Like many Latin American countries, Venezuela possesses immense natural wealth. Yet although it holds the sixth largest oil reserves in the world (more than 75bn barrels, sufficient to last 60 years), and although it is the largest foreign oil supplier to the USA, the overwhelming majority of its people — 80% of its 23 million population — live in poverty.
Other figures give a graphic demonstration of a country held to ransom by imperialism:
• 70% of the people earn less than $2 a day — twice as many as 25 years ago;
• 36% get less than $1 a day;
• a quarter of the adult working population is unemployed;
• the poorest fifth of the population consumes only 3% of the GNP;
• the infant mortality rate is three times that of Cuba.
Such wealth as exists is in the hands of the few: 60% is owned by the richest fifth of the population. Recently, however, a new electoral coalition has broken the back of the two ‘traditional’ ruling parties. The key question is what will this mean for the working class and poor? Will the new government be able or willing to meet their aspirations?
Despite a rise in oil prices, the Gross Domestic Product will fall this year by at least 7%. A $35 billion foreign debt swallows 30% of the state budget, whilst inflation is running at 20%. 70-80% of all companies have incurred losses. This disaster results from an economic system built to meet the needs of US and European corporations.
The Chavez coalition
The popular electoral revolt arose from a 40-year struggle between the people and a succession of completely corrupt governments. At its head is Hugo Chavez, a ‘left wing’ ex-parachute regiment lieutenant colonel, who twice attempted coups against the government in 1992. The process started on 9 November 1998 when the traditional parties won only one third of the seats in the congressional elections. In December, Chavez was elected President by the poor with 56% of the vote (33% of those of voting age). In April 1999, a referendum called for a new Constituent Assembly to rewrite the 1961 Constitution. On 25 July, Chavez’s coalition — the Patriotic Pole — won 121 of the 128 seats in a new National Assembly, with 40% of voters backing him. The elections completely destroyed the two ruling class parties, Democratic Action and Copei, neither winning a single seat.
There is immense popular pressure on Chavez to change the system. Seventy per cent of the population is under 30 years of age and demanding action. But as soon as the new National Constituent Assembly was convened in August, the traditional parties called upon the army to defend the existing constitution. On 10 August, Chavez sacked the army commander, and two days later declared Venezuela ‘in emergency’.
Constitutional reform
Chavez’s reform of the constitution — the 26th in Venezuela’s history — is entirely bourgeois in content. Property rights will be respected, but economic planning will be introduced to assure ‘balanced’ development involving state and market. Large land holdings (latifundia) will be prohibited. Public financing of political parties is prohibited, and there is recognition of the right to civil disobedience. Underlying the reforms is the naive idea that Venezuela can escape the devastating consequences of imperialism without confronting the US and Europe, and without the abolition of private ownership of the means of production. It represents an attempt to seek out a ‘Third Way’ which can reconcile the interests of the poor and oppressed with those of the foreign multinationals.
Already Chavez admits that he cannot meet ‘100%’ of the people’s demands, but his priority is to destroy the old way of governing. He claims his task is ‘to offer a clean country’ to foreign investors and that ‘those who are frightened will lose a great opportunity’. He continues: ‘If I were a serious investor … who wanted to invest in the great project that is Venezuela, petroleum, tourism, etc, I would be happy … In the last 30 years how many have stopped investing!’ But in all of this there is no economic plan that begins to address the needs of the poor.
The ‘clean up’ campaign
The governing coalition points out that in the last 20 years at least 50 times the value of the Marshall Plan has been earned by oil exports, yet the country is one of the most debt-ridden in the world, systematically looted by its own ruling class. In Britain, The Economist agrees in its own way: Venezuela was ‘a corrupt and bloated corporate State run as a kleptocracy by … two parties, and sustained only by a high oil price’. (31 July 1999). A ‘clean up’ is in no way antagonistic to imperialism’s broader interests: the US has already legislated against collaboration with corrupt practices, and the EU is about to. The reason is not hard to find — it costs multinationals an estimated $45 billion a year. The Chavez government has already begun its task with ‘energetic’ and ‘prudent’ investigations into corruption at all levels of the state. To date this has included a purge of the Customs Service and an audit of the property of 2,000 leaders of the corrupt trade unions (three thousand unions with two million workers were receiving $24 million a year from the state to suppress militancy). By September 1999, 3,130 claims of judicial corruption or incompetence lay before the Courts’ Inspector General. 195 judges had been sacked by November. The judicial system was in complete chaos: 80% of all prisoners are those on remand, some held for 20 years without trial, most in appalling conditions with murders a daily occurrence. A high percentage of these simply cannot pay fines or bribes, others are just forgotten.
