[News] Venezuela – A Last Warning - The assault against the Bolivarian revolution has intensified in the recent days and weeks

Anti-Imperialist News news at freedomarchives.org
Mon May 23 17:06:44 EDT 2016


http://venezuelanalysis.com/analysis/11985


  Venezuela – A Last Warning

By Jorge Martin – In Defense of Marxism , May 20th 2016

The assault against the Bolivarian revolution has intensified in the 
recent days and weeks. Editorials and front pages in US and Spanish 
newspapers are screaming about hunger in Venezuela and demanding the 
removal of the “dictatorial regime”. Ongoing scarcity problems have led 
to instances of looting. The right-wing opposition is attempting to 
trigger a presidential recall referendum, but is also threatening 
violent action and appealing to foreign powers, including in some case 
for military intervention. What is really happening in Venezuela and how 
can these threats be faced?

On Friday May 13th, Venezuelan president Maduro extended the “Economic 
Emergency Decree” which had given him special powers in January, and 
further decreed a 60-day State of Emergency which includes sweeping 
powers to deal with foreign military threats and to deal with problems 
of food production and distribution.

As was to be expected, the world’s capitalist media joined in a chorus 
of denunciation, screaming about a “dictatorship”, while one of the main 
right-wing opposition leaders, Capriles Radonski made a public appeal to 
disobey the decree. The threats, however, are very real. It is worth 
giving a few examples. A month ago,an editorial in the Washington Post 
<https://www.washingtonpost.com/opinions/venezuela-is-in-desperate-need-of-a-political-intervention/2016/04/12/d7071d98-00c9-11e6-9203-7b8670959b88_story.html> openly 
called for “political intervention” by Venezuela’s neighbours. At the 
weekend, former Colombian president Alvaro Uribe, at a “Concordia 
Summit” in Miami, made an open call 
<http://www.telesurtv.net/english/news/Colombias-Uribe-Calls-for-Armed-Intervention-in-Venezuela-20160513-0034.html> for 
the Venezuelan Armed Forces to carry out a coup or, failing that, for 
foreign military intervention against “the tyranny”.

The Venezuelan right-wing opposition has made repeated appeals 
<http://venezuelanalysis.com/news/11964> for the Organisation of 
American States to use its “Democratic Charter” to intervene against 
president Maduro. They feel emboldened by the successful removal of 
Dilma Rousseff in Brazil and want to go down the same road as soon as 
possible, by any means necessary, legal or illegal. Influential 
Venezuelan right-wing journalist and blogger Francisco Toro (editor of 
the Caracas Chronicles) has just written an article 
<http://www.caracaschronicles.com/2016/05/16/coups-constitutional-order/> openly 
discussing the pros and cons of a coup, which he says would be within 
the constitution and “The Opposite of a Crime”.

Today, the Venezuelan government reported violation of the country’s 
airspace by US military aircraft.

In an attempt to capitalise on the severe economic problems the country 
is facing, the reactionary opposition has been busy trying to create a 
situation of chaos and violence which would justify a coup or foreign 
intervention to expedite the removal of president Nicolás Maduro. There 
have been incidents of violence in Zulia and Tachira. There are 
constant, mostly false, rumours of looting and rioting.


        A very serious crisis

I have been involved in the defence of the Bolivarian revolution for 
more than 13 years now, visited the country often and written about it 
on a regular basis. None of what I have just described is really new. 
Since the very beginning, when Chavez was elected in 1998, and 
particularly since the enabling laws in December 2001, the Venezuelan 
oligarchy and imperialism have been engaged in a constant campaign of 
harassment, violence, destabilisation, coups, lies and slanders, 
diplomatic pressure, economic sabotage, you name it, they have done it.

This time, however, something is different. On all the previous 
occasions, the revolutionary will of the Bolivarian masses of workers, 
peasants and the poor, has defeated the counter-revolutionary attempts 
to put an end to the revolution. This was the case even against the coup 
in April 2002 and then the lockout and sabotage of the oil industry in 
December of the same year, before the revolution was able to grant any 
real improvements in living standards. Those came mainly after the 
government was able to get full control of the state-owned oil company 
in 2003.

