Company Unions:
The New Threat to
the Progressive Labor Movement
By Zenei Cortez Beyond Chron April 25, 2008
The controversial and failed effort by Catholic Healthcare Partners in Ohio to hand-pick a union to represent their employees is not a new problem for the labor movement - but a very old one. It's unfortunate that SEIU's resort to using violence in the wake of this defeat has distracted from the real danger in this situation, which is the new rise of company unions. The California Nurses Association/National Nurses Organizing Committee commits to working against company unions any time they threaten healthcare workers.
After the 1914 Ludlow mine massacre, John D. Rockefeller hit upon this perfect strategy for labor "peace": a union either controlled directly by the employer or which at least would agree to further the employer's interests-the company union. His maneuver undercut miner solidarity in the aftermath of the massacre and turned national attention away from the company's disgraceful record. Within just a few years, more than one million workers were represented by these phony unions, putting the entire labor movement at risk.
What Rockefeller proposed last century is being eyed today by hospital and HMO chains. We are entering an era of heightened healthcare unionization, which will result in either a progressive, democratic, movement of workers committed to better patient care or in a new wave of unions that don't stand up to employers so much as cuddle up to them.
That is exactly the scenario that Catholic Healthcare Partners faced in Ohio. They were in talks with both the AFL-CIO and SEIU, a stark contrast. The AFL-CIO remains America's House of Labor, and has become a more progressive and effective force in recent years. SEIU under Andy Stern, on the other hand, has embarked on a strategy of growth built on corporate agreements. Stern's deals with nursing home operators, hospital chains, insurance corporations, and the pharmaceutical industry have consistently placed the wants of his corporate allies ahead of the needs of workers.
Faced with this choice, Catholic Healthcare Partners dropped talks with the AFL-CIO, and made a back-room deal for a snap election with SEIU. It is noteworthy that CHP themselves filed for the election, most likely because of a distinct lack of worker support. Not only does Andy Stern's SEIU have a poor reputation among RNs nationally, but at this very chain, three years of organizing at five hospitals had only led to fourteen nurses supporting SEIU.
That's a failed organizing drive. By contrast, most union elections require a showing of interest of at least 30 percent of the employees.
This lack of worker support forced CHP to run its election in a nearly-unprecedented manner. Both hospital and union officials were gagged from answering questions from workers ... they were literally blocked from giving out the most basic information. Other unions, including CNA/NNOC, which has members at the facilities, were barred from the ballot. The snap elections were held with just two weeks' notice.
RN's from across the country saw this as a threat not only to their labor rights, but also to their professional practice, which SEIU has a poor record of defending. About a dozen of these RNs from California and Ohio traveled throughout the state, and after a few days of campaigning at the hospitals, were able defeat a deal that the Ohio Hospital Association, the lobbying group, called "refreshing."
In a humiliating defeat not only for themselves, but for all employers looking to hand-pick a union, Catholic Healthcare Partners was forced to withdraw its petition to hold a vote. While its collapse was not mourned by employees ,the employer made its feelings clear to the Associated Press: "We believe in the process we developed, and we hope to use it in the future."
CHP and all other hospital chains should be on notice: any time an employer files for an election to determine representation of Registered Nurses, that employer will have to face the RNs of the California Nurses Association and National Nurses Organizing Committee. We are a progressive, democratic, feminist social movement trade union and we will not allow you to undermine our work with a new wave of company unionism.
As at Ludlow, the stakes are too high.
Zenei Cortez is President of the California Nurses Association/National Nurses Organizing Committee (CNA/NNOC.) In our April 22nd edition, Beyond Chron published the opinion of an SEIU member regarding this controversy.
CNA/NNOC 2000 Franklin Street, Oakland, CA 94612Tel: (510) 273-2200 Fax: (510) 663-1625
martes 29 de abril de 2008
domingo 27 de abril de 2008
Manipulations in Time of War and Hunger
Manipulations in Time of War and Hunger
Bob ChapmanThe International ForecasterApril 27, 2008
Uncle Ben Bernanke is currently pumping out federal reserve notes, or electrons with binary encoding as the case may be, like they were going out of style in order to save the miscreants on Wall Street and in order to postpone economic catastrophe for the benefit of our incumbent sociopaths in Congress, who are the best politicians that money can buy. Based on the elitist Malthusian Agenda, may we suggest that you start converting some of those notes and electrons into storable food, such as rice and freeze-dried food. We suppose this would be the latest incarnation of Uncle Ben’s Converted Rice, and without it, you will be at the mercy of the elitists. The Illuminati want to kill off most of the “useless eaters” on this planet. Their cohorts express shock and dismay over all the food shortages and riots that are breaking out globally when they are in front of the cameras, but when the reporters leave you can hear their maniacal laughter as these cretins contemplate how much easier it will be to control a population of 1 billion or so instead of the current 6 billion which occupy this planet, a number that is rapidly growing at a pace that far outstrips the growth in our fuel and food supplies which have been malevolently curtailed over decades to bring about the current results you see before you.
There have been no new petrochemical refineries constructed since the 1970’s. Oil exploration has been stymied by the oil companies themselves who, with the help of the Illuminati and their operatives in industry, in government and in private trusts and foundations, have funded environmentalist movements, sabotaged and disparaged nuclear plants, shelved patents for greener energy by buying out or killing off inventors and pushed oil prices to ludicrously low levels to stop independent oil wildcatters from extracting oil out of the ground because they could not do so profitably. Big Illuminist automakers contributed to the problem by producing gas-guzzling SUV’s and trucks which most people own more for show than for practical use. Rest assured that there is plenty of oil within our own borders, with enough to supply the needs of the entire US economy for many decades in Alaska, North Dakota and Montana alone, much of it extractable at $16 per barrel using newly developed directional drilling systems, and never mind the hundreds of billions of barrels extractable from oil sands and oil shale in various states and the offshore oil in the Gulf of Mexico. But in order to induce smaller producers to go after this oil (the larger producers will leave it in the ground for obvious reasons), there has to be a floor of about $25 per barrel in order to protect profit margins for smaller operators. Otherwise, as has been done in the past, the larger companies will temporarily drive prices below the cost of production for the smaller companies, thereby driving them out of business.
A floor of $25 per barrel is a very reasonable floor considering we are now at $119 per barrel, but our Congress is bought-and-paid-for by the Illuminati and their big oil interests, so you hear nothing about this from them or our useless fane-stream media which are also controlled by the Illuminati. The elitists do not want plentiful oil — they want to control you!
The same has happened in agriculture. At the beginning of the 20th century, most Americans were still farmers. Virtually everyone had a farm or at least knew how to farm if they had to. No longer. The smaller farmers were squeezed out by subsidies given to big Illuminist-sponsored farming concerns in order to keep crop lands vacant, supposedly to keep food supplies down to support higher prices, but this just served to kill off smaller farmers who could not compete with the much larger farmers who got something for nothing. The smaller farmers were forced in this manner to take jobs in our growing industrial society, culling out the small fry just as was done with oil companies, banks and corporate America generally.
The latest methods of controlling agricultural development are genetically modified food, the bio-fuel scam and radio frequency ID tags for livestock. The hook for genetically modified food is greater output and greater efficiency, but you have to buy seed from the big agricultural companies who are now genetically designing their seeds to self-destruct after one harvest. That way, they control the price and availability of the seeds. Farmers who do not use GM seeds cannot compete with those who do, so fewer and fewer are going with natural seeds that cannot be patented and controlled. And if you are unlucky enough to have your natural crops contaminated by nearby GM crops, you get sued for using patented GM seed by the big agricultural company that owns the patent.
The bio-fuel scam is one of the stupidest, biggest and most dangerous scams ever, as it diverts vital food crops to use in producing bio-fuel, which we in America do not even need as described above due to our huge oil reserves that are located within our own borders. Ethanol is 30% less efficient than gasoline and is very damaging to internal combustion engines, yet we seek this out to shore up oil production shortages. This is pure madness. And when you couple these malevolently manufactured shortages and mega-foolish reallocations of resources with the Fed’s destruction of the dollar, you get food riots globally that are going to spread rapidly and get much worse if something is not done immediately to put an end to this evil scam.
Remember, many currencies in the developing world are pegged to the dollar to support exports, so when the dollar gets destroyed, such pegged currencies get destroyed along with it. This leads to higher food prices in such devalued currencies, and is making food unaffordable for the poor in such countries even when it is available for sale. This situation has been described recently as a “silent tsunami,” but that silence is now turning into the screams and cries of the hungry. This is what the Illuminati want, to kill off the useless eaters, but they have broken their own rules and are bringing these problems to bear far too quickly, a mega-stupid move which they will pay for dearly. Five billion people will not go out quietly.
And then, apparently because Henrietta the hen might wander off out of the barnyard, all farmers are now required to affix RFID tags to their livestock. What other reason could there be for old Henrietta to need a tag. They claim they want to track animals in case of disease, but come on, we got along fine without this Mark-of-the-Beast-technology-for-animals for thousands of years. And yes, you’re next on the tag agenda. These tags are being used first to bump out the smaller livestock producers due to the extra costs and labor associated with the RFID tags. But these tags will also enable the government to locate and control food sources when Caligula declares martial law, or when the next Emperor/Empress who is shoved down our throats in November decides to declare martial law. We can assure you that this is where we are headed in the not too distant future so that the Constitution can be completely suspended and all the dissidents can be herded off to Halliburton-built detention camps. If you have weapons and ammunition but no storable food, you are screwed. Hunger and starvation are the ultimate in gun control.
All these fuel and food scams take place as our general populace worries about their carbon footprints. Their total disconnect from reality is nothing less than surreal. But look at the bright side, it will be like the good old days when all the Administration, Congressional and Military rats go into their bunkers and safe-houses, as set forth in a secret written plan presented to Congress, while the rest of us are starved, diseased, shot, poisoned and/or nuked to death. You’ll get to play “hide and go seek” with your former government officials, as well as “war games” and “cops and robbers.” And think about how much fun it will be when we get to use the drill rigs we formerly used to tap oil reserves to drill down to bunker level so we can place a multi- megaton thermonuclear device down the hole. It will be like when you used to put a cherry bomb or M-80 under a coffee can, and then listen for the loud bang and watch the “cool” explosion. As they say, the only difference between men and boys is the price of their toys! And if the moles try to come out of their bunkers, then we get to play “whack-a-mole.” Heck, we’re starting to warm up to all this potential fun already!
The “Big Cull” is now underway as all the speculation, fraud, excess and profligacy of Wall Street and millions of unscrupulous borrowers get shoved up our derrieres in the form of hyperinflation and higher taxes. When the various GSE’s, where all the old (and now new) toxic waste is being buried, finally go under, it will be like the China Syndrome, a meltdown to hell. The Fed’s general collateral will be used up by then, which will lead to direct monetization of treasuries and rampant inflation. As well, the defaulted debts that are absorbed by the FHA, FHLB, Fannie and Freddie will result in much higher IRS bills as the hapless taxpayers are forced to bail out the cataclysmically decimated system. When, we ask, are the citizens of this country going to have their fill of this bailout tripe? Make sure that every single incumbent other than Ron Paul is voted out of office or we will all be pauperized.
We characterized this situation as the “Big Cull” because that is exactly what is in store for the smaller companies in America, Canada, Mexico, Western Europe and Japan. They will be culled out. Note how only the large insider-banks are being bailed by the Fed, a private central bank which is owned by some of the very companies they are bailing out. Talk about a conflict of interest! Note also how mostly the various transnational conglomerates have any real earnings to speak of due to free trade, globalization, off-shoring, outsourcing, slave labor and a weaker dollar, and even some of these gargantuan concerns are in trouble. The Fed is only giving money to big elitist insider companies, who are hoarding the cash out of fear, yes, but also they will be selectively withholding their largess from any who do not belong to the “Big Game.”
When hyperinflation from an out-of-control money supply finally hits home fully, consumer spending drops off a cliff and corporate earnings go negative, the Fed will be forced to turn to higher rates to save what is left of the dollar or face being run out of the country which by then will start to resemble Zimbabwe, and the whole system will crash and be purged in the upcoming “Very Large Depression” or, if you prefer, the “Much Greater Depression.” Select insiders will be bailed out at taxpayer expense, while those insiders and non-insiders that fail will be merged with, or auctioned off at pennies on the dollar to, the surviving insiders. The elitists have already made plans on which companies will survive and which will fail so they can place their bets accordingly.
The final number of businesses and financial corporations which fail in the upcoming economic devastation could well number in the tens of thousands worldwide. Few companies will be able to survive the coming catastrophe without help from their governments and/or from the Fed or the other main central banks like the BOE, ECB and BOJ.
Even the Fed itself may be discarded and replaced with a far more malevolent cartel vehicle which is put in charge of everything financial as has been suggested by our “beloved” Treasury Secretary, Hanky Panky Paulson, on loan from Goldman Sachs. It is all about driving out the competition so the Illuminati can reign supreme.
The President’s Working Group on Financial Markets was created by Executive Order 12631, signed on March 18, 1988 by President Ronald Reagan in the aftermath of the Stock Market Crash of 1987. Eleven years later, in 1999, the Glass-Steagall Act (GSA), which for many decades had prohibited a bank holding company from owning any non-banking financial companies, such as investment banks and brokerage houses, was repealed by the Gramm-Leach-Bliley Act (GLBA) that was signed into law by President Slick Willie Clinton.
The GSA had been in effect since 1933 and was passed due to abuses, which were found to be a substantial contributing factor to the Great Depression. This wise piece of legislation had kept us out of trouble for over six decades. Both Executive Order 12631 and the GLBA will go down in history as the most ill-advised and most abused financial orders, laws and regulations ever devised, perhaps in the history of our country. The Executive Order currently gives the PPT the right to enter any markets to create stability in the face of a crisis, but instead they use this power on a 24/7 basis to hide from the public all the damage that has been intentionally or unintentionally done to our economy by various Illuminist schemes, including the abuse of the GLBA which allowed banks to pawn off fraudulently rated toxic waste, which quite often the banks themselves or their subsidiaries had created, on their clients and to hold it for those clients in offshore accounts called SIV’s. There are many other versions of toxic waste out there that are waiting to implode, all of which were enabled by the unwise authorization of these incestuous relationships in the GLBA. Asset-backed securities are going to be the next shoe to drop as the cash flows from car loans, credit card accounts, mortgages and such esoteric things as aircraft lease payments, which secure these derivative instruments, are interrupted by rampaging, ever-accelerating defaults on the underlying debt as the economy drops off into a hyperinflationary recession. The PPT hides while the GLBA destroys. That’s how it works.
These moronic acts by former Presidents and Congresses are what allowed the psychopathic creation of hundreds of trillions in derivatives by way of “financial engineering” in order to absorb the rampant money being supplied by the Fed to fuel financial sector profits in order to cover up the damage being done to the economy by free trade, globalization, off-shoring, outsourcing and illegal immigration.
The money was pumped in through the primary dealers via the repo pool and was loaned out to other foreign and domestic banks and to client dupes like hedge funds, insurance companies, pension funds and other institutional investors in order to purchase the toxic waste, often with maniacal degrees of leverage. The sales proceeds were then re-loaned to the mortgage companies so they could fund more fraudulent mortgages which could then be securitized into more toxic waste for resale, thus rolling the money over and over, with the Fed’s periodic money injections allowing them to expand the amount of loan money available overall to keep the bubble going.
All caution was thrown to the wind to bring in even the unqualified so that the fees and commissions would keep rolling in.
Note that as of 2006, the financial sector contributed about 8% to our GDP, when in 1947, it was 2.5%. That is because the financial sector no longer greases the skids for a healthy economy that produces real goods and services, but has become an industry unto itself, peddling toxic waste instead of funding the production of real goods and services. It has become a self-perpetuating, gargantuan producer of poppycock and phony bologna, and has become the portal through which the Fed pumps in titanic amounts of money and credit to produce profits in the financial sector that help to offset the damage to US GDP which has been done by the latest incarnation of the British mercantilist system that has beggared our middle class. This continual pumping of money and credit to cover the damage to our GDP has inexorably moved us toward a weaker dollar and hyperinflation.
The profits generated by this “puff the fluff” smoke and mirrors operation accounts for much of our so-called GDP growth, and also explains the wild growth in derivatives worldwide from about 80 trillion in notional principal in 1999 to today’s 600 trillion plus, with the credit default swaps portion of that total, now about 62 trillion, doubling every three years or so over the past decade.
We feel that Real GDP has been negative on average for almost two decades if you make adjustments for actual, as opposed to official, inflation and especially when you factor in the bogus contribution to GDP that has been made by our quickly deteriorating financial system, some 8% instead of what used to be about 4% before we started down this path toward insanity.
A good portion of the fees and commissions that comprise the financial sector’s contribution to GDP over the past decade have been generated by the fraudulent sale of worthless dot.com stocks and toxic waste OTC derivatives.
We ask what value has been added to our economy and what production has occurred when you sell worthless stocks or repackage existing loans that have been made to unqualified buyers, that are supported by inflated appraisals and that have been given fraudulent ratings? Where is the value added to the economy when substantial portions of what is produced is either worthless or worth far less than what is paid for it from the very outset. It’s almost akin to the sale of new automobiles where a car’s value loses multiple thousands of dollars as they are driven off the dealer’s lot by their new owners. At least with a new car the price is determined by the actual cost of the inputs and an established market value, instead of being valued by reference to artificially low rates of interest along with fraudulent, dreamed-up qualifications and appraisals and arbitrary, often imaginary, market values set by theoretical mathematical models. We feel that much of the filthy lucre that has been produced by the financial sector over the past decade is nothing more than profits earned on Ponzi-scheme money that is rolled over repeatedly. How can such profits possibly be attributed to our GDP with any intellectual honesty?
Note how gold and silver are being held down by sales and leasing as they consolidate for the next move up, while oil is allowed to fly. As soon as gold and silver start to rally, watch how quickly oil drops. Large specs should be ready for this move which means nothing because it will be totally contrived. The fundamentals will be just as strong as ever no matter what they do to oil because inflation and balance sheet destruction are both baked into the cake as our real estate markets and economy drop into the tank. All those high oil prices are going to take their toll down the line in lower profits or higher inflation, just wait and see.
Also note that any new war adventures will most likely occur after both gold and oil have finished their spring rallies and are at much lower levels for purposes of consolidating what will be their most recent gains. A hard but pointless pounding from the cartel can be expected for precious metals and commodities ahead of any new war adventure that is planned. Kosovo, Iran, Lebanon and the Gaza Strip are all possibilities, and these possibilities will keep oil, precious metals and their related shares well bid while the various general stock markets get hammered by the imploding recessionary economy. If a war does start, get ready for some wild action!
Note that Ron Paul took 16% of the vote in Pennsylvania’s Republican Primary, beating Huckabee’s 11%. Yet we hear nothing about this in the media. In fact, we don’t even hear it mentioned that Ron Paul is still a candidate. Our media and our entire elective process are a disgrace. We are governed by a two party dictatorship. If any of the miscreants offered by the Illuminati are elected, we’re leaving the country. Oh, that’s right, we already left! And you might want to consider doing so also.
Another piece of disinformation appeared in the WSJ this past week. Harvard Professor and former Chairman of the President’s Council of Economic Advisors, Martin Feldstein tells us the Fed shouldn’t lower interest rates any further because the likely benefit is small compared to the potential damage due to inflation. This is true and it is part of the theme chanted at the G-7 meeting. Lower interest rates mean higher energy and food inflation. That means riots in the third world and millions starving. We wish they were concerned but they are not. This is just a variation on a theme-propaganda. In Mr. Feldstein’s dissertation nowhere does it refer to the massive increase in money and credit that goes on relentlessly. If interest rates were raised the US economy would collapse even though they should be raising them not lowering them. It is more important to save the economy, Wall Street and the banks.
Inflation and hyperinflation can always be liked about. The other result is the collapsing dollar. Yes, lower interest rates stimulate economic activity, but they also force wages and prices higher as well. As we move forward this year and into next year unemployment and a receding economy will not impede monetary inflation. Lower interest rates will exacerbate the situation, but the inflation is already in the pipeline. What else can one expect with an 18% increase in money and credit and lower interest rates that is in the pipeline for the next 18 months and there is no changing that. The elitists know the solution to the food problem because they created it. Just stop using food for ethanol.
Mr. Feldstein’s comments are generally true but he refuses to cover the whole subject when he certainly knows the answers we know. Lower interest rates do tend to induce investors to add commodities to their portfolios, but that in part is offset by higher margin requirements, which exchanges put in place to protect their commercial dealers. Investors are in commodities and precious metals because they want real assets not paper assets. Feldstein cites lower interest rates as a cause for higher oil prices and food prices because farmers devote more production toward growing corn for ethanol. He fails to mention the government’s $0.51 per gallon subsidy, which along with higher sales prices is an inducement.
In his dissertation nowhere does the word "dollar" appear. The main reason for higher commodity and precious metals prices is a plunging dollar. It’s a flight to quality and something real. He also leaves out totally our current account deficits. What we have is a totally one-sided story. Not an informational commentary, but a clever piece of propaganda. He is a mouthpiece for the elitists who planned this whole capper in the first place. Yes, it is a crime to deliberately starve poor people to death.
Commodities are rising due to American debt, massive monetary increases and now lower interest rates. It is now not only the US due to the credit crisis, the Fed, Wall Street and the money central banks created, but it is also other nations for the past four years that have also increased monetary aggregates by 14%. Again, it is just not interest rates. Isn’t it an inevitable consequence of massive monetary aggregate expansion worldwide that we’d get inflation and speculation? And, lower interest rates are a part of it. Global reserves have increased $2.5 trillion, or 85%, in just the past two years. The dollar is now dysfunctional and the entire world monetary and financial system is out of balance. Again inflation and speculation have to be an obvious conclusion to profligacy. We can expect nothing less in a world of fiat currencies. Once the gold backing was removed from the dollar on 8/15/71 it was all-downhill from there and until we return to gold backed currencies the results will be the same – ultimately disastrous. There is no gold reserve system to restrain monetary expansions. There is no control and no discipline. The result has been an historic inflation in dollar financial claims, which has destroyed the global monetary system and now it’s dismantling financial and economic stability. The destabilizing price movements and myriad inflationary effects are poised to worsen. Once the foreign buyers of dollar denominated assets have had enough BASTA YA' USA the huge dollar reserves will hit our shores and inundate the system.
The Fed and all central banks are on the run and the credit crisis worsens. Trillions of dollars and euros, etc. are being fed into the system in order to just keep it afloat. The world financial system is being nationalized country by country.
There is certainly no end in sight of this monetary expansion. The mortgage market is being nationalized via Freddie Mae, Fannie Mac and the FHA. The same has been happening in banking as major investment banking firms too big to fail have been expanding assets by 14% to 27% over the past 38 weeks, almost all of that increase coming from the Fed as bank credit expanded 12.6%. During that period there was a $184 billion, 29%, increase in foreign custody holdings for foreign central banks at the Fed. All of these capital injections have for the moment stymied the systemic de-leveraging, but that is for now. The inflationary implications are enormous and the solution to the problem is not at hand and we do not think there is one.
The outlook for our economy and financial situation looks dreadful. There has been no solution in nine months and it looks worse than it did in August. The Fed and ECB have stopped the bleeding for now but there is no solution in sight. There is nothing ordinary regarding the credit breakdown. Usually such corrections track economic developments, but not this time. This time it is different. The US government has assumed all the risk, which is a precedent in cost and scope for the American taxpayer. The tide has been stemmed for now but not for long. As Feldstein says you cannot cut interest rates forever nor can government guarantees continue. Market manipulation by our government cannot continue forever. It will eventually lose its effectiveness. Besides there is nothing government or the Fed can do. This collapse has to run its course. The unbalance and maladjustment is simply too great. Risk is being moved from one place to another. From the markets to government, which is no solution, unless they want the dollar at 20 on the USDX. While all this proceeds so will inflation in an over- liquefied global system that is no longer able to handle such a flood of aggregates. We are in uncharted waters especially if you throw in derivatives. All we can say is the world has lots of problems.
As we have said for so many years, the motto for the Illuminati should be “perpetual war for perpetual peace.” The recent testimony by General Petraeus and Ambassador Crocker was devious at best. That is understandable in as much as they are front men for the Illuminists. All we got was ring around the rosy. Our troops conveniently fail in their objectives, which is an excuse to continue the occupation. Congress, which is paid by these Illuminists to keep their heads in the sand, delivered the usual softball questions. Talk about abdication of responsibility to the citizens who elected them. They surely dance to a different fiddler. This is the group that pays the enemy not to appear for battle so they can if only temporarily gain victory. When they cannot gain victory they blame Iran, al Qaeda or the Baghdad government.
They always have a scapegoat. What the US administration is playing for is perpetual war and occupation to keep control of the oil for the internationalist oil giants. This is accomplished by continued occupation, a never ending state of war and a weak disorganized Iraqi government. The upshot of the Senate hearing was that our Senate is a disgrace.
Bob ChapmanThe International ForecasterApril 27, 2008
Uncle Ben Bernanke is currently pumping out federal reserve notes, or electrons with binary encoding as the case may be, like they were going out of style in order to save the miscreants on Wall Street and in order to postpone economic catastrophe for the benefit of our incumbent sociopaths in Congress, who are the best politicians that money can buy. Based on the elitist Malthusian Agenda, may we suggest that you start converting some of those notes and electrons into storable food, such as rice and freeze-dried food. We suppose this would be the latest incarnation of Uncle Ben’s Converted Rice, and without it, you will be at the mercy of the elitists. The Illuminati want to kill off most of the “useless eaters” on this planet. Their cohorts express shock and dismay over all the food shortages and riots that are breaking out globally when they are in front of the cameras, but when the reporters leave you can hear their maniacal laughter as these cretins contemplate how much easier it will be to control a population of 1 billion or so instead of the current 6 billion which occupy this planet, a number that is rapidly growing at a pace that far outstrips the growth in our fuel and food supplies which have been malevolently curtailed over decades to bring about the current results you see before you.
There have been no new petrochemical refineries constructed since the 1970’s. Oil exploration has been stymied by the oil companies themselves who, with the help of the Illuminati and their operatives in industry, in government and in private trusts and foundations, have funded environmentalist movements, sabotaged and disparaged nuclear plants, shelved patents for greener energy by buying out or killing off inventors and pushed oil prices to ludicrously low levels to stop independent oil wildcatters from extracting oil out of the ground because they could not do so profitably. Big Illuminist automakers contributed to the problem by producing gas-guzzling SUV’s and trucks which most people own more for show than for practical use. Rest assured that there is plenty of oil within our own borders, with enough to supply the needs of the entire US economy for many decades in Alaska, North Dakota and Montana alone, much of it extractable at $16 per barrel using newly developed directional drilling systems, and never mind the hundreds of billions of barrels extractable from oil sands and oil shale in various states and the offshore oil in the Gulf of Mexico. But in order to induce smaller producers to go after this oil (the larger producers will leave it in the ground for obvious reasons), there has to be a floor of about $25 per barrel in order to protect profit margins for smaller operators. Otherwise, as has been done in the past, the larger companies will temporarily drive prices below the cost of production for the smaller companies, thereby driving them out of business.
A floor of $25 per barrel is a very reasonable floor considering we are now at $119 per barrel, but our Congress is bought-and-paid-for by the Illuminati and their big oil interests, so you hear nothing about this from them or our useless fane-stream media which are also controlled by the Illuminati. The elitists do not want plentiful oil — they want to control you!
The same has happened in agriculture. At the beginning of the 20th century, most Americans were still farmers. Virtually everyone had a farm or at least knew how to farm if they had to. No longer. The smaller farmers were squeezed out by subsidies given to big Illuminist-sponsored farming concerns in order to keep crop lands vacant, supposedly to keep food supplies down to support higher prices, but this just served to kill off smaller farmers who could not compete with the much larger farmers who got something for nothing. The smaller farmers were forced in this manner to take jobs in our growing industrial society, culling out the small fry just as was done with oil companies, banks and corporate America generally.
The latest methods of controlling agricultural development are genetically modified food, the bio-fuel scam and radio frequency ID tags for livestock. The hook for genetically modified food is greater output and greater efficiency, but you have to buy seed from the big agricultural companies who are now genetically designing their seeds to self-destruct after one harvest. That way, they control the price and availability of the seeds. Farmers who do not use GM seeds cannot compete with those who do, so fewer and fewer are going with natural seeds that cannot be patented and controlled. And if you are unlucky enough to have your natural crops contaminated by nearby GM crops, you get sued for using patented GM seed by the big agricultural company that owns the patent.
The bio-fuel scam is one of the stupidest, biggest and most dangerous scams ever, as it diverts vital food crops to use in producing bio-fuel, which we in America do not even need as described above due to our huge oil reserves that are located within our own borders. Ethanol is 30% less efficient than gasoline and is very damaging to internal combustion engines, yet we seek this out to shore up oil production shortages. This is pure madness. And when you couple these malevolently manufactured shortages and mega-foolish reallocations of resources with the Fed’s destruction of the dollar, you get food riots globally that are going to spread rapidly and get much worse if something is not done immediately to put an end to this evil scam.
Remember, many currencies in the developing world are pegged to the dollar to support exports, so when the dollar gets destroyed, such pegged currencies get destroyed along with it. This leads to higher food prices in such devalued currencies, and is making food unaffordable for the poor in such countries even when it is available for sale. This situation has been described recently as a “silent tsunami,” but that silence is now turning into the screams and cries of the hungry. This is what the Illuminati want, to kill off the useless eaters, but they have broken their own rules and are bringing these problems to bear far too quickly, a mega-stupid move which they will pay for dearly. Five billion people will not go out quietly.
And then, apparently because Henrietta the hen might wander off out of the barnyard, all farmers are now required to affix RFID tags to their livestock. What other reason could there be for old Henrietta to need a tag. They claim they want to track animals in case of disease, but come on, we got along fine without this Mark-of-the-Beast-technology-for-animals for thousands of years. And yes, you’re next on the tag agenda. These tags are being used first to bump out the smaller livestock producers due to the extra costs and labor associated with the RFID tags. But these tags will also enable the government to locate and control food sources when Caligula declares martial law, or when the next Emperor/Empress who is shoved down our throats in November decides to declare martial law. We can assure you that this is where we are headed in the not too distant future so that the Constitution can be completely suspended and all the dissidents can be herded off to Halliburton-built detention camps. If you have weapons and ammunition but no storable food, you are screwed. Hunger and starvation are the ultimate in gun control.
All these fuel and food scams take place as our general populace worries about their carbon footprints. Their total disconnect from reality is nothing less than surreal. But look at the bright side, it will be like the good old days when all the Administration, Congressional and Military rats go into their bunkers and safe-houses, as set forth in a secret written plan presented to Congress, while the rest of us are starved, diseased, shot, poisoned and/or nuked to death. You’ll get to play “hide and go seek” with your former government officials, as well as “war games” and “cops and robbers.” And think about how much fun it will be when we get to use the drill rigs we formerly used to tap oil reserves to drill down to bunker level so we can place a multi- megaton thermonuclear device down the hole. It will be like when you used to put a cherry bomb or M-80 under a coffee can, and then listen for the loud bang and watch the “cool” explosion. As they say, the only difference between men and boys is the price of their toys! And if the moles try to come out of their bunkers, then we get to play “whack-a-mole.” Heck, we’re starting to warm up to all this potential fun already!
The “Big Cull” is now underway as all the speculation, fraud, excess and profligacy of Wall Street and millions of unscrupulous borrowers get shoved up our derrieres in the form of hyperinflation and higher taxes. When the various GSE’s, where all the old (and now new) toxic waste is being buried, finally go under, it will be like the China Syndrome, a meltdown to hell. The Fed’s general collateral will be used up by then, which will lead to direct monetization of treasuries and rampant inflation. As well, the defaulted debts that are absorbed by the FHA, FHLB, Fannie and Freddie will result in much higher IRS bills as the hapless taxpayers are forced to bail out the cataclysmically decimated system. When, we ask, are the citizens of this country going to have their fill of this bailout tripe? Make sure that every single incumbent other than Ron Paul is voted out of office or we will all be pauperized.
We characterized this situation as the “Big Cull” because that is exactly what is in store for the smaller companies in America, Canada, Mexico, Western Europe and Japan. They will be culled out. Note how only the large insider-banks are being bailed by the Fed, a private central bank which is owned by some of the very companies they are bailing out. Talk about a conflict of interest! Note also how mostly the various transnational conglomerates have any real earnings to speak of due to free trade, globalization, off-shoring, outsourcing, slave labor and a weaker dollar, and even some of these gargantuan concerns are in trouble. The Fed is only giving money to big elitist insider companies, who are hoarding the cash out of fear, yes, but also they will be selectively withholding their largess from any who do not belong to the “Big Game.”
When hyperinflation from an out-of-control money supply finally hits home fully, consumer spending drops off a cliff and corporate earnings go negative, the Fed will be forced to turn to higher rates to save what is left of the dollar or face being run out of the country which by then will start to resemble Zimbabwe, and the whole system will crash and be purged in the upcoming “Very Large Depression” or, if you prefer, the “Much Greater Depression.” Select insiders will be bailed out at taxpayer expense, while those insiders and non-insiders that fail will be merged with, or auctioned off at pennies on the dollar to, the surviving insiders. The elitists have already made plans on which companies will survive and which will fail so they can place their bets accordingly.
The final number of businesses and financial corporations which fail in the upcoming economic devastation could well number in the tens of thousands worldwide. Few companies will be able to survive the coming catastrophe without help from their governments and/or from the Fed or the other main central banks like the BOE, ECB and BOJ.
Even the Fed itself may be discarded and replaced with a far more malevolent cartel vehicle which is put in charge of everything financial as has been suggested by our “beloved” Treasury Secretary, Hanky Panky Paulson, on loan from Goldman Sachs. It is all about driving out the competition so the Illuminati can reign supreme.
The President’s Working Group on Financial Markets was created by Executive Order 12631, signed on March 18, 1988 by President Ronald Reagan in the aftermath of the Stock Market Crash of 1987. Eleven years later, in 1999, the Glass-Steagall Act (GSA), which for many decades had prohibited a bank holding company from owning any non-banking financial companies, such as investment banks and brokerage houses, was repealed by the Gramm-Leach-Bliley Act (GLBA) that was signed into law by President Slick Willie Clinton.
The GSA had been in effect since 1933 and was passed due to abuses, which were found to be a substantial contributing factor to the Great Depression. This wise piece of legislation had kept us out of trouble for over six decades. Both Executive Order 12631 and the GLBA will go down in history as the most ill-advised and most abused financial orders, laws and regulations ever devised, perhaps in the history of our country. The Executive Order currently gives the PPT the right to enter any markets to create stability in the face of a crisis, but instead they use this power on a 24/7 basis to hide from the public all the damage that has been intentionally or unintentionally done to our economy by various Illuminist schemes, including the abuse of the GLBA which allowed banks to pawn off fraudulently rated toxic waste, which quite often the banks themselves or their subsidiaries had created, on their clients and to hold it for those clients in offshore accounts called SIV’s. There are many other versions of toxic waste out there that are waiting to implode, all of which were enabled by the unwise authorization of these incestuous relationships in the GLBA. Asset-backed securities are going to be the next shoe to drop as the cash flows from car loans, credit card accounts, mortgages and such esoteric things as aircraft lease payments, which secure these derivative instruments, are interrupted by rampaging, ever-accelerating defaults on the underlying debt as the economy drops off into a hyperinflationary recession. The PPT hides while the GLBA destroys. That’s how it works.
These moronic acts by former Presidents and Congresses are what allowed the psychopathic creation of hundreds of trillions in derivatives by way of “financial engineering” in order to absorb the rampant money being supplied by the Fed to fuel financial sector profits in order to cover up the damage being done to the economy by free trade, globalization, off-shoring, outsourcing and illegal immigration.
The money was pumped in through the primary dealers via the repo pool and was loaned out to other foreign and domestic banks and to client dupes like hedge funds, insurance companies, pension funds and other institutional investors in order to purchase the toxic waste, often with maniacal degrees of leverage. The sales proceeds were then re-loaned to the mortgage companies so they could fund more fraudulent mortgages which could then be securitized into more toxic waste for resale, thus rolling the money over and over, with the Fed’s periodic money injections allowing them to expand the amount of loan money available overall to keep the bubble going.
All caution was thrown to the wind to bring in even the unqualified so that the fees and commissions would keep rolling in.
Note that as of 2006, the financial sector contributed about 8% to our GDP, when in 1947, it was 2.5%. That is because the financial sector no longer greases the skids for a healthy economy that produces real goods and services, but has become an industry unto itself, peddling toxic waste instead of funding the production of real goods and services. It has become a self-perpetuating, gargantuan producer of poppycock and phony bologna, and has become the portal through which the Fed pumps in titanic amounts of money and credit to produce profits in the financial sector that help to offset the damage to US GDP which has been done by the latest incarnation of the British mercantilist system that has beggared our middle class. This continual pumping of money and credit to cover the damage to our GDP has inexorably moved us toward a weaker dollar and hyperinflation.
The profits generated by this “puff the fluff” smoke and mirrors operation accounts for much of our so-called GDP growth, and also explains the wild growth in derivatives worldwide from about 80 trillion in notional principal in 1999 to today’s 600 trillion plus, with the credit default swaps portion of that total, now about 62 trillion, doubling every three years or so over the past decade.
We feel that Real GDP has been negative on average for almost two decades if you make adjustments for actual, as opposed to official, inflation and especially when you factor in the bogus contribution to GDP that has been made by our quickly deteriorating financial system, some 8% instead of what used to be about 4% before we started down this path toward insanity.
A good portion of the fees and commissions that comprise the financial sector’s contribution to GDP over the past decade have been generated by the fraudulent sale of worthless dot.com stocks and toxic waste OTC derivatives.
We ask what value has been added to our economy and what production has occurred when you sell worthless stocks or repackage existing loans that have been made to unqualified buyers, that are supported by inflated appraisals and that have been given fraudulent ratings? Where is the value added to the economy when substantial portions of what is produced is either worthless or worth far less than what is paid for it from the very outset. It’s almost akin to the sale of new automobiles where a car’s value loses multiple thousands of dollars as they are driven off the dealer’s lot by their new owners. At least with a new car the price is determined by the actual cost of the inputs and an established market value, instead of being valued by reference to artificially low rates of interest along with fraudulent, dreamed-up qualifications and appraisals and arbitrary, often imaginary, market values set by theoretical mathematical models. We feel that much of the filthy lucre that has been produced by the financial sector over the past decade is nothing more than profits earned on Ponzi-scheme money that is rolled over repeatedly. How can such profits possibly be attributed to our GDP with any intellectual honesty?
Note how gold and silver are being held down by sales and leasing as they consolidate for the next move up, while oil is allowed to fly. As soon as gold and silver start to rally, watch how quickly oil drops. Large specs should be ready for this move which means nothing because it will be totally contrived. The fundamentals will be just as strong as ever no matter what they do to oil because inflation and balance sheet destruction are both baked into the cake as our real estate markets and economy drop into the tank. All those high oil prices are going to take their toll down the line in lower profits or higher inflation, just wait and see.
