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From International Socialism 2 : 143, Summer 2014.
Copyright © International Socialism.
Copied with thanks from the International Socialism Website.
Marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
Hugo Chávez’s final testament, before his death in March 2013, was the Plan de La Patria 2013–19. It opens with a combative reaffirmation of the project for “socialism for the 21st century” that Chávez memorably announced at the Porto Alegre World Social Forum in 2005:
This is a programme for the transition to socialism and the radicalisation of participatory democracy. We should not delude ourselves – the socio-economic form that prevails in Venezuela remains capitalist ... This programme is aimed at the “radical suppression of the logic of capital” and a continuing transition to socialism. For new forms of planning and production for the benefit of the people to emerge requires “pulverising” the bourgeois form of the state that is still reproducing itself through its abominable old practices.
Yet it is in many ways a confession of failure, a recognition of the unresolved contradictions of the Chavista period. [1] From the perspective of 2014, one year into the government of Nicolás Maduro, Chávez’s appointed successor, it seems increasingly like rhetoric, fine words that do not reflect the reality of life in Venezuela.
In April 2013 Maduro was duly elected, but with a majority of less than 1 percent. There were protests and the street barricades or guarimbas made a brief but violent reappearance. The official right wing opposition, which had backed the candidacy of Capriles Radonski, gained confidence from the result and prepared for the next electoral challenge under the banner of the MUD, the United Democratic Forum. The new Voluntad Popular (People’s Will) organisation, however, led by María Corina Machado and Leopoldo López (both members of Venezuela’s richest families), called for continuing direct action. Their rhetoric was inflammatory and their methods confrontational.
On 12 February, the Day of Youth, huge, mainly student demonstrations erupted in all of Venezuela’s major cities, with the largest numbers in the capital, Caracas. Their demands had to do with the situation in higher education; beyond that their slogans were mainly anti-Chavista. But they quickly expanded to embrace economic issues – inflation, scarcity and the relentless rise in prices. The barricades became permanent fixtures and were progressively more violent, as the balaclava-clad protesters burned tyres, engaged in occasional acts of terrorism against government buildings and spread oil across main roads.
López had been arrested early on in the protests (and remains in detention). Machado, however, appeared at every demonstration and travelled to the US to publicise the movement. She was not admitted to the UN but she had powerful friends in the media – CNN ran a non-stop campaign of denunciation of Venezuela, based on interviews with representatives of Voluntad Popular and blurred phone footage of unspecified acts of violence. Clearly the point of the protests was to make the country ungovernable – inhibiting traffic flows, creating artificial shortages and generally intimidating people in the street.
But there was a peculiarity about the demonstrations and the barricades. They were almost entirely restricted to middle class areas. In the past the guarimba has always been associated with the protests of the poor and the working class, the action of choice of the marginalised barrios that surround every Latin American city – and Caracas is no exception to that rule. The event that is usually described as the first act of the process that brought Chávez to power – the Caracazo of 27 February 1989 – began with burning buses and barricades. On that day the barrios exploded with rage when IMF austerity measures were imposed by the government of Carlos Andrés Pérez. The piquetero movements of the unemployed in Argentina in the 1990s and the indigenous movements in Bolivia in the early 21st century used the barricade to great effect. And in recent weeks the protests at the misuse of public funds for the World Cup in Brazil have brought balaclavas and burning barricades to the streets of Rio.
In Venezuela weapons have certainly made their appearance on the barricades, possibly in the hands of paramilitaries linked to the drug trade or criminals exploiting the protests’ disruptive potential. By mid-May there were over 40 dead and close to 3,000 arrests, at least half of them students. Responsibility for the deaths was pretty evenly balanced between the police and National Guard and the random violence of the barricades. On 15 May the tent cities set up on a couple of Caracas’s main avenues, obviously inspired by the Occupy movement, were forcibly removed. The government has consistently described the protesters as “fascists”. Although there is little real evidence of any organised ideologically coherent anti-working class movement, the hostility of the US government and the powerful Venezuelan financial lobby in the US is palpable.