For ten years, the revolution was able to grant widespread reforms and 
massively improve the living standards of the masses. This was 
accompanied by a process of political radicalisation in which the late 
president Chávez and the revolutionary masses pushed each other forward. 
Socialism was declared as the aim of the Bolivarian revolution, there 
were wide ranging experiences of workers’ control, factories were 
occupied and expropriated, companies were re-nationalised. Millions 
became active at all levels in an attempt to take their future into 
their own hands. The motor force of the revolution and its main source 
of strength which allowed it to thwart all the attempts of the oligarchy 
and imperialism were the revolutionary masses, active, politically aware 
and engaged at all levels.

Of course, this period was helped by high oil prices (which reached a 
peak of over $140 a barrel in 2008). The government could use a massive 
amount of money from oil revenues to fund social programs which 
benefited millions (in education, healthcare, food, housing, pensions, 
etc). The question of taking over the means of production was not 
immediately posed.


        Capitalism cannot be regulated

Measures were taken which limited the normal functioning of the free 
market capitalist economy in order to defend the revolution against the 
sabotage of the ruling class. These included foreign exchange controls 
(to prevent the flight of capital) and price controls on basic food 
products (to defend the purchasing power of the poor).

Soon, the capitalists found a way around this. Foreign exchange controls 
became a swindle and resulted in a massive transfer of hard currency 
from oil revenues directly into the pockets of unscrupulous capitalists. 
How did that happen? The government instituted a subsidised foreign 
exchange rate which was to be used to import basic products (food and 
medical supplies) as well as parts for industry.

Instead, private capitalists applied for preferential dollars which they 
then syphoned into the black market (which developed as an inevitable 
side effect of currency controls) or to offshore bank accounts. Thus we 
witnessed the incredible situation where imports in volume decreased, 
while imports in value (in dollars) massively increased. Marxist 
economist Manuel Sutherland has worked out the figures for imports of 
pharmaceutical products:

/The red column represents pharmaceutical imports in millions of Kg, the 
blue column represents their value in millions of US$. Source: 
http://www.rebelion.org <http://www.rebelion.org/noticia.php?id=202832>/

In 2003, Venezuela was importing pharmaceutical products at 1.96 US$ per 
Kg. By 2014 the price had reached 86.80 US$ per Kg. Imports had 
collapsed by 87% in volume, but increased nearly 6-fold in price! 
Similar figures can be produced for almost every sector of the economy 
in which private capitalists were receiving subsidised dollars to import 
goods.

A similar situation developed with price controls. The private sector, 
which still has almost monopoly control of food processing and 
distribution of many basic items, refused to produce anything covered by 
price controls. Thus, in order to bypass regulated prices for rice, for 
instance, they started producing flavoured or coloured varieties, which 
were not regulated.

This blocking of production on the part of the private capitalists 
forced the whole weight of producing and distributing basic food 
products onto the state. The state imported food from the world market, 
paid at world market prices with oil dollars, then sold it at heavily 
subsidised prices in state-run supermarket chains (PDVAL, MERCAL, 
Bicentenario).

For a period, while oil prices were high, this situation worked, more or 
less. Once oil prices went into freefall and the economy entered into a 
deep recession, the whole edifice came down like a house of cards. In 
2014 Venezuelan oil was still 88 US$ a barrel. In 2015 it halved to $44. 
In January 2016 it had reached its lowest level for over 10 years, at $24.

/Venezuelan money supply. Credit: www.tradingeconomics.com 
<http://www.tradingeconomics.com>/

In order to continue to pay for the social programs (including 
subsidised food products), the state started to print massive amounts of 
money which was not backed up by anything. Between 1999 and 2015, the M2 
measure of money supply increased by over 15,000%!

Inevitably, the combination of massive flight of capital, the associated 
development of a huge dollar black market, the massive expansion of the 
money supply at a time of economic recession (2014 -3.9; 2015 -5.7%) 
inevitably caused hyperinflation. In 2014 the annual inflation rate 
reached a record 68%, but in 2015 it was even higher at 180% according 
to the Venezuelan Central Bank 
<http://www.ine.gov.ve/documentos/NotasdePrensa/pdf/aviso180216.pdf>. It 
has to be pointed out that inflation for food and non-alcoholic 
beverages was even higher than the average.

