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<h1 class="title">Revolution, Counter Revolution, and the Economic
War in Venezuela: Part I</h1>
<div class="submitted">
<p class="byline"> By <span class="author">William Camacaro and
Frederick B. Mills</span>, <span class="date">January 27th
2015<br>
<a class="moz-txt-link-freetext" href="http://venezuelanalysis.com/analysis/11170">http://venezuelanalysis.com/analysis/11170</a><br>
</span> </p>
</div>
<p align="JUSTIFY"><span style="color: #000000;"><strong>Introduction:
A Decisive Battle is at Hand</strong></span></p>
<p align="JUSTIFY"><span style="color: #000000;">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 [<em>pueblo organizado</em>],
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, <a href="http://venezuelanalysis.com/news/11162"><span
style="color: #1155cc;"><span style="text-decoration:
underline;">Henrique Capriles Radonski</span></span></a>,
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 <a
href="http://www.forbes.com/sites/christopherhelman/2014/02/20/cheap-gasoline-why-venezuela-is-doomed-to-collapse/"><span
style="color: #1155cc;"><span style="text-decoration:
underline;">corporate international press</span></span></a>,
the broad spectrum of Chavismo is circling the wagons around the
revolutionary project. </span></p>
<p align="JUSTIFY"><span style="color: #000000;">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<span style="color: #545454;"><span
style="font-family: Arial,serif;"><span style="font-size:
small;"> (</span></span></span>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 <em>guarimbas </em>(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. </span></p>
<p align="JUSTIFY"><span style="color: #000000;">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 (<em>Memoria y Cuenta</em>) on January 21, 2015 held
special weight as Venezuelans and international observers heard
the government’s vision for the way forward.</span></p>
<p align="JUSTIFY"><span style="color: #000000;"> Last Wednesday,
President Maduro gave his annual address before the national
assembly and the country (<em>Memoria y Cuenta</em>), 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 <a
href="http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/gobierno-se-reunira-con-las-cien-distribuidoras-ma.aspx"><span
style="color: #1155cc;"><span style="text-decoration:
underline;">Minister of Commerce, Isabel Delgado</span></span></a>
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.</span></p>
<p align="JUSTIFY"><span style="color: #000000;">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.</span></p>
<ol>
<li>
<p align="JUSTIFY"><span style="color: #000000;"><strong>Overview
of the Current Political Climate in Venezuela</strong></span></p>
</li>
</ol>
<p align="JUSTIFY"><span style="color: #000000;">Both the opposition
coalition<a
href="http://www.lanacion.com.ve/politica/mud-hara-anuncios-este-viernes-23-en-una-convencion-nacional/"><span
style="color: #1155cc;"><span style="text-decoration:
underline;"> MUD</span></span></a> on the one hand, and
the <a
href="http://www.eluniversal.com/nacional-y-politica/150120/venezuelan-pro-government-march-on-january-23"><span
style="color: #1155cc;"><span style="text-decoration:
underline;">United Socialist Party of Venezuela</span></span></a>
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 <a
href="http://www.eluniversal.com/nacional-y-politica/150121/estudiantes-de-anzoategui-anunciaron-concentracion-pacifica-para-el-23"><em><span
style="text-decoration: underline;">El Universal</span></em></a>
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 <em>puntofijismo</em>. 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. </span></p>
<p align="JUSTIFY"><span style="color: #000000;">At this writing,
the<a
href="http://www.google.com/url?q=http%3A%2F%2Fwww.psuv.org.ve%2F&sa=D&sntz=1&usg=AFQjCNHX55MMdt2Je6JRjlBOzyMfzLVf-g"><span
style="text-decoration: underline;"> United Socialist Party
of Venezuela (PSUV) </span></a>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 <a
href="http://globovision.com/mud-convoca-marcha-de-las-ollas-vacias/"><span
style="text-decoration: underline;">MUD</span></a> 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.</span></p>
<p align="JUSTIFY"><span style="color: #000000;"><em>1.2 The