The protests caused the Maduro government some difficulty. It could not condemn the barricades when many of its members had long histories of bus burnings in the demonstrations against previous regimes. And every interview with a government person reiterated the constitutional right to protest that every Venezuelan enjoyed.
The deeper issue was that the protests continued to be very big, and included massive numbers of students but also significant numbers of the middle and lower middle classes. Their protest was centrally economic. Rampant inflation, already a major problem in previous years, rocketed through 2013 and into 2014. Essential goods disappeared from supermarket shelves for weeks at a time and then reappeared at higher prices. Public services, particularly hospital provision, as well as education, deteriorated rapidly; every bureaucratic procedure was achingly long, unreliable, and usually attended by demands for money, be it getting birth certificates, ordering a car or getting your pension. [2] The system of exchange, particularly for acquiring dollars, was corrupt and opaque. The economy seemed to be careering towards collapse, while the government announced all manner of economic measures and reassuring (if often incomprehensible) figures about the provision of housing, the regulation of prices, the penalising of speculators, the upward trend of the economy in general and action against corruption. Once announced, the measures rarely seemed to produce any visible effect.
Finally, the rising levels of violence across society left people living in fear of violent crime, robbery and hijackings. Urban life changed as people stayed home, restaurants and theatres closed early and the levels of private security intensified. And they were right to be concerned. After several years during which no figures were issued, in 2013 it was announced by an independent monitoring agency that 25,000 people had died violent deaths that year, [3] making Venezuela one of the most violent countries in the world. The 2014 figure is already moving in the same direction. So the protests reflected very real problems faced by the middle and lower middle classes, as well as their apprehension that Chavismo, as one poster put it, “wants to make paupers of us all”.
While the protests were restricted to middle class areas, the working class were experiencing the same problems, but they were attenuated by the subsidised food programmes (Mercal and PDVAL) and the provision of medical services and educational opportunities in the barrios. It was also true that the barrios and working class areas were the social base of Chavismo. They had exhibited a fierce loyalty to Chávez, and transferred that loyalty to his appointed successor Nicolás Maduro. Furthermore, they had recent experience of what they could expect from the political leaders of the right. The attempted coup against Chávez in April 2002 lasted only 48 hours but it was time enough for its leaders to announce their repressive intentions if they had held on to power. The bosses’ strike later that year, which attempted to destroy the oil industry, confirmed their ruthlessness. The Maduro government constantly evoked Chávez’s authority to legitimate their own actions, as well as transforming him, worryingly, into the “eternal supreme commander”. And the party he created in 2006, the United Socialist Party of Venezuela (PSUV), was an effective mechanism of local political control by the state, ensuring that continuing loyalty. But it was a lapse of political judgment to assume therefore that no explanations for the anti-Chavismo protests were required beyond denunciations of fascism and allegations of foreign plots.
The core of Chávez’s programme was to achieve state control of the oil industry, negotiate for an appropriate level of royalties, and use that income for social and economic development. PDVSA, the national oil corporation, was taken into state control in the wake of the bosses’ strike of 2002–3 and the Organic Hydrocarbons Law of 2005 defined the industry’s new role. As Rafael Ramírez, the president of PDVSA, put it at the time:
With the social distribution of oil income, invested now in the welfare of the people, its human capital, its social and economic advancement, and by investing it in infrastructure, services and investments to increase national production, oil income will then take on the role of transforming the terrible social inequalities and imbalances that are, paradoxically, one of the features of oil-rich countries of the planet.
The rhetoric remains largely the same today; but the reality bears very little relation to that promised future. Ramírez is today one of the most powerful individuals in Venezuela. As head of the oil corporation, minister for energy, and vice president for the economy, he must therefore take responsibility for the abject failure to reach any of his expressed objectives.
