[News] Revolution, Counter Revolution, and the Economic War in Venezuela

[Anti-Imperialist News]

  Revolution, Counter Revolution, and the Economic War in Venezuela: Part I

By William Camacaro and Frederick B. Mills, January 27th 2015
http://venezuelanalysis.com/analysis/11170

*Introduction: A Decisive Battle is at Hand*

In a speech outside the Miraflores palace on January 17, 2015, upon his 
return from a twelve day trip abroad, President of the Bolivarian 
Republic of Venezuela Nicolas Maduro Moros addressed an expectant crowd 
of well wishers. Seizing the moment in the midst of an economic crisis 
and an intense opposition campaign against his administration, Maduro 
spoke with a renewed sense of confidence and determination: “This 
economic battle is decisive. We have the resources, the organized people 
[/pueblo organizado/], the historic project, the only one that exists in 
Venezuela. We have the force, moral and spiritual. We have the historic 
purpose. I am calling for meeting the challenge of the rebirth of the 
economy of the country.” Just days earlier, perennial presidential 
candidate of the opposition coalition (Democratic Unity Roundtable, MUD) 
and leader of the right wing Justice First party, Henrique Capriles 
Radonski <http://venezuelanalysis.com/news/11162>, argued that the 
combination of falling oil prices and scarcity of basic consumer goods, 
constituted “a perfect storm for changing the government.” As rumors of 
an imminent coup against Maduro spread and predictions of economic 
collapse appear in the some of the corporate international press 
<http://www.forbes.com/sites/christopherhelman/2014/02/20/cheap-gasoline-why-venezuela-is-doomed-to-collapse/>, 
the broad spectrum of Chavismo is circling the wagons around the 
revolutionary project.

Venezuela is not alone, as over the past year there have been 
expressions of solidarity with the Maduro administration from the Union 
of South American Nations (UNASUR), the Bolivarian Alliance for the 
Peoples of Our America(ALBA), the G77 plus China, and the Non-Aligned 
Movement as well as from progressive forces from around the world. At 
the height of the /guarimbas /(violent demonstrations) during the first 
quarter of 2014, the majority position of the Organization of American 
States (OAS) too came down on the side of the constitutional order. The 
late President Hugo Chávez and now Maduro have played leadership roles 
in the regional associations of Latin American independence and 
integration; for this reason social movements, Afro-descendant and 
indigenous peoples, and peasants and workers throughout region are among 
the stakeholders in Venezuela’s revolutionary project.

A great deal hangs in the balance with regard to the feasibility of 
advancing a democratic socialist project while under the continuous 
attack of a U.S. backed opposition, elements of which are bent on 
restoring the neoliberal regime. One gets the sense that a decisive 
battle is underway for the political future of Venezuela and indeed, for 
the cause of sovereignty throughout the region. For all of these reasons 
Maduro’s annual address to the nation (/Memoria y Cuenta/) on January 
21, 2015 held special weight as Venezuelans and international observers 
heard the government’s vision for the way forward.

Last Wednesday, President Maduro gave his annual address before the 
national assembly and the country (/Memoria y Cuenta/), in his role as 
head of state during the year 2014. He made his way, walking along the 
streets towards the National Assembly amid the enthusiastic greetings 
and embraces of a great multitude of followers. Addressing the nation, 
he said: “In the year 2015 we will implement a special plan of 
protection for Venezuelan families through the Great Mission of the 
Households of the Country, having as our objective to protect, through 
holistic policies, the attention given to children, and to increase 
pensions for families and in particular for Venezuelan women.” The 
government of Venezuela understands that in the face of the difficult 
economic situation it has to fortify, not retrench, the social programs 
that benefit the most needy. The Maduro administration is committed to 
maintaining the Grand Housing Mission that up to now has built 673,416 
housing units and it has approved the resources to build 400,000 more 
housing units this coming year. It has also promised to increase the 
number of scholarships and pensions as well as increase the minimum wage 
by 15 percent and preserve the Food Mission. “This is a holistic 
strategy: protect the family, the households of the country, our young 
students; advance our powerful Housing Mission of Venezuela which also 
will generate a great amount of economic development; advance the 
powerful Great Mission New Barrio--Tri-Color (housing renovation 
project); to continue the social development of our country,” emphasized 
Maduro. At the same time, Maduro ordered the immediate inspection of all 
of the food distribution networks of the country and threatened to bring 
the full weight of the law against those who continue the economic 
sabotage. At this writing (January 22) the Minister of Commerce, Isabel 
Delgado 
<http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/gobierno-se-reunira-con-las-cien-distribuidoras-ma.aspx> 
announced that the government is meeting with 100 of the country’s 
largest producers and distributors at the Miraflores Palace to discuss 
distribution issues in the coming days.

This essay will offer a briefing on the current political standoff in 
Caracas and argue that only an effective counter offensive by the 
government, with the support of the popular sectors, can push back the 
opposition economic coup underway in Venezuela and start the country 
down the arduous road to economic recovery. By distinguishing the 
anatomy of the coup in Chile in September of 1973 from the short lived 
coup in Venezuela in April of 2002 and by reviewing the use of food as a 
political weapon during the oil strike in Venezuela from December 2002 
to March 2003, we aim at interpreting the dialectic at work in the 
present confrontation between revolution and counter revolution in this 
South American nation.