Psychological War</em></span></p>
<p align="JUSTIFY"><span style="color: #000000;">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. <a
href="http://www.hinterlaces.com/analisis/hinterlaces/schemel-67-cree-que-un-estallido-social-empeoraria-la-situacion"><span
style="color: #1155cc;"><span style="font-family: Times New
Roman,serif;"><span style="text-decoration: underline;">Oscar
Schémel</span></span></span></a><span style="color:
#444444;"><span style="font-family: Times New Roman,serif;">,
</span></span>President of Venezuelan polling firm and think
tank <em>Hinterlaces</em> argues that the psychological
campaign is aimed at the neurotization of the public: </span></p>
<p align="JUSTIFY"><span style="color: #000000;">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. </span></p>
<p align="JUSTIFY"><span style="color: #000000;">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.” </span></p>
<p align="JUSTIFY"><span style="color: #000000;">Instances of the
sort of rumor mongering observed by Schémel can be found in the
opposition press. For example, <em>El Nacional</em> published
an opinion piece by journalist <a
href="http://www.el-nacional.com/opinion/Llegamos-llegadero_0_555544619.html"><span
style="color: #1155cc;"><span style="text-decoration:
underline;">Marianella Salazar</span></span></a> 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 <em>auctóritas
</em>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 <em>Caracazo</em> 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. <em>Yet a
return to the IMF is just what Salazar has in mind! </em></span></p>
<p align="JUSTIFY"><span style="color: #000000;"><em>1.3
Polarization versus Accommodation </em></span></p>
<p align="JUSTIFY"><span style="color: #000000;">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? </span></p>
<p align="JUSTIFY"><span style="color: #000000;">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. </span></p>
<p align="JUSTIFY"><span style="color: #000000;">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 <a
href="http://venezuelanalysis.com/news/10227"><span
style="color: #1155cc;"><span style="text-decoration:
underline;">three quarters of the municipalities</span></span></a>
in the <a
href="http://www.coha.org/the-municipal-elections-in-venezuela-as-a-plebiscite-on-chavismo/"><span
style="color: #1155cc;"><span style="text-decoration:
underline;">December 2013 municipal elections</span></span></a>.
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 <a
href="http://www.coha.org/venezuela-achieves-progress-in-its-battle-against-contraband/"><span
style="color: #1155cc;"><span style="text-decoration:
underline;">government efforts to curtail contraband,
speculation, and hoarding</span></span></a>, the shortages
have persisted. </span></p>
<p align="JUSTIFY"><span style="color: #000000;">A poll released in
October 2014 by <a
href="http://www.eluniversal.com/nacional-y-politica/141213/drive-for-constituent-assembly-the-best-option-in-store"><span
style="color: #1155cc;"><span style="text-decoration:
underline;">Venezuelan Institute of Data Analysis (IVAD)</span></span></a>
shows an erosion in the public approval rating of President
Maduro though the think tank and polling firm <a
href="http://www.hinterlaces.com/analisis/politica/oscar-schemel-describe-los-principales-factores-politicos-de-2015"><span
style="color: #1155cc;"><span style="text-decoration:
underline;">Hinterlaces</span></span></a> maintains that
the opposition is in no better shape with regard to public
confidence. In terms of the mood of the electorate, Venezuelan
journalist <span style="color: #1155cc;"><span
style="text-decoration: underline;"><a
href="http://www.correodelorinoco.gob.ve/nacionales/desabastecimiento-colas-y-escasez-pueden-incidir-conducta-venezolano-cara-a-elecciones-parlamentarias/">Eleazar
Díaz Range</a><a
href="http://www.correodelorinoco.gob.ve/nacionales/desabastecimiento-colas-y-escasez-pueden-incidir-conducta-venezolano-cara-a-elecciones-parlamentarias/">l</a></span></span>
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.” </span></p>
<p align="JUSTIFY"><span style="color: #000000;">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. </span></p>
<p align="JUSTIFY"><span style="color: #000000;"><strong>2.