The key expression of the new regime in 2005 was the introduction of the Missions, social programmes in health, education, land redistribution, housing and indigenous rights directed at Venezuela’s poor majority. Initially their role would be more than simply to be administrative conduits for the state. Faced with the obduracy of the old order still embedded in the state, the Missions would come to represent organs of a different kind of power – the grass roots democracy enshrined in the Bolivarian Constitution of 1999. The corrupt practices of the old order would then be challenged and replaced and the country’s oil wealth (in a period of rising oil prices) would, for the first time, be dedicated to addressing the needs of the majority. At the same time, Ramirez promised that the then current production of 2.5 million barrels a day would rise to 5 million by 2015, to finance the economic diversification and industrial development that were central to ending the country’s dependency on the black gold.
Today, in mid-2014, production remains at 2.5 million barrels a day at most, and increasing technical problems reflect the lack of investment in plant and infrastructure. What investment there is comes as a result of “associations” with external investors which often carry conditions even more onerous than the “operating agreements” with oil majors during the 1970s. The Rafael Urdaneta gas pipeline across the Gulf of Mexico, for example, is run jointly by a cartel of companies including the Spanish Repsol, the Russian Gazprom and the US Chevron corporation.
PDVSA’s debt leapt from $3.75 billion to $78.5 billion in 2012. The Chinese investment (a debt of around $5 billion currently) is paid for in oil (currently around half a million barrels a day, but the figure will rise) at an undisclosed price; 1 million barrels are sold in the US and Cuba receives over 250,000 daily, also at an undisclosed rate, which it then sells on to earn foreign currency. What the figures show is an income of around $90 billion annually, with a net profit of around $60 billion.
And yet production, agricultural and industrial, is at a virtual standstill. The state-owned industries – including iron and steel and aluminium production based in Bolívar province around Ciudad Guayana – are paralysed by the lack of spare parts for machinery, the absence of raw materials and the failure to invest over time. Some $312 million assigned to the Guayana Corporation by Chávez in 2012, for example, has not arrived. The supply of bauxite, the basis of aluminium production, has dwindled to a virtual halt because the six massive extractor vehicles bought from Belarus are all damaged and there are no spare parts. The huge Alcasa Aluminium Factory in Puerto Ordaz, conceived as the first socialist factory under workers’ control, is not functioning. The construction industry is crippled by the absence of cement [4] and steel rods. Agricultural production has declined continuously in recent years, to the extent that 90 percent of the food consumed in Venezuela is imported – despite the country’s enormous agricultural potential. Land expropriations, which were to be the basis of a new socialist agriculture, declined in 2013, and the agriculture minister recently announced that some lands might now be returned to their original owners, the same people who have regularly employed armed men to attack peasant occupations.
Auto production, which employs 80,000 workers, is barely functioning – the number of cars produced in a week is what would have been produced in one afternoon a few years ago. [5] In the area of pharmaceuticals – where there are life-threatening shortages of essential medicines and drugs, including cancer treatments, anti-convulsive drugs and aspirin – national production has ceased. At a recent conference, Eduardo Samán, whose three tenures as minister of consumer affairs ended abruptly when he went after speculators and closed establishments that were overcharging, argued, in a well-informed speech, that Venezuela could produce its own generic drugs instead of importing them at a huge mark-up. The conference was well attended by press and media who recorded the ministerial speeches; Saman’s contribution, however, was not even alluded to. [6] Prestige projects, like the oil production plants on the Orinoco or the sugar refinery in Barinas province, involved huge spending but have never started production. The full list of such projects is too long to include in this short article. [7]
There is a pattern here. Chavismo has never had a long or even medium term economic plan. The improvisation and pragmatism that characterised Chávez’s presidencies fascinated and amused external observers. But the consequence in half-completed projects, disinformation, sheer inefficiency and above all corruption is only now coming to light to its full extent. The very foundation of the Chavista project, the deployment of oil wealth for the general good, is now systematically undermined. Barrio Adentro, the iconic Mission run by Cuban medical personnel, has no drugs or medicines and can only really offer advice; the hospital sector has suffered a degree of neglect which has led to deteriorating buildings, collapsing equipment, a lack of the most essential drugs, and theft on a grand scale.