Also note that any new war adventures will most likely occur after both gold and oil have finished their spring rallies and are at much lower levels for purposes of consolidating what will be their most recent gains. A hard but pointless pounding from the cartel can be expected for precious metals and commodities ahead of any new war adventure that is planned. Kosovo, Iran, Lebanon and the Gaza Strip are all possibilities, and these possibilities will keep oil, precious metals and their related shares well bid while the various general stock markets get hammered by the imploding recessionary economy. If a war does start, get ready for some wild action!
Note that Ron Paul took 16% of the vote in Pennsylvania’s Republican Primary, beating Huckabee’s 11%. Yet we hear nothing about this in the media. In fact, we don’t even hear it mentioned that Ron Paul is still a candidate. Our media and our entire elective process are a disgrace. We are governed by a two party dictatorship. If any of the miscreants offered by the Illuminati are elected, we’re leaving the country. Oh, that’s right, we already left! And you might want to consider doing so also.
Another piece of disinformation appeared in the WSJ this past week. Harvard Professor and former Chairman of the President’s Council of Economic Advisors, Martin Feldstein tells us the Fed shouldn’t lower interest rates any further because the likely benefit is small compared to the potential damage due to inflation. This is true and it is part of the theme chanted at the G-7 meeting. Lower interest rates mean higher energy and food inflation. That means riots in the third world and millions starving. We wish they were concerned but they are not. This is just a variation on a theme-propaganda. In Mr. Feldstein’s dissertation nowhere does it refer to the massive increase in money and credit that goes on relentlessly. If interest rates were raised the US economy would collapse even though they should be raising them not lowering them. It is more important to save the economy, Wall Street and the banks.
Inflation and hyperinflation can always be liked about. The other result is the collapsing dollar. Yes, lower interest rates stimulate economic activity, but they also force wages and prices higher as well. As we move forward this year and into next year unemployment and a receding economy will not impede monetary inflation. Lower interest rates will exacerbate the situation, but the inflation is already in the pipeline. What else can one expect with an 18% increase in money and credit and lower interest rates that is in the pipeline for the next 18 months and there is no changing that. The elitists know the solution to the food problem because they created it. Just stop using food for ethanol.
Mr. Feldstein’s comments are generally true but he refuses to cover the whole subject when he certainly knows the answers we know. Lower interest rates do tend to induce investors to add commodities to their portfolios, but that in part is offset by higher margin requirements, which exchanges put in place to protect their commercial dealers. Investors are in commodities and precious metals because they want real assets not paper assets. Feldstein cites lower interest rates as a cause for higher oil prices and food prices because farmers devote more production toward growing corn for ethanol. He fails to mention the government’s $0.51 per gallon subsidy, which along with higher sales prices is an inducement.
In his dissertation nowhere does the word "dollar" appear. The main reason for higher commodity and precious metals prices is a plunging dollar. It’s a flight to quality and something real. He also leaves out totally our current account deficits. What we have is a totally one-sided story. Not an informational commentary, but a clever piece of propaganda. He is a mouthpiece for the elitists who planned this whole capper in the first place. Yes, it is a crime to deliberately starve poor people to death.
Commodities are rising due to American debt, massive monetary increases and now lower interest rates. It is now not only the US due to the credit crisis, the Fed, Wall Street and the money central banks created, but it is also other nations for the past four years that have also increased monetary aggregates by 14%. Again, it is just not interest rates. Isn’t it an inevitable consequence of massive monetary aggregate expansion worldwide that we’d get inflation and speculation? And, lower interest rates are a part of it. Global reserves have increased $2.5 trillion, or 85%, in just the past two years. The dollar is now dysfunctional and the entire world monetary and financial system is out of balance. Again inflation and speculation have to be an obvious conclusion to profligacy. We can expect nothing less in a world of fiat currencies. Once the gold backing was removed from the dollar on 8/15/71 it was all-downhill from there and until we return to gold backed currencies the results will be the same – ultimately disastrous. There is no gold reserve system to restrain monetary expansions. There is no control and no discipline. The result has been an historic inflation in dollar financial claims, which has destroyed the global monetary system and now it’s dismantling financial and economic stability. The destabilizing price movements and myriad inflationary effects are poised to worsen. Once the foreign buyers of dollar denominated assets have had enough BASTA YA' USA the huge dollar reserves will hit our shores and inundate the system.
The Fed and all central banks are on the run and the credit crisis worsens. Trillions of dollars and euros, etc. are being fed into the system in order to just keep it afloat. The world financial system is being nationalized country by country.
There is certainly no end in sight of this monetary expansion. The mortgage market is being nationalized via Freddie Mae, Fannie Mac and the FHA. The same has been happening in banking as major investment banking firms too big to fail have been expanding assets by 14% to 27% over the past 38 weeks, almost all of that increase coming from the Fed as bank credit expanded 12.6%. During that period there was a $184 billion, 29%, increase in foreign custody holdings for foreign central banks at the Fed. All of these capital injections have for the moment stymied the systemic de-leveraging, but that is for now. The inflationary implications are enormous and the solution to the problem is not at hand and we do not think there is one.
The outlook for our economy and financial situation looks dreadful. There has been no solution in nine months and it looks worse than it did in August. The Fed and ECB have stopped the bleeding for now but there is no solution in sight. There is nothing ordinary regarding the credit breakdown. Usually such corrections track economic developments, but not this time. This time it is different. The US government has assumed all the risk, which is a precedent in cost and scope for the American taxpayer. The tide has been stemmed for now but not for long. As Feldstein says you cannot cut interest rates forever nor can government guarantees continue. Market manipulation by our government cannot continue forever. It will eventually lose its effectiveness. Besides there is nothing government or the Fed can do. This collapse has to run its course. The unbalance and maladjustment is simply too great. Risk is being moved from one place to another. From the markets to government, which is no solution, unless they want the dollar at 20 on the USDX. While all this proceeds so will inflation in an over- liquefied global system that is no longer able to handle such a flood of aggregates. We are in uncharted waters especially if you throw in derivatives. All we can say is the world has lots of problems.
As we have said for so many years, the motto for the Illuminati should be “perpetual war for perpetual peace.” The recent testimony by General Petraeus and Ambassador Crocker was devious at best. That is understandable in as much as they are front men for the Illuminists. All we got was ring around the rosy. Our troops conveniently fail in their objectives, which is an excuse to continue the occupation. Congress, which is paid by these Illuminists to keep their heads in the sand, delivered the usual softball questions. Talk about abdication of responsibility to the citizens who elected them. They surely dance to a different fiddler. This is the group that pays the enemy not to appear for battle so they can if only temporarily gain victory. When they cannot gain victory they blame Iran, al Qaeda or the Baghdad government.
They always have a scapegoat. What the US administration is playing for is perpetual war and occupation to keep control of the oil for the internationalist oil giants. This is accomplished by continued occupation, a never ending state of war and a weak disorganized Iraqi government. The upshot of the Senate hearing was that our Senate is a disgrace.
MAY DAY, MAY DAY, MAY DAY, Trabajadores sin política,
Trabajadores sin política
Mario Sai · · · · ·
27/04/08
Dios ciega a quien quiere perder y la Izquierda ha estado ciega ante los cambios acaecidos en la condición del trabajo. Y ha perdido las elecciones de forma flagrante. Si existe una causa que explica la separación entre el trabajo y la política –algo evidente incluso en el resultado electoral- ésta consiste precisamente en el hecho de que la política ( las instituciones, los partidos, los sindicatos) ha abandonado la tarea de planificación, promoción, regulación del desarrollo económico y social
Desde el 92 hasta la actualidad en Italia los acuerdos de concertación se han limitado a moderar la dinámica salarial, con la paradoja de que cuanto más importancia se le concedía al conflicto redistributivo tanto más el sindicato perdía la capacidad de defender los salarios , que están hoy, en efecto, entre los más bajos de Europa. Todo esto ha acaecido en la época de la difusión global de las nuevas tecnologías de la información.
En Italia los trabajadores usuarios de información y operarios de tecnología son más de 12 millones. De ellos cerca de un millón pertenecen a nuevas tipologías profesionales que controlan el saber y saben crear o gestionar flujos de información y conocimiento a veces muy por encima de la capacidad de control de la empresa. Frente a esta nueva centralidad del saber y de la creatividad de los trabajadores, las empresas han respondido, no con una confrontación sobre nuevos modelos organizativos, sino ofreciendo una “participación” organizada, según las enseñanzas del modelo Toyota, “de forma jerárquica” tal como lo pone de manifiesto también la reciente reestructuración de la Fiat en Pomigliano.
Este proceso contradictorio de innovación ha provocado una escisión entre áreas de trabajo en las que ha crecido la dependencia y descalificación y áreas de trabajo en las que los trabajadores han adquirido espacios de autonomía y responsabilidad. En estas se han extendido mucho los acuerdos individuales sobre su lugar dentro de la organización del trabajo, las tareas a desempeñar, las retribuciones, el horario. En este escenario se ha abierto paso también entre los trabajadores el consenso respecto de comportamientos de “colaboración”.En 1980, la Fundación Cespe indicaba que la idea de la necesidad de “colaborar” con la empresa era compartida entre los trabajadores por el 42 %, mientras que un 26,5% mantenía comportamientos autónomos y antagonistas. En el 2006 el IRES de la CGIL registraba un porcentaje de comportamientos partidarios de la colaboración del 50,35%, y respecto de los partidarios de los conflictos solo de un 11%.
Se trata con todo de una colaboración subalterna que no abarca ni los contextos organizativos de poder ni a las malas condiciones salariales y laborales. Una reciente investigación de campo auspiciada por FIM- CISL en la Fiat de Melfi, inmediatamente posterior al conflicto sindical del 2004, registraba una caída en picado de de la opinión compartida a favor del modelo participativo, que fue contestado mediante la “intencionada lentitud en el trabajo” (a la que respondieron el 10,4% de los trabajadores); la no participación en la actividad de mejora de la producción (22,3%); el absentismo (49,8%) más que la participación en las huelgas (39,6%).Este tumultuoso y contradictorio proceso de innovación, que ha polarizado las condiciones profesionales y dispersado el trabajo en el territorio se ha visto sometido al condicionamiento de la nueva dimensión global de la producción
Paradójicamente la izquierda no ha sabido ofrecer a los movimientos de la nueva globalización y a sus teóricos propuestas en lo que respecta a la producción y al trabajo telemático a distancia, como si, en ausencia de éstos, se pudiese llegar a fraguar un proyecto de reestructuración ecológica y solidaria de la economía
Han tenido mayor audiencia entre los trabajadores los cantos de sirena de los Tremonti o de los Maroni sobre la protección de la propia condición individual mediante alianzas territoriales entre trabajo y capital. Basta observar los resultados electorales de los distritos industriales, donde operan pequeñas y medianas empresas, de Lombardía y del Véneto , pero también de otras muchas áreas del Centro de Italia
El sindicato en estos sistemas territoriales (con un millón doscientos mil trabajadores, cuatro veces los de la gran empresa) desempeña un papel de tutela de las condiciones de trabajo, pero tiene muchas dificultades para intervenir en el proceso productivo y para orientar socialmente y culturalmente a los trabajadores. No es en absoluto una paradoja votar a la Liga Norte y estar afiliado o ser delegado de la FIOM. El verdadero problema del sindicato confederal está en ser capaz de abandonar esta óptica de tutela y volver a tomar la iniciativa para gobernar y orientar el cambio. Para los partidos el problema no está en la seguir a la zaga de este modelo de localismo del trabajo (como ha hecho el PD) ni en plañir sobre el empeoramiento de las condiciones sociales del trabajo (como lo hacen una gran parte de la izquierda y del sindicato).
Hace falta pasar página. ¿Puede hacerse esto, mediante una discusión interna, en el seno de los actuales partidos de la izquierda, con su limitado asentamiento territorial, con una presencia en los lugares de trabajo reducida a algunas estructuras de pocos afiliados? No se puede hacer, y sería necesario que se dieran cuenta de prisa y que involucraran de manera unitaria todas las fuerzas disponibles.
Mario Sai es un analista político italiano, columnista del cotidiano comunista Il Manifesto.
Traducción para http://www.sinpermiso.info/: Joaquín Miras
sinpermiso electrónico se ofrece semanalmente de forma gratuita. No recibe ningún tipo de subvención pública ni privada, y su existencia sólo es posible gracias al trabajo voluntario de sus colaboradores y a las donaciones altruistas de sus lectores. Si le ha interesado este artículo, considere la posibilidad de contribuir al desarrollo de este proyecto político-cultural realizando una DONACIÓN o haciendo una SUSCRIPCIÓN a la REVISTA SEMESTRAL impresa
Mario Sai · · · · ·
27/04/08
Dios ciega a quien quiere perder y la Izquierda ha estado ciega ante los cambios acaecidos en la condición del trabajo. Y ha perdido las elecciones de forma flagrante. Si existe una causa que explica la separación entre el trabajo y la política –algo evidente incluso en el resultado electoral- ésta consiste precisamente en el hecho de que la política ( las instituciones, los partidos, los sindicatos) ha abandonado la tarea de planificación, promoción, regulación del desarrollo económico y social
Desde el 92 hasta la actualidad en Italia los acuerdos de concertación se han limitado a moderar la dinámica salarial, con la paradoja de que cuanto más importancia se le concedía al conflicto redistributivo tanto más el sindicato perdía la capacidad de defender los salarios , que están hoy, en efecto, entre los más bajos de Europa. Todo esto ha acaecido en la época de la difusión global de las nuevas tecnologías de la información.
En Italia los trabajadores usuarios de información y operarios de tecnología son más de 12 millones. De ellos cerca de un millón pertenecen a nuevas tipologías profesionales que controlan el saber y saben crear o gestionar flujos de información y conocimiento a veces muy por encima de la capacidad de control de la empresa. Frente a esta nueva centralidad del saber y de la creatividad de los trabajadores, las empresas han respondido, no con una confrontación sobre nuevos modelos organizativos, sino ofreciendo una “participación” organizada, según las enseñanzas del modelo Toyota, “de forma jerárquica” tal como lo pone de manifiesto también la reciente reestructuración de la Fiat en Pomigliano.
Este proceso contradictorio de innovación ha provocado una escisión entre áreas de trabajo en las que ha crecido la dependencia y descalificación y áreas de trabajo en las que los trabajadores han adquirido espacios de autonomía y responsabilidad. En estas se han extendido mucho los acuerdos individuales sobre su lugar dentro de la organización del trabajo, las tareas a desempeñar, las retribuciones, el horario. En este escenario se ha abierto paso también entre los trabajadores el consenso respecto de comportamientos de “colaboración”.En 1980, la Fundación Cespe indicaba que la idea de la necesidad de “colaborar” con la empresa era compartida entre los trabajadores por el 42 %, mientras que un 26,5% mantenía comportamientos autónomos y antagonistas. En el 2006 el IRES de la CGIL registraba un porcentaje de comportamientos partidarios de la colaboración del 50,35%, y respecto de los partidarios de los conflictos solo de un 11%.
Se trata con todo de una colaboración subalterna que no abarca ni los contextos organizativos de poder ni a las malas condiciones salariales y laborales. Una reciente investigación de campo auspiciada por FIM- CISL en la Fiat de Melfi, inmediatamente posterior al conflicto sindical del 2004, registraba una caída en picado de de la opinión compartida a favor del modelo participativo, que fue contestado mediante la “intencionada lentitud en el trabajo” (a la que respondieron el 10,4% de los trabajadores); la no participación en la actividad de mejora de la producción (22,3%); el absentismo (49,8%) más que la participación en las huelgas (39,6%).Este tumultuoso y contradictorio proceso de innovación, que ha polarizado las condiciones profesionales y dispersado el trabajo en el territorio se ha visto sometido al condicionamiento de la nueva dimensión global de la producción
Paradójicamente la izquierda no ha sabido ofrecer a los movimientos de la nueva globalización y a sus teóricos propuestas en lo que respecta a la producción y al trabajo telemático a distancia, como si, en ausencia de éstos, se pudiese llegar a fraguar un proyecto de reestructuración ecológica y solidaria de la economía
Han tenido mayor audiencia entre los trabajadores los cantos de sirena de los Tremonti o de los Maroni sobre la protección de la propia condición individual mediante alianzas territoriales entre trabajo y capital. Basta observar los resultados electorales de los distritos industriales, donde operan pequeñas y medianas empresas, de Lombardía y del Véneto , pero también de otras muchas áreas del Centro de Italia
El sindicato en estos sistemas territoriales (con un millón doscientos mil trabajadores, cuatro veces los de la gran empresa) desempeña un papel de tutela de las condiciones de trabajo, pero tiene muchas dificultades para intervenir en el proceso productivo y para orientar socialmente y culturalmente a los trabajadores. No es en absoluto una paradoja votar a la Liga Norte y estar afiliado o ser delegado de la FIOM. El verdadero problema del sindicato confederal está en ser capaz de abandonar esta óptica de tutela y volver a tomar la iniciativa para gobernar y orientar el cambio. Para los partidos el problema no está en la seguir a la zaga de este modelo de localismo del trabajo (como ha hecho el PD) ni en plañir sobre el empeoramiento de las condiciones sociales del trabajo (como lo hacen una gran parte de la izquierda y del sindicato).
Hace falta pasar página. ¿Puede hacerse esto, mediante una discusión interna, en el seno de los actuales partidos de la izquierda, con su limitado asentamiento territorial, con una presencia en los lugares de trabajo reducida a algunas estructuras de pocos afiliados? No se puede hacer, y sería necesario que se dieran cuenta de prisa y que involucraran de manera unitaria todas las fuerzas disponibles.
Mario Sai es un analista político italiano, columnista del cotidiano comunista Il Manifesto.
Traducción para http://www.sinpermiso.info/: Joaquín Miras
sinpermiso electrónico se ofrece semanalmente de forma gratuita. No recibe ningún tipo de subvención pública ni privada, y su existencia sólo es posible gracias al trabajo voluntario de sus colaboradores y a las donaciones altruistas de sus lectores. Si le ha interesado este artículo, considere la posibilidad de contribuir al desarrollo de este proyecto político-cultural realizando una DONACIÓN o haciendo una SUSCRIPCIÓN a la REVISTA SEMESTRAL impresa
Premio Cervantes
Discurso de recepción del Premio Cervantes
Juan Gelman · · · · ·
27/04/08
Majestades, Señor Presidente del Gobierno, Señor Ministro de Cultura, Señor Rector de la Universidad de Alcalá de Henares, autoridades estatales, autonómicas, locales y académicas, amigas, amigos, señoras y señores:
Deseo, ante todo, expresar mi agradecimiento al jurado del Premio de Literatura en Lengua Castellana Miguel de Cervantes, a la alta investidura que lo patrocina y a las instituciones que hacen posible esta honrosísima distinción, la más preciada de la lengua, que hoy se me otorga. Mi gratitud es profunda y desborda lo meramente personal. En el año 2006 se galardonó con este Premio al gran poeta español Antonio Gamoneda y en el 2007 lo recibe también un poeta, esta vez de Iberoamérica. Se premia a la poesía entonces, "que es como una doncella tierna y de poca edad y en todo extremo hermosa" para don Quijote, doncella que, dice Cervantes en "Viaje del Parnaso",
"puede pintar en la mitad del día / la noche, y en la noche más escura / el alba bella que las perlas cría... / Es de ingenio tan vivo y admirable / que a veces toca en puntos que suspenden, / por tener no se qué de inescrutable".
A la poesía hoy se premia, como fuera premiada ayer y aun antes en este histórico Paraninfo donde voces muy altas resuenan todavía. Y es algo verdaderamente admirable en estos "Dürftiger Zeite", estos tiempos mezquinos, estos tiempos de penuria, como los calificaba Hölderin preguntándose "Wozu Dichter", para qué poetas. ¿Qué hubiera dicho hoy, en un mundo en el que cada tres segundos y medio un niño menor de 5 años
muere de enfermedades curables, de hambre, de pobreza? Me pregunto cuántos habrán fallecido desde que comencé a decir estas palabras. Pero ahí está la poesía: de pie contra la muerte.
Safo habló del bello huerto en el que "un agua fresca rumorea entre las ramas de los manzanos, todo el lugar sombreado por las rosas y del ramaje tembloroso el sueño descendía", Mallarmé conoció la desnudez de los sueños dispersos, Santa Teresa recogía las imágenes y los fantasmas de los objetos que mueven apetitos, San Juan bebió el vino de amor que sólo una copa sirve, Cavalcanti vio a la mujer que hacía temblar de claridad el aire, Hildegarda de Bingen lloró las suaves lágrimas de la compunción, y tanta belleza cargada de más vida causa el temblor de todo el ser. ¿No será la palabra poética el sueño de otro sueño?
Santa Teresa y San Juan de la Cruz tuvieron para mí un significado muy particular en el exilio al que me condenó la dictadura militar argentina. Su lectura desde otro lugar me reunió con lo que yo mismo sentía, es decir, la presencia ausente de lo amado, Dios para ellos, el país del que fui expulsado para mí. Y cuánta compañía de imposible me brindaron. Ese es un destino "que no es sino morir muchas veces", comprobaba Teresa de Avila. Y yo moría muchas veces y más con cada noticia de un amigo o compañero asesinado o desaparecido que agrandaba la pérdida de lo amado. La dictadura militar argentina desapareció a 30.000 personas y cabe señalar que la palabra "desaparecido" es una sola, pero encierra cuatro conceptos: el secuestro de ciudadanas y ciudadanos inermes, su tortura, su asesinato y la desaparición de sus restos en el fuego, en el mar o en suelo ignoto. El Quijote me abría entonces manantiales de consuelo.
Lo leí por primera vez en mi adolescencia y con placer extremo después de cruzar, no sin esfuerzo, la barrera de las imposiciones escolares. Me acuciaba una pregunta: ¿cómo habrá sido el hombre, don Miguel? Conocía su vida de pobreza y sufrimiento, sus cárceles, su cautiverio en Argel, su Lepanto, los intentos fallidos de mejorar su suerte. Pero él, ¿quién era? Releía el autorretrato que trazó en el prólogo de las Novelas Ejemplares: "Este que veis aquí, de rostro aguileño, de cabello castaño, frente lisa y desembarazada", que nada me decía, salvo la mención de sus "alegres ojos". Comprendí entonces que él era en su escritura. Me interno en ella y aún hoy creo a veces escuchar sus carcajadas cuando acostaba al Caballero de la Triste Figura en el papel. Sólo quien, desde el dolor, ha escrito con verdadero goce puede dar a sus lectores un gozo semejante. Cómico es el rostro de la tragedia cuando se mira a sí misma.
Declaro que, en verdad. quise recorrer ante ustedes, con ustedes, los trabajos de Persiles y Sigismunda, o la locura quebradiza del licenciado Vidriera, o compartir la nueva admiración y la nueva maravilla del coloquio de los perros, o el combate verdaderamente ejemplar entre los poetas malos y los buenos que tiene lugar en "Viaje del Parnaso" y en el que cualquier buen poeta podía caer herido por un pésimo soneto bien arrojado. Pero tal como la lámpara alimentada a querosén que los campesinos de mi país encienden a la noche y alrededor de la cual se sientan a cenar, cuando hay, y luego a leer, cuando hay y cuando hay ganas, y a la que mosquitos y otros seres alados acuden ciegos de luz y la calor los mata, así yo, encandilado por don Alonso Quijano, no puedo sustraerme a su fulgor.
Muchas plumas hondas y brillantes han explorado los rincones del gran libro. Por eso, parafraseando al autor, declaro sin ironía alguna que, con seguridad, este discurso carece de invención, es menguado de estilo, pobre de conceptos, falto de toda erudición y doctrina. Sólo hablo como lector devoto de Cervantes, pero quién puede describir los territorios del asombro. Con mucha suerte y perspicacia, es posible apenas sentarse a la sombra de lo que siempre calla.
Cervantes se instala en un supuesto pasado de nobleza e hidalguía para criticar las injusticias de su época, que son las mismas de hoy: la pobreza, la opresión, la corrupción arriba y la impotencia abajo, la imposibilidad de mejorar los tiempos de penuria que Hölderlin nombró. Se burla de ese intento de cambio y se burla de esa burla porque sabe que jamás será posible terminar con la utopía, recortar la capacidad de sueño y de deseo de los seres humanos. Cervantes inventó la primera novela moderna, que contiene y es madre de todas las novedades posteriores, de Kafka a Joyce. Y cuando en pleno siglo XX Michel Foucault encuentra en Raymond Roussel las características de la novela moderna, éstas: "el espacio, el vacío, la muerte, la transgresión, la distancia, el delirio, el doble, la locura, el simulacro, la fractura del sujeto", uno se pregunta ¿qué? ¿No existe todo eso, y más, en la escritura de Cervantes?
Su modernidad no se limita a un singular universo literario. La más humana es un espejo en el que podemos aún mirarnos sin deformaciones en este siglo XXI. Dice Don Quijote: "Bien hayan aquellos benditos siglos que carecieron de la espantable furia de aquestos endemoniados instrumentos de la artillería a cuyo inventor tengo para mí que en el infierno se le está dando el premio de su diabólica invención, con la cual dio causa que un infame ycobarde brazo quite la vida a un valeroso caballero, y que sin saber cómo o por dónde, en la mitad del coraje y brío que enciende y anima a los valientes pechos, llega una desmandada bala (disparada de quien quizá huyó y se espantó del resplandor que hizo el fuego al disparar la maldita máquina) y corta y acaba en un instante los pensamientos y la vida de quien la merecía gozar luengos siglos".
Desde el lugar de presunto caballero andante quejoso de que las armas de fuego hayan sustituido a las espadas, y que una bala lejana torne inútil el combate cuerpo a cuerpo, Don Quijote destaca un hecho que ha modificado por completo la concepción de la muerte en Occidente: es la aparición de la muerte a distancia, cada vez más segura para el que mata, cada vez más terrible para el que muere. Pasaron al olvido las ceremonias públicas y organizadas que presidía el mismo agonizante en su lecho: la despedida de los familiares, los amigos, los vecinos, el dictado del testamento ante los deudos. La muerte hospitalizada llega hoy con un cortejo de silencios y mentiras. Y qué decir de los 200.000 civiles de Hiroshima que el coronel Paul Tobbets aniquiló desde la altura apretando un simple botón. Piloteaba un aparato que bautizó con el nombre de su madre, arrojó la bomba atómica y después durmió tranquilo todas las noches, dijo. Pocos conocen el nombre de las víctimas cuya vida el coronel había segado. La muerte se ha vuelto anónima y hay algo peor: hoy mismo centenares de miles de seres humanos son privados de la muerte propia. Así se da en Irak.
Creo, sin embargo, como el historiador y filósofo Juan Carlos Rodríguez, que el Quijote es una gran novela de amor. Del amor imposible. En el amor se da lo que no se tiene y se recibe lo que no se da y ahí está la presencia del ser amado nunca visto, el amor a un mundo más humano nunca visto y torpemente entrevisto, el amor a una mujer que no es y a una justicia para todos que no es. Son amores diferentes pero se juntan en un haz de fuego. ¿Y acaso no quisimos hacer quijotadas en alguna ocasión, ayudar a los flacos y menesterosos? ¿Luchando contra molinos de aspas de acero, que ya no de madera? ¿Despanzurrando odres de vino en vez de enfrentar a los dueños del dolor ajeno? ¿"En este valle de lágrimas, en este mal mundo que tenemos -dice Sancho-, donde apenas se halla cosa que esté sin mezcla de maldad, embuste y bellaquería"?
He celebrado hace dos años, con ocasión de la entrega del Premio Reina Sofía de Poesía Iberoamericana, mi llegada a una España que no acepta las aventuras bélicas y que rompe clausuras sociales que hieren la intimidad de las personas. Hoy celebro nuevamente a una España empeñada en rescatar su memoria histórica, único camino para construir una conciencia cívica sólida que abra las puertas al futuro. Ya no vivimos en la Grecia del siglo V antes de Cristo en que los ciudadanos eran obligados a olvidar por decreto. Esa clase de olvido es imposible. Bien lo sabemos en nuestro Cono Sur.
Para San Agustín, la memoria es un santuario vasto, sin límite, en el que se llama a los recuerdos que a uno se le antojan. Pero hay recuerdos que no necesitan ser llamados y siempre están ahí y muestran su rostro sin descanso. Es el rostro de los seres amados que las dictaduras militares desaparecieron. Pesan en el interior de cada familiar, de cada amigo, de cada compañero de trabajo, alimentan preguntas incesantes: ¿cómo murieron? ¿Quiénes lo mataron? ¿Por qué? ¿Dónde están sus restos para recuperarlos y darles un lugar de homenaje y de memoria? ¿Dónde está la verdad, su verdad? La nuestra es la verdad del sufrimiento. La de los asesinos, la cobardía del silencio. Así prolongan la impunidad de sus crímenes y la convierten en impunidad dos veces.
Enterrar a sus muertos es una ley no escrita, dice Antígona, una ley fija siempre, inmutable, que no es una ley de hoy sino una ley eterna que nadie sabe cuándo comenzó a regir. "¡Iba yo a pisotear esas leyes venerables, impuestas por los dioses, ante la antojadiza voluntad de un hombre, fuera el que fuera!", exclama. Así habla de y con los familiares de desaparecidos bajo las dictaduras militares que devastaron nuestros países. Y los hombres no han logrado aún lo que Medea pedía: curar el infortunio con el canto.
Hay quienes vilipendian este esfuerzo de memoria. Dicen que no hay que remover el pasado, que no hay que tener ojos en la nuca, que hay que mirar hacia adelante y no encarnizarse en reabrir viejas heridas. Están perfectamente equivocados. Las heridas aún no están cerradas. Laten en el subsuelo de la sociedad como un cáncer sin sosiego. Su único tratamiento es la verdad. Y luego, la justicia. Sólo así es posible el olvido verdadero. La memoria es memoria si es presente y así como Don Quijote limpiaba sus armas, hay que limpiar el pasado para que entre en su pasado. Y sospecho que no pocos de quienes preconizan la destitución del pasado en general, en realidad quieren la destitución de su pasado en particular.
Pero volviendo a algunos párrafos atrás: hay tanto que decir de Cervantes, de este hombre tan fuera del uso de los otros. De sus neologismos, por ejemplo. Salvo él, nadie vio a una persona caminar asnalmente. O llevar en la cabeza un baciyelmo. O bachillear. Don Quijote aprueba la creación de palabras nuevas, porque "esto es enriquecer la lengua, sobre quien tienen poder el vulgo y el uso". Hace unos años ciertos poetas lanzaron una advertencia en tono casi legislativo: no hay que lastimar al lenguaje, como si éste fuera río coagulado, como si los pueblos no vinieran "lastimándolo" desde que empezaron a nombrar. Cuando Lope dice "siempre mañana y nunca mañanamos" agranda el lenguaje y muestra que el castellano vive, porque sólo no cambian las lenguas que están muertas. La lengua expande el lenguaje para hablar mejor consigo misma.
Esas invenciones laten en las entrañas de la lengua y traen balbuceos y brisas de la infancia como memoria de la palabra que de afuera vino, tocó al infante en su cuna y le abrió una herida que nunca ha de cerrar. Esas palabras nuevas, ¿no son acaso una victoria contra los límites del lenguaje? ¿Acaso el aire no nos sigue hablando? ¿Y el mar, la lluvia, no tienen muchas voces? ¿Cuántas palabras aún desconocidas guardan en sus silencios? Hay millones de espacios sin nombrar y la poesía trabaja y nombra lo que no tiene nombre todavía.
Esto exige que el poeta despeje en sí caminos que no recorrió antes, que desbroce las malezas de su subjetividad, que no escuche el estrépito de la palabra impuesta, que explore los mil rostros que la vivencia abre en la imaginación, que encuentre la expresión que les dé rostro en la escritura. El internarse en sí mismo del poeta es un atrevimiento que lo expone a la intemperie. Aunque bien decía Rilke: "[...] lo que finalmente nos resguarda / es nuestra desprotección". Ese atrevimiento conduce al poeta a un más adentro de sí que lo trasciende como ser. Es un trascender hacia sí mismo que se dirige a la verdad del corazón y a la verdad del mundo. Marina Tsvetaeva, la gran poeta rusa aniquilada por el estalinismo, recordó alguna vez que el poeta no vive para escribir. Escribe para vivir.
Juan Gelman ha sido galardonado con el Premio Cervantes 2007.
La Jornada, 23 abril 2008
Juan Gelman · · · · ·
27/04/08
Majestades, Señor Presidente del Gobierno, Señor Ministro de Cultura, Señor Rector de la Universidad de Alcalá de Henares, autoridades estatales, autonómicas, locales y académicas, amigas, amigos, señoras y señores:
Deseo, ante todo, expresar mi agradecimiento al jurado del Premio de Literatura en Lengua Castellana Miguel de Cervantes, a la alta investidura que lo patrocina y a las instituciones que hacen posible esta honrosísima distinción, la más preciada de la lengua, que hoy se me otorga. Mi gratitud es profunda y desborda lo meramente personal. En el año 2006 se galardonó con este Premio al gran poeta español Antonio Gamoneda y en el 2007 lo recibe también un poeta, esta vez de Iberoamérica. Se premia a la poesía entonces, "que es como una doncella tierna y de poca edad y en todo extremo hermosa" para don Quijote, doncella que, dice Cervantes en "Viaje del Parnaso",
"puede pintar en la mitad del día / la noche, y en la noche más escura / el alba bella que las perlas cría... / Es de ingenio tan vivo y admirable / que a veces toca en puntos que suspenden, / por tener no se qué de inescrutable".
A la poesía hoy se premia, como fuera premiada ayer y aun antes en este histórico Paraninfo donde voces muy altas resuenan todavía. Y es algo verdaderamente admirable en estos "Dürftiger Zeite", estos tiempos mezquinos, estos tiempos de penuria, como los calificaba Hölderin preguntándose "Wozu Dichter", para qué poetas. ¿Qué hubiera dicho hoy, en un mundo en el que cada tres segundos y medio un niño menor de 5 años
muere de enfermedades curables, de hambre, de pobreza? Me pregunto cuántos habrán fallecido desde que comencé a decir estas palabras. Pero ahí está la poesía: de pie contra la muerte.
Safo habló del bello huerto en el que "un agua fresca rumorea entre las ramas de los manzanos, todo el lugar sombreado por las rosas y del ramaje tembloroso el sueño descendía", Mallarmé conoció la desnudez de los sueños dispersos, Santa Teresa recogía las imágenes y los fantasmas de los objetos que mueven apetitos, San Juan bebió el vino de amor que sólo una copa sirve, Cavalcanti vio a la mujer que hacía temblar de claridad el aire, Hildegarda de Bingen lloró las suaves lágrimas de la compunción, y tanta belleza cargada de más vida causa el temblor de todo el ser. ¿No será la palabra poética el sueño de otro sueño?
Santa Teresa y San Juan de la Cruz tuvieron para mí un significado muy particular en el exilio al que me condenó la dictadura militar argentina. Su lectura desde otro lugar me reunió con lo que yo mismo sentía, es decir, la presencia ausente de lo amado, Dios para ellos, el país del que fui expulsado para mí. Y cuánta compañía de imposible me brindaron. Ese es un destino "que no es sino morir muchas veces", comprobaba Teresa de Avila. Y yo moría muchas veces y más con cada noticia de un amigo o compañero asesinado o desaparecido que agrandaba la pérdida de lo amado. La dictadura militar argentina desapareció a 30.000 personas y cabe señalar que la palabra "desaparecido" es una sola, pero encierra cuatro conceptos: el secuestro de ciudadanas y ciudadanos inermes, su tortura, su asesinato y la desaparición de sus restos en el fuego, en el mar o en suelo ignoto. El Quijote me abría entonces manantiales de consuelo.
Lo leí por primera vez en mi adolescencia y con placer extremo después de cruzar, no sin esfuerzo, la barrera de las imposiciones escolares. Me acuciaba una pregunta: ¿cómo habrá sido el hombre, don Miguel? Conocía su vida de pobreza y sufrimiento, sus cárceles, su cautiverio en Argel, su Lepanto, los intentos fallidos de mejorar su suerte. Pero él, ¿quién era? Releía el autorretrato que trazó en el prólogo de las Novelas Ejemplares: "Este que veis aquí, de rostro aguileño, de cabello castaño, frente lisa y desembarazada", que nada me decía, salvo la mención de sus "alegres ojos". Comprendí entonces que él era en su escritura. Me interno en ella y aún hoy creo a veces escuchar sus carcajadas cuando acostaba al Caballero de la Triste Figura en el papel. Sólo quien, desde el dolor, ha escrito con verdadero goce puede dar a sus lectores un gozo semejante. Cómico es el rostro de la tragedia cuando se mira a sí misma.
Declaro que, en verdad. quise recorrer ante ustedes, con ustedes, los trabajos de Persiles y Sigismunda, o la locura quebradiza del licenciado Vidriera, o compartir la nueva admiración y la nueva maravilla del coloquio de los perros, o el combate verdaderamente ejemplar entre los poetas malos y los buenos que tiene lugar en "Viaje del Parnaso" y en el que cualquier buen poeta podía caer herido por un pésimo soneto bien arrojado. Pero tal como la lámpara alimentada a querosén que los campesinos de mi país encienden a la noche y alrededor de la cual se sientan a cenar, cuando hay, y luego a leer, cuando hay y cuando hay ganas, y a la que mosquitos y otros seres alados acuden ciegos de luz y la calor los mata, así yo, encandilado por don Alonso Quijano, no puedo sustraerme a su fulgor.
Muchas plumas hondas y brillantes han explorado los rincones del gran libro. Por eso, parafraseando al autor, declaro sin ironía alguna que, con seguridad, este discurso carece de invención, es menguado de estilo, pobre de conceptos, falto de toda erudición y doctrina. Sólo hablo como lector devoto de Cervantes, pero quién puede describir los territorios del asombro. Con mucha suerte y perspicacia, es posible apenas sentarse a la sombra de lo que siempre calla.
Cervantes se instala en un supuesto pasado de nobleza e hidalguía para criticar las injusticias de su época, que son las mismas de hoy: la pobreza, la opresión, la corrupción arriba y la impotencia abajo, la imposibilidad de mejorar los tiempos de penuria que Hölderlin nombró. Se burla de ese intento de cambio y se burla de esa burla porque sabe que jamás será posible terminar con la utopía, recortar la capacidad de sueño y de deseo de los seres humanos. Cervantes inventó la primera novela moderna, que contiene y es madre de todas las novedades posteriores, de Kafka a Joyce. Y cuando en pleno siglo XX Michel Foucault encuentra en Raymond Roussel las características de la novela moderna, éstas: "el espacio, el vacío, la muerte, la transgresión, la distancia, el delirio, el doble, la locura, el simulacro, la fractura del sujeto", uno se pregunta ¿qué? ¿No existe todo eso, y más, en la escritura de Cervantes?
Su modernidad no se limita a un singular universo literario. La más humana es un espejo en el que podemos aún mirarnos sin deformaciones en este siglo XXI. Dice Don Quijote: "Bien hayan aquellos benditos siglos que carecieron de la espantable furia de aquestos endemoniados instrumentos de la artillería a cuyo inventor tengo para mí que en el infierno se le está dando el premio de su diabólica invención, con la cual dio causa que un infame ycobarde brazo quite la vida a un valeroso caballero, y que sin saber cómo o por dónde, en la mitad del coraje y brío que enciende y anima a los valientes pechos, llega una desmandada bala (disparada de quien quizá huyó y se espantó del resplandor que hizo el fuego al disparar la maldita máquina) y corta y acaba en un instante los pensamientos y la vida de quien la merecía gozar luengos siglos".