Historical Precedents</strong></span></p>
<p align="JUSTIFY"><span style="color: #000000;"><em>2.1 Venezuela
Compared to Chile in 1973</em></span></p>
<p align="JUSTIFY"><span style="color: #000000;">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 <em>The Pinochet File: A
Declassified Dossier on Atrocity and Accountability</em>,
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). </span></p>
<p align="JUSTIFY"><span style="color: #000000;">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:</span></p>
<p align="JUSTIFY"><span style="color: #000000;">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)</span></p>
<p align="JUSTIFY"><span style="color: #000000;">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. </span></p>
<p align="JUSTIFY"><span style="color: #000000;">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, <a
href="http://www.noticias24.com/venezuela/noticia/270821/presidente-maduro-llamo-a-la-union-del-pueblo-para-obtener-victoria-ante-la-guerra-economica/"><span
style="text-decoration: underline;">Maduro urged</span></a>:
“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….”
</span></p>
<p align="JUSTIFY"><span style="color: #000000;"><em>2.2 The Oil
Strike of December 2002 to March 2003</em></span></p>
<p align="JUSTIFY"><span style="color: #000000;">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. </span></p>
<p align="JUSTIFY"><span style="color: #000000;">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. </span></p>
<p align="JUSTIFY"><span style="color: #000000;">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 <span style="color:
#222222;">Chávez</span>’s decisive actions at the time: </span></p>
<p align="JUSTIFY"><span style="color: #000000;"><span style="color:
#222222;">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)</span></span></p>
<p align="JUSTIFY"><span style="color: #000000;">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. </span></p>
<p align="JUSTIFY"><span style="color: #000000;">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 <em>We Created Chávez</em>,
<em>A People’s History of the Venezuelan Revolution</em>:</span></p>
<p align="JUSTIFY"><span style="color: #000000;">If the reversed
coup marked the <em>political</em> destruction of the
anti-Chávez opposition, then the defeat of the oil lockout
effectively crushed the opposition’s <em>economic </em>power,
wresting the national oil company PDVSA--often referred to as a
‘state within a state’ as a result of its <em>de facto</em>
autonomy--from their greedy hands to be put instead into the
service of the Revolution. (2013, p. 181)</span></p>
<p align="JUSTIFY"><span style="color: #000000;">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:</span></p>
<p align="JUSTIFY"><span style="color: #000000;">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 [<em>pueblo</em>]. (German Sanchez, 2012, p.
283)</span></p>
<p align="JUSTIFY"><span style="color: #000000;">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.</span></p>
<p align="JUSTIFY"><span style="color: #000000;">The damage wrought
by an attempt at an economic coup by crippling the oil industry
was devastating. According to Jones (2007) “<span style="color:
#222222;">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).</span>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).</span></p>
<p align="JUSTIFY"><span style="color: #000000;">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.<br>
</span></p>
<h1 class="title">Part II</h1>
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<div class="submitted">
<p class="byline"> By <span class="author">William
Camacaro and Frederick B. Mills</span>, <span
class="date">January 27th 2015<br>
<a class="moz-txt-link-freetext" href="http://venezuelanalysis.com/analysis/11171">http://venezuelanalysis.com/analysis/11171</a><br>
</span> </p>
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<div class="content-text">
<div class="content-text-inner">
<p align="JUSTIFY"><span style="color: #000000;"><strong>3.