The black market exchange rate for the dollar jumped from 187 Bolivars 
per $ in January 2015 to over 1,000 Bolivars per dollar now (having 
reached a peak of 1,200 in February this year). This is the exchange 
rate at which most prices of products are now calculated.

Another effect of this massive economic dislocation is the rapid 
depletion of foreign reserves:

/Foreign exchange reserves. Credit: www.tradingeconomics.com 
<http://www.tradingeconomics.com>/

 From US$24bn at the beginning of 2015, they have collapsed down to 
US$12.7bn now, according to the official figures of the Venezuelan 
Central Bank.

This dire situation has led to a sharp decrease in government imports of 
food and other basic products. Overall imports went down by 18.7% in 
2015. This has created permanent scarcity of basic products in the 
state-owned supermarket chains selling them at regulated prices. In turn 
this has created a huge black market for these products. The root cause 
of the black market is scarcity, which is then aggravated by the 
existence of the black market itself. The massive difference created 
between the regulated prices (ever more scarce) and the black market, 
then acts as a huge magnet for products towards the latter. This is a 
comparison of the prices of some basic products as sold by 
/bachaqueros/ (black marketeers) in the working class and poor 
neighborhood of Petare in Caracas in March:

/Credit: teleSUR <http://www.telesurtv.net/>/

The government has decreed increases in the minimum wage, several times, 
over the last two years, from around 10,000 Bs in November 2015 to 
15,000 now (to which we have to add 18,000 Bs of the /cesta ticket 
/(food supplement). Still, if you have to purchase most of your weekly 
basket of products in the black market, this is not enough. Since state 
imports of food have sharply gone down, scarcity of regulated products 
has increased and people are forced to get a bigger share of their 
shopping basket on the free and black market.

Scarcity has led to massive corruption at all levels, diverting products 
from the official state-run supply chain onto the black market. From the 
family that queues for hours and then re-sells some of what they’ve 
bought, to the state supermarket manager who diverts whole lorries full 
of products (in connivance with the national guard officers guarding the 
establishment), to criminal gangs who hire people to queue for hours and 
buy whatever subsidised products are available (threatening and paying 
off supermarket workers, national guards, supermarket managers, etc), to 
the nationwide director of the Bicentenario state supermarket chain who 
diverts ship-loads of products.

To this we have to add a thousand and one different ways in which the 
private sector breaks the price regulation regime. Maize flour is 
permanently scarce, but/areperas /are always well stocked. Chickens are 
almost impossible to purchase at regulated prices, but roast chicken 
joints never lack them. Wheat flour can’t be bought at the official 
price, and bakeries use lack of flour as an argument not to produce the 
normal loaf of bread (the price of which is regulated), but then they 
are mysteriously able to produce any other variety of bread, cakes and 
biscuits, which we have to assume are made with flour. What’s behind 
this mystery? The fact that private wholesale producers do supply these 
establishments, but of course not at regulated prices.

Any attempt to clamp down on this situation by using repressive measures 
against black marketeers, though necessary, is bound to fail. The root 
cause is not the/bachaqueros/ big or small, but the actual inability of 
the government to fund the supply of the necessary amount of products to 
cover the whole demand combined with the unwillingness of the private 
sector to produce and sell products at the regulated prices fixed by the 
government.

One of the main reasons for this unsustainable economic dislocation is 
therefore, the “natural” rebellion of the capitalist producers against 
any attempt to regulate the normal workings of the “free market”. This 
is the real meaning of the “economic war” that the Bolivarian government 
has denounced for many years. Yes, there is, undoubtedly, an element of 
deliberate economic sabotage aimed at hitting the working masses in 
order to undermine their support for the revolution. But at the same 
time it is easy to understand that from the point of view of the 
capitalists, if they can get a profit margin of 100%, 1000% or even 
higher in the black market, they will not sell, nor produce regulated 
products on which they can make only a very modest gain or sometimes a loss.

