‘For there to be socialism, we have to transform Venezuela’s economic structures, we have to work towards social property of the means of production, which will allow us to generate the conditions required to achieve social justice, for there to be no misery, poverty or crime in Venezuela … socialism is scientific or it is nothing.’ Hugo Chavez, February 2009
On 15 February the national referendum to remove limits on periods of office of elected representatives produced a 55% vote in favour, with 45% against. This important victory demonstrated the successful political consolidation of the new United Socialist Party of Venezuela (PSUV). President Chavez is now able to fight a campaign for re-election in 2012 as leader of a socialist party with a majority in Congress, a great step forward from the previous cross-party alliances.
The nationalisation and regulation programme
The Bolivarian socialist project emerged in earnest in 2006, as the process of political education and consolidation progressed, with the promise to renationalise industries privatised in the pre-Chavez years. The first wave of nationalisation, at the start of 2007, focused on the electricity, telecommunications and petroleum sectors.
From August 2008 steps were taken to nationalise the Banco de Venezuela, owned by Spain’s Santander Group. Now complete, the government’s payment reflects the new global economic reality. Nationalised during the 1994 banking crisis, then privatised in 1996, it has assets of some $900m, a 12% share of the loan market, 285 offices and three million customers. The Venezuelan banking sector was previously dominated by four private groups: two Spanish multinationals, BBVA and Santander, and two Venezuelan banks, Mercantil and Banesco. Santander bought the Banco de Venezuela at the ridiculously cheap price of $300m. This nationalisation strengthens government control over the banking network. It follows the collapse of the Stanford Antigua-based International Bank in February. The Venezuelan government then guaranteed the $220m of deposits in Stanford’s banks in Venezuela. However, the reactionary wealthy elite, who have plundered Venezuela for years, bought $3bn of the $8bn worth of fraudulent Certificates of Deposit sold by Stanford in Antigua, concealing their loot from the people of Venezuela, and have now paid dearly for their greed.
In April 2008 the nationalisation of the principal steel factory in South America, the Sidor plant, and of 60% of Venezuela’s cement industry, was announced. Additionally, several milk producing plants were bought with the subsequent takeover of 32 large farms.
In 2008 the Law on Food Security and Sovereignty was passed, granting decree authority to President Chavez for 18 months. The law defines food security as a matter of ‘public utility’, permitting Chavez to order expropriation of property if necessary. On 28 February 2009 temporary direct control was taken over the rice processing plant in Guarico state owned by Venezuela’s largest food producer, Polar. The plant was operating at half capacity and adding artificial flavouring to 90% of its rice in order to evade government price controls (60% of all plain rice has to be sold at regulated prices). Officials from the National Institute in Defence of People’s Access to Goods and Services (INDEPABIS) had found more than 16,000 tons of unpackaged, unmodified rice stored at the plant, which the workers immediately began packaging. A spokesperson for the union at the plant confirmed that the rice was sufficient for two months’ production. There is now 300,000 tons of stored rice, with the dry season harvest underway, so Venezuela’s monthly demand of 90,000 tons of rice should be satisfied if processors and packagers comply with the government’s food security laws.
On 5 March further inspections led to the initial expropriation of a plant owned by the multinational food company Cargill in Portugesa state, also found to be modifying rice to evade price controls. INDEPABIS found approximately 18,000 tons of non-modified rice stored in the plant’s warehouse. Cargill reported nearly $4bn in net earnings worldwide in 2008, a 36% increase over 2007, while the number of people suffering hunger worldwide increased to a record 923 million.
As Chavez has stated, ‘We have to transform the economic model, basing it on social property over land, industry, the means of production. This is part of life or death, of the hope that the Bolivarian revolution will not fail.’