The Economic Model Must Change</strong></span></p>
<p align="JUSTIFY"><span style="color: #000000;">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.</span></p>
<p align="JUSTIFY"><span style="color: #000000;"><em>3.1
The MUD--Fedecámaras Position</em></span></p>
<p align="JUSTIFY"><span style="color: #000000;">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 <a
href="http://globovision.com/fedecamaras-zulia-pide-eliminar-la-ley-de-precios-justos/"><span
style="color: #1155cc;"><span
style="text-decoration: underline;">Law of
Just Prices</span></span></a>, deregulate the
economy, correct the “excesses” of Labor Law, and
establish one floating exchange rate. The director
of the Chamber of Commerce of Caracas, <a
href="http://www.fedecamaras.org.ve/detalle.php?id=2726"><span
style="color: #1155cc;"><span
style="text-decoration: underline;">Victor
Maldonado</span></span></a>, 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 <em>divisas</em> <a
href="http://noticiaaldia.com/2013/01/desabastecimiento-es-por-falta-de-divisas-fedecamaras/"><span
style="color: #1155cc;"><span
style="text-decoration: underline;">(dollars)</span></span></a>
available at preferential exchange rates for the
import sector. </span></p>
<p align="JUSTIFY"><span style="color: #000000;">For <a
href="http://www.bloomberg.com/news/2015-01-14/capriles-calls-for-united-venezuela-opposition-as-crisis-deepens.html"><span
style="color: #1155cc;"><span
style="text-decoration: underline;">Capriles
Radonski</span></span></a>, 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,
<a
href="http://www.lanacion.com.ve/politica/mud-hara-anuncios-este-viernes-23-en-una-convencion-nacional/"><span
style="color: #1155cc;"><span
style="font-family: Georgia,serif;"><span
style="text-decoration: underline;">Jesús
Torrealba</span></span></span></a><span
style="color: #373737;"><span style="font-family:
Georgia,serif;">, </span></span>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 <em>pueblo</em> 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.] </span></p>
<p align="JUSTIFY"><span style="color: #000000;"><em>3.2
The Government Position</em></span></p>
<p align="JUSTIFY"><span style="color: #000000;">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 <em>divisas</em> (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? </span></p>
<p align="JUSTIFY"><span style="color: #000000;">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 (<em>Memoria y Cuent</em>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 <a
href="http://venezuelanalysis.com/news/11122"><span
style="color: #1155cc;"><span
style="text-decoration: underline;">Economic
Recovery Plan</span></span></a>. There is
empirical evidence, however, reported with some
frequency in Venezuelan newspapers and by <a
href="http://venezuelanalysis.com/news/11158"><span
style="text-decoration: underline;">Venezuela
Analysis</span></a>, 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 <em>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.</em> As the
President of Fedecámara, Jorge Roig remarked, during
a <a
href="http://www.correodelorinoco.gob.ve/nacionales/jorge-roig-confiesa-colas-duraran-hasta-que-gobierno-siga-atacando-a-empresa-privada/"><span
style="text-decoration: underline;">recent
interview</span></a> with journalist Vladimir
Villegas: “how long will the lines last? As long as
the government continues to attack private
enterprise.” </span></p>
<p><span style="color: #000000;"> 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 (<em>Memoria y Cuenta</em>)
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. </span></p>
<p align="JUSTIFY"><span style="color: #000000;"><em>3.3
The Economic Model Debate</em></span></p>
<p align="JUSTIFY"><span style="color: #000000;">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. <em>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?</em>
</span></p>
<p align="JUSTIFY"><span style="color: #000000;">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.”</span><br>
<br>
</p>
<p align="JUSTIFY"><span style="color: #000000;"><strong>4.
The Balance of Forces </strong></span></p>
<p align="JUSTIFY"><span style="color: #000000;">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,<a
href="http://www.antv.gob.ve/m9/ns_noticias_antv.asp?id=58422"><span
style="text-decoration: underline;">Jorge
Rodríguez</span></a>: 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.”</span></p>
<p align="JUSTIFY"><span style="color: #000000;">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
<em>coup d'état</em>. 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.</span></p>
<p align="JUSTIFY"><span style="color: #000000;">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 (<a
href="http://www.hinterlaces.com/analisis/politica/67-muestra-opinion-desfavorable-del-gobierno-de-eeuu"><span
style="color: #1155cc;"><span
style="text-decoration: underline;">88 percent</span></span></a>)
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.” </span></p>
<p align="JUSTIFY"><span style="color: #000000;">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 <a
href="http://www.coha.org/chavistas-deliberate-on-the-way-forward/"><span
style="color: #1155cc;"><span
style="text-decoration: underline;">transition
to socialism</span></span></a> according to
the <a
href="http://www.nicolasmaduro.org.ve/programa-patria-venezuela-2013-2019/"><span
style="color: #1155cc;"><span
style="text-decoration: underline;">Plan de la
Patria (2013 - 2019)</span></span></a>.
