Skipper of the Dreamboat

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Westward out of Caracas, a speeding convoy of official limousines and patrol cars snaked down the winding, concrete Pan American Highway. From the back seat of a Cadillac limousine, a short, rotund man in khaki took in the fleeting sights: trucks piled high with sugar cane, drowsy town plazas seared to a dry-season brown, the jet air base near Maracay, and scenic Lake Valencia, a shimmering turquoise in a chartreuse valley. But most of the time Colonel Marcos Perez Jimenez, President of Venezuela, eyed a low, sleek, two-seater Mercedes-Benz sports car that rolled along with the cavalcade.

At Valencia, his patience ran out. Stopping the procession, he strode over to the Mercedes-Benz, settled into the red-leather driver's seat, pulled down the top-hinged door and streaked off.

"One must test oneself against danger in preparation for when it comes," says President Perez Jimenez. Setting a killing pace for the official sedans that followed, he swerved along the northward-twisting highway toward the Caribbean. At the coast he turned west again over the low plain to Barquisimeto, speeding through the clear dusk that silhouetted wide-spreading saman trees blackly against an orchid sky.

Next morning at 8, the President, a road-racer's gleam in his eye, took the wheel again and sped away through dun-colored hills. Official chauffeurs in the convoy crossed themselves and followed. But it was ideal driving: troops patrolled the highway (particularly guarding bridges) and kept all other traffic backed up at side roads.

In gullied wastelands, the shriek of tires and the stench of scorched rubber filled entire valleys. On straight stretches of new road built by his government, Perez Jimenez watched the speedometer needle of the Mercedes-Benz tremble around 160 kilometers (100 m.p.h.). He flashed by goats, banana plantations, royal palms and startled girls in magenta dresses; he hurried dustily on through villages where school children lined the streets for shrill vivas, through towns that tried to attract official attention to their rustic needs with crude banners impossible to read at high speed. After nine hours he coasted into San Cristobal, 18 miles from the Colombian border and 650 miles from Caracas. "Sports, swimming, high speeds," he mused, "all are fine ways to set aside the cares of office."

Firm Hand, Fast Engine. Almost anywhere else, a hot-rodding President, with or without office cares, would be an unusual spectacle. But in Venezuela, that famed, throbbing boom land of South America, the spectacular is commonplace. Four years ago Colonel Perez Jimenez, then 36, put together an unbeatable combination of nerve and luck to seize dictatorial power in Venezuela; today, growing in influence to the stepped-up beat of the boom, he is a key man in Latin American politics. But though the hard-driving President keeps a firm hand on the wheel, it is Venezuela's fabulous oil wealth, coming in an ever-faster flow, that powers the boom. Under a sense-making profit split with the foreign companies that produce petroleum, the Venezuelan treasury gets about $1,500,000 a day in one form or another. What the money does is downright wondrous.

In bustling cities, businessmen make fortunes, while middle-class girl clerks and secretaries, emancipated from ancient constraints by modern salaries, drive their own convertibles or fly to Miami for vacations and shopping. In the country, the rope-soled sandal that only recently covered the bare foot is being rapidly replaced by the shoe.

Caracas (pop. 87,000), the balmy capital (average temperature 70DEG). is the national show window--a bursting city overhauling itself so fast that the visitor who returns only once a year can easily get lost. Under clouds of dust, half pulverized rubble and half cement, new super-boulevards crash through old slums, and lavender-painted buses soon roll along them.

The construction drive has revealed the Venezuelans' exciting talent for vivid modern architecture. Their use of color--lemon yellow, white, red, and ultramarine blue--outdoes the native bougainvillea and the bright toucan birds. Red-earth gashes in the surrounding azure mountains promise more to come.

Rhinestone Yo-Yos. COMPRE HOY Y PAGUE MANANA! shouts a huge sign atop Sears, Roebuck's mammoth Caracas department store: BUY TODAY AND PAY TOMORROW! On time payments, women in pipeless hillside shanties buy U.S.-made washing machines, and happily lug water in buckets on their heads to fill them. Specialty shops sell canned Spanish cuttlefish, rhinestone-studded yo-yos, TV sets and a potent local liquor disarmingly called La Economica. The 4,000 millionaires who set "two Cadillacs in every garage" as their standard enjoy such diverse luxuries as art collections, a drive-in that serves chilled martinis, sports-car racing and a nightclub where a cow does an act.