The emblematic Gran Misión Vivienda, building social housing, is regularly presented as the shining example of Chavista success. Every Thursday, Maduro appears on television, delivering houses somewhere in the country and throwing out figures in the hundreds of thousands – but the reality, again, is very different from the extravagant claims made for the programme. In fact, house building is down by 66 percent over the same period last year. In April this year Maduro announced the plan to build 220,000 houses – without mentioning that this was a reduction of the original target of 380,000. [8] Around 4 percent of them have been built so far. And where Chávez’s vision of a social housing project included schools, sports facilities, business and community facilities, the present projects are limited to the physical buildings, many of which remain unfinished. The administration of these half-built towers has in many cases been left to local criminals who buy and sell “spaces” – not rooms or flats – under the benevolent indifference of the state.
The question is, where has the oil income gone? Why are so many projects incomplete? Where are the dollars handed out to importers for goods that plainly have not arrived? In fact, the distribution of dollars on terms too byzantine to understand has covered a large-scale flight of capital which never returned at all. Jorge Giordani, the minister of planning, recently announced that $20 billion had “disappeared” from the Treasury in 2012 and that 40 percent of dollar allocations in 2013 had gone to “empresas de maletín”, phantom companies created to launder money. He claimed to have a full list of them that he was about to publish. The list has yet to appear. Those dollars – the official estimate is $190 billion – are presumably now nestling in bank accounts in Panama, the US, Russia and elsewhere.
The beneficiaries of this secret commerce are not just the old ruling classes, the Venezuelan capitalists who run the 35 percent of the economy still in private hands. The new Chavista state bureaucracy running government agencies and nationalised enterprises has grown personally wealthy in the exercise of state power. Infrastructural projects, absorbing vast amounts of state funds, are delayed or abandoned unfinished. The Brazilian engineering giant Odebrecht, involved in several big bridge-building projects in the Orinoco Basin and in the much-delayed train system which was so emblematic for Chávez, has suspended operations until the financial future of the projects is clarified. The house-building programme financed by what is called the Chinese Fund, the fund drawing money from PDVSA and the Central Bank of Venezuela for major projects, provides no accounts. And projects are rarely fully completed. Yet the budget for materials, like cement, has been allocated and spent in each case.
How should we characterise this economy? It is clearly capitalist, as Chávez himself acknowledged, and run by a layer of bureaucrats acting in concert with private capital, or indeed as profiteers themselves. The picture internationally confirms that, since it is currently operating joint enterprises, especially in oil, with China, Russia, Belarus, Spain, Iran and others, none of whom have any interest in altruism or building a socialist economy.
The economic project articulated by Chávez and Ramirez, and repeated by government spokespeople as a mantra, has gone into reverse. The state, which Chávez wanted “pulverised”, has grown in size and penetration and has accrued to itself greater and greater powers – from oil to communications, from currency agency to direct importer. It has also expanded from 16 to 32 ministries and quadrupled the number of vice-ministers, providing opportunities for the kind of nepotism [9] that was the defining feature of the Fourth Republic, which preceded Chávez. The Missions, meanwhile, and the direct democracy they were to represent, have withered on the vine. They exist, and Maduro recently announced that more would be created and all placed under the control of a single new ministry. Like the consejos comunales and the comunas they are administrative arms of the state with neither autonomy nor political or economic independence.
Until now, and for all the compromise and deterioration of the project, Chavismo continues to enjoy a significant level of support among the majority whose residual loyalty to Chávez is mobilised day in and day out. But there is no one in Venezuela who does not know about corruption and inflation from personal experience. The question then is, what future does Chavismo envisage for itself and its project?