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.</span></p>
<p align="JUSTIFY"><span style="color: #000000;">Another
important factor in considering the current balance
of forces is the <em>civic military unity </em>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 <em>guarimbas
</em>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. </span></p>
<p align="JUSTIFY"><span style="color: #000000;">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 (<a
href="http://venezuelanalysis.com/news/11143"><span
style="color: #1155cc;"><span
style="text-decoration: underline;">about 20
billion dollars in investments</span></span></a>)
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 <a
href="http://www.telesurtv.net/news/Comisiones-tecnicas-de-paises-petroleros-se-reuniran-en-Caracas-20150118-0001.html"><span
style="color: #1155cc;"><span
style="text-decoration: underline;">OPEC
countries </span></span></a>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 <a
href="http://www.counterpunch.org/2015/01/02/approchement-between-the-united-states-and-cuba-and-sanctions-against-venezuela/"><span
style="color: #1155cc;"><span
style="text-decoration: underline;">Latin
America</span></span></a>, but among the
Non-aligned Movement countries as well.</span></p>
<p align="JUSTIFY"><span style="color: #000000;">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 <a
href="http://www.correodelorinoco.gob.ve/foto-dia/asi-recibio-pueblo-al-presidente-maduro-fotos/"><span
style="color: #1155cc;"><span
style="text-decoration: underline;">return
from a twelve day trip abroad</span></span></a>,
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.</span></p>
<p align="JUSTIFY"><span style="color: #000000;">Note:
Translations by the authors are unofficial.</span></p>
<p align="JUSTIFY"><span style="color: #000000;">See: <a
href="http://venezuelanalysis.com/analysis/11170">Revolution,
Counter Revolution, and the Economic War in
Venezuela: Part I</a><br>
</span></p>
<p align="JUSTIFY"><span style="color: #000000;"><strong>References
to Books:</strong></span></p>
<p align="JUSTIFY"><span style="color: #000000;">Ciccariello-Maher,
G. (2013). <em>We Created Chávez: A People’s
History of the Venezuelan Revolution.</em> Durham:
Duke University Press.</span></p>
<p align="JUSTIFY"><span style="color: #000000;">Coronil,
F. (2011). “State Reflections: The 2002 Coup against
Hugo Chávez.” In Thomas Ponniah and Jonathan
Eastwood, Eds. <em>The Revolution in Venezuela:
Social and Political Change Under Chávez</em>.
Cambridge, MA: Harvard University Press.</span></p>
<p align="JUSTIFY"><span style="color: #000000;">Gott,
R. (2011). <em>Hugo Chávez and the Bolivarian
Revolution</em>. New York: Verso.</span></p>
<p align="JUSTIFY"><span style="color: #000000;">Jones,
B. (2007). <span style="color: #222222;">!HUGO! </span><span
style="color: #222222;"><em>The Hugo Chávez story
From Mud Hut to Perpetual Revolution</em></span><span
style="color: #222222;">. Hanover New Hampshire:
Steerforth Press.</span></span></p>
<p align="JUSTIFY"><span style="color: #000000;">Kornbluh,
P. (2003). <em>The Pinochet File: A Declassified
Dossier on Atrocity and Accountability</em>. New
York: The New Press.</span></p>
<p align="JUSTIFY"><span style="color: #000000;">Mancilla,
A. S. (2014). <em>El Pensamiento Económico de Hugo
Chávez</em>. Spain: El Viejo Topo.</span></p>
<p align="JUSTIFY"><span style="color: #000000;"><span
style="color: #222222;">Sanchez, G.(2012). </span><span
style="color: #222222;"><em>LA NUBE NEGRA: Golpe
Petrolero en Venezuela</em></span><span
style="color: #222222;">. CA: Vadell Hermanos
Editores.</span></span></p>
<p align="JUSTIFY"><span style="color: #000000;">Wilpert,
G. (2007). <em>Changing Venezuela by Taking Power:
The History and Policies of the Chávez Government</em>.
New York: Verso.</span></p>
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