Outside the capital, the country is also booming. In the hot western oil town of Maracaibo (average temperature: 86DEG), competition has forced even the bordello-owners to install airconditioning. In the eastern plains and jungles, prospectors ruin their teeth on back-country diets while diligently hunting for diamonds, then get the cavities filled with the gold they have panned along the way.

Some 33,000 colorfully assorted citizens of the U.S. live and make money in Venezuela. In the countryside, boomers who have drifted in from such places as Greenland or Morocco run dredges, build railroads, drive piles (but in the oilfields the oldtime Texas roughnecks have largely been replaced by the Venezuelans they trained). In the cities the American musius (Venezuelan slang for any foreigner, from monsieur) range from topflight oil-company executives and managers of U.S.-owned factories or assembly plants (cars, tires, chemicals, etc.) through a wide spectrum of salesmen, admen and promoters to some all-purpose operators that the others call "export bums." U.S. and other foreign companies have contributed heavily to Caracas' great private building boom, but the government splurge of public works is more than twice as big. The Centre Simon Bolivar, a complex of twin 30-story office buildings, underground parking areas, landscaping and traffic routes, is nearing completion on a site where 400 buildings once stood in the heart of old Caracas. It was inspired by Rockefeller Center--but so far has cost at least three times as much as the Manhattan development, put up mostly in the depressed '30s for $125 million.

Forty 15-story apartment houses plus other vast developments provide public housing. The new University City has a brightly painted super-hospital and two cantilever-roofed stadiums that seat 75,000 fans without a single view-blocking pillar.

The nation's highway net, doubled (to 7,500 miles) in the last six years, is capped by the famed Autopista, a spectacular $6,000,000-a-mile parkway that connects mountain-bound Caracas with its main airfield and seaport, ten miles away. Throughout Venezuela there are 250 new schools, 690 new clinics or hospitals, aqueducts, airstrips, first-class private or government-financed hotels.

Oil & Water. The oil that runs this dreamboat comes up at the rate of nearly 2,000,000 bbls. a day from 9,249 wells. Only the U.S. produces more (6,340,000 bbls. a day) than Venezuela, and no nation exports more. The boom began in 1922, when a fabulous gusher spewed up the drilling tools and geysered petroleum for nine days. Oil has been found all across the top of Venezuela, but most of it comes from in and around Lake Maracaibo, an arm of the Caribbean Sea. One of the sights of the continent is Maracaibo's 2,012 derricks, set on piles in the lake, busily sucking up the black crude from 2,000 ft. to 4,000 ft. down. A tenth of the world's oil is produced right there. And there is plenty left: proven reserves for 15 years at the present rate. New concessions, expected soon (the government has received offers totaling a reported $150 million), will probably bring the store of buried riches up to one hardheaded oil executive's guess: "Enough for 100 years." By themselves, great oil reserves do not guarantee great oil wealth. The happy secret of Venezuela's prosperity lies in the partnership between the country and the foreign companies (Jersey Standard, Shell, Texas, Gulf and others), which have provided the investment capital--$3 billion--and the know-how that gets the oil into the northbound tankers.

Other Latin American countries may also be sitting atop lakes of oil. But in the '20s and '30s, when the business was growing up, Mexico and Bolivia expropriated foreign companies, Brazil shut them out, Peru, Argentina and Colombia discouraged them. In effect, the other countries channeled investment into Venezuela, which prudently held its royalties to an average 8% during the early, expensive job of exploration. Once the companies struck it rich, Venezuela raised royalties (to 16 2/3%) and taxes, eventually pioneered the celebrated 50-50 agreement--half the profits to the country, half to the companies--that has now been copied in the Middle East and elsewhere. The companies went along with little complaint, led by Creole Petroleum Corp., the Jersey Standard affiliate whose Venezuelan operations were ably directed by veterans of Standard's painful expropriation experience in Mexico. Today, Brazil and Argentina pay heavily to import foreign oil, Mexico and Colombia barely hold their own with nationalized industries, Peru and Bolivia are inviting foreign oilmen to return. Venezuela builds and prospers.

