Venezuela: New year, new battles

Fight Racism! Fight Imperialism! 237 February/March 2014

‘[2014] is going to be a year of establishing a new internal economic order... at the service of the population.’

President Nicolas Maduro

A significant victory in the December municipal elections has enabled President Maduro to begin 2014 in a strong position. This year will be the first since 2006 that the Bolivarian Revolution has not been put to the test in the ballot box. Socialists must use this opportunity to win the economic war, consolidate the bases of popular power and push ahead with Chavez’s Programa Patria plan for socialist development which was passed by the National Assembly at the end of 2013.

Wresting control of the economy from private speculation and tackling inflation, which exceeded 50% last year, are urgent tasks. The minimum wage was increased by 10% in January, a stopgap measure to alleviate the lack of purchasing power for the working class. The crackdown on hoarding and speculation continues, with such crimes now punishable by up to ten years in prison. On 23 January, Maduro implemented ‘the law for the control of fair costs, prices and profits’, imposing a 30% cap on private profit margins. The National Superintendency for the Defence of Socioeconomic Rights (SUNDEE) brings together existing organisations to monitor importers, producers, suppliers and retailers more efficiently. SUNDEE has new powers to confiscate over-priced goods, occupy stores and factories and enforce price controls. In addition a mandatory register of importers and exporters is being drawn up, a step towards state control of foreign trade.

New regulations limiting access to dollars for travel have been introduced as part of the fight against currency fraud. International travel, internet shopping, some imports and airline tickets will no longer be eligible for dollars sold at the preferential rate of Bs6.30: US$1. Instead the rate is Bs11.30 to the dollar, the rate used by the state in regular foreign currency auctions. Imports of food, domestic industry, agriculture, health care, education and science will continue to operate at the Bs6.30 rate. In addition, the amount of dollars allocated for foreign travel and internet shopping is now reduced to combat capital flight and economic sabotage. The measures will make it more difficult for Venezuelans to participate in scams such as ‘the scrape’ (see FRFI 236). Facing critics, Rafael Ramirez, vice-president for the economy and oil minister emphasised, ‘Should we give dollars to people who resell them on the black market, or should we bring in medicine? Should we give dollars to travellers, or should we bring in food?’

In his State of Nation address on 15 January, Maduro announced the investment of over $4bn in 11 strategic areas including oil derivatives, construction, manufacturing, agriculture and telecommunication. Agrarian reform and production will be accelerated with the planned expropriation of 350,000 hectares of idle land this year. A new stage of the street government initiative has already commenced. In 2013 nearly 3.5 million people participated in street government events, drawing up proposals that launched over 3,300 public works. The more control that the Bolivarian revolution has over land and industry, the more it can move towards food sufficiency and import substitution; while developing the participation of popular power in the management of land distribution and organisation of industry is essential in rooting out corruption and fraud.

The ruling United Socialist Party of Venezuela (PSUV) has called its second national congress for July. Maduro hopes this will ‘rectify, revise, and re-drive’ the party’s theoretical and organisational bases. The results from the working groups for the congress will be presented on 20 February, so that a process of discussion with the grass roots can take place. With rumbles of discontent about internal democracy and grassroots participation in recent elections, the progress that the PSUV can make in the coming months could be decisive for the future of the Bolivarian Revolution.

Sam McGill

Venezuela: Bolivarian Revolution faces renewed violence

On 12 February, fascists attacked the presidential Miraflores Palace in Caracas and the Attorney General's office. Exploiting the 12 February Day of Youth celebrations, when annual processions commemorate the role of youth in the independence battle in La Victoria in 1814, violent groups of masked thugs took to the streets in several cities across Venezuela. During clashes with revolutionary forces in Caracas and Merida, student Basil de Costa and community activist Juan Montoya were killed, and 23 were injured.

Read more ...

Venezuela economic battlelines are drawn in run-up to elections (updated)

 Fight Racism! Fight Imperialism! 236 December 2013/January 2014 

They underestimated me. They said Maduro was an amateur… what you have seen is little compared to what we’re going to do to defend the people’s rights.
(President Maduro, 19 November 2013)

Venezuelan president Nicolas Maduro has passed a series of economic decrees to protect job stability and savingsOn 19 November, Venezuelan President Maduro secured the votes he needed from the National Assembly to empower him to legislate by decree for 12 months. This ‘Enabling Law’, as he explained, gives the Bolivarian Revolution vital powers to ‘fight corruption, usury, money-laundering and the economic war unleashed in recent times against the country by the national oligarchy’.1 It follows a series of active measures taken by the government to exert greater control over the Venezuelan economy. 

