2003: The Architecture of Control

Photo: Historia Total

February 3, 2003, marked the end of the indefinite strike called by the Democratic Coordinator the previous December. The government believed that Christmas would finish off the strike and the opposition thought the collective pressure would force the government to hold a recall referendum against Hugo Chávez. Both failed, but the opposition languished into defeat. Only the creation of the group of friendly nations of the Negotiation Roundtable back then helped find a less humiliating end to the conflict. The shortage of gasoline was definitive for the end of the strike. Without a single glimmer of understanding, between speeches for dialogue and reconciliation, the government tightened its repressive grip.

Regulations, here to stay

Finance Minister Tobías Nóbrega announced that a new foreign exchange regime would be put in place, managed by the Currency Management Commission (CADIVI), harshly criticized for its future consequences and the huge niche of corruption it would bring. Chávez demanded: “Not a single dollar for golpistas,” establishing the discretional nature of the instrument for good. Dollar purchases were suspended for almost three weeks. CADIVI established a unique sale price of Bs. 1,596 and a sell price of Bs. 1,600 (Chávez started his government with the dollar at Bs. 573 in 1999). He also established rigid price controls. When Cordiplan chief Felipe Pérez Martí announced that FX controls would be dismantled by the third quarter of the year, he eased his own way out of the institution, which brought the return of Jorge Giordani to his command post.


Chávez said that those responsible for the national strike were “saboteurs, golpistas, terrorists.” He used repression and disregarded the rights to strike and to protest, as well as the institutions charged with trying criminal actions. Chávez ordered punitive laws: the law of contents (the first version of the Ley Resorte,) the law of the Armed Forces, the Anti-terrorism law, the TSJ law and the law of Foreign Exchange Crimes, all of them created to punish dissent and slash freedom, but since MVR couldn’t get a majority in the National Assembly, they couldn’t move further. Chávez’ vengeful vision also determined the economic agenda, the requirements for legal persons to have access to foreign currency became absurd. It’s worth noting the TSJ ruling that established that article 350 of the Constitution didn’t apply to Chávez but to regimes imposed through a coup d’état.

PDVSA’s chaos

Thousands of employees were laid off at all levels of the oil industry, which complicated restarting operations and revealed the discrepancies between the two perceptions of the industry. It was more important to get rid of those who dissented than to keep everything operational. In its ignorance, the government couldn’t even activate the internal distribution of hydrocarbons. Disregarding the organizational intelligence contained in years of training and practice was a highly expensive bill for the country and the mistakes became evident in time.

Judicial Terrorism

Administrative proceedings were opened against TV stations and there were also abuses against journalists, in a concrete effort to demonstrate that justice had lost its impartiality. Contests were suspended and the amount of provisional judges increased so that MVR could fill judicial seats with their own people. Judges who accepted rulings against the government were forced into retirement and the Prosecutor’s Office ignored complaints and lawsuits against the Administration. Prosecutor Danilo Anderson was infamous for his defense of Llaguno gunmen and became a pawn of prosecutor general Isaías Rodríguez for all political cases. The case of Fedecámaras head Carlos Fernández was iconic: arrested by DISIP, he was accused of treason, civil rebellion, instigating crime, criminal association and voluntary waste, under control judge 34, Maikel Moreno. Fernández was released due to procedural mistakes. CTV chief Carlos Ortega came out of hiding and was sheltered by the Costa Rican Embassy, until he was granted safe passage to leave the country. There were also attempts to take the board of the association Gente del Petróleo before court, but those didn’t prosper.

Negotiation table

After the strike failed, the Democratic Coordinator was forced to mutate, with questionable exercises of self-criticism and splits among its members. Súmate organized the signature collection event called “El firmazo” on the same day that the referendum should’ve taken place: February 2. With OAS chief César Gaviria in the country, the declaration against violence, for peace and democracy was signed. Next day, DISIP arrested Carlos Fernández and later, Chávez mocked the agreement to hold the referendum, establishing unacceptable demands to sign it. A third document, clearly favorable for the government, was drafted. In the end, it was signed due to international pressure, without a date for the referendum and effectively dismantling the Negotiation Roundtable. With Gaviria out of the equation, international interest dwindled.


Two explosive devices were placed in the offices of the Colombian and the Spanish embassies. There were also explosions in meeting rooms used by the Negotiation Roundtable, damaging four stories of the Caracas Teleport Center, in addition to the explosion at the home of Miranda’s governor and the attempt against journalist Marta Colomina. The common denominator was the use of materials that are exclusive to the Armed Forces. All of those cases went unpunished. Ah! Cubans arrived in the country for Misión Robison (literacy), as well as Barrio Adentro doctors.

Multiple referendums

The government postponed holding of the recall referendum any way it could, the key was the delay in the election of CNE board members. On August 25th, the government appointed Francisco Rodríguez (chairman), with Tibisay Lucena as his deputy; Ezequiel Zamora (vice president); Jorge Rodríguez; Oscar Battaglini and Sobella Mejías. In September, the CNE rejected the signatures submitted to request a presidential recall referendum because they were untimely (collected in February) and informal. Meanwhile, the government requested 48 recalls: 38 of them against lawmakers and the other 10 against governors and mayors opposed to MVR; the CNE only rejected three of these requests, obviously seeking to prevent the presidential referendum.


The Venezuelan economy suffered a 9.4% GDP drop. CADIVI restricted foreign currency transactions, making the recovery of internal production quite difficult. The total investment also dropped by 38.9%. The government decreed a 30% increase of the minimum wage. Unemployment rates rose. Inflation reached 27.1%. Chávez, the BCV and the banking sector signed the Agreement of Economic Stability, valid for one year. Thanks to FX controls, the monetary base experienced a 46.4% nominal increase. The National Assembly approved two partial reforms of the Law of the Investment Fund for Macroeconomic Stabilization (FIEM), to scrap the restrictions preventing PDVSA and the states to withdraw funds. They also approved the Law that created the Fund for Macroeconomic Stabilization (FEM), abolishing the FIEM and the Fund for the Recovery of Public Debt. It was the year of the architecture of control.

Naky Soto

Naky gets called Naibet at home and at the bank. She coordinates training programs for an NGO. She collects moments and turns them into words. She has more stories than freckles.