[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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