Desde el lugar de presunto caballero andante quejoso de que las armas de fuego hayan sustituido a las espadas, y que una bala lejana torne inútil el combate cuerpo a cuerpo, Don Quijote destaca un hecho que ha modificado por completo la concepción de la muerte en Occidente: es la aparición de la muerte a distancia, cada vez más segura para el que mata, cada vez más terrible para el que muere. Pasaron al olvido las ceremonias públicas y organizadas que presidía el mismo agonizante en su lecho: la despedida de los familiares, los amigos, los vecinos, el dictado del testamento ante los deudos. La muerte hospitalizada llega hoy con un cortejo de silencios y mentiras. Y qué decir de los 200.000 civiles de Hiroshima que el coronel Paul Tobbets aniquiló desde la altura apretando un simple botón. Piloteaba un aparato que bautizó con el nombre de su madre, arrojó la bomba atómica y después durmió tranquilo todas las noches, dijo. Pocos conocen el nombre de las víctimas cuya vida el coronel había segado. La muerte se ha vuelto anónima y hay algo peor: hoy mismo centenares de miles de seres humanos son privados de la muerte propia. Así se da en Irak.
Creo, sin embargo, como el historiador y filósofo Juan Carlos Rodríguez, que el Quijote es una gran novela de amor. Del amor imposible. En el amor se da lo que no se tiene y se recibe lo que no se da y ahí está la presencia del ser amado nunca visto, el amor a un mundo más humano nunca visto y torpemente entrevisto, el amor a una mujer que no es y a una justicia para todos que no es. Son amores diferentes pero se juntan en un haz de fuego. ¿Y acaso no quisimos hacer quijotadas en alguna ocasión, ayudar a los flacos y menesterosos? ¿Luchando contra molinos de aspas de acero, que ya no de madera? ¿Despanzurrando odres de vino en vez de enfrentar a los dueños del dolor ajeno? ¿"En este valle de lágrimas, en este mal mundo que tenemos -dice Sancho-, donde apenas se halla cosa que esté sin mezcla de maldad, embuste y bellaquería"?
He celebrado hace dos años, con ocasión de la entrega del Premio Reina Sofía de Poesía Iberoamericana, mi llegada a una España que no acepta las aventuras bélicas y que rompe clausuras sociales que hieren la intimidad de las personas. Hoy celebro nuevamente a una España empeñada en rescatar su memoria histórica, único camino para construir una conciencia cívica sólida que abra las puertas al futuro. Ya no vivimos en la Grecia del siglo V antes de Cristo en que los ciudadanos eran obligados a olvidar por decreto. Esa clase de olvido es imposible. Bien lo sabemos en nuestro Cono Sur.
Para San Agustín, la memoria es un santuario vasto, sin límite, en el que se llama a los recuerdos que a uno se le antojan. Pero hay recuerdos que no necesitan ser llamados y siempre están ahí y muestran su rostro sin descanso. Es el rostro de los seres amados que las dictaduras militares desaparecieron. Pesan en el interior de cada familiar, de cada amigo, de cada compañero de trabajo, alimentan preguntas incesantes: ¿cómo murieron? ¿Quiénes lo mataron? ¿Por qué? ¿Dónde están sus restos para recuperarlos y darles un lugar de homenaje y de memoria? ¿Dónde está la verdad, su verdad? La nuestra es la verdad del sufrimiento. La de los asesinos, la cobardía del silencio. Así prolongan la impunidad de sus crímenes y la convierten en impunidad dos veces.
Enterrar a sus muertos es una ley no escrita, dice Antígona, una ley fija siempre, inmutable, que no es una ley de hoy sino una ley eterna que nadie sabe cuándo comenzó a regir. "¡Iba yo a pisotear esas leyes venerables, impuestas por los dioses, ante la antojadiza voluntad de un hombre, fuera el que fuera!", exclama. Así habla de y con los familiares de desaparecidos bajo las dictaduras militares que devastaron nuestros países. Y los hombres no han logrado aún lo que Medea pedía: curar el infortunio con el canto.
Hay quienes vilipendian este esfuerzo de memoria. Dicen que no hay que remover el pasado, que no hay que tener ojos en la nuca, que hay que mirar hacia adelante y no encarnizarse en reabrir viejas heridas. Están perfectamente equivocados. Las heridas aún no están cerradas. Laten en el subsuelo de la sociedad como un cáncer sin sosiego. Su único tratamiento es la verdad. Y luego, la justicia. Sólo así es posible el olvido verdadero. La memoria es memoria si es presente y así como Don Quijote limpiaba sus armas, hay que limpiar el pasado para que entre en su pasado. Y sospecho que no pocos de quienes preconizan la destitución del pasado en general, en realidad quieren la destitución de su pasado en particular.
Pero volviendo a algunos párrafos atrás: hay tanto que decir de Cervantes, de este hombre tan fuera del uso de los otros. De sus neologismos, por ejemplo. Salvo él, nadie vio a una persona caminar asnalmente. O llevar en la cabeza un baciyelmo. O bachillear. Don Quijote aprueba la creación de palabras nuevas, porque "esto es enriquecer la lengua, sobre quien tienen poder el vulgo y el uso". Hace unos años ciertos poetas lanzaron una advertencia en tono casi legislativo: no hay que lastimar al lenguaje, como si éste fuera río coagulado, como si los pueblos no vinieran "lastimándolo" desde que empezaron a nombrar. Cuando Lope dice "siempre mañana y nunca mañanamos" agranda el lenguaje y muestra que el castellano vive, porque sólo no cambian las lenguas que están muertas. La lengua expande el lenguaje para hablar mejor consigo misma.
Esas invenciones laten en las entrañas de la lengua y traen balbuceos y brisas de la infancia como memoria de la palabra que de afuera vino, tocó al infante en su cuna y le abrió una herida que nunca ha de cerrar. Esas palabras nuevas, ¿no son acaso una victoria contra los límites del lenguaje? ¿Acaso el aire no nos sigue hablando? ¿Y el mar, la lluvia, no tienen muchas voces? ¿Cuántas palabras aún desconocidas guardan en sus silencios? Hay millones de espacios sin nombrar y la poesía trabaja y nombra lo que no tiene nombre todavía.
Esto exige que el poeta despeje en sí caminos que no recorrió antes, que desbroce las malezas de su subjetividad, que no escuche el estrépito de la palabra impuesta, que explore los mil rostros que la vivencia abre en la imaginación, que encuentre la expresión que les dé rostro en la escritura. El internarse en sí mismo del poeta es un atrevimiento que lo expone a la intemperie. Aunque bien decía Rilke: "[...] lo que finalmente nos resguarda / es nuestra desprotección". Ese atrevimiento conduce al poeta a un más adentro de sí que lo trasciende como ser. Es un trascender hacia sí mismo que se dirige a la verdad del corazón y a la verdad del mundo. Marina Tsvetaeva, la gran poeta rusa aniquilada por el estalinismo, recordó alguna vez que el poeta no vive para escribir. Escribe para vivir.
Juan Gelman ha sido galardonado con el Premio Cervantes 2007.
La Jornada, 23 abril 2008
Unidos en Solidaridad con el Pueblo Boliviano en Lucha por su Liberación Nacional
BOLIVIA: EL MISMO DIVISIONISMO
QUE ESTADOS UNIDOS
USO EN PANAMA EN 1903
Por Olmedo Beluche
Cuando escucho los dramáticos acontecimientos que afectan a la hermana república de Bolivia en estos días tengo una fuerte sensación de “deja vú”, como dirían los franceses. Esto lo he visto antes. ¿Dónde? ¡Ah! Es la misma estrategia de Estados Unidos que separó a Panamá de Colombia en 1903 para apoderarse del canal.
Los panameños que aún creen en las mentiras históricas contadas por nuestros historiadores al servicio de la oligarquía y el imperialismo yanqui, especialmente aquellos que se dicen de “izquierdas”, que miren hacia Bolivia en 2008, y aprenderán algo de historia panameña. En Bolivia, desde la elección abrumadora del presidente Evo Morales, en enero de 2006, el imperialismo norteamericano y europeo, en asocio con la oligarquia blanca que ha explotado, oprimido y discriminado a la mayoría indígena de ese país por 500 años, se han dedicado a la tarea de sabotear todas las iniciativas del gobierno.
Primero, empresas transnacionales y oligarcas “nacionales”, trataron de bloquear la nacionalización del gas decretada por Evo. Recurso natural que dichas empresas venían explotando por décadas sin entregar al país casi nada de las ganancias que se embolsaban. Luego procuraron sabotear la Asamblea Constituyente, electa democráticamente, en que el pueblo de TODAS las provincias (incluida Santa Cruz) ratificó, para redactar un nuevo modelo de país, a los partidarios de Evo Morales y a una mayoría de diputados indígenas, hasta entonces excluida de la participación política y las grandes decisiones.
Inventaron que, para aprobar los artículos de la nueva Constitución, el gobierno debía aceptar de las imposiciones de una oposición castigada con una escasa representación por parte del voto popular, aduciendo una que sólo podía aprobarse por una mayoría de 75% de los diputados y no por mayoría simple (mitad más uno), Cuando, después de meses de sabotaje, los diputados decidieron aprobar la nueva Carta Magna, cuetionaron la “capitalidad” de La Paz, obligaron a mover de ciudad las sesiones y pusieron manifestantes violentos que agredieron a los diputados aymaras, quechuas y de otros grupos étnicos en las puertas de la Asamblea Constituyente. En el interín, la oligarquía racista boliviana, asesorada por el embajador yanqui Philp S. Golberg (que antes trabajó en Kosovo ayudando a la fragmentación de las exYugoslavia), inició una campaña para prejuiciar a los “mestizos” contra los indígenas.
Campaña acompañada de ataques armados de grupos paramilitares contra organizaciones obreras y populares que apoyan al gobierno. El objetivo, anular su presencia en las provincias del este del país donde los pueblos originarios son menores que en la sierra. Su labor de división del país continuó tratando de legitimar ideológicamente la existencia de dos Bolivias, la blanca y la india, para justificar la división del país, el desconocimiento del gobierno y las autoridades legítimamente electas. Ese divisionismo, disfrazado de “separatismo” adoptó ahora el llamado a unos referéndums ilegales en Santa Cruz, Beni, Pando y Tarija que buscan declararse independientes del gobierno central.
Como ha dicho el diplomático boliviano, Jorge Alvarado: “Ellos persiguen separarse de Bolivia porque consideran que en su territorio se encuentran las mayores riquezas, reservas importantes de hidrocarburos, las tierras más productivas y con esas riquezas pueden mantenerse”. Cuyos frutos no quieren compartir con las mayorías desposeídas, tal y como vienen haciendo desde la Colonia. Agrega el embajador boliviano, “detrás de todo esto está el imperio”. “Quieren es dividir al país para reinar –señala- no sólo en Bolivia, sino en Latinoamérica, porque la intención de Estados Unidos es dividir a los países latinoamericanos con esos pretextos del separatismo”.
El objetivo de Estados Unidos es claro: obtener el control de los recursos naturales bolivianos, en especial el gas, que serán cedidos gustosamente por los gobernadores separatistas, anulando los impuestos y la nacionalización hecha por Evo Morales. La política contienental de Estados Unidos del “divide y vencerás” no es nueva. Tiene 200 años de aplicación en el continente, desde la famosa doctrina del “América para los americanos”. Y fue advertida y vaticinada por Bolívar numerosas veces, en especial en la convocatoria al Congreso Anficitiónico de Panamá en 1826. Ese “divide y vencerás” se aplicó literalemente en Panamá, en 1903, por parte de Teodoro Roosevelt para apoderarse de nuestro principal recurso natural, la posición geográfica, y construir un canal controlado por ellos.
Primero propusieron un borrador de tratado tan leonino que, cuando los negociadores colombianos (Martínez Silva y Vicente Concha) se opusieron, forzaron su retiro, hasta que el embajador colombiano firmó, sin consultar a su gobierno, el oprobioso Tratado Herrán-Hay en enero de 1903. Cuando el tratado empezó a encontrar una tenaz resistencia de la opinión pública, panameña y colombiana, y se hizo evidente que no se aprobaría sin modificaciones en el Senado colombiano, Estados Unidos empezó a preparar el “plan b”, es decir, la separación de Panamá de Colombia.
Para ello contó con la decidida colaboración de la oligarquía conservadora panameña, hasta ese momento aliada del gobierno conservador de Bogotá presidido por Marroquín, cuyos líderes eran, casualidad (!), dos empleados de la Compañía del Ferrocarril de Panamá, José A. Arango y Manuel Amador Guerrero (el último cartagenero).
Cerradas las sesiones del Senado en Bogotá, el 30 de octubre de 1903, se procedió a realizar la separación el 3 de noviembre, con una cuantiosa flota militar norteamericana. Quince días después se firmaba en Washington el Tratado Hay-Bunau Varilla, por un francés accionista de la Compañía Nueva del Canal, con aprobación de la ilegal Junta Provisional de Gobierno panameña, compuesta por conspicuos oligarcas del patio, que lo ratificó en inglés y sin traducción oficial.
Por esa vía, Estados Unidos se apropio del Canal de Panamá, del que salieron en el año 2000 después de un siglo de luchas generacionales del pueblo panameño. Para dar apariencia legítima a este acto intervencionista, los historiadores al servicio de la oligarquía, procedieron a reescribir la historia tratando de encontrar un supuesto anticolombianismo de los panameños durante el siglo XIX, igual que hoy hace la oligarquía boliviana para dividir al pueblo entre “indios” y “cambas”.
Lamentablemente, en Panamá, mucha gente progresista sigue imbuida de la falsificación histórica sin querer aprender la lección que nos legara el propio Libertador Simón Bolívar: sólo la unidad nos hará libres, los divisionismos regionalistas son fomentados por intereses extranjeros y oligarquías locales para sojuzgarnos.
Por ello, los panameños más que nadie, debemos ser plenamente solidarios con el pueblo boliviano que pugna por su liberación, denunciando a los divisionistas de hoy, hijos de la casta de traidores que nos fragmentaron el siglo pasado para beneficio del imperialismo norteamericano. ¡Viva Bolivia unida!¡No a los ilegítimos referéndums separatistas!¡Manos yanquis fuera de Bolivia y Latinoamérica!¡Por la unidad latinoamericana!
QUE ESTADOS UNIDOS
USO EN PANAMA EN 1903
Por Olmedo Beluche
Cuando escucho los dramáticos acontecimientos que afectan a la hermana república de Bolivia en estos días tengo una fuerte sensación de “deja vú”, como dirían los franceses. Esto lo he visto antes. ¿Dónde? ¡Ah! Es la misma estrategia de Estados Unidos que separó a Panamá de Colombia en 1903 para apoderarse del canal.
Los panameños que aún creen en las mentiras históricas contadas por nuestros historiadores al servicio de la oligarquía y el imperialismo yanqui, especialmente aquellos que se dicen de “izquierdas”, que miren hacia Bolivia en 2008, y aprenderán algo de historia panameña. En Bolivia, desde la elección abrumadora del presidente Evo Morales, en enero de 2006, el imperialismo norteamericano y europeo, en asocio con la oligarquia blanca que ha explotado, oprimido y discriminado a la mayoría indígena de ese país por 500 años, se han dedicado a la tarea de sabotear todas las iniciativas del gobierno.
Primero, empresas transnacionales y oligarcas “nacionales”, trataron de bloquear la nacionalización del gas decretada por Evo. Recurso natural que dichas empresas venían explotando por décadas sin entregar al país casi nada de las ganancias que se embolsaban. Luego procuraron sabotear la Asamblea Constituyente, electa democráticamente, en que el pueblo de TODAS las provincias (incluida Santa Cruz) ratificó, para redactar un nuevo modelo de país, a los partidarios de Evo Morales y a una mayoría de diputados indígenas, hasta entonces excluida de la participación política y las grandes decisiones.
Inventaron que, para aprobar los artículos de la nueva Constitución, el gobierno debía aceptar de las imposiciones de una oposición castigada con una escasa representación por parte del voto popular, aduciendo una que sólo podía aprobarse por una mayoría de 75% de los diputados y no por mayoría simple (mitad más uno), Cuando, después de meses de sabotaje, los diputados decidieron aprobar la nueva Carta Magna, cuetionaron la “capitalidad” de La Paz, obligaron a mover de ciudad las sesiones y pusieron manifestantes violentos que agredieron a los diputados aymaras, quechuas y de otros grupos étnicos en las puertas de la Asamblea Constituyente. En el interín, la oligarquía racista boliviana, asesorada por el embajador yanqui Philp S. Golberg (que antes trabajó en Kosovo ayudando a la fragmentación de las exYugoslavia), inició una campaña para prejuiciar a los “mestizos” contra los indígenas.
Campaña acompañada de ataques armados de grupos paramilitares contra organizaciones obreras y populares que apoyan al gobierno. El objetivo, anular su presencia en las provincias del este del país donde los pueblos originarios son menores que en la sierra. Su labor de división del país continuó tratando de legitimar ideológicamente la existencia de dos Bolivias, la blanca y la india, para justificar la división del país, el desconocimiento del gobierno y las autoridades legítimamente electas. Ese divisionismo, disfrazado de “separatismo” adoptó ahora el llamado a unos referéndums ilegales en Santa Cruz, Beni, Pando y Tarija que buscan declararse independientes del gobierno central.
Como ha dicho el diplomático boliviano, Jorge Alvarado: “Ellos persiguen separarse de Bolivia porque consideran que en su territorio se encuentran las mayores riquezas, reservas importantes de hidrocarburos, las tierras más productivas y con esas riquezas pueden mantenerse”. Cuyos frutos no quieren compartir con las mayorías desposeídas, tal y como vienen haciendo desde la Colonia. Agrega el embajador boliviano, “detrás de todo esto está el imperio”. “Quieren es dividir al país para reinar –señala- no sólo en Bolivia, sino en Latinoamérica, porque la intención de Estados Unidos es dividir a los países latinoamericanos con esos pretextos del separatismo”.
El objetivo de Estados Unidos es claro: obtener el control de los recursos naturales bolivianos, en especial el gas, que serán cedidos gustosamente por los gobernadores separatistas, anulando los impuestos y la nacionalización hecha por Evo Morales. La política contienental de Estados Unidos del “divide y vencerás” no es nueva. Tiene 200 años de aplicación en el continente, desde la famosa doctrina del “América para los americanos”. Y fue advertida y vaticinada por Bolívar numerosas veces, en especial en la convocatoria al Congreso Anficitiónico de Panamá en 1826. Ese “divide y vencerás” se aplicó literalemente en Panamá, en 1903, por parte de Teodoro Roosevelt para apoderarse de nuestro principal recurso natural, la posición geográfica, y construir un canal controlado por ellos.
Primero propusieron un borrador de tratado tan leonino que, cuando los negociadores colombianos (Martínez Silva y Vicente Concha) se opusieron, forzaron su retiro, hasta que el embajador colombiano firmó, sin consultar a su gobierno, el oprobioso Tratado Herrán-Hay en enero de 1903. Cuando el tratado empezó a encontrar una tenaz resistencia de la opinión pública, panameña y colombiana, y se hizo evidente que no se aprobaría sin modificaciones en el Senado colombiano, Estados Unidos empezó a preparar el “plan b”, es decir, la separación de Panamá de Colombia.
Para ello contó con la decidida colaboración de la oligarquía conservadora panameña, hasta ese momento aliada del gobierno conservador de Bogotá presidido por Marroquín, cuyos líderes eran, casualidad (!), dos empleados de la Compañía del Ferrocarril de Panamá, José A. Arango y Manuel Amador Guerrero (el último cartagenero).
Cerradas las sesiones del Senado en Bogotá, el 30 de octubre de 1903, se procedió a realizar la separación el 3 de noviembre, con una cuantiosa flota militar norteamericana. Quince días después se firmaba en Washington el Tratado Hay-Bunau Varilla, por un francés accionista de la Compañía Nueva del Canal, con aprobación de la ilegal Junta Provisional de Gobierno panameña, compuesta por conspicuos oligarcas del patio, que lo ratificó en inglés y sin traducción oficial.
Por esa vía, Estados Unidos se apropio del Canal de Panamá, del que salieron en el año 2000 después de un siglo de luchas generacionales del pueblo panameño. Para dar apariencia legítima a este acto intervencionista, los historiadores al servicio de la oligarquía, procedieron a reescribir la historia tratando de encontrar un supuesto anticolombianismo de los panameños durante el siglo XIX, igual que hoy hace la oligarquía boliviana para dividir al pueblo entre “indios” y “cambas”.
Lamentablemente, en Panamá, mucha gente progresista sigue imbuida de la falsificación histórica sin querer aprender la lección que nos legara el propio Libertador Simón Bolívar: sólo la unidad nos hará libres, los divisionismos regionalistas son fomentados por intereses extranjeros y oligarquías locales para sojuzgarnos.
Por ello, los panameños más que nadie, debemos ser plenamente solidarios con el pueblo boliviano que pugna por su liberación, denunciando a los divisionistas de hoy, hijos de la casta de traidores que nos fragmentaron el siglo pasado para beneficio del imperialismo norteamericano. ¡Viva Bolivia unida!¡No a los ilegítimos referéndums separatistas!¡Manos yanquis fuera de Bolivia y Latinoamérica!¡Por la unidad latinoamericana!
viernes 25 de abril de 2008
The Venezuelan Economy in the Chávez Years
Economic Indicators
A new paper from the Center for Economic and Policy Research looks at the Venezuelan economy during the last eight years and finds that it does not fit the mold of an "oil boom headed for a bust," as is commonly believed:
The Venezuelan Economy in the Chávez Years
by Mark Weisbrot and Luis Sandoval, July 2007.
Download the article as a pdf file (392kb).
Contents
Executive Summary
Introduction
Economic Growth
Social Spending, Poverty, and Employment
Fiscal and Monetary Policy, Exchange Rates, Balance of Payments, and the Sustainability of the Current Economic Expansion
Conclusion
Executive Summary
Venezuela has experienced very rapid growth since the bottom of the recession in 2003, and grew by 10.3 percent last year. The most commonly held view of the current economic expansion is that it is an "oil boom" driven by high oil prices, as in the past, and is headed for a "bust." The coming collapse is seen either as a result of oil prices eventually declining, or as a result of the government's mismanagement of economic policy.
There is much evidence to contradict this conventional wisdom. Venezuela suffered a severe economic growth collapse in the 1980s and 1990s, with its real GDP peaking in 1977. In this regard it is similar to the region as a whole, which since 1980 has suffered its worst long-term growth performance in more than a century. Hugo Chávez Frias was elected in 1998 and took office in 1999, and the first four years of his administration were plagued by political instability that had a large adverse impact on the economy. (See Figure 2). This culminated in a military coup that temporarily toppled the constitutional government in April 2002, followed by a devastating oil strike from December 2002-February 2003. The oil strike sent the economy into a severe recession, during which Venezuela lost 24 percent of GDP.
But in the second quarter of 2003, the political situation began to stabilize, and it has continued to stabilize throughout the current economic expansion. The economy has had continuous rapid growth since the onset of political stability. Real (inflation-adjusted) GDP has grown by 76 percent since the bottom of the recession in 2003. It is likely that the government's expansionary fiscal and monetary policies, as well as exchange controls, have contributed to the current economic upswing. Central government spending has increased from 21.4 percent of GDP in 1998 to 30 percent in 2006. Real short-term interest rates have been negative throughout all or most of the recovery (depending on the measure—see Figure 4).
The government's revenue increased even faster than spending during this period, from 17.4 to 30 percent of GDP over the same period, leaving the central government with a balanced budget for 2006. The government has planned conservatively with respect to oil prices: for example, for 2007, the budget plans for oil at $29 per barrel, 52 percent under the average $60.20 dollars per barrel that Venezuelan crude sold for last year. The government has typically exceeded planned spending as oil prices come in higher than the budgeted price, so it is possible that spending would be reduced if oil prices decline.
However, Venezuela has a large cushion of reserves to draw upon before an oil price decline would begin to squeeze its finances. A decline in oil prices of 20 percent or more could be absorbed from official international reserves, which at $25.2 billion are enough to pay off almost all of Venezuela's foreign debt. This does not include other government offshore accounts, which are estimated to be in the range of an additional $14-$19 billion. With its low foreign debt (14.6 percent of GDP), the government could also tap international credit markets in the event of an oil price decline. Furthermore, a collapse of oil prices does not appear to be likely in the foreseeable future. The July 10 short-term outlook of the US Energy Information Agency projects oil prices at $65.56 per barrel for 2007 and $66.92 for 2008. The risks of unanticipated supply shocks – especially in the volatile Middle East − seem to be mostly on the downside, which would increase prices.
The Chávez government has greatly increased social spending, including spending on health care, subsidized food, and education. The most pronounced difference has been in the area of health care. For example, in 1998 there were 1,628 primary care physicians for a population of 23.4 million. Today, there are 19,571 for a population of 27 million. The Venezuelan government has also provided widespread access to subsidized food. By 2006, there were 15,726 stores throughout the country that offered mainly food items at subsidized prices (with average savings of 27% and 39% compared to market prices in 2005 and 2006, respectively).
The central government's social spending has increased massively, from 8.2 percent of GDP in 1998 to 13.6 percent for 2006. See Table 2. In real (inflation-adjusted) terms, social spending per person has increased by 170 percent over the period 1998-2006. But this does not include social spending by PDVSA (Petróleos de Venezuela, the state oil company), which was 7.3 percent of GDP in 2006. With this included, social spending reached 20.9 percent of GDP in 2006, at least 314 percent more than in 1998 (in terms of real social spending per person).
The poverty rate has decreased rapidly from its peak of 55.1 percent in 2003 to 30.4 percent at end of 2006, as would be expected in the face of the very rapid economic growth during these last three years. (See Table 3). If we compare the pre-Chávez poverty rate (43.9 percent) with the end of 2006 (30.4 percent) this is a 31 percent drop in the rate of poverty. However this poverty rate does not take into account the increased access to health care or education that poor people have experienced. The situation of the poor has therefore improved significantly beyond even the substantial poverty reduction that is visible in the official poverty rate, which measures only cash income. Measured unemployment has also dropped substantially to 8.3 percent for June 2007, its lowest level in more than a decade; as compared to 15 percent in June 1999 and 18.4 percent in June 2003 (coming out of the recession). Formal employment has also increased significantly since 1998, from 44.5 to 49.4 percent of the labor force.
The main challenges facing the economy are in the areas of the exchange rate and inflation. The Venezuelan currency is substantially overvalued. The government is reluctant to devalue because this would raise inflation, which is currently running at 19.3 percent and exceeds their target. Since there are exchange controls and the government is running a large current account surplus (8 percent of GDP), there is nothing that would force a devaluation in the near future (as for example, the currency collapses in Argentina, Russia, and Brazil in the late 1990s). But this poses an intermediate-run problem, since even if inflation is stabilized and begins to be reduced, current rates of inflation will continue to appreciate Venezuela's real exchange rate. This makes imports artificially cheap and non-oil exports too expensive on world markets, hurting the tradable goods sector and eventually becoming unsustainable. It also makes it extremely difficult for the economy to diversify away from its dependence on oil.
Inflation itself is a problem, now running at 19.4 percent. But it should be emphasized that double-digit inflation rates in a developing country such as Venezuela are not comparable to the same phenomenon occurring in the United States or Europe. Inflation in Venezuela was much higher in the pre-Chávez years, running at 36 percent in 1998 and 100 percent in 1996. It has fallen through most of the current recovery, from a 40 percent annual rate (monthly, year-over-year) at the peak of the oil strike in February 2003 to 10.4 percent a year ago, before climbing again to its present rate (see Figure 3). Over the last three months it appears to have stabilized at 19.4 percent.
Because of its large current account surplus, large reserves, and low foreign debt, the government has a number of tools available to stabilize and reduce inflation – as well as eventually bring the currency into alignment – without sacrificing the growth of the economy. It appears the government is committed to maintaining a high rate of growth, in addition to its other goals. Therefore, at present it does not appear that the current economic expansion is about to end any time in the near future.
Introduction
Like almost everything surrounding Venezuela, discussion of Venezuela's economy is almost always polarized, with emphasis generally on the negative. For example, for almost two years, major U.S. media outlets, as well as more specialized publications1 stated that poverty had increased under the administration of President Hugo Chávez. This was false, but the media did not correct its reporting until the Center for Economic and Policy Research published a paper on the subject.
2 This brief overview takes a look at Venezuela's economic performance over the last eight years, examining the major economic indicators, fiscal and monetary policy, the foreign sector, social spending and programs, poverty, and other policy issues. The authors hope that it will contribute to clarifying some of the important issues surrounding this controversial subject.
Economic Growth
Many accounts of the Venezuelan economy today dismiss the country's current rapid economic expansion as an "oil boom" that will end in a disastrous bust, similar to what happened in the 1970s and early 1980s.
3 It is therefore worth looking at Venezuela's growth in both current and historical perspective to see if there is any basis for this commonly held view.
Latin America as a region has suffered a sharp slowdown in economic growth in 1980, from which it has yet to recover. For the 26 years from 1980-2006, per capita GDP has grown only about 15 percent, as compared to 82 percent during just the 20 years from 1960-1980. This is the worst long-term growth performance for more than a hundred years, although the last three years have shown a significant improvement.Venezuela was no exception to this trend, although its decline from peak GDP in 1977 was sharper than most of the region, and lasted longer. As can be seen in Figure 1, real GDP per capita declined by 26 percent from 1978 to 1986. It hit bottom in 2003, 38 percent below its 1978 peak.
Since the first quarter of 2003, the economy has grown by a remarkable 76 percent.
4 There are several issues that arise when looking at this growth in both current and historical perspective.
First, it must be noted that there are serious measurement problems with the data prior to 1984.
5 Without going into all of the measurement problems, there is a general problem that in an oil economy, consumption and therefore living standards can rise with the price of oil even as oil GDP declines in real terms. This is because the rising price of oil can allow the producing country to buy more internationally, even while the volume of oil produced (which is what real GDP measures) is constant or declining. In fact, during the 1970s it was precisely the decline in output from Venezuela and other OPEC nations that caused oil prices to rise. These relationships can be seen in Figure 1. From 1970 to 1985, real oil output fell by 70 percent, while consumption and non-oil GDP rose. Oil prices spiraled enormously during this period, increasing by 948 percent from 1970 to 1980.
Oil prices collapsed beginning in 1981, and the Venezuelan economy went down with them.
6 Is this sort of unraveling ahead in Venezuela, as many analysts predict? Of course, the future of oil prices is difficult to project. The July 10 short-term outlook of the US Energy Information Agency projects oil prices at $65.56 per barrel for 2007 and $66.92 for 2008.
7 The risks of unanticipated supply shocks seem to be mostly on the downside, which would increase prices. Most importantly, there is the potential for adverse supply shocks from the Middle East, where the Bush Administration has threatened to bomb Iran if the standoff over that country's nuclear program cannot be resolved; and the general risk of widening war, terrorism, or rebellion there carries an unknown risk for other major world suppliers in the region. However, there is always the risk of an unexpected downturn in oil prices. If such an unanticipated reduction in oil prices is temporary, Venezuela would seem well-prepared to withstand it. The government has about $25 billion, or about 14 percent of GDP, in international reserves. This is much more than is needed maintain a safe level of reserves for imports or other needs. As discussed below, the country also has relatively low levels of public and foreign public debt, and if necessary could borrow rather than cut government spending or public investment enough to seriously slow the domestic economy. The government also budgets conservatively for oil prices that are far below current prices: for 2006, the government budgeted for oil at $26 per barrel, whereas the average price of Venezuelan crude oil was $60.20 (see below). The probability of an economic collapse brought on by falling oil prices therefore appears to be very small.
It is also worth noting that the current economic expansion is far greater than the 1973-1977 upturn, when oil prices were also rapidly rising. As noted above, since the first quarter of 2003, Venezuela's real (inflation-adjusted) GDP has grown by 76 percent; during the 1973-1977 expansion it grew by 31 percent. This is despite the fact that oil prices actually rose even more, and to a higher level in real terms, from 1973-1980 than in their present climb from 1998. Although some of the recent expansion is clearly a rebound from the 2002-2003 oil strike/recession, there was also a significant downturn prior to the 1973-1977 expansion (see Figure 1). Thus the current economic expansion has seen rapid growth even for an "oil boom," and even given its recovery from the oil strike and recession. It seems likely that the government's expansionary fiscal and monetary policies, and perhaps other policies (e.g. exchange controls since February 2003 which have kept more capital within the country) may have contributed to the rapid growth of the present expansion.
Figure 2 shows Venezuela's real quarterly GDP from 1998-2007 (first quarter)
8. As can be seen from the graph, the trajectory of the economy appears to be very heavily influenced by external shocks, especially political instability and strikes. Chávez's first year (1999), which began with the price of Venezuelan oil at its lowest point in 22 years, was marked by negative growth. But the economy began to grow in the first quarter of 2000 and continued through the third quarter of 2001. The next few months were a period of the most extreme political instability: in December of 2001 the Venezuelan Chamber of Commerce (FEDECAMARAS) organized a general business strike against the government.
This political instability, with much capital flight, continued through April 2002, when the elected government was overthrown in a military coup. The constitutional government was restored within 48 hours, but stability did not return, as the opposition continued to seek to topple the government by extra-legal means. Growth remained negative through the summer and fall of 2002, and then the economy was hit with the opposition-led oil strike of December 2002-February 2003. This plunged the economy into a severe recession during which Venezuela lost 24 percent of its GDP. The economy began to recover in the second quarter of 2003 and has grown very rapidly since then.
While some macro-economic policies may have contributed to the economy's poor performance for brief periods – for example the government's temporary pro-cyclical fiscal policy at the beginning of 2002 – it is clear that not only the price of oil but political instability played a very large role in Venezuela's business cycles over the past eight years. After the failure of the oil strike in February 2003, the opposition – especially after an agreement reached with the government in May 2003 – began to focus primarily on electoral means of dislodging the government. This culminated in a presidential recall referendum in August of 2004. Thus, the political situation stabilized considerably in mid-2003 and has continued to stabilize throughout the current economic expansion.
The big upswing from the first to second quarter of 2003 was driven by the recovery of oil production that was cut off during the strike. But the economy's double digit growth continued up to the present, with the result that annual growth was 18.3 percent in 2004, 10.3 percent in 2005, and 10.3 percent in 2006. This growth has been concentrated in the non-oil sector of the economy, with the oil sector barely growing at all for 2005-2006 (see Table 1).
As can be seen in Table 1, the private sector has grown faster than the public sector over the last 8 years, and therefore the private sector is a bigger share of the economy in 2007 than it was before President Chávez took office.
9
Table 1 also shows the sectoral growth of Venezuela's economy over the last 8 years, through the first quarter of 2007. The growth has all been during the current economic expansion – the four years from Q1 2003 to Q1 2007. The fastest growing sector during this period has been finance and insurance, which grew 240 percent during this period. Other fast-growing sectors included construction (144 percent), trade and repair services (127.5 percent), communications (99.5 percent) and transport and storage (87 percent). Manufacturing has done better than the overall economy, with 91 percent growth, but this is not enough growth in this sector to contribute to a process of serious diversification away from its dependence on oil.
In subsequent sections, we will look at the trajectory of Venezuela's foreign and domestic debt, balance of payments, foreign exchange reserves, inflation, investment, government budget, and other indicators to assess whether there are any serious economic imbalances that would justify the prevailing view that the current expansion is headed for some sort of collapse. From what we seen so far, however, there is at least a prima facie case that this is not true. Rather it appears that the Venezuelan economy was hit hard by political instability prior to 2003, but has grown steadily and quite rapidly since political stability began improving in that year.
Social Spending, Poverty, and Employment
The Chávez government has greatly increased social spending, including spending on health care, subsidized food, and education. The state oil company alone was responsible for $13.3 billion (7.3 percent of GDP) of social spending last year
10. The most pronounced difference has been in the area of health care. In 1998 there were 1,628 primary care physicians for a population of 23.4 million. Today, there are 19,571 for a population of 27 million. In 1998 there were 417 emergency rooms, 74 rehab centers and 1,628 primary care centers compared to 721 emergency rooms, 445 rehab centers and 8,621 primary care centers (including the 6,500 ‘check-up points,’ usually in poor neighborhoods, and that are in the process of being expanded to more comprehensive primary care centers) today. Since 2004, 399,662 people have had eye operations that restored their vision.11 In 1999, there were 335 HIV patients receiving antiretroviral treatment from the government, compared to 18,538 in 2006
.12 The Venezuelan government has also provided widespread access to subsidized food. By 2006, there were 15,726 stores throughout the country that offered mainly food items at subsidized prices (with average savings of 27% and 39% compared to market prices in 2005 and 2006, respectively).
13 These plus expanded special programs for the extremely poor (e.g., soup kitchens and food distribution) benefited an average of 67 percent and 43 percent of the population in 2005 and 2006 respectively.
14 These do not include the 1.8 million children that were beneficiaries of a school food program in 2006, compared with 252,000 children in 1999.
15 Access to education has also increased substantially. For example, the number of students in ‘Bolivarian schools’ (primary education) increased from 271,593 for the 1999/2000 school year to 1,098,489 for the 2005/2006 school year.16 Over one million people also participated in adult literacy programs.17
The government has also increased its collection of non-oil taxes on businesses,18 which had been avoiding their taxes, as is common in most of Latin America.19
Table 2 shows the central government's social spending from 1998 to 2006. There has been a massive increase, from 8.2 percent of GDP in 1998 to 13.6 percent for 2006. In real (inflation-adjusted) terms, social spending per person20 has increased by 170 percent over the period 1998-2006. But this does not include PDVSA’s social spending, which was 7.3 percent of GDP in 2006. With this included, social spending reached 20.9 percent of GDP in 2006, at least 314 percent more than in 1998 (in real social spending per capita).
The poverty rate has decreased rapidly from its peak of 55.1 percent in 2003 to 30.4 percent at end of 2006, as would be expected in the face of the very rapid economic growth during these last three years. Table 3 shows the poverty rate since 1997, by household and population. If we compare the pre-Chávez poverty rate (43.9 percent) with end of 2006 (30.4 percent) this is a 31 percent drop in the rate of poverty, which is substantial.21 However this poverty rate measures only cash income – it does not take into account the increased access to health care or education that poor people have experienced. As we have shown previously, taking the most conservative estimate of just the value of the health care benefits – what the poor would have spent on health care in the absence of these new programs – would lower the measured poverty rate by about 2 percentage points. 22 Of course, this is a very conservative estimate of the value of just the increased health care benefits to the poor, since in the absence of these benefits, most poor people would simply have gone without health care, and therefore suffer from worse health, lower income, and lower life expectancy. So the value of these health care services is much greater than the amount that they would have spent out-of-pocket in the absence of the government programs.23 The situation of the poor has therefore improved significantly beyond even the substantial poverty reduction that is visible in the official poverty rate, which measures only cash income.
In evaluating government policy with respect to poverty, it is also worth noting that sharp spike in the poverty rate at the end of 2001 (39 percent) to its peak of 55.1 percent in the second half of 2003 is overwhelmingly attributable to the opposition oil strike of 2002-2003. There is little doubt that poverty would be even lower today if not for the enormous economic damage caused by this strike.