Maduro’s response to the growing political crisis of recent months has been to speak of peace and to convene peace conferences. But it was not clear what was meant by peace, other than an end to violence. The first meetings made it very clear that it was social peace, in other words class collaboration, that would be the framework for the conference. The employers’ federation and the country’s wealthiest capitalists were invited, together with the MUD. The mass organisations and the political allies of Chavismo – the Communist Party and Patria Para Todos – were excluded. Voluntad Popular did not attend. The meeting was therefore a dialogue between the larger section of the right, the business sector and the government.
Jorge Arreaza, the vice president, announced a matter of days later that of the 59 points proposed by the anti-Chávez block, 56 had already been agreed. These were the elements of a new economic policy, including price rises on basic goods and state support for private capital. Small wonder the head of Fedecámaras, the employers’ organisation, congratulated Maduro on his “flexibility”. In fact Maduro had already met with the leaders of private capital, specifically Lorenzo Mendoza, head of Venezuela’s biggest private food producer, the Polar company, late last year. The “peace meetings” throughout April and May produced only rises in the price of coffee, rice, chicken and other staples. Mercal, the subsidised food markets, held to the official prices, but according to the Central Bank, there was an 11 percent fall in the range of goods available there in 2013, and in 2014 the shortfall was 29 percent.
On May Day this year Maduro announced a 30 percent rise in the minimum wage. In 2008 the annual wage rise was consistent with inflation; in 2009–12 it fell short by 10 to 12 percent each year, in 2013 a 20 percent wage rise was set against 56 percent inflation and the rise in 2014 is well short of the anticipated end of year inflation rate of 75 percent. [10] To be more concrete, a monthly basket of basic food items, guaranteeing a daily intake of 2,200 calories, cost 3,700 bolivars at the end of 2013, with a monthly minimum wage at 2,972 bolivars. But this calculation is based on the cost of 50 food items bought at official prices – whereas the reality is that these goods (sugar, coffee, rice, maize flour) are normally only available at these prices in the subsidised markets – Mercal and PDVAL.
According to an analysis by Marea Socialista, 38 percent of the population live on between two and four minimum wages as family income, and 42 percent on less than two, and that does not take into account the 40 percent increase in transport costs that will come twice this year. This means that four fifths of the population are experiencing significant difficulties as inflation goes through the roof. The remaining 20 percent, many of who work within the state, include the people to be seen driving their enormous SUVs through the city and packing the extremely expensive restaurants whose prices, again according to the Central Bank, have risen by 800 percent in the last four years. These are the people who have access to dollars, through whatever channel, and to the things that the dollar can buy.
The key instrument of social and political control in Venezuela is the PSUV, the state party created by decree by Chávez in 2006. The model does not correspond in any way to the direct democracy that Chávez championed. It seems much closer to the centralised and authoritarian structures of the Cuban Communist Party – and to reflect the pervasive influence that Cuba enjoys in every area of the state. Since the Cuban party has held 11 congresses in its 54 years, it is hardly an exemplar of internal democracy or transparency. But it may be that the combination of a free market and a highly organised machinery of political control that characterises Cuba today is the structure that the Chavista leadership would like. One disturbing sign is the growing presence of military personnel across government and the state at all levels; the virtual criminalisation of protest (despite their earlier assurances that it was a constitutional right), and the repressive response exemplified by the forcible dismantling of the peace camps could presage an increasing militarisation of the state. That would be consistent with recent events, but absolutely incompatible with what most ordinary Venezuelans take to be the central ideas of Chavismo – solidarity, openness, democracy and the use of public resources for the general good.
The problem is that the resources needed to relaunch the economy are simply not available to the state. They will be found by turning to foreign investors like China and Russia or other foreign partners who have no commitment to or interest in a socialist project. They invest to accumulate. And there are two reasons to invest in Venezuela – one is to take part ownership of its oil, while the other is to seek cheap labour among a population whose share of national wealth is declining. Until now the political control exercised through the PSUV, through a combination of patronage, clientelism and tough local organisation, plus the memory of a sanctified Chávez, have held the society together. But there is discontent at the grass roots.