 1.

    *Overview of the Current Political Climate in Venezuela*

Both the opposition coalitionMUD 
<http://www.lanacion.com.ve/politica/mud-hara-anuncios-este-viernes-23-en-una-convencion-nacional/> 
on the one hand, and the United Socialist Party of Venezuela 
<http://www.eluniversal.com/nacional-y-politica/150120/venezuelan-pro-government-march-on-january-23> 
and allied parties on the other, are now preparing to mobilize their 
constituents for demonstrations during the third week of January, 
marking the anniversary of the overthrow of the dictatorship of Marcos 
Pérez Jiménez on January 23, 1958. While it appears that the MUD has 
moved its march to the 24th, the Venezuelan newspaper /El Universal/ 
<http://www.eluniversal.com/nacional-y-politica/150121/estudiantes-de-anzoategui-anunciaron-concentracion-pacifica-para-el-23> 
has confirmed a number of anti-government student demonstrations are 
planned in Sucre, Mérida, Zulia, Guayana, Táchira, Carabobo, and Miranda 
on the 23rd. The 23rd of January has cultural significance because it 
marks a break in Venezuelan history, when a dictatorship gave way to a 
power sharing arrangement between the major political parties (AD, 
COPEI, URD) called the pact of Punto Fijo or /puntofijismo/. This 
representative democracy (also referred to as the Fourth Republic) 
advanced the interests of transnational capital and the ruling class of 
Venezuela. It was characterized by routine rampant corruption and the 
prevalence of poverty for more than half the population.

At this writing, theUnited Socialist Party of Venezuela (PSUV) 
<http://www.google.com/url?q=http%3A%2F%2Fwww.psuv.org.ve%2F&sa=D&sntz=1&usg=AFQjCNHX55MMdt2Je6JRjlBOzyMfzLVf-g>has 
called for a “march of the undefeated” in west Caracas, “in honor of 
those who were assassinated and persecuted by the fascist right during 
the governments of the fourth republic.” The MUD 
<http://globovision.com/mud-convoca-marcha-de-las-ollas-vacias/> has 
called on its followers to participate in an anti-government 
demonstration in Caracas on the 24th of January which it designates as 
“the march of the empty pots, against hunger and for change.” The MUD 
action is also a protest against “scarcity, the lines, the insecurity, 
and the repression.” It appears that the MUD will transmit a message “to 
the nation” on the 23rd with a proposal for change. The 23rd and 24th of 
January are therefore set to be days of struggle for the hearts and 
minds of Venezuelan constituent power.

/1.2 The Psychological War/

In addition to an economic war, some political analysts suggest that 
there is also psychological warfare being perpetrated by the opposition 
press and rumor mill. Oscar Schémel 
<http://www.hinterlaces.com/analisis/hinterlaces/schemel-67-cree-que-un-estallido-social-empeoraria-la-situacion>, 
President of Venezuelan polling firm and think tank /Hinterlaces/ argues 
that the psychological campaign is aimed at the neurotization of the 
public:

One of the variables on which these campaigns are based is the 
exacerbation of the problems, the exaggeration of the problems, mediated 
by a campaign of rumors to generate a climate of anxiety. After just a 
week on the queues, people were buying candles, in addition to food, 
because they heard that a coup was coming, because there was going going 
to be a magnicide, because there was going to be generalized looting, 
because there was going to be a social explosion. This generates anxiety 
and this anxiety does not disappear but accumulates.

Although, observes Schémel, this sort of strategy has worked at bringing 
about a social explosion in other countries, it will not work in 
Venezuela: “This accumulation of anxiety in Venezuela does not generate 
a neurotic response because Venezuelans think that chaos or violent, 
irrational, unconstitutional exits can make the situation worse.”

Instances of the sort of rumor mongering observed by Schémel can be 
found in the opposition press. For example, /El Nacional/ published an 
opinion piece by journalist Marianella Salazar 
<http://www.el-nacional.com/opinion/Llegamos-llegadero_0_555544619.html> 
which lays out the details of an alleged military conspiracy to force 
Maduro to resign and seek asylum in Cuba where Raul Castro has already 
allegedly agreed to receive him! Here is how Salazar speculates that the 
plot might then unfold: “on the agenda for the transition has emerged 
the name of General Raúl Baduel. Although he is in the military prison 
of Ramo Verde, he has /auctóritas /in the heart of the Bolivarian Armed 
Forces and they consider him a conciliator without intentions of 
installing a military dictatorship.” Among the outcomes of such a coup 
is that Venezuela could then “leave the China Fund and go to the 
International Monetary Fund.” The author also imagines that should 
General Baduel take the helm of the executive branch of government he 
would “avoid the Caracazo.” Perhaps this is supposed to give readers 
comfort. The /Caracazo/ refers to an uprising originating in the poorer 
sections of Caracas in February 1989 in response to an IMF “structural 
adjustment package” imposed by then President Carlos Andrés Pérez. Pérez 
responded by declaring a state of emergency and between 300 and 3000 
Venezuelans were killed by the security forces. /Yet a return to the IMF 
is just what Salazar has in mind! /