Unemployment has also dropped sharply during the current economic recovery. As can be seen in Table 4, the unemployment rate has fallen from 18.4 percent in June 2003 to 8.3 percent in June 2007,24 its lowest level in more than a decade. If we compare to the beginning of the Chávez administration, unemployment stood at 15 percent in June 1999. By any comparison, the official unemployment rate has dropped sharply. Of course, an unemployment rate of 8.3 percent in Venezuela, as in developing economies generally, is not comparable to the same rate in the United States or Europe. Many of the people counted as employed are very much underemployed. But the measure is consistent over time, and therefore shows a considerable improvement in the labor market. This can be seen in other labor market indicators. For example, employment in the formal sector has increased to 6.06 million (2006), from 4.41 million in 1998 and 4.72 million in 2003. As a percentage of the labor force, formal employment has increased significantly since 1998, from 44.5 to 49.4 percent.
As can be seen in Table 4, there has been an increase of about 1.9 million jobs in the private sector and 478 thousand jobs in the public sector since 1998. Employment as a percentage of the labor force has increased by 1.5 percentage points since 1998. Private employment was a slightly larger percentage of the labor force (75.2 percent) in 2006 as compared to 1998 (74.9 percent). However, both of these indicators probably understate the improvement in the labor market since the number of people who were out of the labor force for education – as access to education was increasing -- rose by 3.4 percentage points, relative to the labor force, during this period.
Fiscal and Monetary Policy, Exchange Rates, Balance of Payments, and the Sustainability of the Current Economic Expansion
As noted previously, one of the most persistent themes in reporting on, and discussion of, Venezuela's current economic expansion is that it is an oil boom headed for collapse. Although some of these statements rely on a drop in oil prices as the trigger for Venezuela's economic collapse, many such prognostications offer little in the way of concrete explanation as to what will bring the current expansion to a halt.25 This is quite different from predicting, for example in the United States at the peak of the 1990's stock market bubble, that stock prices would fall sharply and that this loss of wealth would cause a recession (as did actually happen). Or that the housing bubble, which appears to have peaked last year, would have to burst and that this deflation (through the wealth effect and credit impacts of falling home prices, a shrinking construction sector, etc.) will cause a recession. In these cases one can estimate the overvaluation of asset prices, the size of the expected correction, and the expected impact of such a correction on the economy.26 But given the vagueness of this popular conception of Venezuela's expected economic troubles, it is not possible to address the argument with this kind of specificity; however, it is possible to look at the Venezuelan economy and see if there are any serious economic imbalances that threaten to cut short the current economic expansion.
Venezuela has budgeted conservatively with respect to the price of oil, and the prospect of a collapse in oil prices in the foreseeable future seems unlikely – as described above. Critics also point to the run-up in government spending as an unsustainable trend. Table 5 shows the government's finances since 1998. As can be seen, there has indeed been a very large increase in central government spending, from 21.4 percent of GDP in 1998 to 30 percent in 2006. However, revenues increased even more, from 17.4 to 30 percent of GDP over the same period, leaving the central government with a balanced budget for 2006. For 2007, the government has once again budgeted very conservatively for oil at $29 per barrel, 52 percent under the average $60.20 dollars per barrel that Venezuelan crude sold for last year. However, what the government generally does as oil revenue far exceeds the budgeted price, is to spend beyond budgeted expenditures. Thus, while a fall in oil prices will not cause a budgetary crisis, it could lead to reduced government spending from current levels. This could slow the economy from its present very rapid pace, but it is unlikely to cause a downturn, because Venezuela has a considerable cushion to deal with a decline in oil prices.
As can be seen in Table 5, Venezuela has taken advantage of the current expansion and increased oil revenues to reduce its public debt, and especially foreign public debt. Total public debt increased quite substantially through the crisis of 2002-2003, reaching a peak of 47.7 percent of GDP in 2003. But by 2006 it was down to a modest 23.8 percent of GDP. The government also transitioned away from foreign financing, leaving the external component of the foreign debt at just 14.7 percent of GDP. Goldman-Sachs projects a further decline of total debt to 20 percent of GDP, despite their projection of a growth slowdown (from 10.3 to 7 percent of GDP).27 Total interest payments on the public debt, foreign and domestic, summed to a relatively small 2.1 percent of GDP in 2006.
Thus there is plenty of room to borrow, if necessary, if Venezuela were to face an unexpected decline in oil revenues. But before having to borrow, the government could dip into its international reserves. As can be seen in Table 6, the government's foreign exchange reserves, as of June 30 were $25.2 billion, or about 14 percent of GDP. This has dropped sharply from its peak of $37.4 billion last year, but it is still much larger than the country's needs, enough to pay off almost its entire foreign public debt. The recent depletion of reserves was the result of a $6.77 billion transfer to the National Development Fund (FONDEN), the creation of an offshore account by the National Treasury for PDVSA’s tax payments in order to manage monetary liquidity (i.e. this is central government tax revenue held in dollars and not being spent), a significant increase in the volume of currency transactions to finance imports approved by CADIVI28, and the recent purchase of dollars from the Central Bank by PDVSA as a result of placing $7.5 billion in international bonds (i.e. money raised in bolivares and sold to the Central Bank in order to absorb liquidity). Therefore, these actions do not represent any economic trend that would be expected to further deplete reserves. Also, if we add the offshore accounts of the FONDEN and the National Treasury to the current level of international reserves, the total is in excess of $40 billion29– with some estimates of these total effective international reserves as high as $45 billion.30 The government's revenue from oil last year was $28.9 billion. In the face of an unanticipated decline in oil prices, the government could therefore draw on reserves and borrowing from financial markets for some time before any serious budget cuts would be necessary. For example, if oil revenue were to decline by as much as 20 percent, this could be absorbed from reserves, which would otherwise be expected to grow over the next year.
Another common feature of the "oil boom to be followed by bust" analysis of Venezuela's economy is that government spending is fueling rapidly rising inflation, which will spin out of control. According to this theory, which also is not well specified, either the inflation itself would cause a crisis – e.g. become hyperinflation – or the government would be forced to put the economy into a sharp contraction in order to avoid or reduce dangerous levels of inflation.
Figure 3 shows Venezuela's monthly year-over-year inflation rate since 1991. As can be seen in the graph, inflation declined steadily from May 1998 to January 2002, from a 40 percent to a 12 percent annual rate. It then rose rapidly during Venezuela's worst political instability, from February 2002 to February 2003. This period included the military coup of April 2002 and most importantly, the oil strike of December 2002 to February 2003, which generated major supply shortages and pushed inflation back up to a 40 percent annual rate. After the strike ended, inflation declined steadily again for the next three and a half years, despite the rapid growth during recovery that began in the fourth quarter of 2003. But since June 2006 there has been another upswing, pushing the year-over-year inflation rate from 10.4 percent to 19.4 percent (June 2007).
The current uptick in inflation is fueled by a combination of shortages and the accumulated effects of three and a half years of very rapid growth. How serious of a problem is this increased inflation, and could it lead to an economic crisis and/or the end of the current economic expansion? First, it should be kept in mind that there is no consensus in the macroeconomic research on inflation as to how high it can go without a negative impact on growth, with some studies finding a threshold of 20 percent or more – a threshold that Venezuela is just now approaching.31 Second, it should be emphasized that double-digit inflation rates in a developing country such as Venezuela are not comparable to the same phenomenon occurring in the United States or Europe. Inflation in Venezuela was much higher in the pre-Chávez years, running at 36 percent in 1998 and 100 percent in 1996. Although much of the public does not understand this, it is real (after-inflation) growth in incomes— and employment – that affects people's living standards, not the rate of inflation per se. This is true so long as inflation does not spiral to the point where it actually reduces real growth. So far, it does not appear that inflation in Venezuela is getting out of control. In the last 3 months it has stabilized at about 19.4 percent. Beginning in February of this year, the government reduced the value added tax, in an effort that probably contributed to stabilizing the inflation rate. It is also worth noting that inflation has fallen sharply through most of the current economic recovery, and has only risen over the last year. In the last year it has risen to about half of its peak in February 2003, which was driven by the oil strike of that year.
Furthermore, since the country is running such a large current account surplus, and the government is taking in more revenue that it can spend, it has a number of tools to fight inflation without necessarily sacrificing economic growth. One has been sterilization, whereby the government takes excess domestic currency out of circulation by issuing bonds. The recent sale of $7.5 billion worth of bonds by PDVSA in April, which were snapped up by a large number of investors,32 are an example of the government using bond sales for this purpose. Venezuela's current account surplus also gives it the leeway to defuse inflation through imports. This is what happened through most of the current economic recovery, when inflation was falling despite very rapid growth – excess domestic currency was converted into dollars and spent on imports. As can be seen in Table 6, imports tripled from their depressed level of $10.5 billion in 2003 to $32.2 billion, or 17.8 percent of GDP in 2006. But exports, fueled by rising oil prices and the recovery of oil production from the strike, grew much faster, from $27.2 billion in 2003 to $65.2 billion, or 36 percent of GDP. As a result, the country is running a huge current account surplus: it was 15 percent of GDP for 2006. In the last 2 quarters this surplus has shrunk considerably, but is still about 8 percent of GDP.
In sum, inflation has been rising over most of the last year but it is not an imminent threat to the current expansion. This is likely to remain the case so long as Venezuela maintains a large current account surplus. Nonetheless, the government will need to make sure that inflation does not begin another upward climb of the sort that has happened over the last year. Fortunately, given the government's favorable current account, international reserves and borrowing capacity, it has the ability to bring down inflation without a sharp slowdown in economic growth.
In recent months there have been reports of shortages of foods such as beef, sugar, corn oil, milk, chicken and eggs. In most cases these foods can be purchased in various black markets when they are unavailable in supermarkets and the Mercal centers. These shortages are generally believed to be at least partly a result of price controls, the rapid growth of the economy and consumption, as well as hoarding of some items. While this may become a political problem if it persists or worsens, it is something that the government can easily mitigate. Even more so than in the case of inflation, the government has the ability to ease any shortages through imports, and presumably would do so if there were a serious threat of economic or political damage.
The most serious economic imbalance is the exchange rate. The bolivar is pegged at 2,150 to the dollar; it was fixed at 1,600 in February 2003 when the government implemented foreign exchange controls. If we assume that the currency was neither overvalued nor undervalued when the exchange controls were implemented – more likely it was already overvalued – we would expect a depreciation to about 2,790 as a result of Venezuela's inflation.33 Thus the Venezuelan currency is at least 30 percent overvalued relative to the dollar. It is worth noting that this is not necessarily overvalued to the extent indicated by the parallel market rate, where the currency has depreciated rapidly over the last year, to more than 4,000 bolivares per dollar. It is also worth noting that the parallel exchange market is relatively small as measured, for example, by the difference between total imports (goods and services) and the amount of CADIVI34-approved currency transactions. For 2007 Q1, total imports of goods and services amounted to $9.7 billion while CADIVI approved transactions for the same period totaled $9.1 billion, which suggests that only $583.3 million, or 6 percent of total imports (at the official exchange rate) were covered by the parallel exchange market in that period. Nonetheless the currency is still significantly overvalued.
This is something that will have to be remedied if Venezuela is going to pursue a long-term development strategy that diversifies the economy away from oil. An overvalued currency discourages the development of non-oil sectors, especially manufacturing.
It makes imports artificially cheap and the country's exports more expensive on world markets, thus putting the country's tradable goods at a serious disadvantage in both international and domestic markets.35 This is a serious long-term development problem. There are also distortions and inefficiencies associated with the system of exchange controls and the parallel market.
The overvalued fixed exchange rate, combined with present levels of inflation, also presents a significant intermediate-term problem. Even if inflation is stabilized and begins to be reduced, so long as it remains at or near current levels and the nominal exchange rate remains fixed, Venezuela's currency will become increasingly overvalued. This will increasingly squeeze domestic production outside of oil and non-tradables, and would eventually become unsustainable.
Nonetheless, Venezuela's overvalued exchange rate does not present the kind of immediate threat that e.g., overvalued exchange rates in Argentina, Mexico, Brazil, or Russia presented in the 1990's, where a sudden and forced devaluation was imminent. The cost of adjustment in such situations can be quite significant, as it was in Argentina and Mexico. But the Venezuelan government has a number of options for bringing the currency to a more competitive level over time, given its large current account surplus. The government is understandably reluctant to devalue at present, when it is trying to stabilize an inflation rate that has risen sharply over the last year. But it is a problem that must be dealt with sooner or later.
Real interest rates have been negative throughout the recovery as measured by the 90-day deposit rate or most of the recovery, as measured by the lending rate.36 This is shown in Figure 4. These low interest rates, combined with the government's expansionary fiscal policy, have no doubt contributed to the economy's rapid growth since the fourth quarter of 2003. It is worth noting that the government's currency controls, originally enacted in February 2003 as a means of limiting capital flight from the country, have enabled it to pursue expansionary fiscal and monetary policies while maintaining a fixed exchange rate.
Thus the overall combination of macroeconomic policy has been successful at promoting rapid growth, although with an increasingly overvalued real exchange rate.
Finally, another recurring theme is that Venezuela's economic growth will be cut short from a lack of investment, as investors – both foreign and domestic – perceive the economy to be an unfavorable investment climate. Table 6 also shows gross capital formation and gross fixed capital formation since 1998. As can be seen from the totals, gross fixed capital formation stagnated from 1998-2001 and collapsed by 57 percent during the worst instability and oil strike of 2002-2003. However, it has grown enormously during the current economic expansion. It rebounded sharply in 2004, growing by 49.7 percent year-over-year in real terms. It has continued its rapid growth through the present, increasing by 37.9 percent in 2005, and 33.5 percent in 2006. For the first quarter of 2007, gross capital formation is up 27 percent year-over-year.
These figures do not separate public and private investment. Data for gross capital formation which does make this separation is available through 2004. In that year, gross private capital formation grew by 138.9 percent, while gross public capital formation grew by 48.7 percent. It is possible however, that private investment has not kept pace with the growth of public investment after 2004. We do know from Central Bank balance of payments data that foreign direct investment in Venezuela was negative for the year 2006, for the first time in eight years of the Chávez government. This is a significant change, although not that large, as foreign direct investment in Venezuela was about 1.8 percent of GDP in 2005. But we do not know yet how much of the growth in total or fixed capital formation of the last two years has been private versus public.
But even if private investment is lagging, public sector investment has been badly neglected for decades and there is much potential there to improve the productivity of the economy – as was most famously demonstrated by collapse, and then recent repair of the Viaduct 1 bridge that was a vital part of the route from the La Guaira airport to Caracas. The government has not built a new public hospital since the 1970s. If private investment does not keep up with the economy's rapid growth, it is not clear that this will necessarily slow Venezuela's growth and development.
In the last six months, the government has accelerated its drive towards its announced goal of "21st century socialism," nationalizing the telecommunications giant CANTV and some of the country's electricity generation (which was already more than 80 percent in the hands of the government). It has also taken a majority stake in its joint ventures with foreign oil companies in the Orinoco basin. These moves have generally been portrayed as very negative not only for Venezuela's investment climate and for its economic future.
However, it is important to keep some perspective on these changes. The telecommunications and electricity sectors were nationally owned and then privatized in the 1990s. These companies were compensated fully for their assets as part of the recent privatization: "I think this deal is a fair one," AES chief executive Paul Hanrahan said at a news conference in Caracas, adding that negotiations had "respected the rights of investors."37 CANTV has a near-monopoly on land phones and internet service, and has been slow to expand access – Venezuela's internet access remains below average for the region, with 125 users per 1000 people, as compared to 156 for Latin America.38 (This is particularly bad because Venezuela is far above average in per capita income for the region).
In the oil sector, the first round of negotiations were settled for 31 of 33 contracts, with only Total and ENI choosing to leave. Last month, most of the remaining joint ventures were also renegotiated, but Exxon-Mobil and ConocoPhillips announced that they had rejected the government's offer and are planning to pull out. Venezuela is one of the only major oil-producing states in the developing world that allows foreign investment in oil production – even US allies such as Mexico and Saudi Arabia, for example, do not. Venezuela's reserves of heavy crude in the Orinoco region are now estimated to be among the largest in the world, so foreign companies have strong incentives to stay involved. They also face increasing competition from state-run companies from countries such as China, Brazil, India, Russia, and elsewhere.
In sum, the Venezuelan government's moves toward increased state involvement in the economy have not involved any large-scale nationalizations or state planning, and have been careful not to take on administrative functions that are beyond its present capacity. As noted above, the government has not even increased the public sector's share of the economy. The central government's spending, at 30 percent of GDP, is far below such European capitalist countries as France (49 percent) or Sweden (52 percent). There is still plenty of room for both private and public investment.
Conclusion
In sum, the performance of the Venezuelan economy during the Chávez years does not fit the mold of an "oil boom headed for a bust." Rather it appears that the economy was hit hard for the first few years by political instability, and has grown rapidly since the political situation stabilized in the first quarter of 2003. High oil prices have certainly contributed to this growth, as has the government's expansionary fiscal and monetary policy. Containing and reducing inflation, as well as realigning the domestic currency, appear to be the most important challenges in the intermediate run; in the long run, diversifying the economy away from its dependence on oil is also a major challenge.
However, the declining public debt (as a percentage of GDP), the large current account surplus, and the accumulation of reserves have given the government considerable insurance against a decline in oil prices. This favorable macroeconomic situation has also left the government with much flexibility in dealing with inflation and the related imbalance in the exchange rate. Since the government is committed to maintaining solid growth, it does not seem likely that it would sharply curtail economic growth in order to bring down inflation, as is often done. This is especially true since it has not exhausted other alternatives. Therefore, at present it does not appear that the current economic expansion is about to end any time in the near future. The gains in poverty reduction, employment, education and health care that have occurred in the last few years are likely to continue along with the expansion.
About the Authors: Mark Weisbrot is Co-Director and Luis Sandoval is a Research Assistant at the Center for Economic and Policy Research in Washington, DC.
Acknowledgements: The authors would like to thank Dean Baker, Rebecca Ray, and Dan Beeton for their comments, and Kunda Chinku for editorial and research assistance.
Center for Economic and Policy Research1611 Connecticut Avenue, NW, Suite 400Washington, D.C. 20009202-293-5380http://www.cepr.net/
1 See, for example, Javier Corrales, “Hugo Boss,” Foreign Policy, January/February 2006; Jorge G. Castañeda, “Latin America’s Left Turn,” Foreign Affairs, May/June 2006; and Michael Shifter, “In Search of Hugo Chávez,” Foreign Affairs, May/June 2006.
2 Mark Weisbrot, Luis Sandoval and David Rosnick, “Poverty Rates in Venezuela: Getting the Numbers Right,” Center for Economic and Policy Research (CEPR), May 2006: [http://www.cepr.net/documents/venezuelan_poverty_rates_2006_05.pdf].
3 See, for example, Economist Intelligence Unit, "Venezuela risk: Risk overview," Risk Briefing Select, April 27, 2007; Chris Kraul, "Chávez's grand, risky dream," Los Angeles Times, June 23, 2007; and Jose de Cordoba, "Land Grab: Farmers Are Latest Target in Venezuelan Upheaval," The Wall Street Journal, May 17, 2007.
4 See (Banco Central de Venezuela, BCV) quarterly GDP series in 1997 constant prices (not seasonally adjusted) available at: http://www.bcv.org.ve/c2/indicadores.asp (under ‘Agregados Macroeconomicos’). Since this is from the first quarter of 2003 to the first quarter of 2007, seasonal adjustment is not necessary.
5 See Rodriguez (2006) for a discussion of these measurement problems. Since Rodriguez' paper was written, the Penn World Tables data was revised (version 6.2) and so the major data sets at least tell the same basic story: Rodriguez, Journal of Development Studies, Vol. 27, No. 4 (2006) [Available through the author’s website at: http://frrodriguez.web.wesleyan.edu/docs/working_papers/Anarchy.pdf].
6 GDP peaked in 1977, but most of this downturn came after oil prices collapsed.
7 Energy Information Administration (EIA), "Short-Term Energy Outlook," July 10th, 2007. Available online at:[ http://www.eia.doe.gov/emeu/steo/pub/contents.html].
8 Seasonally adjusted.
9 In 2006, the private sector’s total value added was 63 per cent of total GDP, up from 59 per cent in 1999. Calculations based on constant price GDP series from the Venezuelan Central Bank (Banco Central de Venezuela, http://www.bcv.org.ve/ (last accessed on 06/18/07).
10 From PDVSA's 2006 summary of financial operations. Available online at: http://www.pdvsa.com/interface.sp/database/fichero/publicacion/1792/76.PDF.
11 For these data and more information on the impact of the ‘misiones’ go to: http://www.misionesbolivarianas.gob.ve/.
12 Logros, febrero 2007, SISOV, Ministerio de Planificacion y Desarrollo, available online at http://www.sisov.mpd.gob.ve/estudios/.
13 Ministerio de Alimentacion, Memoria y Cuenta 2006 (Annual report of the Ministry of Food/Nutrition to the National Assembly).
14 Logros, febrero 2007, SISOV, Ministerio de Planificacion y Desarrollo, available online at http://www.sisov.mpd.gob.ve/estudios/
15 Ibid.
16 Ibid.
17 Update on Misión Robinson (February 16, 2007), Ministerio del Poder Popular para la Comunicación y la Información: [http://www.misionesbolivarianas.gob.ve/component/option,com_docman/Itemid,0/task,doc_download/gid,223/].
18 Non-oil tax revenue went from 10 percent of GDP in 1999 to 12 percent in 2006 mostly due to an increase in the collection of income taxes (on individuals and companies) from 2 percent of GDP in 1999 to 3.2 percent in 2006. Data from Venezuela’s Ministry of Finance (http://www.mf.gov.ve/, last accessed on 06/18/07).
19 See John Schmitt (2003), “Is it Time to Export the US Tax Model to Latin America?”, Center for Economic and Policy Research. Available online at: http://www.cepr.net/index.php?option=com_content&task=view&id=391&Itemid=8.
20 Per capita social spending is a better measure than social spending per se because it takes population growth into account.
21 It is worth noting that the economy has grown for more than half a year since the last survey, so poverty would probably be somewhat lower today.
22 Weisbrot, Sandoval and Rosnick (2006). “Poverty Rates in Venezuela: Getting the Numbers Right,” Center for Economic and Policy Research (CEPR), Washington, DC: [http://www.cepr.net/documents/venezuelan_poverty_rates_2006_05.pdf]: see Table 2 and text.
23 The alternative would be to estimate the market value of health care services received, but this would exaggerate the impact of health care on the actual situation of the poor; we have therefore used the conservative estimate described above as a lower bound of the impact of this health care spending on the poor. (see Weisbrot, Sandoval and Rosnick, 2006).
24 The data are not seasonally adjusted, so we are comparing unemployment rates for the same month across years.
25 For example, Domingo Maza Zavala, then director of the Central Bank, warned the New York Times in October 2005 of a recession as soon as 2007, without offering an explanation of how this might happen (October 30, 2005), “Chávez Restyles Venezuela With '21st-Century Socialism,” The New York Times). Also, the IMF has projected a drastic growth slowdown for three consecutive years, which has not materialized. See Table 2 in David Rosnick and Mark Weisbrot (2007), “Political Forecasting? The IMF’s Flawed Growth Projections for Argentina and Venezuela,” Center for Economic and Policy Research. Available online at: http://www.cepr.net/index.php?option=com_content&task=view&id=1107 ].
26 See, for example, Dean Baker (2000), “Double Bubble: The Implications of the Over-Valuation of the Stock Market and the Dollar,” Center for Economic and Policy Research. [Available online: http://www.cepr.net/documents/publications/double_bubble.pdf] and; Dean Baker and David Rosnick (2005) “Will a Bursting Bubble Trouble Bernanke?: The Evidence for a Housing Bubble,” Center for Economic and Policy Research. [Available online: http://www.cepr.net/documents/publications/housing_bubble_2005_11.pdf]
27 Goldman Sachs, Latin America Economic Analyst, Issue No 07/10, May 18, 2007.
28 CADIVI (Comisión de Administración de Divisas) is the government’s Currency Administration Commission, which processes applications to obtain foreign currency in Venezuela.
29 This calculation is based on the sum of (a) $6.77 billion in transfer of BCV international reserves to Fonden (assuming it was all kept in foreign currency); (b) $8.86 billion ($8.85 billion and EUR 4.5 million that the Fonden had in foreign currency as of Dec. 22, 2006 [http://www.fonden.gob.ve/descargas//32/Sintesis%20Ejecutiva%20Memoria%20FONDEN%202006.pdf]; and (c) at least $5 billion in National Treasury’s foreign currency denominated account for PDVSA’s fiscal contribution [see, Bancaribe Monthly Reports (September 2006: http://www.bancaribe.com.ve/uploads/MENSUAL_Septiembre.pdf; February 2007: http://www.bancaribe.com.ve/uploads/MENSUAL_Febrero.pdf].
30 Goldman Sachs, Latin America Economic Analyst, Issue No 07/14, July 13, 2007
31 See, for example, Michael Bruno (1995), “Does Inflation Really Lower Growth?” Finance and Development, September; Michael Bruno and William Easterly (1998), “Inflation Crises and Long-Run Growth,” Journal of Monetary Economics, 41, pp. 3-26; and Robert Pollin and Andong Zhu (2005), “Inflation and Economic Growth: A Cross-Country Non-linear Analysis,” Political Economy Research Institute, Working Paper Series No. 109: University of Massachusetts, Amherst [Available online: http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_101-150/WP109.pdf].
32 Benedict Mander, “PdVSA Issue Proves a Pioneer in the ‘Democratisation’ of Capital,” Financial Times, April 12, 2007.
33 This is based on the ratio of Venezuela's cumulative consumer price inflation since Feburary 2003, which is 98.3 percent, to U.S. inflation of 13.6 percent.
34 The government's Commission for the Administration of Foreign Exchange.
35 The phenomenon of resource-exporting countries having overvalued currencies and the harmful results of such overvaluation are sometimes called "Dutch disease," from the experience of the Netherlands after the discovery of natural gas there in the 1960s.
36 The lending rate is a weighted average of the rates charged on promissory notes and loans made by commercial banks and universal banks.
37 Steven Mufson, “AES to Sell Utility Stake To Venezuela; Chávez's State-Control Plan Nets Electric Firm,” The Washington Post, February 9, 2007.
38 Source: World Bank, World Development Indicators Online, last accessed on 06/06/2007.
Bookmark/Search this post with:
A new paper from the Center for Economic and Policy Research looks at the Venezuelan economy during the last eight years and finds that it does not fit the mold of an "oil boom headed for a bust," as is commonly believed:
The Venezuelan Economy in the Chávez Years
by Mark Weisbrot and Luis Sandoval, July 2007.
Download the article as a pdf file (392kb).
Contents
Executive Summary
Introduction
Economic Growth
Social Spending, Poverty, and Employment
Fiscal and Monetary Policy, Exchange Rates, Balance of Payments, and the Sustainability of the Current Economic Expansion
Conclusion
Executive Summary
Venezuela has experienced very rapid growth since the bottom of the recession in 2003, and grew by 10.3 percent last year. The most commonly held view of the current economic expansion is that it is an "oil boom" driven by high oil prices, as in the past, and is headed for a "bust." The coming collapse is seen either as a result of oil prices eventually declining, or as a result of the government's mismanagement of economic policy.
There is much evidence to contradict this conventional wisdom. Venezuela suffered a severe economic growth collapse in the 1980s and 1990s, with its real GDP peaking in 1977. In this regard it is similar to the region as a whole, which since 1980 has suffered its worst long-term growth performance in more than a century. Hugo Chávez Frias was elected in 1998 and took office in 1999, and the first four years of his administration were plagued by political instability that had a large adverse impact on the economy. (See Figure 2). This culminated in a military coup that temporarily toppled the constitutional government in April 2002, followed by a devastating oil strike from December 2002-February 2003. The oil strike sent the economy into a severe recession, during which Venezuela lost 24 percent of GDP.
But in the second quarter of 2003, the political situation began to stabilize, and it has continued to stabilize throughout the current economic expansion. The economy has had continuous rapid growth since the onset of political stability. Real (inflation-adjusted) GDP has grown by 76 percent since the bottom of the recession in 2003. It is likely that the government's expansionary fiscal and monetary policies, as well as exchange controls, have contributed to the current economic upswing. Central government spending has increased from 21.4 percent of GDP in 1998 to 30 percent in 2006. Real short-term interest rates have been negative throughout all or most of the recovery (depending on the measure—see Figure 4).
The government's revenue increased even faster than spending during this period, from 17.4 to 30 percent of GDP over the same period, leaving the central government with a balanced budget for 2006. The government has planned conservatively with respect to oil prices: for example, for 2007, the budget plans for oil at $29 per barrel, 52 percent under the average $60.20 dollars per barrel that Venezuelan crude sold for last year. The government has typically exceeded planned spending as oil prices come in higher than the budgeted price, so it is possible that spending would be reduced if oil prices decline.
However, Venezuela has a large cushion of reserves to draw upon before an oil price decline would begin to squeeze its finances. A decline in oil prices of 20 percent or more could be absorbed from official international reserves, which at $25.2 billion are enough to pay off almost all of Venezuela's foreign debt. This does not include other government offshore accounts, which are estimated to be in the range of an additional $14-$19 billion. With its low foreign debt (14.6 percent of GDP), the government could also tap international credit markets in the event of an oil price decline. Furthermore, a collapse of oil prices does not appear to be likely in the foreseeable future. The July 10 short-term outlook of the US Energy Information Agency projects oil prices at $65.56 per barrel for 2007 and $66.92 for 2008. The risks of unanticipated supply shocks – especially in the volatile Middle East − seem to be mostly on the downside, which would increase prices.
The Chávez government has greatly increased social spending, including spending on health care, subsidized food, and education. The most pronounced difference has been in the area of health care. For example, in 1998 there were 1,628 primary care physicians for a population of 23.4 million. Today, there are 19,571 for a population of 27 million. The Venezuelan government has also provided widespread access to subsidized food. By 2006, there were 15,726 stores throughout the country that offered mainly food items at subsidized prices (with average savings of 27% and 39% compared to market prices in 2005 and 2006, respectively).
The central government's social spending has increased massively, from 8.2 percent of GDP in 1998 to 13.6 percent for 2006. See Table 2. In real (inflation-adjusted) terms, social spending per person has increased by 170 percent over the period 1998-2006. But this does not include social spending by PDVSA (Petróleos de Venezuela, the state oil company), which was 7.3 percent of GDP in 2006. With this included, social spending reached 20.9 percent of GDP in 2006, at least 314 percent more than in 1998 (in terms of real social spending per person).
The poverty rate has decreased rapidly from its peak of 55.1 percent in 2003 to 30.4 percent at end of 2006, as would be expected in the face of the very rapid economic growth during these last three years. (See Table 3). If we compare the pre-Chávez poverty rate (43.9 percent) with the end of 2006 (30.4 percent) this is a 31 percent drop in the rate of poverty. However this poverty rate does not take into account the increased access to health care or education that poor people have experienced. The situation of the poor has therefore improved significantly beyond even the substantial poverty reduction that is visible in the official poverty rate, which measures only cash income. Measured unemployment has also dropped substantially to 8.3 percent for June 2007, its lowest level in more than a decade; as compared to 15 percent in June 1999 and 18.4 percent in June 2003 (coming out of the recession). Formal employment has also increased significantly since 1998, from 44.5 to 49.4 percent of the labor force.
The main challenges facing the economy are in the areas of the exchange rate and inflation. The Venezuelan currency is substantially overvalued. The government is reluctant to devalue because this would raise inflation, which is currently running at 19.3 percent and exceeds their target. Since there are exchange controls and the government is running a large current account surplus (8 percent of GDP), there is nothing that would force a devaluation in the near future (as for example, the currency collapses in Argentina, Russia, and Brazil in the late 1990s). But this poses an intermediate-run problem, since even if inflation is stabilized and begins to be reduced, current rates of inflation will continue to appreciate Venezuela's real exchange rate. This makes imports artificially cheap and non-oil exports too expensive on world markets, hurting the tradable goods sector and eventually becoming unsustainable. It also makes it extremely difficult for the economy to diversify away from its dependence on oil.
Inflation itself is a problem, now running at 19.4 percent. But it should be emphasized that double-digit inflation rates in a developing country such as Venezuela are not comparable to the same phenomenon occurring in the United States or Europe. Inflation in Venezuela was much higher in the pre-Chávez years, running at 36 percent in 1998 and 100 percent in 1996. It has fallen through most of the current recovery, from a 40 percent annual rate (monthly, year-over-year) at the peak of the oil strike in February 2003 to 10.4 percent a year ago, before climbing again to its present rate (see Figure 3). Over the last three months it appears to have stabilized at 19.4 percent.
Because of its large current account surplus, large reserves, and low foreign debt, the government has a number of tools available to stabilize and reduce inflation – as well as eventually bring the currency into alignment – without sacrificing the growth of the economy. It appears the government is committed to maintaining a high rate of growth, in addition to its other goals. Therefore, at present it does not appear that the current economic expansion is about to end any time in the near future.
Introduction
Like almost everything surrounding Venezuela, discussion of Venezuela's economy is almost always polarized, with emphasis generally on the negative. For example, for almost two years, major U.S. media outlets, as well as more specialized publications1 stated that poverty had increased under the administration of President Hugo Chávez. This was false, but the media did not correct its reporting until the Center for Economic and Policy Research published a paper on the subject.
2 This brief overview takes a look at Venezuela's economic performance over the last eight years, examining the major economic indicators, fiscal and monetary policy, the foreign sector, social spending and programs, poverty, and other policy issues. The authors hope that it will contribute to clarifying some of the important issues surrounding this controversial subject.
Economic Growth
Many accounts of the Venezuelan economy today dismiss the country's current rapid economic expansion as an "oil boom" that will end in a disastrous bust, similar to what happened in the 1970s and early 1980s.
3 It is therefore worth looking at Venezuela's growth in both current and historical perspective to see if there is any basis for this commonly held view.
Latin America as a region has suffered a sharp slowdown in economic growth in 1980, from which it has yet to recover. For the 26 years from 1980-2006, per capita GDP has grown only about 15 percent, as compared to 82 percent during just the 20 years from 1960-1980. This is the worst long-term growth performance for more than a hundred years, although the last three years have shown a significant improvement.Venezuela was no exception to this trend, although its decline from peak GDP in 1977 was sharper than most of the region, and lasted longer. As can be seen in Figure 1, real GDP per capita declined by 26 percent from 1978 to 1986. It hit bottom in 2003, 38 percent below its 1978 peak.
Since the first quarter of 2003, the economy has grown by a remarkable 76 percent.
4 There are several issues that arise when looking at this growth in both current and historical perspective.
First, it must be noted that there are serious measurement problems with the data prior to 1984.
5 Without going into all of the measurement problems, there is a general problem that in an oil economy, consumption and therefore living standards can rise with the price of oil even as oil GDP declines in real terms. This is because the rising price of oil can allow the producing country to buy more internationally, even while the volume of oil produced (which is what real GDP measures) is constant or declining. In fact, during the 1970s it was precisely the decline in output from Venezuela and other OPEC nations that caused oil prices to rise. These relationships can be seen in Figure 1. From 1970 to 1985, real oil output fell by 70 percent, while consumption and non-oil GDP rose. Oil prices spiraled enormously during this period, increasing by 948 percent from 1970 to 1980.
Oil prices collapsed beginning in 1981, and the Venezuelan economy went down with them.
6 Is this sort of unraveling ahead in Venezuela, as many analysts predict? Of course, the future of oil prices is difficult to project. The July 10 short-term outlook of the US Energy Information Agency projects oil prices at $65.56 per barrel for 2007 and $66.92 for 2008.
7 The risks of unanticipated supply shocks seem to be mostly on the downside, which would increase prices. Most importantly, there is the potential for adverse supply shocks from the Middle East, where the Bush Administration has threatened to bomb Iran if the standoff over that country's nuclear program cannot be resolved; and the general risk of widening war, terrorism, or rebellion there carries an unknown risk for other major world suppliers in the region. However, there is always the risk of an unexpected downturn in oil prices. If such an unanticipated reduction in oil prices is temporary, Venezuela would seem well-prepared to withstand it. The government has about $25 billion, or about 14 percent of GDP, in international reserves. This is much more than is needed maintain a safe level of reserves for imports or other needs. As discussed below, the country also has relatively low levels of public and foreign public debt, and if necessary could borrow rather than cut government spending or public investment enough to seriously slow the domestic economy. The government also budgets conservatively for oil prices that are far below current prices: for 2006, the government budgeted for oil at $26 per barrel, whereas the average price of Venezuelan crude oil was $60.20 (see below). The probability of an economic collapse brought on by falling oil prices therefore appears to be very small.
It is also worth noting that the current economic expansion is far greater than the 1973-1977 upturn, when oil prices were also rapidly rising. As noted above, since the first quarter of 2003, Venezuela's real (inflation-adjusted) GDP has grown by 76 percent; during the 1973-1977 expansion it grew by 31 percent. This is despite the fact that oil prices actually rose even more, and to a higher level in real terms, from 1973-1980 than in their present climb from 1998. Although some of the recent expansion is clearly a rebound from the 2002-2003 oil strike/recession, there was also a significant downturn prior to the 1973-1977 expansion (see Figure 1). Thus the current economic expansion has seen rapid growth even for an "oil boom," and even given its recovery from the oil strike and recession. It seems likely that the government's expansionary fiscal and monetary policies, and perhaps other policies (e.g. exchange controls since February 2003 which have kept more capital within the country) may have contributed to the rapid growth of the present expansion.
Figure 2 shows Venezuela's real quarterly GDP from 1998-2007 (first quarter)
8. As can be seen from the graph, the trajectory of the economy appears to be very heavily influenced by external shocks, especially political instability and strikes. Chávez's first year (1999), which began with the price of Venezuelan oil at its lowest point in 22 years, was marked by negative growth. But the economy began to grow in the first quarter of 2000 and continued through the third quarter of 2001. The next few months were a period of the most extreme political instability: in December of 2001 the Venezuelan Chamber of Commerce (FEDECAMARAS) organized a general business strike against the government.
This political instability, with much capital flight, continued through April 2002, when the elected government was overthrown in a military coup. The constitutional government was restored within 48 hours, but stability did not return, as the opposition continued to seek to topple the government by extra-legal means. Growth remained negative through the summer and fall of 2002, and then the economy was hit with the opposition-led oil strike of December 2002-February 2003. This plunged the economy into a severe recession during which Venezuela lost 24 percent of its GDP. The economy began to recover in the second quarter of 2003 and has grown very rapidly since then.
While some macro-economic policies may have contributed to the economy's poor performance for brief periods – for example the government's temporary pro-cyclical fiscal policy at the beginning of 2002 – it is clear that not only the price of oil but political instability played a very large role in Venezuela's business cycles over the past eight years. After the failure of the oil strike in February 2003, the opposition – especially after an agreement reached with the government in May 2003 – began to focus primarily on electoral means of dislodging the government. This culminated in a presidential recall referendum in August of 2004. Thus, the political situation stabilized considerably in mid-2003 and has continued to stabilize throughout the current economic expansion.