An Old Andean Custom. Venezuelan independence dates back to 1821, when one of hemisphere history's towering figures, Simon Bolivar, finally drove the Spanish rulers out of his homeland and went on to free the neighboring nations. Bolivar had no illusions that he had brought U.S.-style democracy to the liberated lands; he died predicting that in the Americas, "Ecuador will be the convent, Colombia the university, Venezuela the barracks." He knew his countrymen well; soldiers have ruled Venezuela through most of its history. Many of them were from the high western Andes, where to celebrate their own character, the mountain men sing:

Strong as the tree against the wind, Strong as the rock against the river, Strong as the mountain snow against the sun.

Out of this pride, the Andeans through the years have built a tradition that they, rather than natives of the listless lowlands or of luxury-loving Caracas, have a natural claim to run the country.

All the Venezuelan Presidents from 1899 to 1945 came from a section of the Andes around San Cristobal. Marcos Perez Jimenez comes from nearby Michelena, a tiny settlement founded by one of his ancestors, where he was born on April 25, 1914. His father, 70 years old at the time, was a small-time cattleman and coffee planter, his mother a schoolteacher from Colombia.

One day Marcos' elder brother Juan arrived home in a braid-bedecked uniform from Venezuela's main military academy, and Marcos decided to become an officer too. His nearsightedness barred him from his first choice, the air force, so he took the school's two-year course in artillery, and at 18 got his first command, a battery of two venerable cannon. After a stretch of teaching at the academy, Perez Jimenez finished his own military education with three years at the Peruvian War College in Lima. By 1945 he was a major, and--like 16 other young war-school graduates --rebelliously resentful that his studies had brought him only low pay and petty commands under politically appointed generals.

No less resentful was a politico named Romulo Betancourt, whose left-wing but anti-Communist party, Accion Democratica (A.D.) was having rough going at the hands of the general then in the presidency. One night Perez Jimenez and a few other officers secretly sought out Betancourt. Said Perez Jimenez: "Why don't you come along with us in a movement that would dignify the country and purify the armed forces?" Army and A.D. joined in a successful revolution that killed 300 and wounded 1,500.

"It Is Inadmissible . . ." Betancourt became President, taking Major Carlos Delgado Chalbaud, who had played a key role in the army revolt, as his War Minister. Under Betancourt, A.D. wrote a constitution that guaranteed every civil right the party could think of. A.D. encouraged unions. It gave Venezuela its first free and universal presidential election, with the party's candidate, Novelist (Dona Barbara) Romulo Gallegos, winning three to one. Most important, A.D. worked out and ratified the historic 50-50 contract with the oil companies--the golden rule that was later to benefit no one more than the officer Betancourt assigned as army chief of staff: Marcos Perez Jimenez.

Seemingly satisfied with his rise in the world, Perez Jimenez dutifully put down a dozen or so minor uprisings against the A.D. government. His older brother Juan helped stage one such plot; Perez Jimenez jailed him, gave him a dishonorable discharge, has never spoken to him since. But A.D.'s liberal trends increasingly alarmed Perez Jimenez. Of universal suffrage, first practiced in Venezuela under A.D., he said privately: "It is inadmissible that my own vote and the vote of an illiterate farm hand should have the same value."

He waited through President Gallegos' first months in office, and waited while the U.S. approvingly hailed President Gallegos on a good-will tour to Bolivar, Mo. with President Harry Truman. But he soon concluded that A.D. meant to make the army no more than a well-subordinated police force. To Delgado Chalbaud and to the young Academy officers who had supported the revolution he preached a new stroke "to hit the target we missed in 1945." One morning in November 1948 Delgado Chalbaud, Perez Jimenez and another officer (all by then lieutenant colonels) tossed out Gallegois in a bloodless coup.

Promotion. With Delgado Chalbaud as President and Perez Jimenez as Minister of Defense, the colonels' junta jailed and exiled A.D. leaders, drove the party underground, suppressed a strike among the oil workers. The junta ruled with a kind of uneasy stability for two years, then ran into a tragic setback, never fully explained: moderate, St. Cyr-educated Delgado Chalbaud was kidnaped and killed by a fanatical retired general. Nothing more than circumstantial evidence--plus the obvious fact that he succeeded to power--has ever linked Perez Jimenez in any plot with the assassin, who two days later was "killed while attempting to escape."--* Thereafter, Perez Jimenez was boss, although with Andean patience he brought in a malleable civilian lawyer to fill the presidency for a while. "The colonel," as people began to call him, energetically launched new public works in step with the oil revenues that leaped upward with the war in Korea and the shutdown of the Iranian petroleum industry.