/1.3 Polarization versus Accommodation /

These sorts of economic and psychological opposition campaigns are not 
new to Venezuelan politics. Since Hugo Chávez was elected President in 
1998 the counter revolution has been relentless in its quest to bring 
about regime change, with hard liners willing to deploy terrorist 
attacks and sabotage. Each onslaught by the ultra right has been 
deterred by the civic military alliance that has continued to back the 
constitutional order to this day. But is this time different? Are we 
witnessing the eve of another break in history, one that will restore a 
rehabilitated version of the neo-liberal regime of the fourth republic? 
Or will the Bolivarian cause weather yet another political and economic 
storm?

The last fifteen years show that Chavismo does not strengthen its 
position by negotiating with the right but by confronting it. After the 
April 2002 coup Chávez resorted to conciliation and compromise to no 
avail. Something similar has happened during the Maduro administration. 
After narrowly winning the presidential election in April of 2013, the 
opposition presidential candidate refused to concede the electoral 
victory to Nicolas Maduro and urged his followers to “drain the 
outrage.” The opposition waged an unsuccessful international campaign to 
delegitimize the outcome of the presidential election and an estimated 
eleven Chavistas were killed by anti-government extremists. Yet Maduro 
called for dialog with the opposition, and UNASUR as well as the Vatican 
helped to mediate the discussions. Maduro took some heat from the left 
for these talks and the shortages and price gouging only continued.

Later in the year (2013), Maduro launched an offensive to enforce price 
controls and anti-hoarding laws. While evoking the antipathy of big 
business, such measures may partly account for a recovery in the 
electoral base of Chavismo in time for the municipal elections in 
December that year. The PSUV and their allies won about three quarters 
of the municipalities <http://venezuelanalysis.com/news/10227> in the 
December 2013 municipal elections 
<http://www.coha.org/the-municipal-elections-in-venezuela-as-a-plebiscite-on-chavismo/>. 
In what opposition leader Capriles had vowed would be a plebiscite on 
Chavismo, the PSUV and its allies together also won the popular vote by 
a margin of about 6.5 percent. Of course, a year later things are 
different: the economy is in recession and despite intensified 
government efforts to curtail contraband, speculation, and hoarding 
<http://www.coha.org/venezuela-achieves-progress-in-its-battle-against-contraband/>, 
the shortages have persisted.

A poll released in October 2014 by Venezuelan Institute of Data Analysis 
(IVAD) 
<http://www.eluniversal.com/nacional-y-politica/141213/drive-for-constituent-assembly-the-best-option-in-store> 
shows an erosion in the public approval rating of President Maduro 
though the think tank and polling firm Hinterlaces 
<http://www.hinterlaces.com/analisis/politica/oscar-schemel-describe-los-principales-factores-politicos-de-2015> 
maintains that the opposition is in no better shape with regard to 
public confidence. In terms of the mood of the electorate, Venezuelan 
journalist Eleazar Díaz Range 
<http://www.correodelorinoco.gob.ve/nacionales/desabastecimiento-colas-y-escasez-pueden-incidir-conducta-venezolano-cara-a-elecciones-parlamentarias/>l 
<http://www.correodelorinoco.gob.ve/nacionales/desabastecimiento-colas-y-escasez-pueden-incidir-conducta-venezolano-cara-a-elecciones-parlamentarias/> 
argues that the shortages could provoke apathy among voters and 
therefore influence the outcome of the upcoming parliamentary elections. 
He urges that Maduro needs more effective “political communication and 
to execute what he promises.”

To be sure, there are indeed signs of some dissatisfaction with the 
government response to the shortages even in the popular barrios. But 
this does not necessarily translate into widespread disaffection. Those 
who are prepared to write the obituary on Chavismo will probably join 
their like-minded predecessors of the last fifteen years in 
underestimating the driving force behind the Bolivarian revolution: the 
millions of formerly excluded constituents, now protagonists in a 
politics of liberation, who will not easily succumb to military, 
economic, or parliamentary coups, the success of which they reasonably 
suspect would once again relegate them to the margins of social and 
economic life.

*2. Historical Precedents*

/2.1 Venezuela Compared to Chile in 1973/

The situation on the ground today in Venezuela, in particular the 
shortages of basic goods, is in some respects analogous to the the 
conditions leading up to the 1973 coup against the democratically 
elected socialist government of Salvador Allende in Chile. A major 
tactic of the right-wing Chilean opposition and the Nixon administration 
was to "make the economy scream" by provoking food shortages, a truckers 
strike, and mayhem in the streets. Researcher Peter Kornbluh, in /The 
Pinochet File: A Declassified Dossier on Atrocity and Accountability/, 
summarizes declassified cables that indicate in the days preceding the 
overthrow of Allende a terrorist paramilitary group and a “large 
segment” of the business community were “undertaking actions to increase 
discontent and incidents of violence...in order to create an atmosphere 
in Chile which would be propitious for a military coup” (2003, p 91).