Eduardo Saman, the new head of the price-control organisation Indepais, has continued to take a hard line against speculation despite an assassination attempt on his life in early October. During November, inspectors and soldiers entered more than 1,400 shops accused of extortionate price-fixing and corruption – for example, the country’s largest electrical chain, Daka, was forced to slash prices marked up to 1,200% of import costs.

Read more ...

Venezuela: Class struggle in the fight for food/FRFI 235 Oct/Nov 2013

Fight Racism! Fight Imperialism! 235 October/November 2013

Recent struggles by Venezuelan workers have exposed the opportunism that still exists within the management structures of industry, permeating through nationalised companies, and even the highest levels of government. This point has been illustrated in a series of protests and victories in state food companies throughout July and August. They show that the forward momentum of the Bolivarian Revolution depends on the socialisation of production and the deepening of worker controls throughout the country.

Read more ...

Venezuela: the fight against corruption /FRFI 234 Aug/Sep 2013

Fight Racism! Fight Imperialism! 234 August/September 2013

At his inauguration in April 2013, President Maduro said his presidential term would be ‘a revolution within the revolution – efficiency or nothing’, stressing that ‘Only with the people, with socialism’ was it possible to live humanely. In the last few months, Maduro has taken steps to implement this vision by cracking down on corruption and battling against food shortages, speculation and hoarding.

Following the violent aftermath of the April presidential elections, when fascist opposition gangs ransacked and torched public services and state buildings leaving 13 dead, the Venezuelan government has faced down continuing attempts by the imperialist-aligned opposition to destabilise the Bolivarian Revolution. The opposition’s accusations of electoral fraud were exposed as empty posturing when the results of a two-month audit of 100% of the votes found a 99.98% correspondence between paper and electronic votes. Those present at the audit included candidate representatives, external auditors, electoral council technicians and 141 representatives from civil society groups. This transparency, coupled with broad international recognition of the results, has left the opposition scraping the barrel for fresh smears, such as claiming that Maduro was in fact born in neighbouring Colombia, making him ineligible to be president – a claim easily disproved.

Crackdown on corruption

Speaking at a rally marking the 24 June anniversary of ‘the Battle of Carabobo’, a key date in Venezuela’s struggle for independence, Maduro emphasised:

‘Either we confront this today or corruption is going to swallow up our country. We cannot divorce ourselves from the ?ght against those who are corrupt and their methods of corruption.’

Deeds have matched words. Maduro has replaced directors in the national electric system in order to tackle the sabotage which resulted in frequent blackouts in the run-up to the presidential elections. He has responded to denunciations of speculation and extortion within the country’s consumer protection agency, Indepabis, which regulates price controls, leading to the high-profile arrest of its director, Luis Garcia, and his head of control and inspection Trino Martínez. In June, two senior employees within SENIAT, the national customs, duties and taxes administration were arrested for fraud and in July five civil servants working for the China-Venezuela investment fund were arrested on suspicion of embezzling $84m. These five officials are alleged to be members of opposition party Primero Justicia (Justice First) whose National Assembly legislator, Richard Mardo, is being prosecuted for money laundering. Also in July, seven immigration service officials were arrested in Tachira, on the border with Colombia, for corruption and trafficking and in Monagas, the manager of the legal division of the state oil company PDVSA was detained for corruption. This endemic culture of corruption permeates even community organisations, as evinced by the arrests of 14 people involved in illegally charging people for access to houses and other benefits available through the Bolivarian social missions.

Rooting out corruption is essential to driving forward the struggle for socialism in Venezuela. To do so requires fundamentally addressing Venezuela’s heritage as an under-developed country dependent on extracting and exporting oil, a phenomenon Chavez referred to as the ‘oil-rentier state’. Unravelling this culture of pervasive corruption and materialism will take huge advances in deepening socialist consciousness and making significant inroads into undermining the capitalist free market in Venezuela. With 70% of the economy still in the hands of private companies and oil accounting for around 90% of export earnings, building a society driven by people’s needs, not profit, will initially mean diversifying the oil-dependent economy, and removing ruling class control over key economic sectors, principally finance, food production, and food distribution, and fostering a non-private productive sector.