The big upswing from the first to second quarter of 2003 was driven by the recovery of oil production that was cut off during the strike. But the economy's double digit growth continued up to the present, with the result that annual growth was 18.3 percent in 2004, 10.3 percent in 2005, and 10.3 percent in 2006. This growth has been concentrated in the non-oil sector of the economy, with the oil sector barely growing at all for 2005-2006 (see Table 1).
As can be seen in Table 1, the private sector has grown faster than the public sector over the last 8 years, and therefore the private sector is a bigger share of the economy in 2007 than it was before President Chávez took office.
9
Table 1 also shows the sectoral growth of Venezuela's economy over the last 8 years, through the first quarter of 2007. The growth has all been during the current economic expansion – the four years from Q1 2003 to Q1 2007. The fastest growing sector during this period has been finance and insurance, which grew 240 percent during this period. Other fast-growing sectors included construction (144 percent), trade and repair services (127.5 percent), communications (99.5 percent) and transport and storage (87 percent). Manufacturing has done better than the overall economy, with 91 percent growth, but this is not enough growth in this sector to contribute to a process of serious diversification away from its dependence on oil.
In subsequent sections, we will look at the trajectory of Venezuela's foreign and domestic debt, balance of payments, foreign exchange reserves, inflation, investment, government budget, and other indicators to assess whether there are any serious economic imbalances that would justify the prevailing view that the current expansion is headed for some sort of collapse. From what we seen so far, however, there is at least a prima facie case that this is not true. Rather it appears that the Venezuelan economy was hit hard by political instability prior to 2003, but has grown steadily and quite rapidly since political stability began improving in that year.
Social Spending, Poverty, and Employment
The Chávez government has greatly increased social spending, including spending on health care, subsidized food, and education. The state oil company alone was responsible for $13.3 billion (7.3 percent of GDP) of social spending last year
10. The most pronounced difference has been in the area of health care. In 1998 there were 1,628 primary care physicians for a population of 23.4 million. Today, there are 19,571 for a population of 27 million. In 1998 there were 417 emergency rooms, 74 rehab centers and 1,628 primary care centers compared to 721 emergency rooms, 445 rehab centers and 8,621 primary care centers (including the 6,500 ‘check-up points,’ usually in poor neighborhoods, and that are in the process of being expanded to more comprehensive primary care centers) today. Since 2004, 399,662 people have had eye operations that restored their vision.11 In 1999, there were 335 HIV patients receiving antiretroviral treatment from the government, compared to 18,538 in 2006
.12 The Venezuelan government has also provided widespread access to subsidized food. By 2006, there were 15,726 stores throughout the country that offered mainly food items at subsidized prices (with average savings of 27% and 39% compared to market prices in 2005 and 2006, respectively).
13 These plus expanded special programs for the extremely poor (e.g., soup kitchens and food distribution) benefited an average of 67 percent and 43 percent of the population in 2005 and 2006 respectively.
14 These do not include the 1.8 million children that were beneficiaries of a school food program in 2006, compared with 252,000 children in 1999.
15 Access to education has also increased substantially. For example, the number of students in ‘Bolivarian schools’ (primary education) increased from 271,593 for the 1999/2000 school year to 1,098,489 for the 2005/2006 school year.16 Over one million people also participated in adult literacy programs.17
The government has also increased its collection of non-oil taxes on businesses,18 which had been avoiding their taxes, as is common in most of Latin America.19
Table 2 shows the central government's social spending from 1998 to 2006. There has been a massive increase, from 8.2 percent of GDP in 1998 to 13.6 percent for 2006. In real (inflation-adjusted) terms, social spending per person20 has increased by 170 percent over the period 1998-2006. But this does not include PDVSA’s social spending, which was 7.3 percent of GDP in 2006. With this included, social spending reached 20.9 percent of GDP in 2006, at least 314 percent more than in 1998 (in real social spending per capita).
The poverty rate has decreased rapidly from its peak of 55.1 percent in 2003 to 30.4 percent at end of 2006, as would be expected in the face of the very rapid economic growth during these last three years. Table 3 shows the poverty rate since 1997, by household and population. If we compare the pre-Chávez poverty rate (43.9 percent) with end of 2006 (30.4 percent) this is a 31 percent drop in the rate of poverty, which is substantial.21 However this poverty rate measures only cash income – it does not take into account the increased access to health care or education that poor people have experienced. As we have shown previously, taking the most conservative estimate of just the value of the health care benefits – what the poor would have spent on health care in the absence of these new programs – would lower the measured poverty rate by about 2 percentage points. 22 Of course, this is a very conservative estimate of the value of just the increased health care benefits to the poor, since in the absence of these benefits, most poor people would simply have gone without health care, and therefore suffer from worse health, lower income, and lower life expectancy. So the value of these health care services is much greater than the amount that they would have spent out-of-pocket in the absence of the government programs.23 The situation of the poor has therefore improved significantly beyond even the substantial poverty reduction that is visible in the official poverty rate, which measures only cash income.
In evaluating government policy with respect to poverty, it is also worth noting that sharp spike in the poverty rate at the end of 2001 (39 percent) to its peak of 55.1 percent in the second half of 2003 is overwhelmingly attributable to the opposition oil strike of 2002-2003. There is little doubt that poverty would be even lower today if not for the enormous economic damage caused by this strike.
Unemployment has also dropped sharply during the current economic recovery. As can be seen in Table 4, the unemployment rate has fallen from 18.4 percent in June 2003 to 8.3 percent in June 2007,24 its lowest level in more than a decade. If we compare to the beginning of the Chávez administration, unemployment stood at 15 percent in June 1999. By any comparison, the official unemployment rate has dropped sharply. Of course, an unemployment rate of 8.3 percent in Venezuela, as in developing economies generally, is not comparable to the same rate in the United States or Europe. Many of the people counted as employed are very much underemployed. But the measure is consistent over time, and therefore shows a considerable improvement in the labor market. This can be seen in other labor market indicators. For example, employment in the formal sector has increased to 6.06 million (2006), from 4.41 million in 1998 and 4.72 million in 2003. As a percentage of the labor force, formal employment has increased significantly since 1998, from 44.5 to 49.4 percent.
As can be seen in Table 4, there has been an increase of about 1.9 million jobs in the private sector and 478 thousand jobs in the public sector since 1998. Employment as a percentage of the labor force has increased by 1.5 percentage points since 1998. Private employment was a slightly larger percentage of the labor force (75.2 percent) in 2006 as compared to 1998 (74.9 percent). However, both of these indicators probably understate the improvement in the labor market since the number of people who were out of the labor force for education – as access to education was increasing -- rose by 3.4 percentage points, relative to the labor force, during this period.
Fiscal and Monetary Policy, Exchange Rates, Balance of Payments, and the Sustainability of the Current Economic Expansion
As noted previously, one of the most persistent themes in reporting on, and discussion of, Venezuela's current economic expansion is that it is an oil boom headed for collapse. Although some of these statements rely on a drop in oil prices as the trigger for Venezuela's economic collapse, many such prognostications offer little in the way of concrete explanation as to what will bring the current expansion to a halt.25 This is quite different from predicting, for example in the United States at the peak of the 1990's stock market bubble, that stock prices would fall sharply and that this loss of wealth would cause a recession (as did actually happen). Or that the housing bubble, which appears to have peaked last year, would have to burst and that this deflation (through the wealth effect and credit impacts of falling home prices, a shrinking construction sector, etc.) will cause a recession. In these cases one can estimate the overvaluation of asset prices, the size of the expected correction, and the expected impact of such a correction on the economy.26 But given the vagueness of this popular conception of Venezuela's expected economic troubles, it is not possible to address the argument with this kind of specificity; however, it is possible to look at the Venezuelan economy and see if there are any serious economic imbalances that threaten to cut short the current economic expansion.
Venezuela has budgeted conservatively with respect to the price of oil, and the prospect of a collapse in oil prices in the foreseeable future seems unlikely – as described above. Critics also point to the run-up in government spending as an unsustainable trend. Table 5 shows the government's finances since 1998. As can be seen, there has indeed been a very large increase in central government spending, from 21.4 percent of GDP in 1998 to 30 percent in 2006. However, revenues increased even more, from 17.4 to 30 percent of GDP over the same period, leaving the central government with a balanced budget for 2006. For 2007, the government has once again budgeted very conservatively for oil at $29 per barrel, 52 percent under the average $60.20 dollars per barrel that Venezuelan crude sold for last year. However, what the government generally does as oil revenue far exceeds the budgeted price, is to spend beyond budgeted expenditures. Thus, while a fall in oil prices will not cause a budgetary crisis, it could lead to reduced government spending from current levels. This could slow the economy from its present very rapid pace, but it is unlikely to cause a downturn, because Venezuela has a considerable cushion to deal with a decline in oil prices.
As can be seen in Table 5, Venezuela has taken advantage of the current expansion and increased oil revenues to reduce its public debt, and especially foreign public debt. Total public debt increased quite substantially through the crisis of 2002-2003, reaching a peak of 47.7 percent of GDP in 2003. But by 2006 it was down to a modest 23.8 percent of GDP. The government also transitioned away from foreign financing, leaving the external component of the foreign debt at just 14.7 percent of GDP. Goldman-Sachs projects a further decline of total debt to 20 percent of GDP, despite their projection of a growth slowdown (from 10.3 to 7 percent of GDP).27 Total interest payments on the public debt, foreign and domestic, summed to a relatively small 2.1 percent of GDP in 2006.
Thus there is plenty of room to borrow, if necessary, if Venezuela were to face an unexpected decline in oil revenues. But before having to borrow, the government could dip into its international reserves. As can be seen in Table 6, the government's foreign exchange reserves, as of June 30 were $25.2 billion, or about 14 percent of GDP. This has dropped sharply from its peak of $37.4 billion last year, but it is still much larger than the country's needs, enough to pay off almost its entire foreign public debt. The recent depletion of reserves was the result of a $6.77 billion transfer to the National Development Fund (FONDEN), the creation of an offshore account by the National Treasury for PDVSA’s tax payments in order to manage monetary liquidity (i.e. this is central government tax revenue held in dollars and not being spent), a significant increase in the volume of currency transactions to finance imports approved by CADIVI28, and the recent purchase of dollars from the Central Bank by PDVSA as a result of placing $7.5 billion in international bonds (i.e. money raised in bolivares and sold to the Central Bank in order to absorb liquidity). Therefore, these actions do not represent any economic trend that would be expected to further deplete reserves. Also, if we add the offshore accounts of the FONDEN and the National Treasury to the current level of international reserves, the total is in excess of $40 billion29– with some estimates of these total effective international reserves as high as $45 billion.30 The government's revenue from oil last year was $28.9 billion. In the face of an unanticipated decline in oil prices, the government could therefore draw on reserves and borrowing from financial markets for some time before any serious budget cuts would be necessary. For example, if oil revenue were to decline by as much as 20 percent, this could be absorbed from reserves, which would otherwise be expected to grow over the next year.
Another common feature of the "oil boom to be followed by bust" analysis of Venezuela's economy is that government spending is fueling rapidly rising inflation, which will spin out of control. According to this theory, which also is not well specified, either the inflation itself would cause a crisis – e.g. become hyperinflation – or the government would be forced to put the economy into a sharp contraction in order to avoid or reduce dangerous levels of inflation.
Figure 3 shows Venezuela's monthly year-over-year inflation rate since 1991. As can be seen in the graph, inflation declined steadily from May 1998 to January 2002, from a 40 percent to a 12 percent annual rate. It then rose rapidly during Venezuela's worst political instability, from February 2002 to February 2003. This period included the military coup of April 2002 and most importantly, the oil strike of December 2002 to February 2003, which generated major supply shortages and pushed inflation back up to a 40 percent annual rate. After the strike ended, inflation declined steadily again for the next three and a half years, despite the rapid growth during recovery that began in the fourth quarter of 2003. But since June 2006 there has been another upswing, pushing the year-over-year inflation rate from 10.4 percent to 19.4 percent (June 2007).
The current uptick in inflation is fueled by a combination of shortages and the accumulated effects of three and a half years of very rapid growth. How serious of a problem is this increased inflation, and could it lead to an economic crisis and/or the end of the current economic expansion? First, it should be kept in mind that there is no consensus in the macroeconomic research on inflation as to how high it can go without a negative impact on growth, with some studies finding a threshold of 20 percent or more – a threshold that Venezuela is just now approaching.31 Second, it should be emphasized that double-digit inflation rates in a developing country such as Venezuela are not comparable to the same phenomenon occurring in the United States or Europe. Inflation in Venezuela was much higher in the pre-Chávez years, running at 36 percent in 1998 and 100 percent in 1996. Although much of the public does not understand this, it is real (after-inflation) growth in incomes— and employment – that affects people's living standards, not the rate of inflation per se. This is true so long as inflation does not spiral to the point where it actually reduces real growth. So far, it does not appear that inflation in Venezuela is getting out of control. In the last 3 months it has stabilized at about 19.4 percent. Beginning in February of this year, the government reduced the value added tax, in an effort that probably contributed to stabilizing the inflation rate. It is also worth noting that inflation has fallen sharply through most of the current economic recovery, and has only risen over the last year. In the last year it has risen to about half of its peak in February 2003, which was driven by the oil strike of that year.
Furthermore, since the country is running such a large current account surplus, and the government is taking in more revenue that it can spend, it has a number of tools to fight inflation without necessarily sacrificing economic growth. One has been sterilization, whereby the government takes excess domestic currency out of circulation by issuing bonds. The recent sale of $7.5 billion worth of bonds by PDVSA in April, which were snapped up by a large number of investors,32 are an example of the government using bond sales for this purpose. Venezuela's current account surplus also gives it the leeway to defuse inflation through imports. This is what happened through most of the current economic recovery, when inflation was falling despite very rapid growth – excess domestic currency was converted into dollars and spent on imports. As can be seen in Table 6, imports tripled from their depressed level of $10.5 billion in 2003 to $32.2 billion, or 17.8 percent of GDP in 2006. But exports, fueled by rising oil prices and the recovery of oil production from the strike, grew much faster, from $27.2 billion in 2003 to $65.2 billion, or 36 percent of GDP. As a result, the country is running a huge current account surplus: it was 15 percent of GDP for 2006. In the last 2 quarters this surplus has shrunk considerably, but is still about 8 percent of GDP.
In sum, inflation has been rising over most of the last year but it is not an imminent threat to the current expansion. This is likely to remain the case so long as Venezuela maintains a large current account surplus. Nonetheless, the government will need to make sure that inflation does not begin another upward climb of the sort that has happened over the last year. Fortunately, given the government's favorable current account, international reserves and borrowing capacity, it has the ability to bring down inflation without a sharp slowdown in economic growth.
In recent months there have been reports of shortages of foods such as beef, sugar, corn oil, milk, chicken and eggs. In most cases these foods can be purchased in various black markets when they are unavailable in supermarkets and the Mercal centers. These shortages are generally believed to be at least partly a result of price controls, the rapid growth of the economy and consumption, as well as hoarding of some items. While this may become a political problem if it persists or worsens, it is something that the government can easily mitigate. Even more so than in the case of inflation, the government has the ability to ease any shortages through imports, and presumably would do so if there were a serious threat of economic or political damage.
The most serious economic imbalance is the exchange rate. The bolivar is pegged at 2,150 to the dollar; it was fixed at 1,600 in February 2003 when the government implemented foreign exchange controls. If we assume that the currency was neither overvalued nor undervalued when the exchange controls were implemented – more likely it was already overvalued – we would expect a depreciation to about 2,790 as a result of Venezuela's inflation.33 Thus the Venezuelan currency is at least 30 percent overvalued relative to the dollar. It is worth noting that this is not necessarily overvalued to the extent indicated by the parallel market rate, where the currency has depreciated rapidly over the last year, to more than 4,000 bolivares per dollar. It is also worth noting that the parallel exchange market is relatively small as measured, for example, by the difference between total imports (goods and services) and the amount of CADIVI34-approved currency transactions. For 2007 Q1, total imports of goods and services amounted to $9.7 billion while CADIVI approved transactions for the same period totaled $9.1 billion, which suggests that only $583.3 million, or 6 percent of total imports (at the official exchange rate) were covered by the parallel exchange market in that period. Nonetheless the currency is still significantly overvalued.
This is something that will have to be remedied if Venezuela is going to pursue a long-term development strategy that diversifies the economy away from oil. An overvalued currency discourages the development of non-oil sectors, especially manufacturing.
It makes imports artificially cheap and the country's exports more expensive on world markets, thus putting the country's tradable goods at a serious disadvantage in both international and domestic markets.35 This is a serious long-term development problem. There are also distortions and inefficiencies associated with the system of exchange controls and the parallel market.
The overvalued fixed exchange rate, combined with present levels of inflation, also presents a significant intermediate-term problem. Even if inflation is stabilized and begins to be reduced, so long as it remains at or near current levels and the nominal exchange rate remains fixed, Venezuela's currency will become increasingly overvalued. This will increasingly squeeze domestic production outside of oil and non-tradables, and would eventually become unsustainable.
Nonetheless, Venezuela's overvalued exchange rate does not present the kind of immediate threat that e.g., overvalued exchange rates in Argentina, Mexico, Brazil, or Russia presented in the 1990's, where a sudden and forced devaluation was imminent. The cost of adjustment in such situations can be quite significant, as it was in Argentina and Mexico. But the Venezuelan government has a number of options for bringing the currency to a more competitive level over time, given its large current account surplus. The government is understandably reluctant to devalue at present, when it is trying to stabilize an inflation rate that has risen sharply over the last year. But it is a problem that must be dealt with sooner or later.
Real interest rates have been negative throughout the recovery as measured by the 90-day deposit rate or most of the recovery, as measured by the lending rate.36 This is shown in Figure 4. These low interest rates, combined with the government's expansionary fiscal policy, have no doubt contributed to the economy's rapid growth since the fourth quarter of 2003. It is worth noting that the government's currency controls, originally enacted in February 2003 as a means of limiting capital flight from the country, have enabled it to pursue expansionary fiscal and monetary policies while maintaining a fixed exchange rate.
Thus the overall combination of macroeconomic policy has been successful at promoting rapid growth, although with an increasingly overvalued real exchange rate.
Finally, another recurring theme is that Venezuela's economic growth will be cut short from a lack of investment, as investors – both foreign and domestic – perceive the economy to be an unfavorable investment climate. Table 6 also shows gross capital formation and gross fixed capital formation since 1998. As can be seen from the totals, gross fixed capital formation stagnated from 1998-2001 and collapsed by 57 percent during the worst instability and oil strike of 2002-2003. However, it has grown enormously during the current economic expansion. It rebounded sharply in 2004, growing by 49.7 percent year-over-year in real terms. It has continued its rapid growth through the present, increasing by 37.9 percent in 2005, and 33.5 percent in 2006. For the first quarter of 2007, gross capital formation is up 27 percent year-over-year.
These figures do not separate public and private investment. Data for gross capital formation which does make this separation is available through 2004. In that year, gross private capital formation grew by 138.9 percent, while gross public capital formation grew by 48.7 percent. It is possible however, that private investment has not kept pace with the growth of public investment after 2004. We do know from Central Bank balance of payments data that foreign direct investment in Venezuela was negative for the year 2006, for the first time in eight years of the Chávez government. This is a significant change, although not that large, as foreign direct investment in Venezuela was about 1.8 percent of GDP in 2005. But we do not know yet how much of the growth in total or fixed capital formation of the last two years has been private versus public.
But even if private investment is lagging, public sector investment has been badly neglected for decades and there is much potential there to improve the productivity of the economy – as was most famously demonstrated by collapse, and then recent repair of the Viaduct 1 bridge that was a vital part of the route from the La Guaira airport to Caracas. The government has not built a new public hospital since the 1970s. If private investment does not keep up with the economy's rapid growth, it is not clear that this will necessarily slow Venezuela's growth and development.
In the last six months, the government has accelerated its drive towards its announced goal of "21st century socialism," nationalizing the telecommunications giant CANTV and some of the country's electricity generation (which was already more than 80 percent in the hands of the government). It has also taken a majority stake in its joint ventures with foreign oil companies in the Orinoco basin. These moves have generally been portrayed as very negative not only for Venezuela's investment climate and for its economic future.
However, it is important to keep some perspective on these changes. The telecommunications and electricity sectors were nationally owned and then privatized in the 1990s. These companies were compensated fully for their assets as part of the recent privatization: "I think this deal is a fair one," AES chief executive Paul Hanrahan said at a news conference in Caracas, adding that negotiations had "respected the rights of investors."37 CANTV has a near-monopoly on land phones and internet service, and has been slow to expand access – Venezuela's internet access remains below average for the region, with 125 users per 1000 people, as compared to 156 for Latin America.38 (This is particularly bad because Venezuela is far above average in per capita income for the region).
In the oil sector, the first round of negotiations were settled for 31 of 33 contracts, with only Total and ENI choosing to leave. Last month, most of the remaining joint ventures were also renegotiated, but Exxon-Mobil and ConocoPhillips announced that they had rejected the government's offer and are planning to pull out. Venezuela is one of the only major oil-producing states in the developing world that allows foreign investment in oil production – even US allies such as Mexico and Saudi Arabia, for example, do not. Venezuela's reserves of heavy crude in the Orinoco region are now estimated to be among the largest in the world, so foreign companies have strong incentives to stay involved. They also face increasing competition from state-run companies from countries such as China, Brazil, India, Russia, and elsewhere.
In sum, the Venezuelan government's moves toward increased state involvement in the economy have not involved any large-scale nationalizations or state planning, and have been careful not to take on administrative functions that are beyond its present capacity. As noted above, the government has not even increased the public sector's share of the economy. The central government's spending, at 30 percent of GDP, is far below such European capitalist countries as France (49 percent) or Sweden (52 percent). There is still plenty of room for both private and public investment.
Conclusion
In sum, the performance of the Venezuelan economy during the Chávez years does not fit the mold of an "oil boom headed for a bust." Rather it appears that the economy was hit hard for the first few years by political instability, and has grown rapidly since the political situation stabilized in the first quarter of 2003. High oil prices have certainly contributed to this growth, as has the government's expansionary fiscal and monetary policy. Containing and reducing inflation, as well as realigning the domestic currency, appear to be the most important challenges in the intermediate run; in the long run, diversifying the economy away from its dependence on oil is also a major challenge.
However, the declining public debt (as a percentage of GDP), the large current account surplus, and the accumulation of reserves have given the government considerable insurance against a decline in oil prices. This favorable macroeconomic situation has also left the government with much flexibility in dealing with inflation and the related imbalance in the exchange rate. Since the government is committed to maintaining solid growth, it does not seem likely that it would sharply curtail economic growth in order to bring down inflation, as is often done. This is especially true since it has not exhausted other alternatives. Therefore, at present it does not appear that the current economic expansion is about to end any time in the near future. The gains in poverty reduction, employment, education and health care that have occurred in the last few years are likely to continue along with the expansion.
About the Authors: Mark Weisbrot is Co-Director and Luis Sandoval is a Research Assistant at the Center for Economic and Policy Research in Washington, DC.
Acknowledgements: The authors would like to thank Dean Baker, Rebecca Ray, and Dan Beeton for their comments, and Kunda Chinku for editorial and research assistance.
Center for Economic and Policy Research1611 Connecticut Avenue, NW, Suite 400Washington, D.C. 20009202-293-5380http://www.cepr.net/
1 See, for example, Javier Corrales, “Hugo Boss,” Foreign Policy, January/February 2006; Jorge G. Castañeda, “Latin America’s Left Turn,” Foreign Affairs, May/June 2006; and Michael Shifter, “In Search of Hugo Chávez,” Foreign Affairs, May/June 2006.
2 Mark Weisbrot, Luis Sandoval and David Rosnick, “Poverty Rates in Venezuela: Getting the Numbers Right,” Center for Economic and Policy Research (CEPR), May 2006: [http://www.cepr.net/documents/venezuelan_poverty_rates_2006_05.pdf].
3 See, for example, Economist Intelligence Unit, "Venezuela risk: Risk overview," Risk Briefing Select, April 27, 2007; Chris Kraul, "Chávez's grand, risky dream," Los Angeles Times, June 23, 2007; and Jose de Cordoba, "Land Grab: Farmers Are Latest Target in Venezuelan Upheaval," The Wall Street Journal, May 17, 2007.
4 See (Banco Central de Venezuela, BCV) quarterly GDP series in 1997 constant prices (not seasonally adjusted) available at: http://www.bcv.org.ve/c2/indicadores.asp (under ‘Agregados Macroeconomicos’). Since this is from the first quarter of 2003 to the first quarter of 2007, seasonal adjustment is not necessary.
5 See Rodriguez (2006) for a discussion of these measurement problems. Since Rodriguez' paper was written, the Penn World Tables data was revised (version 6.2) and so the major data sets at least tell the same basic story: Rodriguez, Journal of Development Studies, Vol. 27, No. 4 (2006) [Available through the author’s website at: http://frrodriguez.web.wesleyan.edu/docs/working_papers/Anarchy.pdf].
6 GDP peaked in 1977, but most of this downturn came after oil prices collapsed.
7 Energy Information Administration (EIA), "Short-Term Energy Outlook," July 10th, 2007. Available online at:[ http://www.eia.doe.gov/emeu/steo/pub/contents.html].
8 Seasonally adjusted.
9 In 2006, the private sector’s total value added was 63 per cent of total GDP, up from 59 per cent in 1999. Calculations based on constant price GDP series from the Venezuelan Central Bank (Banco Central de Venezuela, http://www.bcv.org.ve/ (last accessed on 06/18/07).
10 From PDVSA's 2006 summary of financial operations. Available online at: http://www.pdvsa.com/interface.sp/database/fichero/publicacion/1792/76.PDF.
11 For these data and more information on the impact of the ‘misiones’ go to: http://www.misionesbolivarianas.gob.ve/.
12 Logros, febrero 2007, SISOV, Ministerio de Planificacion y Desarrollo, available online at http://www.sisov.mpd.gob.ve/estudios/.
13 Ministerio de Alimentacion, Memoria y Cuenta 2006 (Annual report of the Ministry of Food/Nutrition to the National Assembly).
14 Logros, febrero 2007, SISOV, Ministerio de Planificacion y Desarrollo, available online at http://www.sisov.mpd.gob.ve/estudios/
15 Ibid.
16 Ibid.
17 Update on Misión Robinson (February 16, 2007), Ministerio del Poder Popular para la Comunicación y la Información: [http://www.misionesbolivarianas.gob.ve/component/option,com_docman/Itemid,0/task,doc_download/gid,223/].
18 Non-oil tax revenue went from 10 percent of GDP in 1999 to 12 percent in 2006 mostly due to an increase in the collection of income taxes (on individuals and companies) from 2 percent of GDP in 1999 to 3.2 percent in 2006. Data from Venezuela’s Ministry of Finance (http://www.mf.gov.ve/, last accessed on 06/18/07).
19 See John Schmitt (2003), “Is it Time to Export the US Tax Model to Latin America?”, Center for Economic and Policy Research. Available online at: http://www.cepr.net/index.php?option=com_content&task=view&id=391&Itemid=8.
20 Per capita social spending is a better measure than social spending per se because it takes population growth into account.
21 It is worth noting that the economy has grown for more than half a year since the last survey, so poverty would probably be somewhat lower today.
22 Weisbrot, Sandoval and Rosnick (2006). “Poverty Rates in Venezuela: Getting the Numbers Right,” Center for Economic and Policy Research (CEPR), Washington, DC: [http://www.cepr.net/documents/venezuelan_poverty_rates_2006_05.pdf]: see Table 2 and text.
23 The alternative would be to estimate the market value of health care services received, but this would exaggerate the impact of health care on the actual situation of the poor; we have therefore used the conservative estimate described above as a lower bound of the impact of this health care spending on the poor. (see Weisbrot, Sandoval and Rosnick, 2006).
24 The data are not seasonally adjusted, so we are comparing unemployment rates for the same month across years.
25 For example, Domingo Maza Zavala, then director of the Central Bank, warned the New York Times in October 2005 of a recession as soon as 2007, without offering an explanation of how this might happen (October 30, 2005), “Chávez Restyles Venezuela With '21st-Century Socialism,” The New York Times). Also, the IMF has projected a drastic growth slowdown for three consecutive years, which has not materialized. See Table 2 in David Rosnick and Mark Weisbrot (2007), “Political Forecasting? The IMF’s Flawed Growth Projections for Argentina and Venezuela,” Center for Economic and Policy Research. Available online at: http://www.cepr.net/index.php?option=com_content&task=view&id=1107 ].
26 See, for example, Dean Baker (2000), “Double Bubble: The Implications of the Over-Valuation of the Stock Market and the Dollar,” Center for Economic and Policy Research. [Available online: http://www.cepr.net/documents/publications/double_bubble.pdf] and; Dean Baker and David Rosnick (2005) “Will a Bursting Bubble Trouble Bernanke?: The Evidence for a Housing Bubble,” Center for Economic and Policy Research. [Available online: http://www.cepr.net/documents/publications/housing_bubble_2005_11.pdf]
27 Goldman Sachs, Latin America Economic Analyst, Issue No 07/10, May 18, 2007.
28 CADIVI (Comisión de Administración de Divisas) is the government’s Currency Administration Commission, which processes applications to obtain foreign currency in Venezuela.
29 This calculation is based on the sum of (a) $6.77 billion in transfer of BCV international reserves to Fonden (assuming it was all kept in foreign currency); (b) $8.86 billion ($8.85 billion and EUR 4.5 million that the Fonden had in foreign currency as of Dec. 22, 2006 [http://www.fonden.gob.ve/descargas//32/Sintesis%20Ejecutiva%20Memoria%20FONDEN%202006.pdf]; and (c) at least $5 billion in National Treasury’s foreign currency denominated account for PDVSA’s fiscal contribution [see, Bancaribe Monthly Reports (September 2006: http://www.bancaribe.com.ve/uploads/MENSUAL_Septiembre.pdf; February 2007: http://www.bancaribe.com.ve/uploads/MENSUAL_Febrero.pdf].
30 Goldman Sachs, Latin America Economic Analyst, Issue No 07/14, July 13, 2007
31 See, for example, Michael Bruno (1995), “Does Inflation Really Lower Growth?” Finance and Development, September; Michael Bruno and William Easterly (1998), “Inflation Crises and Long-Run Growth,” Journal of Monetary Economics, 41, pp. 3-26; and Robert Pollin and Andong Zhu (2005), “Inflation and Economic Growth: A Cross-Country Non-linear Analysis,” Political Economy Research Institute, Working Paper Series No. 109: University of Massachusetts, Amherst [Available online: http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_101-150/WP109.pdf].
32 Benedict Mander, “PdVSA Issue Proves a Pioneer in the ‘Democratisation’ of Capital,” Financial Times, April 12, 2007.
33 This is based on the ratio of Venezuela's cumulative consumer price inflation since Feburary 2003, which is 98.3 percent, to U.S. inflation of 13.6 percent.
34 The government's Commission for the Administration of Foreign Exchange.
35 The phenomenon of resource-exporting countries having overvalued currencies and the harmful results of such overvaluation are sometimes called "Dutch disease," from the experience of the Netherlands after the discovery of natural gas there in the 1960s.
36 The lending rate is a weighted average of the rates charged on promissory notes and loans made by commercial banks and universal banks.
37 Steven Mufson, “AES to Sell Utility Stake To Venezuela; Chávez's State-Control Plan Nets Electric Firm,” The Washington Post, February 9, 2007.
38 Source: World Bank, World Development Indicators Online, last accessed on 06/06/2007.
Bookmark/Search this post with:
Venezuela’s Constitutional Reform:
Venezuela’s Constitutional Reform:
An Article-by-Article Summary
November 23rd 2007,
by Gregory Wilpert – Venezuelanalysis.com
http://www.venezuelanalysis.com/analysis/2889
The following is an article-by-article summary of the changes being proposed to Venezuela's 1999 constitution. The summary is in no way official and should only be used as an aid in making sense of the proposed constitutional reform. The official reform text is quite long (31 pages), as it includes the full text of each to be changed article, even if only one sentence or word was changed in the article. Making out what, exactly, the changes are relative to the original 1999 constitution can thus be a sometimes time-consuming and difficult task.
Venezuelans will vote on the reform on December 2nd and will do so in two blocks. Block "A" includes President Chavez's original proposal, as amended by the National Assembly, which would change 33 articles out of the 350 articles in the constitution. Also included in block A are another 13 articles introduced by the National Assembly. Block "B" includes another 26 reform articles proposed by the National Assembly. Voters may vote "Yes" or "No" on each block.
Reform Question: "Are you in agreement with the approval of the constitutional reform project, passed by the National Assembly, with the participation of the people, and based in the initiative of President Hugo Chavez, with its respective titles, chapters, and transitional, derogative, and final dispositions, distributed in the following blocks?"
[Articles in italics are those proposed by the National Assembly, non-italic articles were proposed by the President.]
Block A
Section II. Politico-Territorial Division of the Country: President may declare special military and development zones, citizens have a new "right to the city."
Art. 11 - Allows the President to decree special military regions for the defense of the nation. Also, it would allow him to name military authorities for these regions in a case of emergency.
Art. 16 - Allows the president to decree, with permission from the National Assembly, communal cities, maritime regions, federal territories, federal municipalities, island districts, federal provinces, federal cities, and functional districts. Also the president may name and remove national government authorities for these territorial divisions (these do not, however, supplant the existing elected authorities in these regions).
Art. 18 - Provides a new right, the right to the city, which says that all citizens have the right to equal access to the city's services or benefits. Also names Caracas, the capital as the "Cradle of Simon Bolivar, the Liberator, and Queen of the Warairarepano" [an indigenous name for the mountain range surrounding Caracas].
Section III. Citizen Rights and Duties: Voting age lowered to 16 years, gender parity in candidacies, creation of councils of popular power, social security fund for self-employed, reduction of workweek to 36 hours, recognition of Venezuelans of African descent, free university education, introduction of communal and social property.
Art. 64 - Lowers the minimum voting age from 18 to 16 years.
Art. 67 - Requires candidates for elected office to be set up in accordance with gender parity, reverses the prohibition against state financing of campaigns and parties, and prohibits foreign funding of political activity.
Art. 70 - Establishes that councils of popular power (of communities, workers, students, farmers, fishers, youth, women, etc.) are one of the main means for citizen participation in the government.
Art. 87 - Creates a social security fund for the self-employed, in order to guarantee them a pension, vacation pay, sick pay, etc.
Art. 90 - Reduction of the workweek from 44 hours to 36.
Art. 98 - Guarantees freedom for cultural creations, but without guaranteeing intellectual property.
Art. 100 - Recognition of Venezuelans of African descent, as part of Venezuelan culture to protect and promote (in addition to indigenous and European culture).
Art. 103 - Right to a free education expanded from high school to university.
Art. 112 - The state will promote a diversified and independent economic model, in which the interests of the community prevail over individual interests and that guarantee the social and material needs of the people. The state is no longer obliged to promote private enterprise.
Art. 113 - Monopolies are prohibited instead of merely being "not allowed." The state has the right to "reserve" the exploitation of natural resources or provision of services that are considered by the constitution or by a separate law to be strategic to the nation. Concessions granted to private parties must provide adequate benefits to the public.
Art. 115 - Introduces new forms of property, in addition to private property. The new forms are (1) public property, belonging to state bodies, (2) direct and indirect social property, belonging to the society in general, where indirect social property is administered by the state and direct is administered by particular communities, (3) collective property, which belongs to particular groups, (4) mixed property, which can be a combination of ownership of any of the previous five forms.
Section IV. Functions of the State: Creation of popular power based in direct democracy, recognition of missions for alleviating urgent needs, foreign policy to pursue a pluri-polar world, devolution of central, state, and municipal functions to the popular power, guaranteed revenues for the popular power.
Art. 136 - Creates the popular power, in addition to the municipal, state, and national powers. "The people are the depositories of sovereignty and exercise it directly via the popular power. This is not born of suffrage nor any election, but out of the condition of the human groups that are organized as the base of the population." The popular power is organized via communal councils, workers' councils, student councils, farmer councils, crafts councils, fisher councils, sports councils, youth councils, elderly councils, women's councils, disables persons' councils, and others indicated by law.
Art. 141 - The public administration is organized into traditional bureaucracies and missions, which have an ad-hoc character and are designed to address urgent needs of the population.
Art. 152 - Venezuela's foreign policy is directed towards creating a pluri-polar world, free of hegemonies of any imperialist, colonial, or neo-colonial power.
Art. 153 - Strengthening of the mandate to unify Latin America, so as to achieve what Simon Bolivar called, "A Nation of Republics."
Art. 156 - Specifies the powers of the national government, adding powers that are spelled out in earlier and in later articles in greater detail. New powers of the national government include the ordering of the territorial regime of states and municipalities, the creation and suspension of federal territories, the administration of branches of the national economy and their eventual transfer to social, collective, or mixed forms of property, and the promotion, organization, and registering of councils of the popular power.
Art. 157 - The national assembly may attribute to the bodies of the popular power, in addition to those of the federal district, the states, and the municipalities, issues that are of national government competency, so as to promote a participatory and active democracy (instead of promoting decentralization, as was originally stated here).
Art. 158 - The state will promote the active participation of the people, restoring power to the population (instead of decentralizing the state).
Art. 167 - States' incomes are increased from 20% to 25% of the national budget, where 5% is to be dedicated to the financing of each state's communal councils.
Art. 168 - Municipalities are obligated to include in their activities the participation of councils of popular power.
Art. 184 - Decentralization of power, by its transfer from state and municipal level to the communal level, will include the participation of communities in the management of public enterprises. Also, communal councils are defined as the executive arm of direct democratic citizen assemblies, which elect and at any time may revoke the mandates of the communal council members.
Art. 185 - The national government council is no longer presided over by the Vice-President, but by the President. Its members are the President, Vice-President(s), Ministers, and Governors. Participation of mayors and of civil society groups is optional now. Previously the federal governmental council (as it was called) was responsible for coordinating policies on all governmental levels. Now it is an advisory body for the formulation of the national development plan.
Section V. Organization of the State: President may name secondary vice-presidents as needed, presidential term extended and limit on reelection removed, may re-organize internal politico-territorial boundaries, and promotes all military officers.
Art. 225 - The president may designate the number of secondary vice-presidents he or she deems necessary. Previously there was only one Vice-President.
Art. 230 - Presidential term is extended from six to seven years. The two consecutive term limit on presidential reelection is removed.
Art. 236 - New presidential powers as specified in other sections of the reform are listed here, which include the ordering and management of the country's internal political boundaries, the creation and suspension of federal territories, setting the number and naming of secondary vice-presidents (in addition to the first vice-president), promote all officers of the armed forces, and administrate international reserves in coordination with the Central Bank.
Art. 251 - Adds detail to the functioning of the State Council, which advises the president on all matters.
Art. 252 - Composition of the State Council changed to include the heads of each branch of government: executive, judiciary, legislature, citizen power, and electoral power. The president may include representatives of the popular power and others as needed. Previously the council included five representatives designated by the president, one by the National Assembly, one by the judiciary, and one by the state governors.
Art. 272 - Removal of the requirement for the state to create an autonomous penitentiary system and places the entire system under the administration of a ministry instead of states and municipalities. Also, removes the option of privatizing the country's penitentiary system.