A similar game plan was played out, albeit unsuccessfully, during the 
short lived coup against Chávez in April 2002. In the months leading up 
to the coup there was a fall in oil prices, an economic slowdown, 
growing resentment within the PDVSA management over government 
interventions, and some erosion in Chávez’s approval ratings. A general 
strike called by the anti-government Federation of Venezuelan Workers 
(CTV) and the Venezuelan Federation of Chambers of Commerce 
(fedecámaras) on December 10, 2002 met with what Wilpert calls “moderate 
success” (2007, p. 23). The fedecámaras--Media--Military coup went into 
action on April 11 and by the afternoon of April 12 the most extreme 
elements within the golpista camp exhibited their brand of democracy. 
Political analyst Fernando Coronil describes the scene inside Miraflores 
Palace that day:

Pedro Carmona [then head of fedecámaras] proclaimed himself provisional 
president in the name of the law of Chávez’s constitution. Immediately 
afterwards he named some members of his cabinet, summarily dismissed the 
National Assembly, the state governors, and municipal leaders (all of 
them democratically elected), disbanded the Supreme Court, and fired the 
Attorney General and the People’s Defender. (2011, p. 49)

No sooner had this regime been sworn-in amidst a great deal of 
celebration and fanfare by the golpistas than the coup began to unravel.

The situation on the ground today in Venezuela, especially the shortages 
of basic goods, is reminiscent of the U.S.--backed coup that toppled the 
democratically elected government of Salvador Allende. That coup 
succeeded and Chile was subjected to a decade and a half of brutal rule 
by the Pinochet dictatorship. By contrast, the short-lived coup of April 
2002 against Chávez, once again supported by a U.S.--backed opposition, 
was derailed by an enormous show of popular power and by the loyalty of 
a majority of army and security forces. This reversal of a military coup 
was unprecedented in Latin America and it came as a great surprise to 
the Venezuelan golpistas. Since that time a persistent slogan of 
Chavismo has been that “for every April 11 there will be an April 13.” 
On January 17, 2015, Maduro urged 
<http://www.noticias24.com/venezuela/noticia/270821/presidente-maduro-llamo-a-la-union-del-pueblo-para-obtener-victoria-ante-la-guerra-economica/>: 
“In the face of this 11th of April in process, in the arena of economic 
sabotage, we need to wage an economic 13th of April….”

/2.2 The Oil Strike of December 2002 to March 2003/

The short lived 2002 coup against Chávez removed the military option 
from the arsenal of the counter revolution. Just months later, the same 
opposition groups launched an attempt at an economic coup against the 
Bolivarian government. Chávez had issued 49 laws by decree, a temporary 
power (the enabling law) granted by the National Assembly. Some of these 
laws, in particular those relating to land reform and oil industry 
policy, did not sit well with landowners and PDVSA. With the possibility 
of privatizing the state owned oil industry foreclosed by the 1999 
Constitution, Chávez sought to ensure that a substantial part of oil 
revenue would be directed towards social investment (referred to often 
as by Bolivarians as “paying the social debt”), but he was up against an 
entrenched group of oil executives that coveted their independence.

PDVSA management argued that Chávez was seeking to politicize PDVSA and 
undermine what it took to be a “meritocracy”. According to Gregory 
Wilpert’s history of the period, the company was unwilling “to go along 
with the government’s plans to increase taxes on the oil industry, to 
reduce costs, to increase transparency in its international operations, 
and to appoint a pro-Chávez board of directors.” Wilpert observes that 
this conflict came to a head during the April 2002 coup attempt “when 
PDVSA managers actively supported the coup by shutting down one of 
Venezuela’s main refineries during that crisis…” (p. 95). After a brief 
period of what Wilpert calls a “retreat” by Chávez in the aftermath of 
the coup, the opposition called for a “general strike” which led to “a 
combination of management lockout (of the oil industry), administrative 
and professional employee strike, and general sabotage of the oil 
industry” (25). It is important to note that in addition to placing a 
stranglehold on the country’s main source of export revenue, there were 
“food and gas shortages throughout Venezuela, mostly because many 
distribution centers were closed down” (25). In a move that brought most 
harm to the poor and working class, gasoline and food were being used as 
a political weapon against the Bolivarian project.

Richard Gott’s history of the Bolivarian revolution draws attention to 
the impact of deliberate food shortages during the oil strike: “The mass 
of the population bore the food shortages with equanimity. They 
tolerated the electricity blackouts, the oil scarcity, and the transport 
failures” (2011, p. 251). Historian Bart Jones (2007) also describes the 
scene and Chávez’s decisive actions at the time:

The situation was desperate. Gasoline supplies were dwindling, and 
service stations were closed. So Chávez did something else previously 
unthinkable in a nation with some of the world’s largest oil reserves – 
he imported gasoline. He contacted Brazil, Trinidad and Tobago, Mexico, 
Russia and other countries to ask them to send what they could. When 
basic foods grew scarce, he cobbled together another informal supply 
network, persuading Colombia The Dominican Republic, and others to send 
rice, flour, milk, meat and other products. (p. 378)

After weeks of an industry lockout and acts of sabotage against PDVSA 
infrastructure Chávez went on the offensive, using troops to stop the 
hoarding of food and to keep schools and banks open (254). The 
opposition attempt to cripple the oil industry did not sit well with the 
military, who were called in to secure the facilities. The management of 
PDVSA was replaced and an overall 18,000 (almost half the workforce) 
lost their jobs.

