chávez became president, however, Venezuela has dutifully paid its creditors. As he stated a few days before the recent elections: "We are paying what we owe because we want to continue to interact with foreign lenders."

         The rhetoric Chávez employs against political foes is often, but not always, aggressive. He has clashed head-on with the hierarchy of the church, the nation's main business organization and the communications media. As he has done in the past, however, Chávez called for a truce with these institutions on the night of July 30. Quoting Simón Bolívar, he stated "hatred has no place in my heart."

         Chávez's critics at home and abroad are sometimes no less belligerent. Aristóbulo Istúriz, a leading Venezuelan politician, told an audience at Georgetown University in March, "Chávez's rivals who have a limited public in the nation, go to the U.S. on speaking engagements, malign the Venezuelan government, and are received as foreign dignitaries."

         Some U.S. newspapers describe Chávez as a demagogue or a to-be dictator, and indeed he often gets compared to Peru's Alberto Fujimori. Nevertheless, Venezuela's presidential votes were almost entirely processed and counted electronically, unlike the manual method in Peru which made the nation's recent elections easy to manipulate.

         Chávez exaggerates when he calls his movement a "revolution," and indeed the new constitution guarantees the sanctity of private property. Nevertheless, some of his policies have far-reaching implications for South America. At the beginning of the new century, no other nation in the continent pursues an independent foreign policy or has put forward viable alternatives to the neoliberal formulas that Washington has so forcibly pushed.

         Venezuela's recent electoral campaign failed to stimulate a serious discussion of these issues, but the line was clearly drawn between Chávez's support for a new vision and Arias's criticisms of the government, which pointed in the opposite direction. Indeed, the Venezuelan voter was presented with a clearer choice between "continuity" and "change" than in Argentina, Chile and Mexico, where new parties have assumed the presidency in recent months.

         An array of powerful forces -- including the Church hierarchy, organized business groups, the middle class, traditional political parties and the mass media -- for the most part opposed Chávez's new constitution and are now pitted against the government. In the face of such an awesome challenge, Chávez may be tempted to follow the example of Peru's Fujimori and opt for a non-democratic course. What is equally troublesome is that Chávez's movement is largely a one-man show, and the coalition that supports him, including his own party, lacks well defined, long-term goals.

         Thus slippage can go in one of two directions. Chávez, given his military background and the relatively large number of officers he has appointed, could militarize the government and turn his back on democratic rules. A second danger is that he limit himself to an aggressive discourse in favor of social change, while doing little to alleviate the lot of the poor in concrete ways.

         Perhaps the most encouraging side effect of the "peaceful revolution" has been an acquired sense of empowerment among common people. As Chávez said, people have "woken up." Maura Jiménez, a slum dweller in the eastern town of Barcelona, displayed this greater awareness when she criticized the large number of candidates who ran as "independents" even though they really represented the discredited traditional parties. She remarked: "the time when people could be so easily deceived has past." Indeed, comments like this are common now a day in Venezuela. It explains why people generally understood that the traditional parties were behind the candidacy of Arias Cárdenas. This sense of popular awareness also represents a major challenge for President Chávez as he enters his second period in office. Northeast Research Associates Pie in the Sky Farm 93 Dwinell Road United States doing some building for the people, they Marshfield, Vermont