The thoroughness of this campaign has raised some alarm abroad: for instance The Economist, after its smug assessment of ‘populist, but unthreatening, gestures’ last year, now writes of an ‘elected dictatorship’, branding Chavez’s actions as ‘Caribbean Jacobinism’. James Foley in the US Department of State also has ‘growing concern’ over ‘excessive accumulation of power’ (this from a country that intervened 748 times in Latin America between 1800 and 1969). But Chavez is no ‘Jacobin’: he has the massive pressure of a young and energetic coalition representing the mass of workers urging him into action. He has to make some concessions in order to maintain their support.
Foreign policy
Other Latin American countries facing similar political problems to Venezuela, and fearing similar elec-toral shifts, watch Venezuela anx-iously. Chavez knows that it is too late for the ‘old regime’ and that a new approach has to be adopted to prevent economic crisis from becoming the source of widespread revolutionary violence. Thus on 20 August he denounced proposed regional manoeuvres which he claimed would `NATOise’ the Colombian civil war. He suggested he could discuss directly with the two chief Colombian revolutionary move-ments, FARC and ELN, and negotiate the security of Venezuela’s borders with Colombia. His purpose is to put pressure on the Colombian and other Latin American governments to accommodate domestic pressure for change.
The economic programme
How is it possible for the poor of the oppressed and weaker nations to improve their lot, especially when the gap between rich and poor in the imperialist countries has widened so much over the past 25 years? Any attempt to change the situation in Venezuela in favour of the workers must bring it into conflict with imperialism. Already the political change under Chavez has led the big private proprietors to slow down activity and stop investments. International banks have followed suit. Compared to 1998, Venezuelan exports to Colombia had fallen 50% by September 1999, and imports by 31%. On 17 November Chavez submitted the next year’s budget to the Constituent Assembly. It effectively allows the President to spend up to 2% of the GDP. But how will this game of being a big spender in a market economy actually resolve the crisis of the poor? This question is made even more pertinent by the fact that heavy expenditure has been promised on the prison system and a new national police force — a modern force to police a ‘mixed’ market economy!
Up to 25% of Venezuelans may be called ‘middle class’. They want the state apparatus to be cleared of corruption, but they fear the economic programme that Chavez is preparing. They want the promised ‘massive public investment in the health sector, in education and security’, because they believe it will start an economic recovery, not because the mass of the people do not receive health care or education. They do not want the state to be the entrepreneur; ‘the productive sector’ must be in private hands. Hence the middle class wants an end to a situation where the state owns twice as much property as the private sector ($4 trillion as compared to $2 trillion). It regards this as an obstacle to the creation of wealth. Its idea of ‘real’ reform is more private property, private initiative and private profit. But Chavez is not master of his destiny. He has to look on the one hand to the masses and on the other to the interests of imperialism and the foreign investment needed to maintain growth.
A visit Chavez made recently to nine states in Europe and Asia showed two of his major concerns — first, to confirm his political legitimacy in the face of increasing US anxiety and second, to build new economic links outside of the old oligarchic network. One step was to secure an agreement with OPEC, in particular Saudi Arabia and Mexico, to restrict oil output and so stabilise its price. This is of particular importance given that PDVSA, the state-owned oil company, provides 40% of the state’s income. During his trip Chavez spoke of invigorating the manufacturing sector but at the same time actively sought new foreign investment. Hence talks with Total-fina (Italy) and Elf Aquitaine (France) foresee $4bn investment in the Orinoco basin. New contracts are being offered in the gas industry ($8bn over the next 10 years) with Shell Gas involved. The petrochemical industry is to be expanded over 10 years in joint ventures with US and Italian companies to exploit cheap gas reserves (95 cents per barrel compared to 141 in the US).
All power to the workers!
The new leadership is not seeking to escape from its enslavement to foreign capital, but rather to intensify it, in an ‘uncorrupt’ way. Chavez is trapped, as promises to the impoverished masses compete with commitment to the immense power of international capital and its domestic allies in the ruling class. His aim is to create a modern, properly functioning bourgeois republic. This ‘Third Way’ has been tried innumerable times in Latin American countries and has always ended in disaster. The fact is that a government such as that of Chavez has to take one side or the other. If it does not challenge imperialism, then it will have to attack the working class and oppressed. ‘Development’ today under imperialism requires the degradation of the mass of humanity. Hence communists support every demand of the Venezuelan workers for work and justice, which must include the democratic use of all Venezuela’s natural resources for the benefit of all its people.
All power to the workers!
Expropriation of all private means of production!
All economic production for the needs of the working people!
Imperialism out of Venezuela!
FRFI 152 December 1999/January 2000