After liquidating several revolts inspired by the outlawed A.D., the strongman resolved to wipe out its underground leadership. For the job he chose an engaging, worldly and cold-blooded police expert named Pedro Estrada. As chief of the Seguridad National, Estrada built it up to a crack plainclothes force with eyes and ears in every cafe, hotel, office and oil camp. Estrada's henchmen jailed thousands, sometimes learned secrets from captured suspects by seating them naked for hours on blocks of ice, by other ingenious indignities or by old-fashioned beatings. When an A.D. chieftain or one of the party's hotheaded bomb-throwers was located, he was jailed or gunned down on the streets. Today, political prisoners are down to around 400, and though Estrada still listens vigilantly in his office with its eight telephones, A.D. makes scarcely a sound in Venezuela. Romulo Betancourt, undiscouraged, dreams of the day when A.D. will take over again, but he is in his seventh year of exile (currently in Puerto Rico).

Miscalculation. Perez Jimenez' next planned move was to get himself elected President. An official political party was organized. With A.D. outlawed, the opposition was divided between a Catholic conservative group and a mildly left-of-center party. Registrations showed that the government party outnumbered the combined opposition 1,200,000 to 800,000.

Perez Jimenez' advisers calculated that he could win an unrigged election--and even the opposition agreed with them.

But few Latin American strongmen can count on much popular support. The first telegraphed election-night returns at Caracas' Miraflores Palace heralded the bad news: an apparent ten-to-one defeat for the Perez Jimenezrez slate. The strongman was bitterly disappointed, but his wife, Pedro Estrada and others steadied him, arguing glibly that the army, the real custodian of power, still had to decide whether the results were "acceptable." Newspapers were ordered to wait for the full official count; foreign news cables were bottled up. Two days later it was blandly announced that the government party had won after all. Now each Dec. 2 is celebrated by opening hundreds of public works, and Venezuela is dotted with projects named in honor of the date, e.g., San Cristobal's Gimnasio 2 de Diciembre.

The election established a constituent assembly that drafted a new constitution and voted Perez Jimenez into office, a legal President at last.

"There Must Be a Leader." As South America's youngest chief executive, Perez Jimenez has conquered much of his early, unconfident stiffness and has warmed to his job with relish. "P.J.," as he is known to Caracas' English-speaking colony, demands plenty of action, but he rarely needs or wants suggestions from his cabinet. He treats the ministers as a team of technicians; their two-hour Saturday sessions are brisk and businesslike.

For support, he still relies heavily on an unofficial army council of 38 officers ranking from captain to colonel--many of them co-conspirators in the 1945 revolution and many also from Perez Jimenez' academy class of '34. To reward this loyal backing, Perez Jimenez pays the officers well* and provides them with lush perquisites. Nothing in Venezuela--or out of it, for that matter--quite matches the palatial Circulo de las Fuerzas Armadas, the social club for military officers and top government officials. It has a hotel (television in every room), restaurants, bar, cocktail lounge, nightclub, two swimming pools, stable, gymnasium, fencing court, bowling alleys, library and theater. Some notably sumptuous touches: marble floors, blue Polaroid windows, Gobelin tapestries, Sevres vases, Tiffany clocks, a glass-walled conservatory housing a living, blooming chunk of the Venezuelan jungle. To the grander dances at the club, some colonels' wives wear $1,500 Balmain gowns.

"We Still Need Halters." Of his style of rule, Perez Jimenez said in a recent interview: "I make every effort to give Venezuelans the kind of government best adapted to them. People may call it a dictatorial regime, [but] my country is not ready for the kind of democracy that brings abuses of liberty. We are still in our infant years and we still need halters.

"We have to control certain liberties. Results, based on hard facts, prove we are on the right path." For example: "No newspaperman is told what to write, but he is forbidden to write anything that, in our opinion, may be bad for the morale or progress of the country. In a word, the press is censored. Very mildly indeed, but censored." In Perez Jimenez' view, "there must be a leader who shows the way without being perturbed by the necessity of winning demagogic popularity." He makes it plain that for the present he has no intention of trying to become a popular politician, or of relaxing the severity of his regime.