The oil lockout and the subsequent government takeover of the management 
of PDVSA struck a great blow against the economic power of the 
oligarchy. As George Ciccariello-Maher points out in /We Created 
Chávez/, /A People’s History of the Venezuelan Revolution/:

If the reversed coup marked the /political/ destruction of the 
anti-Chávez opposition, then the defeat of the oil lockout effectively 
crushed the opposition’s /economic /power, wresting the national oil 
company PDVSA--often referred to as a ‘state within a state’ as a result 
of its /de facto/ autonomy--from their greedy hands to be put instead 
into the service of the Revolution. (2013, p. 181)

Ciccariello-Maher also documents, through interviews with activists who 
resisted the oil strike, that pro-Chavista workers played a role in 
taking back control of the oil installations from striking managers and 
workers (p. 182). Another account by a PDVSA insider, former PDVSA 
president (2004 - 2014) and currently Venezuela’s ambassador the the 
United Nations, Rafael Ramírez, supports this view:

In the petroleum industry something very interesting happened. Being a 
vertical organization the workers knew who had given the instruction to 
bring the industry to a hault. So just as on April 13, the patriotic 
soldiers and officials rebelled against the senior military officials. 
The patriotic workers and managers rejected the indications of their 
bosses who were committed to sabotage. The petroleum meritocracy was 
very arrogant and demeaning towards the people [/pueblo/]. (German 
Sanchez, 2012, p. 283)

It is important to note that popular power ensured the return of the 
democratically elected government of Chávez to power in 2002 and 
defended the government again during the oil strike in 2002-2003. These 
events occurred prior to the implementation of the social missions later 
in 2003. These are the social programs that have done so much to reduce 
economic inequality in the country, alleviate poverty and increase 
access to education, healthcare, and housing for millions of formerly 
excluded Venezuelans. It appears that the popular sectors had cast their 
lot, despite the trappings of economic and psychological warfare, for 
staying the Bolivarian course rather than opting for a restoration of 
the neoliberal regime.

The damage wrought by an attempt at an economic coup by crippling the 
oil industry was devastating. According to Jones (2007) “Production 
plummeted to as little as 150,000 barrels a day, compared with normal 
output of 3 million a day. Exports typically averaging 2.5 million 
barrels a day dropped to next to nothing” (p. 379). Furthermore, Jones 
writes that “the economy nearly collapsed, contracting by 27 percent in 
the first fourth months of 2003” (p. 386).Jones puts the total cost to 
the oil industry of the lockout at $13.3 billion USD (2007, p. 386). 
Economist Alfredo Serrano Mancilla indicates that by the end of the 
strike unemployment shot up to 20.7 percent and about 700,000 jobs were 
lost. Many small and medium size businesses went bust because they 
depended for their supplies on businesses under the umbrella of the 
opposition Fedecámaras. Poverty reduction that had been underway since 
1998 suffered a reversal that could not be effectively remedied until 
the implementation of the missions established in the aftermath of the 
oil strike in 2003 (pp. 308-310).

After the oil strike, the opposition regrouped and within months Chávez 
faced a recall referendum in which he won a resounding victory. On 
August 15, 2004, 5,800,600 (59.25 percent) voted for Chávez and 
3,989,000 (40.74 percent) voted for recall. So in just a three year 
period, the Bolivarian revolution faced down a military coup, an 
economic coup and constitutional referendum by an opposition that sought 
regime change even this meant resorting to extra constitutional means. 
As a result, argues Ciccariello-Maher, the revolution only became more 
radicalized and determined.


  Part II

By William Camacaro and Frederick B. Mills, January 27th 2015
http://venezuelanalysis.com/analysis/11171

*3. The Economic Model Must Change*

Today there is universal agreement among both the broad spectrum of 
Chavismo and the various factions of the opposition: Venezuela is facing 
an economic crisis, perhaps even an emergency, that requires urgent 
“rectificación”. While high inflation, a broken currency exchange 
system, and falling oil prices have indeed been urgent issues, the 
scarcity of basic goods reached crisis proportions in the days preceding 
and during Maduro’s trip abroad and still stands in need of a 
sustainable remedy. The government and the opposition approach these 
problems from radically different perspectives and propose dialectically 
opposed solutions. Something has to give, and give soon.

/3.1 The MUD--Fedecámaras Position/

The opposition MUD--Fedecámaras position is that the current economic 
crisis can be resolved by free market oriented reform. Fedecámaras has 
called on the government to respect private property rights, repeal the 
Law of Just Prices 
<http://globovision.com/fedecamaras-zulia-pide-eliminar-la-ley-de-precios-justos/>, 
deregulate the economy, correct the “excesses” of Labor Law, and 
establish one floating exchange rate. The director of the Chamber of 
Commerce of Caracas, Victor Maldonado 
<http://www.fedecamaras.org.ve/detalle.php?id=2726>, maintains that “If 
we begin to make these corrections today in the economy in the medium 
term one will see the results.” Fedecámaras representatives also blame 
some of the scarcity of consumer products on a lack of sufficient 
/divisas/ (dollars) 
<http://noticiaaldia.com/2013/01/desabastecimiento-es-por-falta-de-divisas-fedecamaras/> 
available at preferential exchange rates for the import sector.