Section VI. Socio-Economic System: Weakening of the role of private enterprise in the economic system, possible better treatment of national businesses over foreign ones, no privatization any part of the national oil industry, taxation of idle agricultural land, removal of central bank autonomy.
Art. 299 - The socio-economic regimen of the country is based on socialist (among other) principles. Instead of stipulating that the state promotes development with the help of private initiative, it is to do so with community, social, and personal initiative.
Art. 300 - Rewording of how publicly owned enterprises should be created, to be regionalized and in favor of a "socialist economy", instead of "decentralized."
Art. 301 - Removal of the requirement that foreign businesses receive the same treatment as national businesses, stating that national businesses may receive better treatment.
Art. 302 - Strengthening of the state's right to exploit the country's mineral resources, especially all those related to oil and gas.
Art. 303 - Removal of the permission to privatize subsidiaries of the country's state oil industry that operate within the country.
Art. 305 - If necessary, the state may take over agricultural production in order to guarantee alimentary security and sovereignty.
Art. 307 - Strengthening of the prohibition against latifundios (large and idle landed estates) and creation of a tax on productive agricultural land that is idle. Landowners who engage in the ecological destruction of their land may be expropriated.
Art. 318 - Removal of the Central Bank's autonomy and foreign reserves to be administrated by the Central Bank together with the President.
Art. 320 - The state must defend the economic and monetary stability of the country. Removal of statements on the bank's autonomy.
Art. 321 - Removal of the requirement to set up a macro-economic stabilization fund. Instead, every year the President and the Central Bank establish the level of reserves necessary for the national economy and all "excess reserves" are assigned to a special development and investment fund.
Section VII. National Security: Armed forces to be anti-imperialist, reserves to become a militia.
Art. 328 - Armed forces of Venezuela renamed to "Bolivarian Armed Force." Specification that the military is "patriotic, popular, and anti-imperialist" at the service of the Venezuelan people and never at the service of an oligarchy or of a foreign imperial power, whose professionals are not activists in any political party (modified from the prohibition against all political activity by members of the military).
Art. 329 - Addition of the term "Bolivarian" to each of the branches of the military and renaming of the reserves to "National Bolivarian Militia."
Section VIII. Constitutional changes: Signature requirements increased for citizen-initiated referenda to modify the constitution.
Art. 341 - Increase in the signature requirement for citizen-initiated constitutional amendments from 15% to 20% of registered voters.
Art. 342 - Increase in the signature requirement for citizen-initiated constitutional reforms from 15% to 25% of registered voters.
Art. 348 - Increase in the signature requirement for citizen-initiated constitutional assembly from 15% to 30% of registered voters.
Block "B"
Section III. Citizen Rights and Duties: Non-discrimination based on sexual orientation and health, increase in signature requirements for citizen-initiated referenda, primary home protected from expropriation.
Art. 21 - Inclusion of prohibition against discrimination based on sexual orientation and on health.
Art. 71 - Increase in the signature requirement for citizen-initiated consultative referenda from 10% to 20% of registered voters.
Art. 72 - Increase in the signature requirement for citizen-initiated recall referenda from 20% to 30% of registered voters. Also, voter participation set at minimum 40% (previously no minimum was set, other than that at least as many had to vote for the recall as originally voted for the elected official).
Art. 73 - Increase in the signature requirement for citizen-initiated approbatory referenda from 15% to 30% of registered voters.
Art. 74 - Increase in the signature requirement for citizen-initiated rescinding referenda from 10% to 30% of registered voters. In the case of law decrees, increased from 5% to 30% of registered voters.
Art. 82 - Protection of primary home from confiscation due to bankruptcy or other legal proceedings.
Art. 109 - Equal voting rights for professors, students, and employees in the election of university authorities.
Section IV. Functions of the State: State and local comptrollers appointed by national Comptroller General, political divisions determined on a national instead of state level.
Art. 163 - State comptrollers are to be appointed by the national Comptroller General, not the states, following a process in which organizations of popular power nominate candidates.
Art. 164 - State powers are specified in accordance with other articles of the reform. States can no longer organize the politico-territorial division of municipalities, but only coordinate these.
Art. 173 - Political divisions within municipalities are to be determined by a national law, instead of being in the power of the municipalities. The creation of such divisions is to attend to community initiative, with the objective being the de-concentration of municipal administration.
Art. 176 - The municipal comptroller is to be appointed by the national Comptroller General, not the municipalities, following the nomination of candidates by the organizations of popular power.
Section V. State organization: Councils of popular power participate in the nomination of members of the judiciary, citizen, and electoral powers, procedures for removing members of these branches specified more explicitly.
Art. 191 - National Assembly deputies who the president has called to serve in the executive may return to the National Assembly to finish their term in office once they stop working in the executive. Previously they lost their seat in the assembly.
Art. 264 - Specifies that Supreme Court judges are to be named by a majority of the National Assembly, instead of being left to a law. Also, in addition to civil society groups related to the law profession, representatives of the popular power are to participate in the nomination process.
Art. 265 - Supreme Court judges may be removed from office by a simple majority vote of the National Assembly, instead of a two-thirds majority and an accusation by the citizen power.
Art. 266 - Adds the ability of the Supreme Court to rule on the merits of court proceedings against members of the National Electoral Council, in addition to its ability to do so in the case of all other high-level government officials.
Art. 279 - Includes representatives of popular power councils for the nomination of Attorney General, Comptroller General, and Human Rights Defender. Also, specifies that each of these may be removed by a majority of the National Assembly, instead of leaving the issue to a separate law and a ruling from the Supreme Court.
Art. 289 - Adds to the Comptroller General's powers the ability to name state and municipal comptrollers.
Art. 293 - Removes the National Electoral Council's responsibility to preside over union elections.
Art. 295 - Inclusion of representatives from the Popular Power in the nomination process of members to the National Electoral Council. Specifies that members may be chosen by a majority of National Assembly members, instead of a two-thirds majority. Election of electoral council members is supposed to be staggered now, where three are elected and then halfway through their 7-year term, the other two are to be elected.
Art. 296 - Members of the National Electoral Council may be removed by a majority of National Assembly members, without the need of a prior ruling from the Supreme Court.
Section VIII. Constitutional exceptions: Right to information no longer guaranteed during state of emergency, emergencies to last as long as the conditions that caused it.
Art. 337 - Change in states of emergency, so that the right to information is no longer protected in such instances. Also, the right to due process is removed in favor of the right to defense, to no forced disappearance, to personal integrity, to be judged by one's natural judges, and not to be condemned to over 30 years imprisonment.
Art. 338 - States of alert, emergency, and of interior or exterior commotion are no longer limited to a maximum of 180 days, but are to last as long as conditions persist that motivated the state of exception.
Art. 339 - The Supreme Court's approval for states of exception is no longer necessary, only the approval of the National Assembly.
Full Spanish text of the constitutional reform proposal
English translation of Venezuela's 1999 constitution
An Article-by-Article Summary
November 23rd 2007,
by Gregory Wilpert – Venezuelanalysis.com
http://www.venezuelanalysis.com/analysis/2889
The following is an article-by-article summary of the changes being proposed to Venezuela's 1999 constitution. The summary is in no way official and should only be used as an aid in making sense of the proposed constitutional reform. The official reform text is quite long (31 pages), as it includes the full text of each to be changed article, even if only one sentence or word was changed in the article. Making out what, exactly, the changes are relative to the original 1999 constitution can thus be a sometimes time-consuming and difficult task.
Venezuelans will vote on the reform on December 2nd and will do so in two blocks. Block "A" includes President Chavez's original proposal, as amended by the National Assembly, which would change 33 articles out of the 350 articles in the constitution. Also included in block A are another 13 articles introduced by the National Assembly. Block "B" includes another 26 reform articles proposed by the National Assembly. Voters may vote "Yes" or "No" on each block.
Reform Question: "Are you in agreement with the approval of the constitutional reform project, passed by the National Assembly, with the participation of the people, and based in the initiative of President Hugo Chavez, with its respective titles, chapters, and transitional, derogative, and final dispositions, distributed in the following blocks?"
[Articles in italics are those proposed by the National Assembly, non-italic articles were proposed by the President.]
Block A
Section II. Politico-Territorial Division of the Country: President may declare special military and development zones, citizens have a new "right to the city."
Art. 11 - Allows the President to decree special military regions for the defense of the nation. Also, it would allow him to name military authorities for these regions in a case of emergency.
Art. 16 - Allows the president to decree, with permission from the National Assembly, communal cities, maritime regions, federal territories, federal municipalities, island districts, federal provinces, federal cities, and functional districts. Also the president may name and remove national government authorities for these territorial divisions (these do not, however, supplant the existing elected authorities in these regions).
Art. 18 - Provides a new right, the right to the city, which says that all citizens have the right to equal access to the city's services or benefits. Also names Caracas, the capital as the "Cradle of Simon Bolivar, the Liberator, and Queen of the Warairarepano" [an indigenous name for the mountain range surrounding Caracas].
Section III. Citizen Rights and Duties: Voting age lowered to 16 years, gender parity in candidacies, creation of councils of popular power, social security fund for self-employed, reduction of workweek to 36 hours, recognition of Venezuelans of African descent, free university education, introduction of communal and social property.
Art. 64 - Lowers the minimum voting age from 18 to 16 years.
Art. 67 - Requires candidates for elected office to be set up in accordance with gender parity, reverses the prohibition against state financing of campaigns and parties, and prohibits foreign funding of political activity.
Art. 70 - Establishes that councils of popular power (of communities, workers, students, farmers, fishers, youth, women, etc.) are one of the main means for citizen participation in the government.
Art. 87 - Creates a social security fund for the self-employed, in order to guarantee them a pension, vacation pay, sick pay, etc.
Art. 90 - Reduction of the workweek from 44 hours to 36.
Art. 98 - Guarantees freedom for cultural creations, but without guaranteeing intellectual property.
Art. 100 - Recognition of Venezuelans of African descent, as part of Venezuelan culture to protect and promote (in addition to indigenous and European culture).
Art. 103 - Right to a free education expanded from high school to university.
Art. 112 - The state will promote a diversified and independent economic model, in which the interests of the community prevail over individual interests and that guarantee the social and material needs of the people. The state is no longer obliged to promote private enterprise.
Art. 113 - Monopolies are prohibited instead of merely being "not allowed." The state has the right to "reserve" the exploitation of natural resources or provision of services that are considered by the constitution or by a separate law to be strategic to the nation. Concessions granted to private parties must provide adequate benefits to the public.
Art. 115 - Introduces new forms of property, in addition to private property. The new forms are (1) public property, belonging to state bodies, (2) direct and indirect social property, belonging to the society in general, where indirect social property is administered by the state and direct is administered by particular communities, (3) collective property, which belongs to particular groups, (4) mixed property, which can be a combination of ownership of any of the previous five forms.
Section IV. Functions of the State: Creation of popular power based in direct democracy, recognition of missions for alleviating urgent needs, foreign policy to pursue a pluri-polar world, devolution of central, state, and municipal functions to the popular power, guaranteed revenues for the popular power.
Art. 136 - Creates the popular power, in addition to the municipal, state, and national powers. "The people are the depositories of sovereignty and exercise it directly via the popular power. This is not born of suffrage nor any election, but out of the condition of the human groups that are organized as the base of the population." The popular power is organized via communal councils, workers' councils, student councils, farmer councils, crafts councils, fisher councils, sports councils, youth councils, elderly councils, women's councils, disables persons' councils, and others indicated by law.
Art. 141 - The public administration is organized into traditional bureaucracies and missions, which have an ad-hoc character and are designed to address urgent needs of the population.
Art. 152 - Venezuela's foreign policy is directed towards creating a pluri-polar world, free of hegemonies of any imperialist, colonial, or neo-colonial power.
Art. 153 - Strengthening of the mandate to unify Latin America, so as to achieve what Simon Bolivar called, "A Nation of Republics."
Art. 156 - Specifies the powers of the national government, adding powers that are spelled out in earlier and in later articles in greater detail. New powers of the national government include the ordering of the territorial regime of states and municipalities, the creation and suspension of federal territories, the administration of branches of the national economy and their eventual transfer to social, collective, or mixed forms of property, and the promotion, organization, and registering of councils of the popular power.
Art. 157 - The national assembly may attribute to the bodies of the popular power, in addition to those of the federal district, the states, and the municipalities, issues that are of national government competency, so as to promote a participatory and active democracy (instead of promoting decentralization, as was originally stated here).
Art. 158 - The state will promote the active participation of the people, restoring power to the population (instead of decentralizing the state).
Art. 167 - States' incomes are increased from 20% to 25% of the national budget, where 5% is to be dedicated to the financing of each state's communal councils.
Art. 168 - Municipalities are obligated to include in their activities the participation of councils of popular power.
Art. 184 - Decentralization of power, by its transfer from state and municipal level to the communal level, will include the participation of communities in the management of public enterprises. Also, communal councils are defined as the executive arm of direct democratic citizen assemblies, which elect and at any time may revoke the mandates of the communal council members.
Art. 185 - The national government council is no longer presided over by the Vice-President, but by the President. Its members are the President, Vice-President(s), Ministers, and Governors. Participation of mayors and of civil society groups is optional now. Previously the federal governmental council (as it was called) was responsible for coordinating policies on all governmental levels. Now it is an advisory body for the formulation of the national development plan.
Section V. Organization of the State: President may name secondary vice-presidents as needed, presidential term extended and limit on reelection removed, may re-organize internal politico-territorial boundaries, and promotes all military officers.
Art. 225 - The president may designate the number of secondary vice-presidents he or she deems necessary. Previously there was only one Vice-President.
Art. 230 - Presidential term is extended from six to seven years. The two consecutive term limit on presidential reelection is removed.
Art. 236 - New presidential powers as specified in other sections of the reform are listed here, which include the ordering and management of the country's internal political boundaries, the creation and suspension of federal territories, setting the number and naming of secondary vice-presidents (in addition to the first vice-president), promote all officers of the armed forces, and administrate international reserves in coordination with the Central Bank.
Art. 251 - Adds detail to the functioning of the State Council, which advises the president on all matters.
Art. 252 - Composition of the State Council changed to include the heads of each branch of government: executive, judiciary, legislature, citizen power, and electoral power. The president may include representatives of the popular power and others as needed. Previously the council included five representatives designated by the president, one by the National Assembly, one by the judiciary, and one by the state governors.
Art. 272 - Removal of the requirement for the state to create an autonomous penitentiary system and places the entire system under the administration of a ministry instead of states and municipalities. Also, removes the option of privatizing the country's penitentiary system.
Section VI. Socio-Economic System: Weakening of the role of private enterprise in the economic system, possible better treatment of national businesses over foreign ones, no privatization any part of the national oil industry, taxation of idle agricultural land, removal of central bank autonomy.
Art. 299 - The socio-economic regimen of the country is based on socialist (among other) principles. Instead of stipulating that the state promotes development with the help of private initiative, it is to do so with community, social, and personal initiative.
Art. 300 - Rewording of how publicly owned enterprises should be created, to be regionalized and in favor of a "socialist economy", instead of "decentralized."
Art. 301 - Removal of the requirement that foreign businesses receive the same treatment as national businesses, stating that national businesses may receive better treatment.
Art. 302 - Strengthening of the state's right to exploit the country's mineral resources, especially all those related to oil and gas.
Art. 303 - Removal of the permission to privatize subsidiaries of the country's state oil industry that operate within the country.
Art. 305 - If necessary, the state may take over agricultural production in order to guarantee alimentary security and sovereignty.
Art. 307 - Strengthening of the prohibition against latifundios (large and idle landed estates) and creation of a tax on productive agricultural land that is idle. Landowners who engage in the ecological destruction of their land may be expropriated.
Art. 318 - Removal of the Central Bank's autonomy and foreign reserves to be administrated by the Central Bank together with the President.
Art. 320 - The state must defend the economic and monetary stability of the country. Removal of statements on the bank's autonomy.
Art. 321 - Removal of the requirement to set up a macro-economic stabilization fund. Instead, every year the President and the Central Bank establish the level of reserves necessary for the national economy and all "excess reserves" are assigned to a special development and investment fund.
Section VII. National Security: Armed forces to be anti-imperialist, reserves to become a militia.
Art. 328 - Armed forces of Venezuela renamed to "Bolivarian Armed Force." Specification that the military is "patriotic, popular, and anti-imperialist" at the service of the Venezuelan people and never at the service of an oligarchy or of a foreign imperial power, whose professionals are not activists in any political party (modified from the prohibition against all political activity by members of the military).
Art. 329 - Addition of the term "Bolivarian" to each of the branches of the military and renaming of the reserves to "National Bolivarian Militia."
Section VIII. Constitutional changes: Signature requirements increased for citizen-initiated referenda to modify the constitution.
Art. 341 - Increase in the signature requirement for citizen-initiated constitutional amendments from 15% to 20% of registered voters.
Art. 342 - Increase in the signature requirement for citizen-initiated constitutional reforms from 15% to 25% of registered voters.
Art. 348 - Increase in the signature requirement for citizen-initiated constitutional assembly from 15% to 30% of registered voters.
Block "B"
Section III. Citizen Rights and Duties: Non-discrimination based on sexual orientation and health, increase in signature requirements for citizen-initiated referenda, primary home protected from expropriation.
Art. 21 - Inclusion of prohibition against discrimination based on sexual orientation and on health.
Art. 71 - Increase in the signature requirement for citizen-initiated consultative referenda from 10% to 20% of registered voters.
Art. 72 - Increase in the signature requirement for citizen-initiated recall referenda from 20% to 30% of registered voters. Also, voter participation set at minimum 40% (previously no minimum was set, other than that at least as many had to vote for the recall as originally voted for the elected official).
Art. 73 - Increase in the signature requirement for citizen-initiated approbatory referenda from 15% to 30% of registered voters.
Art. 74 - Increase in the signature requirement for citizen-initiated rescinding referenda from 10% to 30% of registered voters. In the case of law decrees, increased from 5% to 30% of registered voters.
Art. 82 - Protection of primary home from confiscation due to bankruptcy or other legal proceedings.
Art. 109 - Equal voting rights for professors, students, and employees in the election of university authorities.
Section IV. Functions of the State: State and local comptrollers appointed by national Comptroller General, political divisions determined on a national instead of state level.
Art. 163 - State comptrollers are to be appointed by the national Comptroller General, not the states, following a process in which organizations of popular power nominate candidates.
Art. 164 - State powers are specified in accordance with other articles of the reform. States can no longer organize the politico-territorial division of municipalities, but only coordinate these.
Art. 173 - Political divisions within municipalities are to be determined by a national law, instead of being in the power of the municipalities. The creation of such divisions is to attend to community initiative, with the objective being the de-concentration of municipal administration.
Art. 176 - The municipal comptroller is to be appointed by the national Comptroller General, not the municipalities, following the nomination of candidates by the organizations of popular power.
Section V. State organization: Councils of popular power participate in the nomination of members of the judiciary, citizen, and electoral powers, procedures for removing members of these branches specified more explicitly.
Art. 191 - National Assembly deputies who the president has called to serve in the executive may return to the National Assembly to finish their term in office once they stop working in the executive. Previously they lost their seat in the assembly.
Art. 264 - Specifies that Supreme Court judges are to be named by a majority of the National Assembly, instead of being left to a law. Also, in addition to civil society groups related to the law profession, representatives of the popular power are to participate in the nomination process.
Art. 265 - Supreme Court judges may be removed from office by a simple majority vote of the National Assembly, instead of a two-thirds majority and an accusation by the citizen power.
Art. 266 - Adds the ability of the Supreme Court to rule on the merits of court proceedings against members of the National Electoral Council, in addition to its ability to do so in the case of all other high-level government officials.
Art. 279 - Includes representatives of popular power councils for the nomination of Attorney General, Comptroller General, and Human Rights Defender. Also, specifies that each of these may be removed by a majority of the National Assembly, instead of leaving the issue to a separate law and a ruling from the Supreme Court.
Art. 289 - Adds to the Comptroller General's powers the ability to name state and municipal comptrollers.
Art. 293 - Removes the National Electoral Council's responsibility to preside over union elections.
Art. 295 - Inclusion of representatives from the Popular Power in the nomination process of members to the National Electoral Council. Specifies that members may be chosen by a majority of National Assembly members, instead of a two-thirds majority. Election of electoral council members is supposed to be staggered now, where three are elected and then halfway through their 7-year term, the other two are to be elected.
Art. 296 - Members of the National Electoral Council may be removed by a majority of National Assembly members, without the need of a prior ruling from the Supreme Court.
Section VIII. Constitutional exceptions: Right to information no longer guaranteed during state of emergency, emergencies to last as long as the conditions that caused it.
Art. 337 - Change in states of emergency, so that the right to information is no longer protected in such instances. Also, the right to due process is removed in favor of the right to defense, to no forced disappearance, to personal integrity, to be judged by one's natural judges, and not to be condemned to over 30 years imprisonment.
Art. 338 - States of alert, emergency, and of interior or exterior commotion are no longer limited to a maximum of 180 days, but are to last as long as conditions persist that motivated the state of exception.
Art. 339 - The Supreme Court's approval for states of exception is no longer necessary, only the approval of the National Assembly.
Full Spanish text of the constitutional reform proposal
English translation of Venezuela's 1999 constitution
Hispanic in Congress, NY Hon. Jose Serrano speech on Latin America
Congressman José Serrano's
Speech on
U.S. policy Towards Latin America
November 12th 2007, by José Serrano
U.S. Representative from New York, José Serrano Mr. Speaker, I rise today to speak about an issue that troubles me quite a bit and I think should trouble a lot of the American people. Certainly it should concern Members of Congress.
A resolution was passed this afternoon by voice vote dealing with the alleged involvement and behavior of the President of Iran, therefore, the Government of Iran, in Latin America and supporting, according to this resolution, terrorist activities in Latin America.
Let me briefly read the opening statement of this resolution, the title, if you will: expressing concern relating to the threatening behavior of the Iranian regime and the activities of terrorist organizations sponsored by that regime in Latin America.
Well, just to deal with language itself, we know that when our government calls another government a regime, it is not saying anything positive about it. It is, in fact, confronting it in some way. But I think that as unnoticed as this went by, as I said it was passed on a voice vote, as unnoticed that this went by, this puts us in a situation, the Congress, the American people, our Nation, on a road, on a path to a very dangerous situation in the future, perhaps in the near future.
We all know how concerned the administration is and how concerned some Members of Congress are about the possibility that Iran could be involved in activities that would be hurtful to us. I want to correct that. I think all Members of Congress are concerned about that possibility.But I think we are also concerned about the fact, many of us, that there seems to be a drumbeat towards war with , a drumbeat that says, basically, some of the same things that were said when we were taken off to war against Iraq. Just about everything that was told to us at that time happened not to be true. History will tell whether, in fact, we were lied to, or whether the information was so bad that the administration had no choice but to pass that on to us thinking that it was correct.
But there are many who feel that we were lied to. Again, history will have to deal with that.My concern is that this resolution today moves away from just a concern about the behavior of the Government in Iran and begins to suggest that there are neighbors of ours, and, yes, I say neighbors, because that’s what the Latin American people are, neighbors of ours, that could be involved in this behavior, behavior which would be dangerous to the United States, behavior which we all should be concerned about, behavior that, perhaps, would lead us to get involved in Latin America in a way that we haven’t been involved for a long, long time.
But I think in order to understand where we are with this issue, we also have to have, I think, an understanding of how history repeats itself, how some things that we are hearing now we have heard before. For close to 50 years now, we have had a very strong lobbying effort in this country against a Cuban Government. The so-called anti-Castro lobby has been very strong, and that lobby has been very influential in getting many Members of Congress and Presidents, present and past, to feel that the only path towards changes in Cuba is to continuously attack and confront the Cuban Government. To the dismay of many people, I am sure, and with all due respect to many people, it is no secret that for the most part that lobby, this effort, has come out of anti-Castro groups who, for the most part, live in the State of Florida.
Well, something very interesting has happened in the last few years. As Latin America has elected leftist-leaning leaders, people who propose to put forth a modern-day socialism, as they call it, 21st-century socialism, but people who have been elected and reelected as they have emerged, they have decided that it would not be improper for them as leaders of those countries to have a relationship with the Cuban Government.
Well, that upsets the same people who have been upset with the Cuban Government. The fact that some new governments in Latin America would now be friendly to the Government in Cuba would upset these folks.
Our policy towards Cuba has been heavily influenced by this anti-Castro movement. I can’t tell you how many times in the 17 years that I have been in Congress and have tried to change that policy. I have been told by Members of Congress on both sides, Democrats and Republicans, liberals and conservatives, I have been told by them, I agree with you, you are right with this policy having to change.
But I think we have to continue it, and most of them will tell you, because the lobbying effort, out of a couple of communities in this country is so strong, that I really don’t want to face that. Right on the House floor they have told me, I don’t want to face that, I will just go along with this policy, as outdated as this may be, as inefficient as that may be, because it hasn’t changed anything in Cuba, not that we should necessarily be changing things in another country. But now we find that those same folks have now picked new targets.
Chief among those targets, top of the list, is the President of Venezuela, Hugo Chavez, who has over and over again shown his friendship to President Castro of Cuba, and that irritates the folks who support ending Mr. Castro’s stay in Cuba. Those folks then have started to say the same things that they have said for years about Mr. Castro.
Now, the fact of life is that the Cuban Government, the system in Cuba, and the system in Venezuela, for instance, are totally different, totally different. But not to those folks who simply would want to get rid of one. They now feel that they have a target which is the President of Venezuela.
That target then, I think, leads us to situations like today, where a resolution presented here speaks of putting together all these groups who have one thing in common. They speak out against our government, they say things we don’t like, and who happen to have been visited or received telephone calls or offers of help from Iran.
Now, Communist China, and I use that title, that phrase, that word, so we understand what we are talking about, are involved in the economy of every country in Latin America; but you don’t see a resolution on the House floor condemning Communist China for being involved in Latin America.
Why? Because they’re a big trading partner of ours. And secondly, let’s be honest, because there is no Chinese American lobby in this country influencing how we behave in Congress. And so we could deal with China every day and they could do whatever they want in their country, and we will never say more than maybe say every so often, behave yourself.
And there are countries in the Middle East who treat their folks in ways that you could spend every day in Congress condemning them, but we won’t do that because we have a relationship with them.
But nothing, and I say this with great admiration, nothing is as strong as the anti-Castro lobby, which has made it clear that the leadership in Latin America that is friendly to Mr. Castro must pay a price, and one of the prices you pay is to lump them together as this hate group that is now going to be involved in terrorist activities in Latin America.
We have democratically elected leaders in Latin America that have these friendly relations with the Cuban Government. That doesn’t matter to us that these folks were elected and re-elected. As long as they are friendly to Cuba, Miami hates them. And as long as Miami hates them, then Congress must hate them too.
So when you hear comments about Chavez, when you hear comments about Evo Morales, the President of Bolivia, when you hear comments about President Correa in Ecuador, understand, when you hear these comments, or about any one of the other left-leaning presidents in Latin America, that you’re basically hearing from the same playbook, the comments that you heard about Cuba for all these years.
But please understand something, that you are not hearing direct attacks on those governments; you’re still hearing an attack on the Cuban Government. It is just being played out in this new scenario called the other countries in Latin America.
Now, it is true that we have, or they have elected leaders in Latin America that are not happy with the U.S. Government and that words have been strong at times towards us. But some of this rhetoric has a history behind it.
While our country paid a great deal of attention to Asia, Europe and the Middle East, we neglected Latin America. That is a fact. That is not Congressman Serrano from the Bronx, New York, just making those comments to sound nice at this time of night. That’s a fact. We neglected Latin America, and they suffered, and still do, through some very difficult periods.And during the Cold War, it was really interesting. We would go to Latin America and we would say, General So-and-So, Senor, do you support communism in the Soviet Union or do you support our style of government? And those generals would say, oh, no; we support your style. We would say, great, you’re our friend. We’ll see you in a couple of years. And meanwhile, they mistreated their folks; they ransacked the country. But it didn’t matter to us because they were not for communism. They were not to the left of the political spectrum. They were not for socialism.
During that time, however, we would say something very positive. Every so often we would kind of knock them on the shoulder and say democracy is the most important thing. Nothing is as important as democracy.
Well, you know something? They’ve tried it all in Latin America. They tried military dictatorships. The people didn’t try it. They were the victims of it, and it didn’t work. Then they tried regular dictatorships, if there’s such a thing different from a military dictatorship. But it didn’t work either. The people suffered, but the ones who tried it didn’t work. Then they tried something new for Latin America in many cases, new to some countries, new to many countries. They tried democracy. They elected folks. But they elected folks who were very much tied to international corporate interests, who got elected, many in questionable elections, and then neglected the people, neglected the people. And the people found out that they had elected people, they had done everything they were asked to do, and they were getting poorer and poorer every day. So what have they done in the last couple of years? They’ve elected left-of-center candidates in Chile, in Argentina, in Ecuador, in Bolivia, in Venezuela. And these folks have been, and are, revolutionaries. They, themselves, claim to be revolutionaries, and that, again, we hear that word, that upsets us. We forget that this great system we have here was created through a revolution against the British. But we were the last ones to use that word in a way that we liked it. Now anybody who calls himself a revolutionary we get upset about. But these people are revolutionaries. They’re trying something new in Latin America. Embarrassing as it may seem, it is new to many countries in Latin America, this whole notion that the person at the bottom, the person who’s been suffering for years, the indigenous people, the darker skinned people, that they would now have an opportunity to have something better.
Now, and this is important what I just mentioned about the fact that in Latin America, the darker skinned folks are beginning to feel that they have a stake in their system.
When Secretary of State Colin Powell, one of the greatest Americans, left the administration at the last, the end of the last term, he came before our Subcommittee on Commerce, Justice, State, and I was the ranking member at that time. And he said to us something very important when he was talking about Latin America. He said, the big change in Latin America, and what we Americans need to understand, now he didn’t say it was good. He didn’t say it was bad. He didn’t say it was a problem for us. He just said it was something that was happening in Latin America, that we as Americans have to pay attention to. He said, those folks are beginning to elect people who look like themselves. Now, that’s a heck of a statement by a very intelligent man who has a good understanding of the world. I don’t know if that upsets some of us, but I think it does upset some folks in this country and throughout the hemisphere, that countries that are composed primarily mostly of indigenous people and people of color have now decided to elect people who look like themself, people who come from them. And when they decide to make changes that are very dramatic and, yes, very revolutionary, we get upset because it doesn’t serve the corporate interests of a lot of American corporations.
So Hugo Chavez in Venezuela decides that he’s going to revolutionize the way Venezuela behaves. He came to the Bronx. He visited the Bronx. He spoke to us and he said something very interesting. He told us who he was. And you never hear about this in this country. He told us he was a kid, very poor, who didn’t have shoes until he was a teenager, walked barefoot, who wanted only one dream in life, to become a major league baseball pitcher. And he was pretty good. But from where he lived, to be seen by major league scouts, he had to go to Caracas. And he was told that the only way to get to Caracas was to join the Army. So he joined the Army. He jokes that it was the worst mistake his country ever made, letting him join the Army, because when he began to travel with the Army he noticed something very interesting of Venezuela. He noticed that people who looked like him were very poor, and other folks who didn’t look like him were living in a country with a lot of oil and a lot of money. He also noticed that not all neighborhoods were like his. He thought all of Venezuela was like his neighborhood, and it wasn’t. It had serious pockets of serious money. So he began to grow a conscience about that; became a military leader, eventually led him into politics. He got elected. And when he got elected he immediately set out to change the way Venezuela behaves. And the opposition to him knows that. That’s why they all admit that he’s so popular within his country, by the folks who are at the bottom.
But, you know, I get to watch Spanish television from Latin America on my cable system in the Bronx, and you know, as tough as we are in American politics, some of the stuff you hear about President Chavez from the owners of these stations who open up their morning programming by reminding people that their President has curly hair and is dark skinned, as if that was a sin, but it’s such a revolutionary thing that has happened in Latin America that some people still can’t get over it. So he’s an idiot. He’s crazy. He’s corrupt.
But even the opposition, at times, in attempting to say something against him, really says dumb things. I wish I had the name of the person, although I wouldn’t use it on the House floor, but during the last elections in Venezuela when the polls indicated that President Chavez was at 62 percent of the vote, one of the New York Times reporters, I think it was, asked this leader of the opposition, Why do you think he’s so popular? And the gentleman said, and this has to be the dumbest statement ever made by a politician in the history of the world, the gentleman said, You would be popular too if you were always building schools and hospitals for the poor. Well, to that I say, what American teenagers taught us to say, duh. I mean, isn’t that the reason why you elect people to take care of those in the society who need help amongst others? Because you don’t play class warfare. So they’re saying that because he’s building hospitals and because he’s building schools, he’s very popular. Well, yeah, Mr. Opposition. Why didn’t you try that when you were in power for the last couple of hundred years to do some of that?
Now, these leaders in Latin America that we attack, it’s important to know how they got to that point of being the leaders of these countries. For instance, in this resolution, it says, whereas in January of 2007, the President of Iran made his second visit to Central and South America in 5 months to meet with Hugo Chavez, President of Venezuela, to visit Daniel Ortega, President of Nicaragua, and to attend the inauguration of Rafael Correa, President of Ecuador.Well, if we’re going to be technical about this, the fact is he went there for the President’s inauguration, something we all did. I mean, every country in the world sent a representative. I imagine our Ambassador was there. If he wasn’t, he should have been there because this was an elected President of Ecuador.
When you make those visits, as our President does, and I commend him for it, you go and you take the time that you’re in that country and you visit neighboring countries if you don’t get a chance to meet with everybody. That’s something you do.
But we attack these people in this resolution that we passed today, this, in my opinion, dangerous resolution, and that’s why we’re here today. We’re here today because Congress passed a resolution today condemning Iran’s involvement in Latin America and suggesting that these progressive leftist semi, if you want to call them, socialists in Latin America have a bond going with the President of Iran to create havoc for us and to fund terrorist organizations.
But there’s something we forget. Let’s look at Daniel Ortega of Nicaragua. He was elected in a free and fair election, recognized by world organizations. As part of the Central American peace plan, Ortega’s Sandinista government agreed to internationally monitored democratic elections in 1990.
Now, this guy we don’t like submitted himself to elections in 1990 and he lost, and peacefully, after having won a revolution, peacefully turned his government over to Violetta Chamorro, who was the victor, with our support, heavily with our support, because all the arguments in those days about how much money we sent into her campaign.
Now, can you imagine if somebody from another country sent money to one of our Presidential campaigns, another government, what we would do with that candidate in this country? But we do that.
Ortega ran for President in 1996 and lost, ran for democratically provided elections in 2001 and lost. Because he came in second place both times, however, Nicaraguan law gave him a seat in the national assembly where he has served as an opposition leader. Then he ran for President again in 2006 and won. Now, shouldn’t that alone make us want to go to Nicaragua or call him up and say, We asked you, we asked everybody in Latin America, to get elected. You ran four times and finally you got elected. Let’s at least talk. No? We are on his case. In fact, we are linking him to terrorist organizations in this resolution.
Rafael Correa, President of Ecuador, elected in free and fair elections January 15 of this year. He is a U.S.-trained economist. What does that mean? That he learned what he knows about what he wants to put in practice in Ecuador in American schools. So shouldn’t we be applauding that? Shouldn’t we be applauding the fact that he got elected democratically? He is Ecuador’s eighth President in 10 years. The instability has been horrible. Maybe there could be stability now. We should be supportive of that. He defeated Alvaro Noboa, a wealthy banana magnate, in a run-off election held in 2006. Contrary to our predictions, he got 57 percent of the vote.
Now, the one that we attack the most, of course, is President Hugo Chavez of Venezuela. Well, let’s review this for a second. President has won elections in 1998, in 2000, and in 2006. In other words, he got elected in 1998. He then went out and had his coalition elect delegates to a constitutional convention. Those delegates wrote a new constitution that, and listen to this revolutionary idea, gave power to the poor and to the indigenous people. They changed the constitution to do that, and they put it before the people. The constitution was passed by the people. So I’d say that that is another referendum on Chavez. Then the new constitution said that he had to cut his 6-year term short and run right away. So he ran in 1998; then he had to run again in 2000.
Then in 2006 in between the opposition again with support from outside forces, a lot of them based right in the State of Florida, they held a referendum. He submitted himself to that referendum to be recalled as the President. He wins in 1998. He doesn’t finish his full term. He goes again in 2000. But by 2004 they were ready to kick him out, the opposition. They hold a referendum. And he wins it big. The recall, he wins it big. In 1999, as I said, he won a referendum for a new constitution. And in 2005 his coalition of parties won election for the Parliament, for the Congress.
Now, here’s the question I have: Didn’t we tell Latin American countries to use the democratic process? Isn’t that what we always said was the bottom line? Everything else could be negotiable, we said at times. But democracy was the bottom line. Even when we didn’t practice it, as I said before, we did say this is what you must do. Now I just read you three examples of people who have used the democratic system to reach their positions. So why are we attacking them continuously on the House floor? Once a month we get a resolution here attacking somebody in Latin America instead of getting close.
Now, what we don’t understand is that this whole situation with Latin America’s electing people who are left of center is because the people are tired of the poverty, tired of the pain, and they now have leaders who at least in what they have attempted to do up to now indicates that they want to balance off the wealth of those countries. Balance off.
We don’t celebrate the fact that Hugo Chavez comes from poverty, reaches the presidency, and has been elected three times himself and his government another five times totaling eight elections since 1998. We don’t celebrate the fact that in over close to 500 years, the people of Bolivia, a country mostly made up of indigenous people, what we call Indians, elected for the first time an Indian, Evo Morales. We don’t celebrate that.
I felt so good when I saw this man take the oath of the presidency dressed in the native dress of his people. I thought it was a great day. Our comments right away were, what is he going to do with the gas industry? Well, he did what we expected. He told some of the gas companies this is a very poor country. We have a lot of natural resources here. We are going to start sharing some of those profits with the people. Oh, he’s a communist. We have got to get rid of him. He’s a problem. So now in this resolution we lump him together with the President of Iran.When you do that, you immediately make enemies of the American people and those people.But you also make a very serious mistake, and this is perhaps the most important thing that we have to pay attention to. When you reject the electoral victories of these folks; when you don’t celebrate the fact that people from the lower class, economic class, that people of darker skin of indigenous people are being elected; when you as the American Government, the greatest and largest government in the world, don’t celebrate that and, in fact, spend a lot of time trying to bring them down; when you don’t do that, it is natural that you drive them to places where you don’t want them to be.
Now, when you are a Member of Congress and you stand up in front of the House and people may watch you on TV, you are supposed to speak as exactly that. My problem, or my strength, is that I so often remind people that I grew up in a public housing project. And in the projects you have certain rules of behavior. And one is that if somebody is trying to do you in and that person is stronger and bigger than you, you go find someone who can help you confront that person. That’s a fact of life for survival. Most Members of Congress, most American elected officials don’t talk about the rule of the projects because they didn’t grow in the projects. I am not saying that makes them worse than me, just different. So I use that as a point of understanding. Again, I grew up in the South Bronx in a public housing project. If you came after me, if you came after my mother, my sister, my cousin, you were my enemy.