What has failed in Venezuela is not “socialism” as the capitalist media 
likes to highlight in their propaganda campaign. It is precisely the 
opposite. What has clearly failed is the attempt to introduce 
regulations in order to make capitalism work, even if only partially, in 
the interest of working people. The conclusion is clear: capitalism 
cannot be regulated. The attempt has led to economic dislocation on a 
massive scale.


        The government’s response: appeals to the private sector

The majority of Venezuelans are aware, to one degree or another, of the 
despicable role played by private companies, like Grupo Polar, in 
creating this situation of hoarding, racketeering, black market, 
speculation, etc. In my last visit to Venezuela I witnessed the 
following argument at a supermarket queue: “- Mujer A: “aquí tienen su 
patria bonita” - Mujer B: “a ver si creen que es el gobierno que produce 
la Harina PAN”” [Woman A, scornfully: “here’s your beautiful fatherland” 
(meaning: this is what /chavismo/ has given you, queues) Woman B, 
sharply: “do you think it is the government that produces Harina PAN” 
(in fact it is Grupo Polar which has a monopoly control over the 
production of maize flour).] The problem is not that people do not 
realise that the private sector is sabotaging the economy. The problem 
is that they cannot see the government as being able or willing to take 
the necessary measures to solve this situation.

To the problems of food scarcity and crime we have to add the severe 
drought affecting Venezuela as a by-product of El Niño which has meant 
problems in energy generation at the El Guiri hydroelectric dam. This 
has led to regular power outages in recent months. In April, the 
government decreed a 2-day working week in public institutions as a 
measure to reduce electricity consumption.

Even on this question we have to factor in a deliberate campaign of 
sabotage of the country’s power grid. There have been, for a number of 
years now, regular bomb attacks against power generating plants, power 
stations and substations in different parts of the country. They usually 
coincide with election campaigns and moments of heightened political 
tension and they have the aim of provoking power outages in order to 
spread a feeling of collapse, chaos, instability…

What has been the government’s response to these extreme problems? Since 
at least 2014 there was an open recognition of the failure of the 
previous model of regulation of capitalism and the use of oil revenues 
to fund social programs. You could say that the turning point was the 
exit of the former finance minister Giordani from the government in July 
2014. Since then, the dominant line in the economic policy of the 
government has been one of making even more concessions to the 
capitalists in the hope of winning back their trust so that they can 
collaborate with the government in order to turn the situation around. 
This has been expressed in a whole series of concrete measures which 
have been taken: the partial liberalisation of foreign exchange, partial 
lifting of the subsidy on the price of fuel, the establishment of 
Special Economic Zones in order to attract foreign direct investment, as 
well as the repatriation of capital held abroad by Venezuelan 
capitalists, the opening up of the Arco Minero (111,000 Sq Km of land) 
for mining exploitation, etc.

None of this has worked. The government holds regular talks with 
businessmen where concessions to their interests are agreed and appeals 
are made for them to invest. At the following round of talks, businesses 
demand even more concessions, but the economy remains in a state of deep 
crisis.

To be fair, the government’s concessions to the private sector are from 
time to time accompanied by threats of expropriation. These threats are 
never followed by actions. Thus on Friday, May 13, when president Maduro 
extended the Economic Emergency and decreed emergency powers for 60 
days, he specifically warned that “any factory that a capitalist 
paralyses, we will take it over and hand it to the communal power”. Less 
than 48 hours later, in an interview with Reuters, the vice-president in 
charge of the whole economic area of the government, Perez Abad, 
reassured international capital by “ruling out the take over of plants 
which are paralysed for lack of raw materials”. In the same interview he 
stressed Venezuela’s intention to continue to pay its foreign debt 
obligations, religiously, in full and on time. He added that this would 
mean a further reduction in imports for 2016.

