After almost a decade in power, Chávez has failed to fulfill his promises. Government corruption is at an all-time high, unemployment is the second-highest in Latin America, and his government style could be defined as “more of the same,” if not “worse than before.” That is, it’s marked by nepotism, inefficiency, a lack of checks and balances, and extreme waste of resources.

What started as a promising drive to upgrade Venezuelan democracy has become a tragic experiment to convert the country into a new copy of Fidel Castro’s Cuba. Helped by oil income, Chávez has been trying to convert Venezuela into a tropical monarchy, one where he would be ruler for life. He has also tried to become the leader of a global alliance against the U.S. These domestic and foreign strategies gave him important early victories, earning him the temporary support of Latin America’s poor and the endorsement of political leaders who shared his resentment of the U.S.

Over the last decade, Venezuela has earned between $600 billion and $700 billion, and most of it has been managed directly by Chávez with little transparency or accountability. Half comes from oil exports, and the rest from national taxes and from a national debt that has more than tripled to some $80 billion.

Burdened by a mediocre team of his own choice (more than 120 ministers have come and gone during his administration), Chávez has been unable to develop social policies to solve the structural causes of poverty, ignorance, and poor health. Instead, he has chosen a path of least resistance, a massive strategy of handouts to the poor. The so-called “Misiones,” created in 2004 at Castro’s suggestion, distribute free or highly subsidized food to the poor, provide medical attention in marginal urban and rural areas, and teach reading and writing in the remaining pockets of illiteracy. (Venezuela’s literacy rate has exceeded 92 percent for the last 15 years.) The problem with these strategies is that they were put in place at the expense of long-term programs that would empower the poor to become independent of state paternalism. Contrary to the old Chinese proverb, Chávez has been giving fish to the poor but not teaching them how to fish. He is creating a legion of Venezuelans ever more dependent on his largesse, in order to consolidate his political power.

Meanwhile he has been engaged in a strategy of discrimination against the middle class, telling the poor, “to be rich is sinful.”

The money received by Chávez is being spent in a highly disorganized manner, leading to rampant corruption. There are several parallel “budgets”: an official one approved by the Chávez-controlled National Assembly, which amounts to some $50 billion per year; a second one derived from money diverted from PDVSA, which spends some $15 billion per year; and a third one from money taken out of the Venezuelan Central Bank, which accounts for about $5 billion per year. The three budgets total some $70 billion per year. (For comparison, Colombia’s budget is about $50 billion, for a population almost twice as large.)

Considerable amounts are spent on domestic handouts. The Misiones require at least $15 billion to $20 billion per year, in order to reach millions of poor Venezuelans. The problem is that this type of direct subsidy fosters corruption, illustrated by the military-run social programs of 2000-02 that had to be shut down due to the pilferage of some $500 million. Corruption and inefficiency have led to a significant decrease in these programs’ impact among the poor, and have increased dissatisfaction. Professor Francisco Rodríguez of Wesleyan University in Middletown, Connecticut has shown convincingly that the Chávez regime’s social expenditures are not more efficient than those of preceding governments, and that social inequality has increased during his tenure.

Handouts also go abroad, to buy loyalties and followers in the hemisphere. In Cuba, Chávez dedicates no less than $2 billion per year to oil subsidies and other donations and grants, while leftist groups in Nicaragua, Bolivia, and El Salvador receive several hundred million dollars per year. The Caribbean states are getting oil subsidies estimated at some $700 million per year. Ecuador is getting subsidies through a program that exchanges Ecuadorean crude for Venezuelan refined products. Argentina has sold Chávez commercial bonds for some $4 billion in transactions that have enriched both the bureaucrats and friends of the Chávez regime.

More than $30 billion per year is dedicated to imports, mostly foodstuffs, bought through Cuban agents or, more recently, through a newly formed division of PDVSA, which is now involved in home construction as well as importing and distributing food. Chávez also buys some $2 billion worth of weapons per year. And yet despite all the government spending, Venezuela is building no new infrastructure.

Meanwhile, a new affluent class has emerged in Caracas and elsewhere in the country. This “Bolivarian bourgeoisie” owns vacation homes in the U.S. and Europe and invariably pays cash for their luxury vehicles, Rolex watches, and Louis Vuitton bags.

Although international monetary reserves have increased to some $32 billion, equivalent to approximately one year of imports, the Chávez regime is starting to experience mounting financial, social, and political problems, both within Venezuela and abroad.

Venezuela’s inflation rate is the highest in Latin America, 23 percent last year, and it’s still increasing. Unemployment remains high, while under-employment includes almost half of the population able to work. Foreign direct investment plummeted to almost zero in 2007 and capital flight continues unabated. Yearly economic growth still appears significant, but is essentially driven by government expenditures, while industrial, mining, and agricultural sectors have contracted. The aggressive posture of Chávez against foreign companies has not helped attract new activities or capital investment.

In the social scene, the “Misiones” have lost their early luster and now show increasing signs of stagnation. Cuban doctors assigned to the health program are escaping the country, mostly through neighboring Colombia. Meanwhile, Chávez’s price controls are having a predictable effect: food shortages are common, forcing the poor and the middle class alike to wait hours in line to buy essential products such as milk and meat.

Over the past two years or so, Chávez’s popularity has fallen both in Venezuela and in the hemisphere. The December 2007 defeat of his proposed constitutional reform was a major blow to his “president for life” pretensions. Unless he tries a coup, he will not be able to stay in power beyond 2012. His weakened regime will face regional elections this November, and he may see another referendum in 2010.

His ouster is becoming more and more likely. If that happens, his so-called socialism will lose strength among regional leaders. Castro’s infirmity and Chávez’s melancholic departure could mean the end of their dream for a socialist, anti-U.S. Latin America. To cite T.S. Eliot’s poem “The Hollow Men,” the end of the Chávez tragedy will likely come “not with a bang but a whimper.”

Gustavo Coronel is a former board member of PDVSA.