The Venezuelan Socialist Party (PSUV) suffered a heavy electoral defeat on Dec 6. An opposition coalition called the Roundtable of Democratic Unity (MUD) won 99 out of 167 seats in the National Assembly – the state legislature. They intend to overturn the political, economic and social system developed since 1998.

For 17 years the PSUV won one election after another, but hostile media outlets around the world alleged that Venezuela had become an authoritarian "dictatorship." This time, when the PSUV suffered electoral defeat, this fictional "dictatorship" suddenly evaporated. In fact,throughout the period since 1998,Venezuela's revolutionary transformation strictly adhered to democratic norms.

It all began back in 1989, when riots by the poor and the oppressed unnerved the country's wealthy elites – who flourished by dividing up the proceeds of state oil revenue among themselves. Oil states are notorious for their corruption and their idiosyncratic power elites – as money flows from the earth into the hands of indigenous capitalists, politicians and bureaucrats, without the need for a diversity of productive investment. Oil becomes a curse, distorting economic, political and social relations.

When the late Hugo Chávez was first elected President of Venezuela in 1998, he initiated a democratic revolution. The people were empowered to decide what happens to the country's oil wealth. Bold and dramatic "missions" and programmes were launched: to eradicate poverty; to provide free healthcare for all; to renovate homes and rehouse slum-dwellers; to educate the people; to elevate the status of women; and to democratize the media. And there was a deep sense of popular participation in the exercise of power. The charismatic and energetic personal style of Hugo Chávez resonated with the masses. His weekly television chats with the people were so compelling that his opponents were marginalized, isolated and wrong-footed time and again.

Chávez was temporarily overthrown by a U.S. backed coup-d'état in April 2002 but mass protests provoked splits in the army and reinstated him as president – enhancing his popular authority. Thereafter Venezuela's democratic revolution grew into a socialist revolution. This emboldened leftist movements in much of Central and South America – where presidents and governments were elected to power on socialist tickets – in what was called a "pink-tide." Venezuela also offered a lifeline to Cuba's embattled revolutionary fortress, e.g. through barter deals that exchanged doctors for oil. This ameliorated some of the crippling impact of the U.S. commercial, economic and financial embargo imposed against Cuba since 1960.

During the rule of Hugo Chávez, the process of gradually extending public sector influence and popular control encountered multiple barriers. The wealthy classes were not expropriated and their personal fortunes grew immensely at this time. But they felt besieged by the empowerment of the poor – whose ability to assert their rights impinged on the prestige and authority of the rich.

The Venezuelan economy – deformed by oil – relies on importing essential daily commodities. Government revenue, invested to subsidize public services, failed to generatea sufficient diversity of indigenous productive activity. On the one side, capitalists siphoned their money abroad and refused to invest in Venezuela; on the other side, bureaucratic solutions tended to exacerbate consumer goods shortages. For example, state subsidises for food and other essentials initially appeared to foster egalitarian outcomes, but soon widespread shortages occurred, supplies were manipulated, and black markets flourished.

Various experiments with dual currencies only exacerbated the problems – as everyone prefers a convertible currency that can be used to buy anything. As reliance on black markets became the norm – corruption infected the state bureaucracy and local organs of popular power. Naturally, powerful private-sector enterprises compounded government problems by manipulating supplies and prices. But the provision of low cost consumer goods does not necessitate ubiquitous bureaucratic price controls or dual currencies. And it is these measures that fuelled hyperinflation and undermined support for the revolution.

In these difficult circumstances, China provided US$50 billion in loans to finance more than 200 state development projects, particularly in heavy industry, railways, and housing for the people.

However, the death of Hugo Chávez in 2013 dealt a body blow to the revolution. His successor, Nicolas Maduro, lacked Chávez's ability to communicate with the people – as one who shares in their trials and tribulations. Chávez could skilfully disarm, neutralize and outmanoeuvre the opposition – and he repeatedly succeeded in rallying the social forces required to defend the revolution. In contrast, Maduro irritated, antagonized and, in the eyes of the electorate, lost the arguments. Furthermore he simultaneously dissipated the energy and dynamism of the revolutionary movement.

The opposition victory in the National Assembly elections will be followed by attempts to oust President Maduro in 2016. History will judge the Venezuelan revolution as proof that radical socialist ideas can win and sustain majorities for prolonged periods.This refutes the argument that socialism is by definition undemocratic. In addition what began as a socialist transformation in Venezuela soon spread internationally. But too often the revolution appeared to respond to events rather than seize the initiative. For now, Venezuelan socialism has suffered a big defeat, but this dream will inevitably come back to life, as capitalist forces seek to reverse the social, cultural and political gains of the revolution.

Heiko Khoo is a columnist with China.org.cn. For more information please visit:

http://china.org.cn/opinion/heikokhoo.htm

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