Well, when President Chavez came to the U.N., our country was outraged. And I was not happy with what he said. He called President Bush the devil, and that was enough for us to go to war. But let’s talk about a little history now. There was a coup attempt on President Chavez by members of the military and members of the elite. All of Latin America, most of Europe, some folks in the Middle East all got up and said you can’t do that. You can’t do that. That man was elected. He’s got to serve his term. What did the United States say? Well, at the White House some folks said publicly he brought it on himself. No, you can’t say that, he brought it on himself. You don’t bring on a coup against your government.
In Latin America they said that our fingerprints were all over that attempted coup; that if we actually did not participate in it, we gave aid to it through our comments and said it was okay. Now, when I met President Chavez when he came to visit the Bronx, he spoke to us for a couple of hours. He’s famous for speaking a couple of hours. He told us about all the things I have mentioned here. But he said when they took him out of the presidential palace, the “White House,” if you will, took him up to the mountains, he knew he was going to die. He knew he was going to get killed. And you can imagine what is going through his head because he doesn’t know what is happening in Washington. He found out later that what was happening to him and when he thought he was going to get killed, he thought the whole world was outraged.
He found out later that Washington was basically saying we’ll figure it out. And we didn’t say anything when the guy who took over for him momentarily suspended the Congress, suspended the constitution, and that’s when the people reacted to it. Of course, Chavez came back because two things happened. One was the folks from the mountain side, the poor folks, the dark-skin folks, the indigenous people found out and they started running to the city and demanding to have their President back. The people won, the power didn’t. But we didn’t say anything.
And he tells us that when he goes there, a young soldier, he’s sitting in a room and opens the door and he hears the rifle load up and he thinks he’s going to get shot right there, and the soldier says, If our President is killed, we will all be killed here. And that did a turnaround where the young soldiers told the older soldiers, We’re not going back to those days. This man was elected and he has to serve his term.
Now, let’s go back a second to my focal point of growing up in the projects. They tried to kill the man and he came back into power. He thinks a few people were involved in it. He calls our President the devil as a representative of the country that didn’t help him during that time. We don’t appreciate having our President called the devil. We don’t encourage that and we all denounced it. But in the projects if you try to bump me off, the least I am going to call you is the devil. In fact, the ramifications may be even more dangerous. So I think it was really a light comment compared to what he felt was happening to him.
Now, there is another issue here that has been discussed a lot. We all heard about how recently President Chavez closed a TV station in Venezuela, and we were outraged. Nobody likes to do that. But what we were not told here is the history behind that. I’m not suggesting it was a good move. If I had been his adviser, I would have said leave it alone. But do you know who was on in the middle of the attempted coup against President Chavez in the Venezuela equivalent of the White House? The owner of the TV station that lost its license a few months ago. He was there as part of the coup to overthrow this government.
Now, listen to me. I don’t support most of the policies of President Bush. But if I heard that CBS, ABC, CNN, anyone tomorrow was involved in a coup against President Bush, I would ask that their license not be renewed because that is not freedom of speech. That is violence against the government.
And you can’t treat them any differently than you would treat someone. I would say we have to seriously consider not allowing them to continue in that role because they just attempted to overthrow a government by force.
Also, they refused to televise the coup. And when they did televise, they only televised the opposition; they never televised the people. The country never knew that Chavez was gone because they didn’t want the people to know. And when he came back, they didn’t know that either, although they had televised part in the middle of the coup because they were supposedly playing cartoons and movies on TV because they didn’t want to support the government in any way. That is the truth behind that licensing situation.
Now, what is the danger in what we’ve done today? Today, we committed the mistake of allowing our emotions on the issue of Cuba to blind us into attacks on Latin American countries, blanket attacks on many countries. And in this resolution we make claims on issues that in no way can be proven.
We’re suggesting that Iran is going to fund terrorist organizations in Latin America. These are some of the same folks that told us there were weapons of mass destruction in Iraq. How many of us have forgotten those words, “weapons of mass destruction”? They also told us that Iraq was tied to al Qaeda. They also told us that Iraq helped al Qaeda in the 9/11 attacks. Even the White House has now admitted that most of that, if not all, was not true. So, I can’t understand this desire to lump this together with Iran, present bad information, if not outright lies, and begin to move us towards a confrontation with Latin America at the same time we have confrontation with Iran.
But look at some of the silly things that the resolution says. It says, Whereas, at the Iranian Conference on Latin America, Iran announced that it would reopen embassies in Chile, Colombia, Ecuador, Nicaragua, Uruguay, and send a representative to Bolivia. And what is wrong with that? Don’t we want people to talk to each other? Don’t we have relations with most of the countries of the world? But when Iran does it, just to reopen relations they had before, re-establish, we get upset. Well, that’s an acceptable action for a sovereign state.
Now, I spoke about the various leaders, and I neglected to remind us that the President of Bolivia was elected on December 18, 2005, with a record 85 percent of the Bolivian people voting in the elections. They were deemed by world organizations to be free and fair. He won a convincing victory, getting 54 percent of the vote, compared to 29 percent for his opposition. Although a lot of people were predicting that he would win, no one thought that he could win this big.
Now, here’s another part of the resolution. And I leave it to the people watching or listening to this to try to figure out what this means, because I don’t know what the crime is here. It says, Whereas, routine civilian airline flights have been established from Tehran, Iran directly into Caracas, Venezuela, and the Government of Venezuela has been found to be indiscriminate in the issuance of Venezuelan passports and other identifying documents to people coming on those flights. So, they’re allowing people to fly directly to them, and they are allowing Iran to fly direct flights. Well, we have direct flights all over the world. What is the issue?
Now, here is the most dangerous one: Whereas, Iran and Hezbollah were involved in the two deadliest terrorist attacks in Argentina, and we all know that this is true, now they claim that Hezbollah is setting up in Latin America with the support of Iran. Well, my God, if that is true, why are we waiting until this particular resolution, which passed in what one could call the quickness of the afternoon without a vote, to bring up such a serious situation? If it’s true that Hezbollah is involved in Latin America setting up bases, recruiting people, shouldn’t we be outraged and really consider how to address that rather than just as a throw-away line in a resolution? This is so much more of this attempt to link Iran to Latin America.
And let me reach the last few minutes here by telling you why I think this is extremely dangerous.
It is pretty clear around here that we are beating the drum towards war with Iran. That’s no longer an alarmed behavior. I’m not trying to alarm people into feeling nervous, but I think most American people are hearing a lot of what they heard before we went to Iraq. And you know that Iraq has been a very, very difficult situation for us, and we don’t know when we will be able to get out of Iraq. And now there is this drumbeat, both inside and outside the Congress, throughout the country, but coming from the government, from the White House, coming out of the President’s office, coming out of the Vice President’s office, that we have to somehow confront Iran. That’s a problem all by itself. And it’s a horrible problem that we could be discussing here for hours.
But my concern, and my reason for speaking on a resolution today, a resolution which was introduced primarily by Democrats, and I know this is not something we usually do, speak against members of our own party, but we can all be nervous about a situation because on both sides of the aisle people are marching forward to war with Iran.
So, now we link these other countries. What does that mean? Does that mean that we now have an excuse to go and try military action against Bolivia? against Argentina? against Ecuador? against Venezuela? Is it because, indeed, they’ve earned the right, if you will, of having us react that way, or is it because we’re using Iran as an excuse to deal with other things we wanted to deal with in the first place, which is getting at these folks.
And so, I go back to my initial statement, that the same lobby group that has been directing our policy towards Cuba and preventing us from making changes in that policy, that same group has been intelligent enough, enabled enough to now direct our attention towards Latin American leftist leaders because they’re friendly to Cuba, and what best way to get at them? To link them to Iran, the ugly country for us right now.
And I’m not suggesting, by the way, that we should not have some concerns, if not serious concerns, about the behavior of Iran. That’s not the issue here. I don’t want people tomorrow saying, oh, he was defending Iran. No. I’m defending no one. What I’m defending is the right of the Latin American people to make their own democratic choices, if you will, and that we will respect that. But by linking them, I have to ask the question, if we go after Iran, and we just finished saying this afternoon that these Latin American countries are tied into Iran’s behavior, aren’t we also giving ourselves the opportunity, the reason, the power to go after these countries, too? That’s my concern.
Let me conclude by speaking to a subject that I know well. You don’t have to live in Latin America to know how Latin Americans feel about the United States or about American people. This may sound like a joke, it may even sound sarcastic, but it is honestly true. All you have to live is in southern Maryland, in northern Virginia, in D.C., in New York, in LA, in Houston, in Dallas, in any city, any suburb in this country that has the growing number of immigrants from Latin America, whether documented or not, they’re here for a reason. And if we were discussing immigration, I would tell you that they’re here because they like this country. They want to work. They want to feed their families. But that is no different than how people in Latin America feel about us. To link them with a group of folks in the Middle East who have openly said, not all of them, but some, who have openly said that they don’t like us, to link them to that is to make two horrible mistakes. One is to have bad information again put forth about a people who actually like us, and also, the worst mistake of all, to drive them into the arms of people we don’t like. Because as I told you before, when you pick on someone and you’re the toughest guy on the block, that person is going to have to find someone to help them out.
So, instead of reaching out to Latin America, we say to them, you’re as bad as the other guy. And we hate the other guy, and we’re going to eventually take action against the other guy, so you know what you can expect. And even if that’s not our intent, it will only make them think that that is our intent, and they will have to try to drum up new relationships. Because they’re not going to give into us, they’re not going to leave office and say we’ll go back to the days when the general ran the country.
Latin Americans, my friends, can be found in any city, any suburb, any neighborhood. And so many of them have such a close relationship to the people back home that they want to do nothing in this country to jeopardize the ability to continue to deal with their family back home. And their family back home will never allow any behavior in those countries that can hurt us. They need us and we need them.And so, when you speak to Latin Americans in our communities, you never hear hatred of the United States as you do in some other countries. They are materially poor, yes, suspicious of America’s intentions in their hemisphere, yes, but interested in making common cause with Hezbollah and other foreign movements to target American interests?
Never. Let me repeat that. They would never team up with a terrorist organization against the United States. They don’t have anything against us of that nature. They just don’t like our rhetoric and our indifference to them, but they’re not going to team up with anybody to hurt us, because most of those countries have so many of their people living here that it would be like attacking another part of your neighborhood. Because to hurt the American interests would almost certainly hurt their own. Money that flows from here to there would be cut off from relatives. Those family ties of people living and working in the United States would be gone.A broad cultural admiration for the U.S. have knit together places like Caracas, Quito, and New York. One of the ironies of the current immigration debate is how folks often evoke how immigration from Latin America is changing this country. What they forget is how that same phenomenon is changing Latin America, which, despite its general political rejection of this administration, is growing ever closer in its embrace of a Pan-American culture and a Pan-American economy.
For many thousands of people in Venezuela, Ecuador and Nicaragua, Americans are their cousins, their siblings and their children. They can be our greatest allies in the world if we don’t continue to push them into the embrace of hostile regimes with foolish resolutions like this one.Mr. Speaker, it wasn’t easy for me to decide to speak on this today. As I said, this resolution was presented by many Democrats, well-intentioned folks. I just see us going down a dangerous road here, a very dangerous road. If we have a problem with Iran, deal with that problem. Don’t link the poor people of Latin America who have nothing against us.
We have tried to export democracy to Latin America, and I think finally it is working. But we don’t like the results. We have tried to export capitalism, and in many ways what they do with each other by trading oil for doctors and oil for technology is capitalism at its best. I often joke, but profoundly so, I think, that we exported baseball to Latin America. I don’t have to tell you how well that is doing in Latin America and doing right here. I am a Yankee fan. But just ask the Boston Red Sox how they feel about Latin American ballplayers and Latin American baseball.So these folks don’t dislike us. But they are going to be troubled tomorrow morning when they find out what we did here in Congress today. They are going to be troubled that we are linking them with people we hate and they don’t want to be hated by us.
So I hope we can spend some time reviewing this, thinking about it, and perhaps understanding that in our desire to do what is right for us and to protect our great country, this country I love, this country in whose Army I served proudly, this country whose Congress I serve proudly, this country that I would give my life for, that as you love your country, you don’t love it different from a child. When that child is not doing the right thing, you have to correct that child. And our country is wrong right now in its desire to treat Latin America with hate and disdain and to make of it something that it is not. They are our neighbors and our friends. We should treat them as such. We should extend our hand to them and tell them, you are our neighbor, you are our friends, you are, in fact, members of this family in more ways than one, and we are members of yours. Let’s work together. Let’s not show a lack of respect for each other.
Speech on
U.S. policy Towards Latin America
November 12th 2007, by José Serrano
U.S. Representative from New York, José Serrano Mr. Speaker, I rise today to speak about an issue that troubles me quite a bit and I think should trouble a lot of the American people. Certainly it should concern Members of Congress.
A resolution was passed this afternoon by voice vote dealing with the alleged involvement and behavior of the President of Iran, therefore, the Government of Iran, in Latin America and supporting, according to this resolution, terrorist activities in Latin America.
Let me briefly read the opening statement of this resolution, the title, if you will: expressing concern relating to the threatening behavior of the Iranian regime and the activities of terrorist organizations sponsored by that regime in Latin America.
Well, just to deal with language itself, we know that when our government calls another government a regime, it is not saying anything positive about it. It is, in fact, confronting it in some way. But I think that as unnoticed as this went by, as I said it was passed on a voice vote, as unnoticed that this went by, this puts us in a situation, the Congress, the American people, our Nation, on a road, on a path to a very dangerous situation in the future, perhaps in the near future.
We all know how concerned the administration is and how concerned some Members of Congress are about the possibility that Iran could be involved in activities that would be hurtful to us. I want to correct that. I think all Members of Congress are concerned about that possibility.But I think we are also concerned about the fact, many of us, that there seems to be a drumbeat towards war with , a drumbeat that says, basically, some of the same things that were said when we were taken off to war against Iraq. Just about everything that was told to us at that time happened not to be true. History will tell whether, in fact, we were lied to, or whether the information was so bad that the administration had no choice but to pass that on to us thinking that it was correct.
But there are many who feel that we were lied to. Again, history will have to deal with that.My concern is that this resolution today moves away from just a concern about the behavior of the Government in Iran and begins to suggest that there are neighbors of ours, and, yes, I say neighbors, because that’s what the Latin American people are, neighbors of ours, that could be involved in this behavior, behavior which would be dangerous to the United States, behavior which we all should be concerned about, behavior that, perhaps, would lead us to get involved in Latin America in a way that we haven’t been involved for a long, long time.
But I think in order to understand where we are with this issue, we also have to have, I think, an understanding of how history repeats itself, how some things that we are hearing now we have heard before. For close to 50 years now, we have had a very strong lobbying effort in this country against a Cuban Government. The so-called anti-Castro lobby has been very strong, and that lobby has been very influential in getting many Members of Congress and Presidents, present and past, to feel that the only path towards changes in Cuba is to continuously attack and confront the Cuban Government. To the dismay of many people, I am sure, and with all due respect to many people, it is no secret that for the most part that lobby, this effort, has come out of anti-Castro groups who, for the most part, live in the State of Florida.
Well, something very interesting has happened in the last few years. As Latin America has elected leftist-leaning leaders, people who propose to put forth a modern-day socialism, as they call it, 21st-century socialism, but people who have been elected and reelected as they have emerged, they have decided that it would not be improper for them as leaders of those countries to have a relationship with the Cuban Government.
Well, that upsets the same people who have been upset with the Cuban Government. The fact that some new governments in Latin America would now be friendly to the Government in Cuba would upset these folks.
Our policy towards Cuba has been heavily influenced by this anti-Castro movement. I can’t tell you how many times in the 17 years that I have been in Congress and have tried to change that policy. I have been told by Members of Congress on both sides, Democrats and Republicans, liberals and conservatives, I have been told by them, I agree with you, you are right with this policy having to change.
But I think we have to continue it, and most of them will tell you, because the lobbying effort, out of a couple of communities in this country is so strong, that I really don’t want to face that. Right on the House floor they have told me, I don’t want to face that, I will just go along with this policy, as outdated as this may be, as inefficient as that may be, because it hasn’t changed anything in Cuba, not that we should necessarily be changing things in another country. But now we find that those same folks have now picked new targets.
Chief among those targets, top of the list, is the President of Venezuela, Hugo Chavez, who has over and over again shown his friendship to President Castro of Cuba, and that irritates the folks who support ending Mr. Castro’s stay in Cuba. Those folks then have started to say the same things that they have said for years about Mr. Castro.
Now, the fact of life is that the Cuban Government, the system in Cuba, and the system in Venezuela, for instance, are totally different, totally different. But not to those folks who simply would want to get rid of one. They now feel that they have a target which is the President of Venezuela.
That target then, I think, leads us to situations like today, where a resolution presented here speaks of putting together all these groups who have one thing in common. They speak out against our government, they say things we don’t like, and who happen to have been visited or received telephone calls or offers of help from Iran.
Now, Communist China, and I use that title, that phrase, that word, so we understand what we are talking about, are involved in the economy of every country in Latin America; but you don’t see a resolution on the House floor condemning Communist China for being involved in Latin America.
Why? Because they’re a big trading partner of ours. And secondly, let’s be honest, because there is no Chinese American lobby in this country influencing how we behave in Congress. And so we could deal with China every day and they could do whatever they want in their country, and we will never say more than maybe say every so often, behave yourself.
And there are countries in the Middle East who treat their folks in ways that you could spend every day in Congress condemning them, but we won’t do that because we have a relationship with them.
But nothing, and I say this with great admiration, nothing is as strong as the anti-Castro lobby, which has made it clear that the leadership in Latin America that is friendly to Mr. Castro must pay a price, and one of the prices you pay is to lump them together as this hate group that is now going to be involved in terrorist activities in Latin America.
We have democratically elected leaders in Latin America that have these friendly relations with the Cuban Government. That doesn’t matter to us that these folks were elected and re-elected. As long as they are friendly to Cuba, Miami hates them. And as long as Miami hates them, then Congress must hate them too.
So when you hear comments about Chavez, when you hear comments about Evo Morales, the President of Bolivia, when you hear comments about President Correa in Ecuador, understand, when you hear these comments, or about any one of the other left-leaning presidents in Latin America, that you’re basically hearing from the same playbook, the comments that you heard about Cuba for all these years.
But please understand something, that you are not hearing direct attacks on those governments; you’re still hearing an attack on the Cuban Government. It is just being played out in this new scenario called the other countries in Latin America.
Now, it is true that we have, or they have elected leaders in Latin America that are not happy with the U.S. Government and that words have been strong at times towards us. But some of this rhetoric has a history behind it.
While our country paid a great deal of attention to Asia, Europe and the Middle East, we neglected Latin America. That is a fact. That is not Congressman Serrano from the Bronx, New York, just making those comments to sound nice at this time of night. That’s a fact. We neglected Latin America, and they suffered, and still do, through some very difficult periods.And during the Cold War, it was really interesting. We would go to Latin America and we would say, General So-and-So, Senor, do you support communism in the Soviet Union or do you support our style of government? And those generals would say, oh, no; we support your style. We would say, great, you’re our friend. We’ll see you in a couple of years. And meanwhile, they mistreated their folks; they ransacked the country. But it didn’t matter to us because they were not for communism. They were not to the left of the political spectrum. They were not for socialism.
During that time, however, we would say something very positive. Every so often we would kind of knock them on the shoulder and say democracy is the most important thing. Nothing is as important as democracy.
Well, you know something? They’ve tried it all in Latin America. They tried military dictatorships. The people didn’t try it. They were the victims of it, and it didn’t work. Then they tried regular dictatorships, if there’s such a thing different from a military dictatorship. But it didn’t work either. The people suffered, but the ones who tried it didn’t work. Then they tried something new for Latin America in many cases, new to some countries, new to many countries. They tried democracy. They elected folks. But they elected folks who were very much tied to international corporate interests, who got elected, many in questionable elections, and then neglected the people, neglected the people. And the people found out that they had elected people, they had done everything they were asked to do, and they were getting poorer and poorer every day. So what have they done in the last couple of years? They’ve elected left-of-center candidates in Chile, in Argentina, in Ecuador, in Bolivia, in Venezuela. And these folks have been, and are, revolutionaries. They, themselves, claim to be revolutionaries, and that, again, we hear that word, that upsets us. We forget that this great system we have here was created through a revolution against the British. But we were the last ones to use that word in a way that we liked it. Now anybody who calls himself a revolutionary we get upset about. But these people are revolutionaries. They’re trying something new in Latin America. Embarrassing as it may seem, it is new to many countries in Latin America, this whole notion that the person at the bottom, the person who’s been suffering for years, the indigenous people, the darker skinned people, that they would now have an opportunity to have something better.
Now, and this is important what I just mentioned about the fact that in Latin America, the darker skinned folks are beginning to feel that they have a stake in their system.
When Secretary of State Colin Powell, one of the greatest Americans, left the administration at the last, the end of the last term, he came before our Subcommittee on Commerce, Justice, State, and I was the ranking member at that time. And he said to us something very important when he was talking about Latin America. He said, the big change in Latin America, and what we Americans need to understand, now he didn’t say it was good. He didn’t say it was bad. He didn’t say it was a problem for us. He just said it was something that was happening in Latin America, that we as Americans have to pay attention to. He said, those folks are beginning to elect people who look like themselves. Now, that’s a heck of a statement by a very intelligent man who has a good understanding of the world. I don’t know if that upsets some of us, but I think it does upset some folks in this country and throughout the hemisphere, that countries that are composed primarily mostly of indigenous people and people of color have now decided to elect people who look like themself, people who come from them. And when they decide to make changes that are very dramatic and, yes, very revolutionary, we get upset because it doesn’t serve the corporate interests of a lot of American corporations.
So Hugo Chavez in Venezuela decides that he’s going to revolutionize the way Venezuela behaves. He came to the Bronx. He visited the Bronx. He spoke to us and he said something very interesting. He told us who he was. And you never hear about this in this country. He told us he was a kid, very poor, who didn’t have shoes until he was a teenager, walked barefoot, who wanted only one dream in life, to become a major league baseball pitcher. And he was pretty good. But from where he lived, to be seen by major league scouts, he had to go to Caracas. And he was told that the only way to get to Caracas was to join the Army. So he joined the Army. He jokes that it was the worst mistake his country ever made, letting him join the Army, because when he began to travel with the Army he noticed something very interesting of Venezuela. He noticed that people who looked like him were very poor, and other folks who didn’t look like him were living in a country with a lot of oil and a lot of money. He also noticed that not all neighborhoods were like his. He thought all of Venezuela was like his neighborhood, and it wasn’t. It had serious pockets of serious money. So he began to grow a conscience about that; became a military leader, eventually led him into politics. He got elected. And when he got elected he immediately set out to change the way Venezuela behaves. And the opposition to him knows that. That’s why they all admit that he’s so popular within his country, by the folks who are at the bottom.
But, you know, I get to watch Spanish television from Latin America on my cable system in the Bronx, and you know, as tough as we are in American politics, some of the stuff you hear about President Chavez from the owners of these stations who open up their morning programming by reminding people that their President has curly hair and is dark skinned, as if that was a sin, but it’s such a revolutionary thing that has happened in Latin America that some people still can’t get over it. So he’s an idiot. He’s crazy. He’s corrupt.
But even the opposition, at times, in attempting to say something against him, really says dumb things. I wish I had the name of the person, although I wouldn’t use it on the House floor, but during the last elections in Venezuela when the polls indicated that President Chavez was at 62 percent of the vote, one of the New York Times reporters, I think it was, asked this leader of the opposition, Why do you think he’s so popular? And the gentleman said, and this has to be the dumbest statement ever made by a politician in the history of the world, the gentleman said, You would be popular too if you were always building schools and hospitals for the poor. Well, to that I say, what American teenagers taught us to say, duh. I mean, isn’t that the reason why you elect people to take care of those in the society who need help amongst others? Because you don’t play class warfare. So they’re saying that because he’s building hospitals and because he’s building schools, he’s very popular. Well, yeah, Mr. Opposition. Why didn’t you try that when you were in power for the last couple of hundred years to do some of that?
Now, these leaders in Latin America that we attack, it’s important to know how they got to that point of being the leaders of these countries. For instance, in this resolution, it says, whereas in January of 2007, the President of Iran made his second visit to Central and South America in 5 months to meet with Hugo Chavez, President of Venezuela, to visit Daniel Ortega, President of Nicaragua, and to attend the inauguration of Rafael Correa, President of Ecuador.Well, if we’re going to be technical about this, the fact is he went there for the President’s inauguration, something we all did. I mean, every country in the world sent a representative. I imagine our Ambassador was there. If he wasn’t, he should have been there because this was an elected President of Ecuador.
When you make those visits, as our President does, and I commend him for it, you go and you take the time that you’re in that country and you visit neighboring countries if you don’t get a chance to meet with everybody. That’s something you do.
But we attack these people in this resolution that we passed today, this, in my opinion, dangerous resolution, and that’s why we’re here today. We’re here today because Congress passed a resolution today condemning Iran’s involvement in Latin America and suggesting that these progressive leftist semi, if you want to call them, socialists in Latin America have a bond going with the President of Iran to create havoc for us and to fund terrorist organizations.
But there’s something we forget. Let’s look at Daniel Ortega of Nicaragua. He was elected in a free and fair election, recognized by world organizations. As part of the Central American peace plan, Ortega’s Sandinista government agreed to internationally monitored democratic elections in 1990.
Now, this guy we don’t like submitted himself to elections in 1990 and he lost, and peacefully, after having won a revolution, peacefully turned his government over to Violetta Chamorro, who was the victor, with our support, heavily with our support, because all the arguments in those days about how much money we sent into her campaign.
Now, can you imagine if somebody from another country sent money to one of our Presidential campaigns, another government, what we would do with that candidate in this country? But we do that.
Ortega ran for President in 1996 and lost, ran for democratically provided elections in 2001 and lost. Because he came in second place both times, however, Nicaraguan law gave him a seat in the national assembly where he has served as an opposition leader. Then he ran for President again in 2006 and won. Now, shouldn’t that alone make us want to go to Nicaragua or call him up and say, We asked you, we asked everybody in Latin America, to get elected. You ran four times and finally you got elected. Let’s at least talk. No? We are on his case. In fact, we are linking him to terrorist organizations in this resolution.
Rafael Correa, President of Ecuador, elected in free and fair elections January 15 of this year. He is a U.S.-trained economist. What does that mean? That he learned what he knows about what he wants to put in practice in Ecuador in American schools. So shouldn’t we be applauding that? Shouldn’t we be applauding the fact that he got elected democratically? He is Ecuador’s eighth President in 10 years. The instability has been horrible. Maybe there could be stability now. We should be supportive of that. He defeated Alvaro Noboa, a wealthy banana magnate, in a run-off election held in 2006. Contrary to our predictions, he got 57 percent of the vote.
Now, the one that we attack the most, of course, is President Hugo Chavez of Venezuela. Well, let’s review this for a second. President has won elections in 1998, in 2000, and in 2006. In other words, he got elected in 1998. He then went out and had his coalition elect delegates to a constitutional convention. Those delegates wrote a new constitution that, and listen to this revolutionary idea, gave power to the poor and to the indigenous people. They changed the constitution to do that, and they put it before the people. The constitution was passed by the people. So I’d say that that is another referendum on Chavez. Then the new constitution said that he had to cut his 6-year term short and run right away. So he ran in 1998; then he had to run again in 2000.
Then in 2006 in between the opposition again with support from outside forces, a lot of them based right in the State of Florida, they held a referendum. He submitted himself to that referendum to be recalled as the President. He wins in 1998. He doesn’t finish his full term. He goes again in 2000. But by 2004 they were ready to kick him out, the opposition. They hold a referendum. And he wins it big. The recall, he wins it big. In 1999, as I said, he won a referendum for a new constitution. And in 2005 his coalition of parties won election for the Parliament, for the Congress.
Now, here’s the question I have: Didn’t we tell Latin American countries to use the democratic process? Isn’t that what we always said was the bottom line? Everything else could be negotiable, we said at times. But democracy was the bottom line. Even when we didn’t practice it, as I said before, we did say this is what you must do. Now I just read you three examples of people who have used the democratic system to reach their positions. So why are we attacking them continuously on the House floor? Once a month we get a resolution here attacking somebody in Latin America instead of getting close.
Now, what we don’t understand is that this whole situation with Latin America’s electing people who are left of center is because the people are tired of the poverty, tired of the pain, and they now have leaders who at least in what they have attempted to do up to now indicates that they want to balance off the wealth of those countries. Balance off.
We don’t celebrate the fact that Hugo Chavez comes from poverty, reaches the presidency, and has been elected three times himself and his government another five times totaling eight elections since 1998. We don’t celebrate the fact that in over close to 500 years, the people of Bolivia, a country mostly made up of indigenous people, what we call Indians, elected for the first time an Indian, Evo Morales. We don’t celebrate that.
I felt so good when I saw this man take the oath of the presidency dressed in the native dress of his people. I thought it was a great day. Our comments right away were, what is he going to do with the gas industry? Well, he did what we expected. He told some of the gas companies this is a very poor country. We have a lot of natural resources here. We are going to start sharing some of those profits with the people. Oh, he’s a communist. We have got to get rid of him. He’s a problem. So now in this resolution we lump him together with the President of Iran.When you do that, you immediately make enemies of the American people and those people.But you also make a very serious mistake, and this is perhaps the most important thing that we have to pay attention to. When you reject the electoral victories of these folks; when you don’t celebrate the fact that people from the lower class, economic class, that people of darker skin of indigenous people are being elected; when you as the American Government, the greatest and largest government in the world, don’t celebrate that and, in fact, spend a lot of time trying to bring them down; when you don’t do that, it is natural that you drive them to places where you don’t want them to be.
Now, when you are a Member of Congress and you stand up in front of the House and people may watch you on TV, you are supposed to speak as exactly that. My problem, or my strength, is that I so often remind people that I grew up in a public housing project. And in the projects you have certain rules of behavior. And one is that if somebody is trying to do you in and that person is stronger and bigger than you, you go find someone who can help you confront that person. That’s a fact of life for survival. Most Members of Congress, most American elected officials don’t talk about the rule of the projects because they didn’t grow in the projects. I am not saying that makes them worse than me, just different. So I use that as a point of understanding. Again, I grew up in the South Bronx in a public housing project. If you came after me, if you came after my mother, my sister, my cousin, you were my enemy.
Well, when President Chavez came to the U.N., our country was outraged. And I was not happy with what he said. He called President Bush the devil, and that was enough for us to go to war. But let’s talk about a little history now. There was a coup attempt on President Chavez by members of the military and members of the elite. All of Latin America, most of Europe, some folks in the Middle East all got up and said you can’t do that. You can’t do that. That man was elected. He’s got to serve his term. What did the United States say? Well, at the White House some folks said publicly he brought it on himself. No, you can’t say that, he brought it on himself. You don’t bring on a coup against your government.
In Latin America they said that our fingerprints were all over that attempted coup; that if we actually did not participate in it, we gave aid to it through our comments and said it was okay. Now, when I met President Chavez when he came to visit the Bronx, he spoke to us for a couple of hours. He’s famous for speaking a couple of hours. He told us about all the things I have mentioned here. But he said when they took him out of the presidential palace, the “White House,” if you will, took him up to the mountains, he knew he was going to die. He knew he was going to get killed. And you can imagine what is going through his head because he doesn’t know what is happening in Washington. He found out later that what was happening to him and when he thought he was going to get killed, he thought the whole world was outraged.
He found out later that Washington was basically saying we’ll figure it out. And we didn’t say anything when the guy who took over for him momentarily suspended the Congress, suspended the constitution, and that’s when the people reacted to it. Of course, Chavez came back because two things happened. One was the folks from the mountain side, the poor folks, the dark-skin folks, the indigenous people found out and they started running to the city and demanding to have their President back. The people won, the power didn’t. But we didn’t say anything.
And he tells us that when he goes there, a young soldier, he’s sitting in a room and opens the door and he hears the rifle load up and he thinks he’s going to get shot right there, and the soldier says, If our President is killed, we will all be killed here. And that did a turnaround where the young soldiers told the older soldiers, We’re not going back to those days. This man was elected and he has to serve his term.
Now, let’s go back a second to my focal point of growing up in the projects. They tried to kill the man and he came back into power. He thinks a few people were involved in it. He calls our President the devil as a representative of the country that didn’t help him during that time. We don’t appreciate having our President called the devil. We don’t encourage that and we all denounced it. But in the projects if you try to bump me off, the least I am going to call you is the devil. In fact, the ramifications may be even more dangerous. So I think it was really a light comment compared to what he felt was happening to him.
Now, there is another issue here that has been discussed a lot. We all heard about how recently President Chavez closed a TV station in Venezuela, and we were outraged. Nobody likes to do that. But what we were not told here is the history behind that. I’m not suggesting it was a good move. If I had been his adviser, I would have said leave it alone. But do you know who was on in the middle of the attempted coup against President Chavez in the Venezuela equivalent of the White House? The owner of the TV station that lost its license a few months ago. He was there as part of the coup to overthrow this government.
Now, listen to me. I don’t support most of the policies of President Bush. But if I heard that CBS, ABC, CNN, anyone tomorrow was involved in a coup against President Bush, I would ask that their license not be renewed because that is not freedom of speech. That is violence against the government.
And you can’t treat them any differently than you would treat someone. I would say we have to seriously consider not allowing them to continue in that role because they just attempted to overthrow a government by force.
Also, they refused to televise the coup. And when they did televise, they only televised the opposition; they never televised the people. The country never knew that Chavez was gone because they didn’t want the people to know. And when he came back, they didn’t know that either, although they had televised part in the middle of the coup because they were supposedly playing cartoons and movies on TV because they didn’t want to support the government in any way. That is the truth behind that licensing situation.
Now, what is the danger in what we’ve done today? Today, we committed the mistake of allowing our emotions on the issue of Cuba to blind us into attacks on Latin American countries, blanket attacks on many countries. And in this resolution we make claims on issues that in no way can be proven.
We’re suggesting that Iran is going to fund terrorist organizations in Latin America. These are some of the same folks that told us there were weapons of mass destruction in Iraq. How many of us have forgotten those words, “weapons of mass destruction”? They also told us that Iraq was tied to al Qaeda. They also told us that Iraq helped al Qaeda in the 9/11 attacks. Even the White House has now admitted that most of that, if not all, was not true. So, I can’t understand this desire to lump this together with Iran, present bad information, if not outright lies, and begin to move us towards a confrontation with Latin America at the same time we have confrontation with Iran.
But look at some of the silly things that the resolution says. It says, Whereas, at the Iranian Conference on Latin America, Iran announced that it would reopen embassies in Chile, Colombia, Ecuador, Nicaragua, Uruguay, and send a representative to Bolivia. And what is wrong with that? Don’t we want people to talk to each other? Don’t we have relations with most of the countries of the world? But when Iran does it, just to reopen relations they had before, re-establish, we get upset. Well, that’s an acceptable action for a sovereign state.
Now, I spoke about the various leaders, and I neglected to remind us that the President of Bolivia was elected on December 18, 2005, with a record 85 percent of the Bolivian people voting in the elections. They were deemed by world organizations to be free and fair. He won a convincing victory, getting 54 percent of the vote, compared to 29 percent for his opposition. Although a lot of people were predicting that he would win, no one thought that he could win this big.
Now, here’s another part of the resolution. And I leave it to the people watching or listening to this to try to figure out what this means, because I don’t know what the crime is here. It says, Whereas, routine civilian airline flights have been established from Tehran, Iran directly into Caracas, Venezuela, and the Government of Venezuela has been found to be indiscriminate in the issuance of Venezuelan passports and other identifying documents to people coming on those flights. So, they’re allowing people to fly directly to them, and they are allowing Iran to fly direct flights. Well, we have direct flights all over the world. What is the issue?
Now, here is the most dangerous one: Whereas, Iran and Hezbollah were involved in the two deadliest terrorist attacks in Argentina, and we all know that this is true, now they claim that Hezbollah is setting up in Latin America with the support of Iran. Well, my God, if that is true, why are we waiting until this particular resolution, which passed in what one could call the quickness of the afternoon without a vote, to bring up such a serious situation? If it’s true that Hezbollah is involved in Latin America setting up bases, recruiting people, shouldn’t we be outraged and really consider how to address that rather than just as a throw-away line in a resolution? This is so much more of this attempt to link Iran to Latin America.
And let me reach the last few minutes here by telling you why I think this is extremely dangerous.
It is pretty clear around here that we are beating the drum towards war with Iran. That’s no longer an alarmed behavior. I’m not trying to alarm people into feeling nervous, but I think most American people are hearing a lot of what they heard before we went to Iraq. And you know that Iraq has been a very, very difficult situation for us, and we don’t know when we will be able to get out of Iraq. And now there is this drumbeat, both inside and outside the Congress, throughout the country, but coming from the government, from the White House, coming out of the President’s office, coming out of the Vice President’s office, that we have to somehow confront Iran. That’s a problem all by itself. And it’s a horrible problem that we could be discussing here for hours.
But my concern, and my reason for speaking on a resolution today, a resolution which was introduced primarily by Democrats, and I know this is not something we usually do, speak against members of our own party, but we can all be nervous about a situation because on both sides of the aisle people are marching forward to war with Iran.
So, now we link these other countries. What does that mean? Does that mean that we now have an excuse to go and try military action against Bolivia? against Argentina? against Ecuador? against Venezuela? Is it because, indeed, they’ve earned the right, if you will, of having us react that way, or is it because we’re using Iran as an excuse to deal with other things we wanted to deal with in the first place, which is getting at these folks.
And so, I go back to my initial statement, that the same lobby group that has been directing our policy towards Cuba and preventing us from making changes in that policy, that same group has been intelligent enough, enabled enough to now direct our attention towards Latin American leftist leaders because they’re friendly to Cuba, and what best way to get at them? To link them to Iran, the ugly country for us right now.
And I’m not suggesting, by the way, that we should not have some concerns, if not serious concerns, about the behavior of Iran. That’s not the issue here. I don’t want people tomorrow saying, oh, he was defending Iran. No. I’m defending no one. What I’m defending is the right of the Latin American people to make their own democratic choices, if you will, and that we will respect that. But by linking them, I have to ask the question, if we go after Iran, and we just finished saying this afternoon that these Latin American countries are tied into Iran’s behavior, aren’t we also giving ourselves the opportunity, the reason, the power to go after these countries, too? That’s my concern.
Let me conclude by speaking to a subject that I know well. You don’t have to live in Latin America to know how Latin Americans feel about the United States or about American people. This may sound like a joke, it may even sound sarcastic, but it is honestly true. All you have to live is in southern Maryland, in northern Virginia, in D.C., in New York, in LA, in Houston, in Dallas, in any city, any suburb in this country that has the growing number of immigrants from Latin America, whether documented or not, they’re here for a reason. And if we were discussing immigration, I would tell you that they’re here because they like this country. They want to work. They want to feed their families. But that is no different than how people in Latin America feel about us. To link them with a group of folks in the Middle East who have openly said, not all of them, but some, who have openly said that they don’t like us, to link them to that is to make two horrible mistakes. One is to have bad information again put forth about a people who actually like us, and also, the worst mistake of all, to drive them into the arms of people we don’t like. Because as I told you before, when you pick on someone and you’re the toughest guy on the block, that person is going to have to find someone to help them out.