Opposition disruption and murders
According to the Ezequiel Zamora National Farmers’ Front, since the 2001 land reform law, 214 rural activists have been murdered during campaigns to enforce the law. Now the Simon Bolivar Farmers’ Front has been formed following the assassinations of Mauricio Sanchez, who had been leading the struggle for land reform in southern Zulia state, and farmers’ rights organiser Nelson Lopez, shot 15 times in the back in Yaracuy state early in March. Despite many arrests for the murders, Braulio Alvarez, a National Assembly legislator who co-ordinates the new Front, has called for a national investigation into a network of large estate owners’ and private cattle ranchers’ associations for ordering the crimes.
With the fall in oil prices limiting imports, direct measures have to be taken to resolve the historical problem of inadequate Venezuelan food production. Venezuela’s National Land Institute has recently taken public ownership of more than 12,000 acres of land previously claimed by wealthy families and multinational corporations and is reviewing tens of thousands more acres across the nation. With the newly acquired land, the Venezuelan government plans to promote new forms of social property and sustainable agriculture managed by either co-operative businesses or the state.
The March economic adjustment package
The current global financial meltdown presents the government with serious challenges. With declining oil prices, anti-socialist propagandists predicted a return to ‘realism’, the imposition of the type of anti-working class measures now deepening in all the imperialist states and their neo-colonies; but Chavez is no imperialist lackey. On 21 March an adjustment package was announced, advancing the socialist agenda against the global crisis.
Priority was given to protect all social programmes worth over 20bn bolivars ($9.3bn) – about 12.5% of the country’s GDP. Spending on health and education will also continue. Over 25% of the country’s GDP is destined for these sectors (education over 18% of GDP and health care 7.2% of GDP). This spending includes the six new hospitals being built and nine more planned. A 20% increase in the minimum wage is to be awarded in two stages, 10% on 1 May and the remainder on 1 September.
The total budget is reduced by 6.7%, from approximately 167bn bolivars to 156bn ($77.7bn to $72.6bn). Originally based on oil revenues of $60 a barrel, a figure of $40 is now used, although prices are currently around $50. To make up the projected shortfall VAT is raised from 9% to 12% and government borrowing limits are increased. This debt is currently less than 14% of GDP compared to the US’s 70% and rising. The government says that its $42bn in foreign currency reserves and joint development funds with China and Russia will protect it from further deficits. Spending on aspects of government administration ‘…executive vehicles, redecorating, real estate, new headquarters, promotional material and unnecessary publicity…’ will stop. Funding for regional governments will increase by 32.6% on the 2008 allocation, an extra 10bn bolivars ($4.65bn) for provinces and cities.
The opposition
Now roundly defeated in any democratic forum, the favourite tactic of the opposition is to foster shortages by hoarding and raising prices to promote disaffection against the revolution. Further, opposition groups are hoping to convert the opposition-governed states of Tachira and Zulia into territories beyond central government control. However, the state is moving against prominent figures fomenting separatism, including the recently elected mayor of Maracaibo, Manuel Rosales, previously governor of Zulia. Rosales participated in the defeated coup against Chavez of April 2002, signing the decree that dissolved the Constitution, but did not serve any time in prison. He stood against Chavez in the 2006 presidential election and lost 63% to 36%. Rosales faces possible corruption charges.
The National Assembly reformed the Law on Decentralisation in March to allow the national government to regain control of ports, airports, and highways that weak state governments have allowed to fall under control of criminals. An executive order followed on 15 March. In response to this measure, the Zulia state legislature declared itself in a state of emergency and vowed not to allow the national government to take over the Port of Maracaibo. Since the ports and airports were transferred to the states two decades ago, complicit or weak state governments have allowed criminal networks and multinational corporations to increase their control over these facilities. Decentralisation, introduced in 2006, sought to transfer power to the people, not to states, municipalities, or political parties.
Less and less room is being allowed for the culture of abuse and corruption created by imperialism in over 100 years. Viva Chavez! Viva PSUV!
Alvaro Michaels
FRFI 208 April / May 2009