For Capriles Radonski 
<http://www.bloomberg.com/news/2015-01-14/capriles-calls-for-united-venezuela-opposition-as-crisis-deepens.html>, 
Venezuela is facing a state of emergency on account of a failed economic 
model and therefore the game is up for the Bolivarian project. On 
January 14 he called for a divided opposition to unite in the common 
cause of a “constitutional” change of government. His call appears to 
have gotten some traction. On January 18, Jesús Torrealba 
<http://www.lanacion.com.ve/politica/mud-hara-anuncios-este-viernes-23-en-una-convencion-nacional/>, 
executive secretary of the right wing MUD, announced that the various 
factions within the MUD have united: “This (situation) is grave and for 
this María Corina [Machado], [Leopoldo] López and [Henrique] Capriles 
are in agreement.” Torrealba also said that on the 23rd of January the 
opposition will march and go “where the /pueblo/ are, where there is 
urban and rural poverty, we recall that 54% of the population live in 
the barrios.” [As we noted above, the MUD demonstration appears to have 
been changed to January 24.]

/3.2 The Government Position/

The government position is that basic commodity shortages are being 
caused by elements of the private sector that control the importation, 
production and distribution of food and other products and criminal 
speculators and smugglers who are sometimes allied with this sector. 
These actors are allegedly responsible or complicit in the illegal 
stockpiling of products in warehouses aimed at bringing about artificial 
shortages. There is empirical evidence for such claims. Thousands of 
tons of products, including subsidized items, have been diverted from 
the marketplace for sale in Colombia in 2014. Warehouses full of goods 
that ought to be on store shelves are frequently discovered by the 
authorities. Subsidized food items are often purchased by speculators 
for resale at higher prices in the domestic market. Some importers have 
been buying products at the subsidized currency exchange rate but then 
selling those products as though they were purchased at the much higher 
parallel rate. Fictitious “importers” are also blamed for massive 
amounts of currency fraud by obtaining /divisas/ (dollars)at the 
preferential exchange rate under pretext of importing priority goods and 
then selling those dollars on the parallel market or holding on to them 
in expectation of further devaluation of the bolivar, a practice that 
suggests the corruption of some public servants as well.What are we to 
make of these observations about scarcity?

To be sure, the government has made its share of mistakes in managing 
the economy and Maduro has made it clear in his address to the nation 
(/Memoria y Cuent/a) on January 21 that some changes to economic policy, 
and in particular the currency exchange system, will now be implemented 
as part of an Economic Recovery Plan 
<http://venezuelanalysis.com/news/11122>. There is empirical evidence, 
however, reported with some frequency in Venezuelan newspapers and by 
Venezuela Analysis <http://venezuelanalysis.com/news/11158>, that while 
some of the hoarding, reselling, and speculation is likely being 
perpetrated by opportunists, there is also collusion by the private 
sector. So there is /an economic war underway in Venezuela aimed at 
producing leverage through scarcity to scale back government price 
controls and labor protections and cause disaffection with the 
government./ As the President of Fedecámara, Jorge Roig remarked, during 
a recent interview 
<http://www.correodelorinoco.gob.ve/nacionales/jorge-roig-confiesa-colas-duraran-hasta-que-gobierno-siga-atacando-a-empresa-privada/> 
with journalist Vladimir Villegas: “how long will the lines last? As 
long as the government continues to attack private enterprise.”

For Maduro, the game is up for the economic coup being waged by the 
political opposition and its allied collaborators in the private sector. 
He has delivered an ultimatum to food distributors to cooperate with 
efforts to overcome food shortages and in his January 21, 2015 address 
to the nation (/Memoria y Cuenta/) vowed to immediately launch an all 
out effort to bring the diversion of commodities from the marketplace 
under control. This means that the government will more aggressively 
enforce laws against hoarding, continue to intercept contraband, and 
move to alleviate panic buying. There is growing pressure on the Maduro 
administration to also increase prosecutions of those committing 
currency fraud, including collaborators in the state bureaucracy, and to 
allow an independent audit of the currency exchange transactions. The 
state, backed by workers, is also expected to continue to support the 
resumption of production in plants abandoned by the owners.