In fact, although Maduro’s warning was highlighted by the international 
media, in Venezuela people did not take much notice. He has made the 
same threat of expropriation, specifically aimed at Grupo Polar, on so 
many times, that it is like the man who cried wolf. Whenever workers in 
the recent period have taken over factories which had been paralyzed by 
the bosses, they have been met with either an endless string of 
bureaucratic obstacles or direct repression on the part of the 
Bolivarian police. In most of the cases, even though laws introduced by 
Chavez are on the side of the workers and allow for expropriations and 
workers’ control, in reality the majority of labour inspectors are in 
the pockets of the bosses. Instead of expediting expropriation, they 
keep giving the owners extensions in order to pay wages and restart 
production, which results in the demoralisation of the workers in struggle.

Perez Abad is a chief representative of this policy of concessions to 
the capitalist class. He himself is a businessman and former president 
of one of the country’s employers’ federations. He became minister in 
charge of economic affairs of the government in February when he 
replaced Luis Salas, who was seen by the capitalists as a “radical”. 
Just before Maduro decreed an extension of economic emergency powers, 
Perez Abad had already announced a further increase in the prices of 
regulated products, after discussions with the capitalist affected.

More recently, in an attempt to deal with the question of scarcity, the 
government attempted to promote the formation of Local Provisioning and 
Production Committees. The idea is that the organised communities 
themselves will deal directly with the distribution of subsidised food 
products to the families. This is a step in the right direction, which 
could strengthen the role of rank and file organisations. However, the 
measure has only had a partial impact, so far. Also, it only deals with 
the question of final distribution, but not with the more important 
question of production and processing, which is where the crux of the 
problem lies.


        Impact on consciousness

I said before that something is different this time. What has changed 
from previous attempts of the counter-revolution to defeat the 
Bolivarian movement? The constant stress and strain of having to queue 
for hours to get basic products, the uncertainty created by scarcity and 
hyperinflation, the fact that this situation has been going on for over 
a year now and instead of getting better is getting worse, the 
realisation that while the masses are suffering there are those who call 
themselves “Bolivarian” in positions of power who are benefitting 
massively from corruption, the weariness brought on by having to battle 
against the bureaucracy within your own movement, etc., all of this has 
had an impact on the consciousness of an important layer of the masses 
who previously supported the revolution. This is the key reason for the 
defeat in the December 6 National Assembly elections which were won by 
the right-wing opposition for the first time in 18 years. At that time, 
the Bolivarian revolution lost about 2 million votes, allowing the 
opposition to win an overwhelming majority in the National Assembly.

That defeat created a situation of institutional deadlock. The 
right-wing dominated National Assembly has attempted to pass some 
reactionary laws (a scandalous Amnesty Law, the privatisation of 
housing), but these have been blocked either by the president or by the 
Supreme Court. Meanwhile, initiatives taken by the President are ruled 
out of order by the Assembly.

Currently, the opposition is attempting to trigger a presidential recall 
referendum (a democratic guarantee introduced by the Bolivarian 
revolution under Hugo Chávez). They need to get a certain number of 
signatures to trigger the process, and then, in an Electoral 
Council-supervised process, get 20% of the electoral census to sign for 
it (3.9 million). Then a referendum would be called in which the 
opposition would have to get more votes than Maduro received when he was 
elected in order to force his removal. If he is removed within this 
year, 2016, then the right-wing president of the National Assembly takes 
over until new presidential elections are held. But Maduro will attempt 
by all means to delay any recall referendum until 2017, because if he is 
removed at that time, the vice-president takes over for the remainder of 
his term (until 2019). This also shows how the leadership of the 
Bolivarian movement seems to view the struggle from a purely 
legal-institutional point of view.

The oligarchy also feel emboldened by the electoral defeats in 
Argentina, Bolivia and the removal of Dilma in Brazil. Their side “is 
winning” and now they want to “overthrow the regime” in Venezuela. They 
cannot wait to go through the whole process of a recall referendum, and 
even less until the end of Maduro’s term.

The situation has reached its limits from the point of view of the 
patience of the masses. A week ago a comrade from Catia, a revolutionary 
stronghold in Caracas, described the situation thus: “Up until a few 
weeks ago you had to queue for 4, 6, 8 hours, but you could do your 
shopping for two or three weeks. Now there’s nothing. On Monday, me and 
my mum queued and could only get rice and pasta. The rest you have to 
get it in the black market at /bachaquero /prices. Wages are not enough 
to get by. The national guard is now outside the local supermarket with 
assault rifles manning the queues and they pushed it back a few hundred 
meters to dissuade people from looting.” There have already been small 
scale incidents of looting in Aragua and Guarenas.