The situation is exacerbated by economic sabotage facilitated by the unequal terms of trade between Venezuela and imperialist countries. Chavez introduced currency controls and a fixed exchange rate in 2003 in direct response to opposition-led oil lock outs and economic sabotage. While this initially reduced capital flight to a third of its 2002 level, it continues to be a major problem with an average of $20bn estimated to have left the country each year since 2008. A widespread illegal parallel market exists, where companies import products using government-issued dollars set at the controlled exchange rate of 6.3 bolivars, then sell these products for around 30 bolivars per dollar. A whole web of extortion surrounds this practice which also contributes to food insecurity as items are hoarded, creating shortages and driving up prices. Since January at least 40,000 tons of hoarded food have been discovered, including rice, coffee, sugar and cooking oil. Redistribution of this food in addition to subsidised exports from Mercosur countries have turned the tide in this battle, reducing the food scarcity index from its April peak of 21.3% to 19.3% in June. But winning the war will mean taking down Venezuela’s private networks such as POLAR, which controls nearly 50% of national food production.

Maduro has appointed Eduardo Saman, known to take a hard-line against speculation, as the new head of Indepabis. His government has implemented stronger state controls over foreign exchange, in order to monitor companies that import products using state-issued dollars. These state measures need to work in tandem with the organisations of popular power, increasing democratic control of government policy. A citizens’ network ‘Friends of Indepabis’ has been set up to expose companies that break price control laws and the grassroots forum Aporrea is also encouraging public denunciations of corruption in Caracas.

As Maduro stated in July: ‘Whoever is involved in shady businesses and thinks that they can take advantage of the power that the government has given them in order to steal, well, their time has come now ... no one is untouchable, whether it’s corruption in a red beret or corruption of the yellow fascist bourgeoisie’. There must be no exceptions.

Sam McGill


More Articles ...

  1. Venezuela: Class struggle sharpens in wake of presidential elections/ FRFI 233 Jun/Jul 2013
  2. Letter from the Venezuelan Ambassador
  3. Protest to defend the Venezuelan embassy
  4. Why the majority of Venezuelans will vote Maduro for President /FRFI 232 Apr/May 2013
  5. Chavez’s legacy: the fight for socialism /FRFI 232 Apr/May 2013
  6. Comandante Chavez: socialist, internationalist, revolutionary /FRFI 232 Apr/May 2013
  7. Victory for Maduro and the Bolivarian Revolution
  8. SWP’s Mike Gonzalez says yes to counter-revolution in Venezuela
  9. In memory of President Hugo Chavez
  10. Venezuela: masses mobilise in defence of Bolivarian Revolution /FRFI 231 Feb/Mar 2013
  11. SWP vultures circle Bolivarian Revolution
  12. Venezuela: on the frontline of the battle for socialism/FRFI 230 Dec 2012/Jan 2013
  13. Venezuelan presidential elections the state and the Bolivarian Revolution /FRFI 229 Oct/Nov 2012
  14. RCG Delegation Heads to Caracas Today! - 26 Sep 2012
  15. Venezuela elections: political violence and media manipulation / 228 Aug/Sep 2012
  16. Venezuela and Cuba at the heart of Latin American independence / FRFI 225 Feb/Mar 2012
  17. Venezuela’s communal councils: socialism in construction / FRFI 224 Decr 2011/Jan 2012
  18. Venezuela: rebuilding a nation / FRFI 223 Oct/Nov 2011
  19. Venezuela defies US interference
  20. Chavez returns: The battle continues
  21. BBC distorts truth about Venezuela /FRFI 220 April/May 2011
  22. Venezuela: revolution mobilises after disastrous floods / FRFI 219 Feb/Mar 2011
  23. Venezuela: PSUV acts to provide food and housing for all / FRFI 218 Dec 2010 / Jan 2011
  24. Venezuela: key elections imminent / FRFI 216 Aug/Sep 2010
  25. PSUV speaks in Liverpool and Manchester