As Venezuela goes into its fifth year under Perez Jimenez, many of the other passengers on the oil-powered dreamboat profess to admire the skipper's hard-fisted style of command. "Don't rock the boat," say prosperous U.S. businessmen, happily noting the political quiet, record oil production, boom-time construction and the rising standard of living (70% up in the last decade). But the advice is given so often as to reflect at least a subconscious awareness that the boat may be somewhat unseaworthy. Sample weaknesses:

P: Overdependence on oil. Petroleum forms 95% of Venezuela's exports. A bill perennially proposed by Pennsylvania's Congressman Richard Simpson to cut U.S. imports of foreign oil could cost Venezuela a shattering $340 million a year.

P: Financial mismanagement in the government. Semi-independent government corporations, e.g., the Centro Bolivar, the Workers' Bank, are paying many debts in short-term government notes. The contractors and sellers who get the notes must give discounts up to 18% to convert them into cash, so they naturally fatten their prices to cover the expected sacrifice. The absurdity of such costly short-term debt financing (total: some $127 million) in rich, credit-worthy Venezuela seems explainable only in terms of the carefree feeling that "it's only money." Perez Jimenez, not at all amused and more than a little embarrassed, reportedly plans a Cabinet shake-up soon to correct these practices.

P: Graft. Many government purchasing agents expect from 15% to 25% of a deal as their cut.

P: Backlands poverty. The oil wealth has yet to trickle down to many thousands of half-nomadic rural Venezuelans, who scratch subsistence diets out of jungle clearings.

P: The uncertain future. A tire or tie-rod failure on a Mercedes-Benz, an army plot like the two Perez Jimenez staged, or a simple slip-up by a guard or a food-taster might remove the strongman from the scene. Lacking democracy's orderly system for succession, Venezuela might suffer a turbulent struggle for power.

New Works, New Faces. All these weaknesses could make serious trouble.

But they are essentially short-term problems. In the long run, what Venezuela needs most is more and better people--skilled, educated, healthful, productive citizens. Perez Jimenez obviously realizes this. Through crop subsidies, the building of sugar mills and the construction of whole agricultural colonies that supply farmers with credit to buy land, houses and tractors, the government has already made the country self-sufficient in rice and corn, nearly so in sugar. Highways help farmers get to market. Schools are successfully struggling against illiteracy (still 39%); clinics and hospitals are lowering mortality rates while raising birthrates. Malaria, an old scourge, is now confined to the far jungles.

Foreign immigration, the world's second heaviest (after Canada) in proportion to population, is bringing new skills and faces to Venezuela. From 1947 to 1952, the country took in 373,000 newcomers--Italian stonemasons, barbers and restaurant keepers, Austrian pastry cooks and opticians, French butchers and dressmakers, Portuguese bus drivers and Spanish carpenters. Italy has agreed to send 2,000 more immigrants each month for the next five years.

And a Big Future. Venezuela's plans for the future are bold. Using oilfield gas now 75% wasted, the government wants to build a petrochemical industry and produce fertilizer, explosives and chlorine. It plans a domestic steel plant to use some of the rich Orinoco River iron ore now being mined by U.S. Steel Corp. and Bethlehem Steel Co./- Lacking blast-furnace coal, it has resolved to dam the great Caroni River (an Orinoco tributary), generate 300,000 kw. for an electric steelmaking process. Besides these heavyweight plans, there is talk of building a tourist cable-car line to the top of Mt. Avila, Caracas' northern rampart, and of boring a 10-mile tunnel through it to the sea, for easier access to the sandy Caribbean beaches.

Heavy industry, schools, roads, better national health and skilled immigration can make incalculable contributions to Venezuela's economic life, and may ultimately lead the country to true self-government, to an active political and cultural life. But Perez Jimenez, the little colonel from the Andean village, whose hand was on the spigot when it started to spout big money, frankly distrusts political democracy and pins his hopes for his country and for his place in history on the material things that he is buying and building now. "Rome would be forgotten," he argues, "if it were not for its roads and aqueducts."

* Delgado Chalbaud's hysterical, accusing widow, who became a serious embarrassment to the new regime, was pensioned and eventually shipped off to Europe.

* Captains, $5,760 a year; colonels, $10,800.

/- Shipping 5,000,000 tons a year. Venezuela is the biggest iron-ore exporter to the U.S. But iron ore is no oil-like fountain of wealth to the country; a low-profit business, it pays Venezuela only $3,500,000 a year.

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