/3.3 The Economic Model Debate/

Opposition leader Capriles is certainly correct that the current 
economic model is not sustainable, but what is that model? While there 
has been a great deal of state intervention in the economy and 
significant social investment through the missions under Chavismo, 
Venezuela is still largely a capitalist country, and food imports and 
distribution, despite the growing number of cooperatives and socialist 
or mixed run enterprises, is still mostly in private hands. /So the 
debate is not over whether the economic model has to be changed, all are 
agreed, but in what direction: should there be more or less social 
control over the means or terms of the production and distribution of 
goods and services?/

As Venezuelan philosopher Carlos Lanz points out, the problem of 
scarcity and price gouging is not an aberration but a symptom of what he 
has called “the model of speculative accumulation” being imposed by the 
major food distributors and importers, a model that drives the economic 
war and is the major cause of scarcity in this South American country 
today (Email communication, 01-19-2015). The so called “economic war” is 
not just something being waged by elements of the private sector. It is 
at least in part an expression of the contradiction between the interest 
of capital in maximizing profits and the interest of labor in a more 
equitable distribution of socially produced wealth and of the income 
generated by the nation’s natural resources. In this light, one can 
interpret management induced production slowdowns and hoarding as a form 
of leverage to obtain concessions from the state on the repeal of price 
controls and to rein in some of the legal guarantees that favor labor 
over private interests. Maduro has taken a firm stand on the answer to 
this question in his speech to the nation on January 17 and again on 
January 21, 2015: “It is necessary to further advance the model, not to 
change it.”

*4. The Balance of Forces *

The announcement by the MUD of a march that would enter the Chavista 
strongholds in Caracas on January 23 (a march that we indicated might 
not take place) drew a quick response from the mayor of Caracas,Jorge 
Rodríguez <http://www.antv.gob.ve/m9/ns_noticias_antv.asp?id=58422>: the 
MUD does not have permission to realize any sort of gathering in the 
municipality of Libertador this 23rd of January. “We will not permit 
demonstrations of a violent nature in the municipality of Libertador. 
How does one believe the opposition, that they are going to develop a 
peaceful demonstration if up until now they have not done this…. It is 
inadmissible, we have the obligation to protect the physical integrity 
of the inhabitants and the property” he emphasized. Rodríguez also 
indicated that the security forces are prepared for whatever irregular 
situation that might be posed by the opposition. “We have to assume as 
though it were an equation, that the opposition will behave in a violent 
manner.”

Historic memory probably plays some role in Rodríguez’s decision to deny 
permission to the opposition march to enter his municipality. On the 9th 
of April 2002, fedecámaras, together with the CTV called for a general 
strike to force the resignation of then President Chávez. The march 
calling for the general strike congregated on the 11 of April 2002 at 
the main headquarters of the PDVSA. From there the then president of of 
the CTV said in an impassioned manner: “I do not rule out the 
possibility that this crowd, this human river, marches to Miraflores to 
expel the traitor of the Venezuelan people” (see Jones, 2007, p. 319). 
They marched up to the areas near to the Miraflores palace with the 
permission of the then mayor of Caracas, Alfredo Peña who was part of 
the opposition. In hindsight, this march arguably had as its objective 
the creation of chaos, assassination, and eventually the justification 
of a /coup d'état/. On the heels of a violent attempt at extra 
constitutional regime change earlier last year, and amid rumors of an 
imminent coup, the municipality of Libertador has decided not to lend 
itself at this time to the contingencies of an opposition march that may 
harbor, however unintentional, similar golpista elements.

Both the Maduro administration and the MUD now seek to augment their 
respective bases of support especially among the undecided and 
disaffected voters who will determine the outcome of the upcoming 
parliamentary elections. The opposition has suffered divisions over the 
past year between the more moderate forces open to dialog with the 
government and committed to liberal democratic procedures, and the 
hardliners who want to defeat the Bolivarian cause even if it takes 
extra constitutional means. The MUD defeat at the polls in the nominal 
“plebiscite” municipal elections of December 2013 led to the resignation 
of the executive secretary of the MUD and a leadership vacuum. Just 
months later national polls indicated that the large majority of 
Venezuelans (88 percent 
<http://www.hinterlaces.com/analisis/politica/67-muestra-opinion-desfavorable-del-gobierno-de-eeuu>) 
rejected the violence at the barricades. After these setbacks, it 
appears that the major players within the opposition, at least according 
to the new MUD executive secretary Jesús Torrealba, have regrouped and 
now seek to win seats in the upcoming parliamentary elections as part of 
an effort to bring about a change of government.Capriles has recognized, 
perhaps more than his colleagues in the MUD, the importance of winning 
over at least some of the traditionally pro-government electorate in 
order to garner enough votes to retake the legislative and executive 
helm of the liberal democratic state. One of the slogans that the MUD is 
presently using in this regard: “Chavista Comrades, Unite With Us.”

The Maduro administration, in the midst of an economic crisis 
exacerbated by plummeting oil prices, has been taking heat from both a 
determined opposition and Chavista dissidents who think he has been 
moving too slowly in advancing the transition to socialism 
<http://www.coha.org/chavistas-deliberate-on-the-way-forward/> according 
to the Plan de la Patria (2013 - 2019) 
<http://www.nicolasmaduro.org.ve/programa-patria-venezuela-2013-2019/>. 
Independent community media and a number of leading Chavista public 
intellectuals such as Luis Britto García, José Vicente Rangel, and 
Gonzalo Gómez have articulated an analysis that is not persuaded the 
government is principally responsible for the scarcity of basic goods, 
on the contrary, they express no doubt that there is an economic war 
being waged against the government. But as the keen observer and analyst 
of Venezuelan public opinion, President of Hinterlaces, Oscar Schémel 
points out, the government still has to communicate a stronger case, 
through deeds, that it can effectively deal with the economic crisis. If 
it can achieve this objective promptly, the government can shore up its 
electoral base in time for the parliamentary elections.