Last year there were 3,000 protests, local strikes and land occupations. The struggles of indigenous communities, for example, have been ignored by government and media. The case of Sabino, a leader of the Yukpa people in the state of Maracaibo who are fighting to defend their ancestral territory against the invasions of the state-owned coal giant Carbozulia, is emblematic. Sabino was murdered and his family continue to be persecuted.
All of this demonstrates that the community organisation that so excited outside observers in the early years of the Bolivarian Revolution has long since been incorporated and undermined. But the discourse of independent mass organisation still circulates, albeit often cynically employed to veil reality. And there is a collective memory of struggle and resistance from before the Chávez years. The profound disappointment that many good activists and revolutionaries feel now is wholly understandable, but the left remains disoriented and disarmed by the contradictions of Chavismo. Yet it is the very same activists and socialists who must lead the coming struggles from below, through the trade unions and genuinely democratic grass-roots organisations.
While the Chavista government strives to present a united face, it is no secret that the government contains power groups battling to place themselves in the best position for any future handover of power. While the government’s ownership of the majority of the media [11] ensures that uniform messages are transmitted across the board, there is a growing sense of urgency in government pronouncements. Most importantly, the economic situation is untenable. Foreign airlines are threatening to stop flying to Venezuela if the government does not repay the $5 billion it owes them. The US is, of course, exploiting the situation. The right is watching, and the MUD is collaborating.
And what of the revolution? For the moment the great collective impulse of the early days of Chavismo has given way to a kind of passivity, a politics determined and dictated from above that serves only the interests of an entrenched, self-serving ruling bureaucracy.
While Chávez may continue to be the reference point for future struggles, his role and its contradictions have to be part of the recovery of a tradition of resistance that predated him, which he identified with and celebrated, but which in the end he distanced himself from to create an imprisoning apparatus of power. It is that tradition that has to be recovered, and quickly, if the mass movement, in his name or not, is to resist the depredations and demands of a capitalism that, under whatever party colours it organises, can only survive at their expense.
1. I have addressed Chávez’s career and his years in power in detail in my biography (Gonzalez, 2014).
2. About a year and a half ago it was announced that more cars were to be imported and that people could put down a deposit to get one of the first. Huge queues formed at the car dealerships. A week ago a demonstration was called demanding to know where the cars or the money were – neither had appeared. On pensions, a friend applying for their old age pension was told that, although it was a right, nothing had been processed through the pensions office for the last year and a half.
3. Although there are no official figures, government spokespeople repeated the figure in subsequent statements.
4. According to the Central Bank, cement was the only industry that increased production in 2013. Yet it is virtually impossible to find, and is sold on the black market for ten times its official value. What are being sold in most cases seem to be materials belonging to the state.
5. This was discussed at length by Stalin Pérez Borges of Marea Socialista and a key leader of the trade union left, in his radio programme rebroadcast on www.aporrea.org.
6. The demonstrations of health workers calling for emergency government intervention in the health sector were ignored-despite the fact that hospital drugs and equipment are regularly stolen by armed gangs marauding through the hospitals.
7. See Guerra, 2013, pp. 95–100. Guerra, it will be argued, is no friend of Chavismo. But his analysis is solid and well referenced.
8. El Comercio, 15 April 2014. This is a newspaper independent of the Venezuelan state, but one that produces reliable economic information on a weekly basis.
9. To give just one, typical, example, Maduro’s wife, ex-president of the National Assembly, has given 64 of her relatives jobs there.
10. See the special issue of Marea Socialista, April 2014, and the article En defensa de la Renta Petrolera y la Soberanía Económica published on 8 May 2014 at www.aporrea.org/trabajadores/a187736.html.
11. Here I should acknowledge my argument in earlier articles for this journal that there existed a considerable space for private media to exist and to criticise. It was still true then – it is no longer true today.
Gonzalez, Mike, 2014, Hugo Chávez: Socialist for the Twenty-First Century (Pluto).
Guerra, José, 2013, El Legado de Chávez (Ed Libros Marcados).
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