In these conditions, there is the danger that any appeals made to the 
masses to mobilise against the threat of counter-revolution could fall 
on deaf ears. The masses have shown over and over again their 
willingness to struggle and push the revolution forward. But they are 
not at all convinced that their leaders know where to go, nor how to get 
there.


        A military coup?

The combination of an institutional stalemate, a deep economic crisis, 
and a situation of violence in the streets which the opposition wishes 
to create, could also push a section of the army to intervene “in order 
to restore law and order”. Over the last few weeks there have been 
constant rumours of a coup in the making. On Tuesday, May 17, 
reactionary opposition leader Capriles, called on the army to rebel 
against the president “in order to uphold the constitution”. Capriles, 
of course, is no stranger to coups, having played a role in the 
short-lived reactionary coup of April 2002. The top command of the army 
has repeatedly stated publicly its loyalty to Bolivarianism. But 
everything has its limits.

This is a very dangerous juncture for the Bolivarian revolution. A 
military intervention, whatever form it would take, would be the prelude 
for a “transition” towards the oligarchy retaking control of state 
power. A section of the Bolivarian leaders, some of the corrupt, 
bureaucratic and reformist elements at the top, are already preparing to 
jump ship and would be quite ready to participate in some sort of 
transitional government of “national unity”, as long as they are 
guaranteed some sort of immunity.

At the same time as a layer of the masses is tired and worn out, there 
is also a layer of the advanced activists who are very angry and have 
been radicalised as a result of the election defeat in December. There 
was a movement from the bottom demanding the radicalisation of the 
revolution.

If the Bolivarian leadership were to take firm and decisive action to 
address the problem of scarcity, this would rekindle a wave of 
revolutionary enthusiasm. Such measures would be: a monopoly of foreign 
trade; expropriation of the food production and distribution chain under 
the democratic control of the workers, communities and small peasant 
producers; a default on the foreign debt; expropriation of the banks and 
big businesses; a national democratic plan of production to satisfy the 
needs of the majority. This program, if implemented, would immediately 
provoke an even bigger clash with the Venezuelan oligarchy and its 
imperialist masters, but at least it would have the benefit of 
solidifying and extending support for it amongst the masses which would 
see their problems finally addressed in a serious way.

Let us be under no illusion. If the right wing were to achieve its aims 
of regaining full control of state power (by whatever means), Venezuela 
would not go back to “normal” capitalist democracy. No. The program of 
the ruling class in a country riddled by a massive economic and social 
crisis would be one of war on the working people. They would go on the 
offensive against all the social gains of the revolution. But they would 
also be faced with fierce resistance on the part of the masses and 
therefore they would attempt to crush the movement by force. Under those 
conditions a new /Caracazo/ uprising would be on the cards.

Toby Valderrama and Antonio Aponte put it very sharply in a recent 
article <http://www.aporrea.org/actualidad/a227931.html>: “The 
government must understand that economic war, foreign invasion, attacks 
by foreign spokespersons, be they [OAS secretary general] Almagro, be 
they [former Colombian president] Uribe, they all have the same name: 
capitalism! And they can only be fought with one weapon: socialism. It 
is not possible to fight them with capitalism, because that does not 
convince anyone and you cannot achieve victory. These are times of 
decisiveness, either you are revolutionary or you are capitalist, the 
ability of social-democracy of making fiery speeches and then acting as 
a firefighter to put them down is coming to an end.”

This is correct. As we have explained, the attempt to regulate 
capitalism has failed. There are only two ways out: either to go back to 
“normal” capitalism (that is, to make the workers pay the price for the 
crisis), or to go forward to socialism (that is to make the capitalists 
pay).

It it not too late. The hour is one of extreme danger. This can only be 
overcome by extreme measures and firmness. Enough with vacillations. 
Carry out the revolution to the end!

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