Another important factor in considering the current balance of forces is 
the /civic military unity /built by the late Hugo Chávez. This alliance 
was instrumental in reversing the coup of April 2002 and it ended the 
oil lockout and economic war of 2002-2003. This unity was demonstrated 
once again during the first quarter of 2014 when the /guarimbas /failed 
to gain a foothold in the popular barrios. These events indicate that 
without the support of the popular sectors the military is highly 
unlikely to intervene on behalf of imperial and oligarchic interests.

Perhaps most important to shoring up the government’s immediate fiscal 
position was the recent CELAC--China conference in Beijing and President 
Maduro’s twelve day international trip. Maduro has secured agreements 
with China (about 20 billion dollars in investments 
<http://venezuelanalysis.com/news/11143>) and other countries that have 
given some needed oxygen to Venezuela’s federal budget. Although Maduro 
did not bring home an OPEC agreement, the trip at least set the stage 
for a meeting next week in Caracas of technical teams from OPEC 
countries 
<http://www.telesurtv.net/news/Comisiones-tecnicas-de-paises-petroleros-se-reuniran-en-Caracas-20150118-0001.html>with 
the goal of reaching “global consensus on petroleum prices.” At a time 
when the U.S. is imposing unilateral sanctions on Venezuela, Maduro’s 
trip has also fortified his relationships with a number of nations and 
raised the profile of Caracas on the world stage. Moreover, Venezuela 
has the strong support of allies not only in Latin America 
<http://www.counterpunch.org/2015/01/02/approchement-between-the-united-states-and-cuba-and-sanctions-against-venezuela/>, 
but among the Non-aligned Movement countries as well.

While the images of long lines and empty store shelves are played over 
and over again in the international corporate media, there are other 
scenes that show another side to Venezuelan political reality. As the 
Worker-President Nicolas Maduro drove a bus through the streets of 
Caracas on January 17, upon his return from a twelve day trip abroad 
<http://www.correodelorinoco.gob.ve/foto-dia/asi-recibio-pueblo-al-presidente-maduro-fotos/>, 
he was greeted by well wishers at ten different points in the city. And 
as he walked to the National Assembly Building on the way to deliver his 
address to the nation on January 21, the streets were lined with 
cheering well wishers. There is indeed growing public resentment over 
the shortages and long queues as there was in 2002 and again in 2003. 
Nevertheless, in those cases popular power, at the critical hour, 
remained firmly on the side of the Bolivarian cause, despite the 
hardships caused by scarcity. The MUD is trying to capitalize on “the 
perfect storm” by whittling away at Chavista support for Maduro in the 
popular barrios, but this will be an uphill battle so long as the 
opposition retains the stain of the intensely unpopular April 2002 coup. 
As a number of political commentators have urged, it is most important 
now for Maduro to follow up on his announcements of remedies and reforms 
with more details and effective action if Chavistas are to achieve an 
electoral edge in the coming parliamentary elections. If the last 
fifteen years of the Bolivarian revolution are any indication of the 
future, then once again, just as during the coup of 2002 and the 
subsequent oil strike, the organized expressions of popular power will 
probably be decisive in determining the outcome of the present economic 
and political crossroad.

Note: Translations by the authors are unofficial.

See: Revolution, Counter Revolution, and the Economic War in Venezuela: 
Part I <http://venezuelanalysis.com/analysis/11170>

*References to Books:*

Ciccariello-Maher, G. (2013). /We Created Chávez: A People’s History of 
the Venezuelan Revolution./ Durham: Duke University Press.

Coronil, F. (2011). “State Reflections: The 2002 Coup against Hugo 
Chávez.” In Thomas Ponniah and Jonathan Eastwood, Eds. /The Revolution 
in Venezuela: Social and Political Change Under Chávez/. Cambridge, MA: 
Harvard University Press.

Gott, R. (2011). /Hugo Chávez and the Bolivarian Revolution/. New York: 
Verso.

Jones, B. (2007). !HUGO! /The Hugo Chávez story From Mud Hut to 
Perpetual Revolution/. Hanover New Hampshire: Steerforth Press.

Kornbluh, P. (2003). /The Pinochet File: A Declassified Dossier on 
Atrocity and Accountability/. New York: The New Press.

Mancilla, A. S. (2014). /El Pensamiento Económico de Hugo Chávez/. 
Spain: El Viejo Topo.

Sanchez, G.(2012). /LA NUBE NEGRA: Golpe Petrolero en Venezuela/. CA: 
Vadell Hermanos Editores.

Wilpert, G. (2007). /Changing Venezuela by Taking Power: The History and 
Policies of the Chávez Government/. New York: Verso.

-- 
Freedom Archives 522 Valencia Street San Francisco, CA 94110 415 
863.9977 www.freedomarchives.org
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