So, instead of reaching out to Latin America, we say to them, you’re as bad as the other guy. And we hate the other guy, and we’re going to eventually take action against the other guy, so you know what you can expect. And even if that’s not our intent, it will only make them think that that is our intent, and they will have to try to drum up new relationships. Because they’re not going to give into us, they’re not going to leave office and say we’ll go back to the days when the general ran the country.
Latin Americans, my friends, can be found in any city, any suburb, any neighborhood. And so many of them have such a close relationship to the people back home that they want to do nothing in this country to jeopardize the ability to continue to deal with their family back home. And their family back home will never allow any behavior in those countries that can hurt us. They need us and we need them.And so, when you speak to Latin Americans in our communities, you never hear hatred of the United States as you do in some other countries. They are materially poor, yes, suspicious of America’s intentions in their hemisphere, yes, but interested in making common cause with Hezbollah and other foreign movements to target American interests?
Never. Let me repeat that. They would never team up with a terrorist organization against the United States. They don’t have anything against us of that nature. They just don’t like our rhetoric and our indifference to them, but they’re not going to team up with anybody to hurt us, because most of those countries have so many of their people living here that it would be like attacking another part of your neighborhood. Because to hurt the American interests would almost certainly hurt their own. Money that flows from here to there would be cut off from relatives. Those family ties of people living and working in the United States would be gone.A broad cultural admiration for the U.S. have knit together places like Caracas, Quito, and New York. One of the ironies of the current immigration debate is how folks often evoke how immigration from Latin America is changing this country. What they forget is how that same phenomenon is changing Latin America, which, despite its general political rejection of this administration, is growing ever closer in its embrace of a Pan-American culture and a Pan-American economy.
For many thousands of people in Venezuela, Ecuador and Nicaragua, Americans are their cousins, their siblings and their children. They can be our greatest allies in the world if we don’t continue to push them into the embrace of hostile regimes with foolish resolutions like this one.Mr. Speaker, it wasn’t easy for me to decide to speak on this today. As I said, this resolution was presented by many Democrats, well-intentioned folks. I just see us going down a dangerous road here, a very dangerous road. If we have a problem with Iran, deal with that problem. Don’t link the poor people of Latin America who have nothing against us.
We have tried to export democracy to Latin America, and I think finally it is working. But we don’t like the results. We have tried to export capitalism, and in many ways what they do with each other by trading oil for doctors and oil for technology is capitalism at its best. I often joke, but profoundly so, I think, that we exported baseball to Latin America. I don’t have to tell you how well that is doing in Latin America and doing right here. I am a Yankee fan. But just ask the Boston Red Sox how they feel about Latin American ballplayers and Latin American baseball.So these folks don’t dislike us. But they are going to be troubled tomorrow morning when they find out what we did here in Congress today. They are going to be troubled that we are linking them with people we hate and they don’t want to be hated by us.
So I hope we can spend some time reviewing this, thinking about it, and perhaps understanding that in our desire to do what is right for us and to protect our great country, this country I love, this country in whose Army I served proudly, this country whose Congress I serve proudly, this country that I would give my life for, that as you love your country, you don’t love it different from a child. When that child is not doing the right thing, you have to correct that child. And our country is wrong right now in its desire to treat Latin America with hate and disdain and to make of it something that it is not. They are our neighbors and our friends. We should treat them as such. We should extend our hand to them and tell them, you are our neighbor, you are our friends, you are, in fact, members of this family in more ways than one, and we are members of yours. Let’s work together. Let’s not show a lack of respect for each other.
lunes 21 de abril de 2008
Fidel, Pope Peace and Prosperity
REFLEXIONES DEL COMPAÑERO FIDEL
“PAZ Y PROSPERIDAD”
El Papa Benedicto XVI destronó a Brown, Primer Ministro inglés, quien sustituyó a Blair, al que conocí y con el que hablé unos minutos durante un receso de la Segunda Conferencia de la OMC en Ginebra hace 10 años, después de su discurso, expresándole mi discrepancia a causa de una falsa frase suya sobre el estado social de los niños ingleses. Por la voz, los argumentos y el tono de Brown en su conferencia de prensa en presencia de Bush, me pareció tan autosuficiente como su antecesor en la dirección del Partido Laborista. La actividad del nuevo Primer Ministro de Gran Bretaña, al coincidir con la visita del Papa, era igual a la del jefe de gobierno de una república bananera.
Benedicto XVI prestó especial atención al 13 de abril, cuando ocurrió hace 65 años la incineración de más de mil prisioneros en el pueblo de Gardelegen, y se convirtió en el día que recuerda el martirologio sufrido por el pueblo judío en la Alemania nazi, una tragedia humana que duró años.
Bush lo recibió en la Base Andrews de la Fuerza Aérea norteamericana, gesto inusual. Benedicto XVI, a lo largo de su actividad como Obispo alemán, fue conservador y alérgico a los cambios en la política social y en las normas internas que rigen su iglesia. La gran prensa de Estados Unidos inicialmente fue implacable, a partir de las indisciplinas contra las normas establecidas para los creyentes, calificando a la Iglesia Católica como religión decadente.
Su visita coincidió también con el 81 aniversario de su nacimiento. Bush, solícito y complaciente, le cantó Las mañanitas el propio día 16.
El Papa fue sin duda inteligente. Contraatacó desde el inicio de la visita. A pesar de los 81 años que cumpliría horas más tarde, bajó del avión deslizando apenas sus manos por las barandas de las empinadas escaleras, y en los últimos peldaños ni eso hizo. Es de talla baja y, a ojos vista, pesa la mitad que lo que Bush. Camina ligero. No abandonó un minuto la sonrisa y el brillo de los ojos, y se dedicó de inmediato a cumplir un programa que con 18 años de edad habría agotado a cualquier visitante. Los medios televisivos hicieron zafra.
El Papa visitó universidades, un centro cultural católico edificado expresamente para la ocasión; se reunió con representantes de cientos de escuelas y universidades católicas del enorme país. El jefe del imperio no se atrevería a exigir al Estado del Vaticano “nueva constitución y elecciones libres” como él las concibe para Cuba.
Como líder de una iglesia en medio de la guerra desatada por Estados Unidos contra los musulmanes, su mensaje fue ecuménico y favorable a la paz.
Se reunió con representantes de cultos cuyas iglesias influyen en miles de millones de personas. Los líderes de la religión judía lo recibieron con calor. Desde luego, estos idealizaron el sistema capitalista de Estados Unidos. Uno de los rabinos de Miami afirmó que el 90 por ciento de los judíos de Cuba se trasladaron a aquella ciudad; debió aclarar que no ocurrió así porque los persiguiéramos o les dieran visa en Estados Unidos, sino porque optaron por el derecho a viajar por vía segura que abrió la Revolución y ―como muchos cubanos de otros orígenes étnicos― buscaban ventajas materiales que no habían podido alcanzar en la Cuba colonizada.
Aquí permaneció abierta y respetada la sinagoga judía, y sus representantes se reúnen, junto a las demás iglesias, con los líderes del Partido y el Gobierno Revolucionario, incluidos sus niveles más altos.
En Estados Unidos se exaltó mucho la visita del Papa a la sinagoga. Es la tercera vez que tiene lugar una visita papal a esos centros religiosos judíos. La primera fue la de Juan Pablo II a una sinagoga de Polonia; después, la de Benedicto XVI a una en Alemania; y esta, a la de Nueva York, que es a su vez la primera en ese país.
Particular importancia tiene demandar, en nombre del derecho a creer, el derecho a vivir. En su condición de líder religioso de una iglesia poderosa y fuertemente arraigada en muchos pueblos del mundo, Benedicto XVI habló ante la Organización de Naciones Unidas:
“…el deseo de la paz, la búsqueda de la justicia, el respeto de la dignidad de la persona, la cooperación y la asistencia humanitaria, expresan las justas aspiraciones del espíritu humano.”
“…los objetivos del desarrollo, la reducción de las desigualdades locales y globales, la protección del entorno, de los recursos y del clima, requieren que todos los responsables internacionales actúen conjuntamente y demuestren una disponibilidad para actuar de buena fe, respetando la ley y promoviendo la solidaridad con las regiones más débiles del planeta.”
“Nuestro pensamiento se dirige al modo en que a veces se han aplicado los resultados de los descubrimientos de la investigación científica y tecnológica.”
“…estos derechos se basan en la ley natural inscrita en el corazón del hombre y presente en las diferentes culturas y civilizaciones.”
“…la máxima no hagas a otros lo que no quieres que te hagan a ti en modo alguno puede variar, por mucha que sea la diversidad de las naciones.”
“Mi presencia en esta Asamblea es una muestra de estima por las Naciones Unidas y es considerada como expresión de la esperanza en que la Organización sirva cada vez más como signo de unidad entre los Estados y como instrumento al servicio de toda la familia humana.”
Al concluir, exclamó en inglés, francés, español, árabe, chino y ruso: “¡Paz y prosperidad con la ayuda de Dios!”
Aunque no es fácil desentrañar el pensamiento del Vaticano sobre los espinosos temas que se abordan en un mundo donde el Presidente de Estados Unidos y sus aliados ricos y desarrollados han impuesto una guerra sangrienta contra la cultura y la religión de más de mil millones de personas en nombre de la lucha contra el terrorismo, e impera la tortura, el saqueo y la conquista por la fuerza de los hidrocarburos y las materias primas, lo que expresó el Papa es la antítesis de la política de brutalidad y fuerza que aplica el cantor de Las Mañanitas.
En los próximos días, los pueblos de América Latina están a punto de afrontar dos tragedias: la de Paraguay y la de Bolivia. Una de ellas, por las elecciones que tienen lugar hoy domingo 20 de abril, donde un antiguo Obispo católico cuenta con la mayoría abrumadora del pueblo, según encuestas serias, y es seguro el rechazo a un fraude electoral; otra, por la amenaza de desintegración real de su territorio, que conduciría a luchas fratricidas en el sufrido país.
Benedicto XVI regresa hoy a Roma. Los bellos e impresionantes cantos han cesado en los templos. Ahora se continuará escuchando el odioso e incesante estampido de las armas.
Fidel Castro Ruz
20 de abril de 2008
7 y 42 p.m.
“PAZ Y PROSPERIDAD”
El Papa Benedicto XVI destronó a Brown, Primer Ministro inglés, quien sustituyó a Blair, al que conocí y con el que hablé unos minutos durante un receso de la Segunda Conferencia de la OMC en Ginebra hace 10 años, después de su discurso, expresándole mi discrepancia a causa de una falsa frase suya sobre el estado social de los niños ingleses. Por la voz, los argumentos y el tono de Brown en su conferencia de prensa en presencia de Bush, me pareció tan autosuficiente como su antecesor en la dirección del Partido Laborista. La actividad del nuevo Primer Ministro de Gran Bretaña, al coincidir con la visita del Papa, era igual a la del jefe de gobierno de una república bananera.
Benedicto XVI prestó especial atención al 13 de abril, cuando ocurrió hace 65 años la incineración de más de mil prisioneros en el pueblo de Gardelegen, y se convirtió en el día que recuerda el martirologio sufrido por el pueblo judío en la Alemania nazi, una tragedia humana que duró años.
Bush lo recibió en la Base Andrews de la Fuerza Aérea norteamericana, gesto inusual. Benedicto XVI, a lo largo de su actividad como Obispo alemán, fue conservador y alérgico a los cambios en la política social y en las normas internas que rigen su iglesia. La gran prensa de Estados Unidos inicialmente fue implacable, a partir de las indisciplinas contra las normas establecidas para los creyentes, calificando a la Iglesia Católica como religión decadente.
Su visita coincidió también con el 81 aniversario de su nacimiento. Bush, solícito y complaciente, le cantó Las mañanitas el propio día 16.
El Papa fue sin duda inteligente. Contraatacó desde el inicio de la visita. A pesar de los 81 años que cumpliría horas más tarde, bajó del avión deslizando apenas sus manos por las barandas de las empinadas escaleras, y en los últimos peldaños ni eso hizo. Es de talla baja y, a ojos vista, pesa la mitad que lo que Bush. Camina ligero. No abandonó un minuto la sonrisa y el brillo de los ojos, y se dedicó de inmediato a cumplir un programa que con 18 años de edad habría agotado a cualquier visitante. Los medios televisivos hicieron zafra.
El Papa visitó universidades, un centro cultural católico edificado expresamente para la ocasión; se reunió con representantes de cientos de escuelas y universidades católicas del enorme país. El jefe del imperio no se atrevería a exigir al Estado del Vaticano “nueva constitución y elecciones libres” como él las concibe para Cuba.
Como líder de una iglesia en medio de la guerra desatada por Estados Unidos contra los musulmanes, su mensaje fue ecuménico y favorable a la paz.
Se reunió con representantes de cultos cuyas iglesias influyen en miles de millones de personas. Los líderes de la religión judía lo recibieron con calor. Desde luego, estos idealizaron el sistema capitalista de Estados Unidos. Uno de los rabinos de Miami afirmó que el 90 por ciento de los judíos de Cuba se trasladaron a aquella ciudad; debió aclarar que no ocurrió así porque los persiguiéramos o les dieran visa en Estados Unidos, sino porque optaron por el derecho a viajar por vía segura que abrió la Revolución y ―como muchos cubanos de otros orígenes étnicos― buscaban ventajas materiales que no habían podido alcanzar en la Cuba colonizada.
Aquí permaneció abierta y respetada la sinagoga judía, y sus representantes se reúnen, junto a las demás iglesias, con los líderes del Partido y el Gobierno Revolucionario, incluidos sus niveles más altos.
En Estados Unidos se exaltó mucho la visita del Papa a la sinagoga. Es la tercera vez que tiene lugar una visita papal a esos centros religiosos judíos. La primera fue la de Juan Pablo II a una sinagoga de Polonia; después, la de Benedicto XVI a una en Alemania; y esta, a la de Nueva York, que es a su vez la primera en ese país.
Particular importancia tiene demandar, en nombre del derecho a creer, el derecho a vivir. En su condición de líder religioso de una iglesia poderosa y fuertemente arraigada en muchos pueblos del mundo, Benedicto XVI habló ante la Organización de Naciones Unidas:
“…el deseo de la paz, la búsqueda de la justicia, el respeto de la dignidad de la persona, la cooperación y la asistencia humanitaria, expresan las justas aspiraciones del espíritu humano.”
“…los objetivos del desarrollo, la reducción de las desigualdades locales y globales, la protección del entorno, de los recursos y del clima, requieren que todos los responsables internacionales actúen conjuntamente y demuestren una disponibilidad para actuar de buena fe, respetando la ley y promoviendo la solidaridad con las regiones más débiles del planeta.”
“Nuestro pensamiento se dirige al modo en que a veces se han aplicado los resultados de los descubrimientos de la investigación científica y tecnológica.”
“…estos derechos se basan en la ley natural inscrita en el corazón del hombre y presente en las diferentes culturas y civilizaciones.”
“…la máxima no hagas a otros lo que no quieres que te hagan a ti en modo alguno puede variar, por mucha que sea la diversidad de las naciones.”
“Mi presencia en esta Asamblea es una muestra de estima por las Naciones Unidas y es considerada como expresión de la esperanza en que la Organización sirva cada vez más como signo de unidad entre los Estados y como instrumento al servicio de toda la familia humana.”
Al concluir, exclamó en inglés, francés, español, árabe, chino y ruso: “¡Paz y prosperidad con la ayuda de Dios!”
Aunque no es fácil desentrañar el pensamiento del Vaticano sobre los espinosos temas que se abordan en un mundo donde el Presidente de Estados Unidos y sus aliados ricos y desarrollados han impuesto una guerra sangrienta contra la cultura y la religión de más de mil millones de personas en nombre de la lucha contra el terrorismo, e impera la tortura, el saqueo y la conquista por la fuerza de los hidrocarburos y las materias primas, lo que expresó el Papa es la antítesis de la política de brutalidad y fuerza que aplica el cantor de Las Mañanitas.
En los próximos días, los pueblos de América Latina están a punto de afrontar dos tragedias: la de Paraguay y la de Bolivia. Una de ellas, por las elecciones que tienen lugar hoy domingo 20 de abril, donde un antiguo Obispo católico cuenta con la mayoría abrumadora del pueblo, según encuestas serias, y es seguro el rechazo a un fraude electoral; otra, por la amenaza de desintegración real de su territorio, que conduciría a luchas fratricidas en el sufrido país.
Benedicto XVI regresa hoy a Roma. Los bellos e impresionantes cantos han cesado en los templos. Ahora se continuará escuchando el odioso e incesante estampido de las armas.
Fidel Castro Ruz
20 de abril de 2008
7 y 42 p.m.
Venezuela: Democracy, Socialism and Imperialism
Jump to navigation Jump to content Homepage News Opinion and Analysis Newsbriefs audio Featured articles Contact
Menu
us online - donate to Venezuela Analysis
Home » Opinion & Analysis » The Bolivarian Project
Venezuela: Democracy, Socialism and Imperialism
April 18th 2008, by James Petras - Globalresearch.ca
Introduction
Venezuela ’s President Hugo Chavez remains the world’s leading secular, democratically elected political leader who has consistently and publicly opposed imperialist wars in the Middle East, attacked extra-territorial intervention and US and European Union complicity in kidnapping and torture.
Venezuela plays the major role in sharply reducing the price of oil for the poorest countries in the Caribbean region and Central America, thus substantially aiding them in their balance of payments, without attaching any ‘strings’ to this vital assistance. Venezuela has been in the forefront in supporting free elections and opposing human right abuses in the Middle East, Latin America and South Asia by pro-US client regimes in Iraq , Afghanistan and Colombia.
No other country in the Americas has done more to break down the racial barriers to social mobility and the acquisition of land for Afro-Latin and Indio Americans. President Chavez has been on the cutting edge of efforts toward greater Latin American integration – despite opposition from the United States and several regional regimes, who have opted for bilateral free trade agreements with the US .
Even more significant, President Chavez is the only elected president to reverse a US backed military coup (in 48 hours) and defeat a (US-backed) bosses’ lockout, and return the economy to double-digit growth over the subsequent 4 years.
1 President Chavez is the only elected leader in the history of Latin America to successfully win eleven straight electoral contests against US-financed political parties and almost the entire private mass media over a nine-year period. Finally President Chavez is the only leader in the last half-century who came within 1% of having a popular referendum for a ‘socialist transformation’ approved, a particularly surprising result in a country in which less than 30% of the work force is made up of peasants and factory workers.
President Chavez has drastically reduced long-term poverty faster than any regime in the region,
2 demonstrating that a nationalist-welfare regime is much more effective in ending endemic social ills than its neo-liberal counterparts. A rigorous, empirical study of the socio-economic performance of the Chavez government demonstrates its success in a whole series of indicators after the defeat of the counter-revolutionary coup and lockout and after the nationalization of petroleum (2003).
GDP has grown by more than 87% with only a small part of the growth being in oil. The poverty rate has been cut in half (from 54% in 2003 at the height of the bosses’ lockout to 27% in 2007; and extreme poverty has been reduced from 43% in 1996 to 9% in 2007), and unemployment by more than half (from 17% in 1998 to 7% in 2007). The economy has created jobs at a rate nearly three times that of the United States during its most recent economic expansion. Accessible health care for the poor has been successfully expanded with the number of primary care physicians in the public sector increasing from 1,628 in 1998 to 19,571 by early 2007. About 40% of the population now has access to subsidized food. Access to education, especially higher education, has also been greatly expanded for poor families. Real (inflation adjusted) social spending per person has increased by more than 300%.
3 His policies have once and for all refuted the notion that the competitive demands of ‘globalization’ (deep and extensive insertion in the world market) are incompatible with large-scale social welfare policies. Chavez has demonstrated that links to the world market are compatible with the construction of a more developed welfare state under a popularly-based government
The large-scale, long-term practical accomplishments of the Chavez government, however have been overlooked by liberal and social democratic academics in Venezuela and their colleagues in the US and Europe, who prefer to criticize secondary institutional and policy weaknesses, failing to take into account the world-historic significance of the changes taking place in the context of a hostile, aggressively militarist-driven empire.
4 No reasonable and rigorous contemporary analysis can seriously provide an accurate assessment of Venezuela while glossing over the tremendous accomplishments achieved during the Hugo Chavez presidency.
It is within the framework of Chavez’ innovative and courageous political-social breakthroughs that we should proceed to an analysis of the advances, contradictions and negative aspects of specific political, economic, social and cultural policies, practices and institutions.
The Advances and Limitations of Economic Policy
Venezuela has made tremendous advances in the economy since the failed coup of April 11, 2002 and the employers’ lockout of December 2002-February 2003, which led to a 24% decline in the GDP.
5 Under President Chavez’ leadership and with favorable terms of trade, Venezuela grew by over 10% during the past 5 years, decreasing poverty levels from over 50% to less than 28%, surpassing any country in the world in terms of the rate of poverty-reduction. The economy has, in contrast to the past, accumulated over $35 billion dollars in foreign exchange reserves despite a vast increase in social spending and has totally freed itself of dependence on the onerous terms imposed by the self-styled ‘international banks’ (IMF, World Bank and Inter-American Development Bank) by paying off its debt.
6 The government has nationalized strategic enterprises in the oil and gas industries, steel, cement, food production and distribution, telecommunications and electricity industries. It has passed new excess profits taxes, doubling its revenues. It has signed new petroleum and gas joint ventures with over a dozen European, Asian and Latin American multinationals giving the Venezuelan state majority control. It has expropriated several million acres of uncultivated farm land from speculators and absentee owners and, more recently, an additional 32 under-producing plantations.
7 The importance of these structural changes cannot be understated. In the first place they increased the capacity of the Chavez government to make or influence strategic decisions regarding investment, re-investment, pricing and marketing. The increase in state ownership increases the flow of revenues and profits into the federal treasury, enhancing financing of productive investments, social programs and downstream processing plants and services. The government is slowly diversifying its petroleum markets from a hostile adversary (the USA ) to trade and investment with countries like China , Brazil , Iran and Russia , thus reducing Venezuela ’s vulnerability to arbitrary economic boycotts.
The government has started a large-scale, long-term project to diversify the economy, and especially to become food self-sufficient in staples like milk, meat, vegetables and poultry.
8 Equally important investments in processing raw petroleum into value-added products like fertilizers and plastics are now operative, albeit at a slow pace. New refineries are on schedule to substitute dependence on US based operations and to add value to their exports. New public transport systems are advancing as is visible in the new metro being built in Caracas , which will lessen the traffic jams and air pollution. Over 2.5 billion Strong Bolivars, the new Venezuelan currency (over $1 billion dollars) has been allocated in the form of incentives, credit and subsidies to promote the increase in agricultural production and processing.
9 Investments in new lines of production linked to social programs are underway, including new enterprises manufacturing 15,000 prefabricated houses per year.
10 Venezuela, like the rest of the world (China, EU, USA, Australia and so on) is deeply affected by inflation, especially of imported food. Inflation has escalated over the last 3 years rising from 14% in 2005, to 17% in 2006 and 22% in 2007, threatening to undermine the gains in living standards made over the last 5 years.
11 Government attempts to impose price controls has had limited effect as big food producers have cut back on production, food distributors have decrease shipments and even hoarded essential goods and retail sellers have traded on the black market. On the surface, the problem is that consumer power has increased faster than productivity, increasing demand relative to supply. However, the deeper structural reason is the decline in capitalist investment in production and distribution – despite high profits. Many capitalist food producers and food processors have diverted their profits into investments in speculative activity, including imports of luxury goods and real estate where there is a higher rate of return. Some have lessened investment because of opposition to the government, others because of fears of agrarian reform, while all complain about ‘price controls’ leading to a ‘profit squeeze’. These complaints do not account for low productivity, which existed before price controls and continued even after the government lifted the controls. Inflation and the resultant negative impact is one of the principal reason for popular abstention during the December 2007 referendum and is the cause of popular discontent today in Venezuela . Both the far right and the ultra-left (especially in some neighborhoods and trade unions) have been exploiting this discontent.
Inflation is one of the principal reasons for the decline of the popularity of various regimes (Left, Center and Right) throughout history in Europe, as well as in Latin America .
12 In large part this is because the great majority of workers in Venezuela are self-employed and have no organization or wage and income indexes to keep up with the rise in prices. In Venezuela , even the major industries, like petroleum, steel and aluminum, have ‘sub-contracted’ most of their workers who lack any power to negotiate for wage increases tied to inflation. Government subsidies and promotional incentives to industrial and agricultural capitalists to promote productivity has led to increased profits – without commensurate increases in wage income.
During the period from February to April 2008, the state intervened directly in the productive process, through the takeover of unproductive companies and farms. New worker and peasant demands include ‘opening the books’ of the profitable firms and farms in pursuit of wage and collective bargaining negotiations, re-opening closed firms and investments in new public enterprises. Chavez recognized that the problem of production (supply) will continue to lead to too many Bolivars chasing too few consumer goods – inflation, discontent and political vulnerability – unless he accelerates the nationalization process and deepens public ownership.
To effectively intervene and take control of strategic economic sectors, the government requires working class organizations, cadres and leaders able to co-manage the enterprises, ‘opening the books’ on investments, profits and wages and establish work discipline. Under present capital-labor relations, capitalists totally neglect investment in technology and innovations, employ temporary or contingent workers under precarious conditions and depend on the Venezuelan state to enforce harsh labor codes.
In advancing the Bolivarian road to Socialism, President Chavez has to deal with incompetent and reactionary officials in his own government. For example, prior to Chavez’ nationalization of the major steel multinational SIDOR, the Minister of Labor, an incompetent and inexperienced functionary with no prior relation to labor, sided with the company and approved of the Governor of the state of Bolivar in calling out the National Guard to break the strike. Throughout 2007-2008, management of SIDOR refused to negotiate in good faith with the unions, which provoked strikes in January in February and March 2008. The intransigence of the steel bosses increased the militancy of the workers and led to Chavez’ intervention. In defense of his order to nationalize, Chavez cited the positive role of the steel workers in opposing the coup, the ‘slave-like’ work conditions and the export strategies, which denied the domestic construction industry the steel it needed for high-priority homebuilding. He called on the nationalized industry to be run under ‘workers councils’ in a efficient and productive manner.
13 Government repression of strikes provoked regional union solidarity and worker-led marches against the National Guard and calls for the resignation of the ineffective Labor Minister. After Chavez nationalized steel, trade unions from major industrial sectors met to coordinate support for President Chavez and press for further moves toward public ownership. Equally ominous, brutality and excess use of force ordered by the general in charge of the National Guard is indicative of a profoundly anti-working class, pro-big business bias of the Guard officers, a potentially dangerous threat to the Chavez government in the future.
14 By confronting the problem of inflation and the overvalued, strong Venezuelan Bolivar Chavez is dealing with an issue that is real and deeply felt by most workers. Failure by the government to deal with its structural roots makes it vulnerable to demagogic appeals by the right and the sectarian ultra-left and its principle beneficiary, the US imperialism.
New public investments in fertilizer plants, prefabricated housing, positive measures reducing inflation by one third in the first 2 months of 2008 and policies sharply increasing food supply by 20% indicate that the Chavez government is beginning to confront some of the economy’s weak points. In visits to several public and private retail markets during the last part of February and early March, we did not find any shortages of essential items, contrary to the opposition, and the US and European media reports. An opposition organized protest of shortages of liquid gas in Catia (a popular neighborhood in Caracas ) was front-page news (with blown-up photos) in the opposition daily, El Universal, but with no follow up reports when the government sent in supplies the next day.
15 By the beginning of 2008, public spending, which is not always efficiently invested or entirely free of corruption, reduced unemployment 8.5%, the lowest in decades.
16 However a government goal of 5.5% seems over optimistic, especially in light of the fall-out from the US recession and decline in European demand.
The big challenge to Chavez’ economic policy in 2008, a year of important state and local elections in November, is to ensure that the inevitable mid-year increase in public spending is directed toward productive investments and not to populist short-term programs, which will ignite another wave of inflation. We can expect that, as the elections approach, the capitalist class will once again resort to ‘planned shortages’, distribution blockages, as well as other politically induced economic problems in order to blame and discredit the government.
Unless the government reduces its reliance on the private sector for investments, employment, production, finance and distribution, they will be forced into taking costly and improvised measures to avoid electoral losses and popular abstention. The indivisible ties between private business control over strategic economic decisions and their paramount interest in pursuing political measures designed to undermine the Chavez government, means that the government will remain under constant threat unless it takes control of the commanding heights of the economy. In recognition of those structural factors Chavez has announced plans to nationalize strategic sectors. The Chavez government has become pro-active, anticipating shocks from the economic elite and displacing them from power. Depending on the private sector will force the government to continue to be ‘reactive’, improvising responses to economic attacks during and after the fact and suffering the negative political consequences.
Politics: The Chavistas Strike Back
During the latter half of 2007, in the run-up to the referendum, and early 2008, the rightwing offensive (aided by the ultra-left) took hold and put the government on the defensive. Early March 2008, the pro-Chavez forces regrouped and launched a new political party – The Venezuelan United Socialist Party (PSUV) at a national convention in Maracaibo . In response to the defeat of the referendum, President Chavez called on his supporters to engage in a ‘Three R’s Campaign’: Review, Rectify and Re-launch. This initiative has led to the election of new party leaders, a decline in old guard paternalistic bosses in the leadership of the PSUV, a rejection of sectarianism toward other pro-Chavez parties and a revitalization of grass roots activism.
17 The party is intended to oversee the mobilization of the Chavez supporters and to educate and organize potential working and lower middle class constituents. The party is mandated to evaluate, criticize and correct the implementation of policies by local officials and engage the mass social movements in common struggle. To succeed the party must organize local popular power to counter-act corrupt Chavez-affiliated as well as opposition policy-makers, press local demands and initiatives, counter rightwing infiltration of neighborhoods by Colombian and local terrorists and turn out the vote at election time.
For the PSUV to succeed as a political organization it needs to take power away from the local clientelistic political machines built around some of the state, regional and municipal level Chavista officials. It needs to overcome the tendency to appoint leaders and candidates from above and to deepen rank and file control over decisions and leaders.
18 Even during the founding congress of the PSUV several delegations criticized the process of electing the national leadership – for neglecting popular representation and overloading it with much criticized political officials.
19 Active communal councils under democratic control have been effective in giving voice and representation to a large number of urban and poor neighborhoods. They have secured popular loyalty and support wherever they have delivered needed services and led struggles against incompetent or recalcitrant Chavista officials.
Violence, crime and personal insecurity are major issues for most poor and lower middle class supporters of the Chavez government and the police are viewed as ineffective reducing crime and securing their neighborhoods and as, at times, complicit with the gangsters.
20 Proposals by the government for greater cooperation between neighborhood committees and the police in identifying criminals have had little effect. This is in part because police have shown little interest in developing on-the-ground, day-by-day relations in the poorer barrios, which they tend to view as ‘criminal breeding grounds’.
Armed gangs controlling the poor neighborhoods commit most of the crime. Local residents fear retaliation if they cooperate or worse, they think that the police are complicit with the criminals. Even more seriously reports from reliable intelligence sources have identified large-scale infiltration of Colombian death squad narco traffickers who combine drugs peddling and rightwing organizing, posing a double threat to local and national security. While the government has taken notice of the general problem of individual insecurity and the specific problem of narco-political infiltration, no national plan of action has yet been put into practice, apart from periodic routine round-ups of low-level common criminals.
21 Venezuela should learn from the example of Cuba, which has had successful crime fighting and anti-terrorist programs for decades organized around a tight network of local ‘committees to defend the revolution’ and backed by a politically trained rapid action internal security force and an efficient judiciary. Individual security and political freedom depends on the collective knowledge of crime groups’ infiltration and the courage of local committees and individuals. Their cooperation requires trust in the integrity, respect and political loyalty of the internal security forces. Their intelligence, evidence collection and testimony depend on the protection of local citizens by the internal security forces against gangster retaliation.
A new type of ‘police official’ needs to be created who does not view the neighborhood and its committees as hostile territory – they must live and identify with the people they are paid to protect. To be effective at the local level, the Chavez government must display exemplary behavior at the national level: It must prosecute and jail criminals and not grant amnesty or give light sentences to coup-makers and economic saboteurs, as Chavez did in early 2008. The failure of the current Attorney General to pursue the murderers of her predecessor, Attorney General Danilo Anderson, was not only a shameful act but set an example of incompetent and feeble law enforcement which does not create confidence in the will of the state to fight political assassins.
22 ‘Popular power’ will only become meaningful to the mass of the poor when they feel secure enough to walk their streets without assaults and intimidation, when the gangs no longer break into homes and local stores, and when armed narco-traffickers no longer flaunt the law. In Venezuela , the struggle against the oligarchs, George Bush and Colombia ’s Uribe begins with a community-based war against local criminals, including a comprehensive tactical and strategic sweep of known criminal gangs followed by exemplary punishment for those convicted of terrorizing the residents. This is one way to make the government respected at the grass roots level and to re-assert and make operative the term popular sovereignty. In every barrio today it is not only the ‘right wing NGO’s’, which challenge Chavez’ authority, it is the armed criminal elements, increasingly linked with reactionary political groups. To successfully confront the external threats, it is incumbent on the government to defeat the gangsters and narco-traffickers that represent a real obstacle to mass mobilization in time of a national emergency, like a new coup attempt.
Failures by some middle level Chavez officials to ensure security and resolve local problems have eroded popular support for political incumbents. The majority of local residents, popular leaders and activists still voice support for President Chavez even as they are critical of the ‘people around him’, ‘his advisers’, and ‘the opportunists’.
23 How this will play out in the November election is not totally clear. But unless fundamental changes take place in candidates and policies, it is likely that the opposition will increase their current minimal representation in state and municipal governments.
Social and Cultural Advances and Contradictions
Venezuela , under the leadership of President Chavez, has made unprecedented social and cultural changes benefiting the broad majority of the urban and rural poor, and working and lower middle classes. Nine new Bolivarian universities and dozens of technical schools have been established with over 200,000 students.
24 Over 2.5 million books, pamphlets and journals have been published by the new state-financed publishing houses, including novels, technical books, poetry, history, social research, natural sciences, medical and scientific texts.
25 Two major television studios and communitarian-based TV stations provide international, national and local news coverage that challenges opposition and US-based (CNN) anti-government propaganda. A major news daily, Vea, and several monthly and weekly magazines debate and promote pro-Chavez politics.
26 Several government-funded missions, composed of tens of thousands of young volunteers, have reduced urban and (to a lesser degree) rural illiteracy, extended health coverage, while increasing local participation and organization in the urban ‘ranchos’ or shantytowns. Major cultural events, including musical, theater and dance groups regularly perform in working class neighborhoods. The Ministry of Culture and Popular Power has initiated a vast number of overseas and local programs involving the Caribbean and Latin American countries.
27 Sports programs, with the aid of Cuban trainers, have received large scale government funding for physical infrastructure (gymnasiums, playing fields, uniforms and professional trainers) and have vastly increased the number of athletes among the urban poor. Major funding to defend and promote indigenous and Afro-Venezuelan culture is in the works, and some movement to ‘affirmative action’ is envisioned, though cultural representation in fields other than sports, music and dance is still quite limited. There is no question that Venezuela is going through a ‘Cultural Revolution’ – reconstructing and recovering its popular, historical and nationalist roots buried below the frivolous and imitative artifacts of a century of culturally colonized oligarchs and their middle class followers.
Cultural Contradictions and Challenges
While the Venezuelan cultural reformation has made a massive impact in raising educational and cultural levels, it has not yet decisively displaced the cultural hegemony of the bourgeoisie and US imperialism. The latter still holds sway over the vast majority of the upper and affluent middle class professionals, Central University academics and students, and important sectors of the public and especially private professional groups (doctors, lawyers, publicists, engineers etc). Despite substantial pay increases and additional stipends, these middle class professionals still cling to their reactionary beliefs in a fit of ‘status panic’.
President Chavez, speaking at the first graduating class of the new inclusive (open admission) Venezuelan Bolivarian University, cited a doctoral thesis which found that 94% of students at the tax-payer funded elite ‘public’ university, Venezuelan Central University (UCV), were from the upper and middle class, while 99% of the students at the private Simon Bolivar University (SBU) were from the same privileged classes. What was especially disturbing was the increasingly exclusive and privileged nature of the UCV and SBU: in 1981 the UCV enrolled 21% from the lower classes compared to 6.5% in 2000; the SBU went from 13% to 1% in the same period. To open higher education to the working class, the poor and the peasants, the Chavez government has begun the construction of 29 public universities, upgrading 29 vocational-technical schools into Polytechnic Universities, and increasing the number of full scholarships from 6,000 to 10,000.
While the vast number of lower class neighborhoods and individuals have benefited from state health, educational and cultural programs, popular education in creating collective solidarity and class consciousness still has had a limited impact. Some individuals from the lower class who had set up economic cooperatives were either incapable of operating them or absconded with state funds. Similar theft and corruption afflicted some of the ‘missions’, where poor accounting practices facilitated waste and losses. Populist paternalism and official negligence (and corruption) weakened the effort to create a new nationalist class-consciousness linked to a new popular hegemony. On the other hand, President Chavez’ intervention in nationalizing the steel industry during the labor-capital dispute heightened class-consciousness and factory worker identification with the Venezuelan road to socialism.
Over the past 5 years the state-financed television programs have greatly improved in terms of their professionalism and programming. They still have not fully overcome the continued hegemonic hold of the bourgeois media over sectors of the popular majority. In terms of entertainment and breaking news coverage, especially during the run-up and the day of the December 2, 2007 referendum, the bourgeois media dominated public attention due, in large part, to the absence of pro-government media coverage.
One of the least effective pro-government print media is the daily newspaper Vea, which is read by few people because of its poor news reporting (big headlines, no content) and mediocre columns and essays. The Minister of Culture and Popular Power told me that substantial changes would soon take place.
28 The wide reaching cultural programs have improved cultural levels but has not led to the growth of mass Chavista cultural movements. Less than 10% of the students at the Central University of Venezuela (UCV) are active members of Chavista student movements or affiliated organizations (according to a Chavista student leader), despite significant improvements in university salaries and facilities.
29 Apparently family and class identification takes precedence over cultural egalitarianism. The vast majority of students and professors at the UCV are apolitical, indifferent or into strictly vocational training and individual mobility. An active minority supports opposition groups; some are linked to US universities and CIA-funded ‘leadership training’ programs while small Trotskyist, Maoist and other sects agitate against the government.
The emergence of the autonomous pro-Chavez communal councils, linked to the Ministry of Culture and Popular Power, is probably the most effective counter-hegemonic movement. The political and social activities of party activists and leaders of the PSUV can succeed in creating a new class consciousness so long as they involve the masses in solving their own practical problems and assume local responsibility for their actions.
Chavista cadres, which act paternally, create patron-client consciousness vulnerable to quick switches to oligarchic-client relations. The key contradiction in the cultural reformation is in the ‘middle class’ Chavista configuration which carries over its paternal orientation in implementing its ‘class conscious programs to the popular classes.
There is a great need for recruitment and education of young local cadres from the barrios, who speak the language of the people and have the class bonds to integrate the masses into a nationalist and socialist cultural-social program. The government’s cultural and popular power movement is a formidable force but it faces tenacious opposition from the virulent and disreputable mass media aligned with the oligarchy.
As the Venezuelan process moves toward egalitarian socialist values, it faces the more subtle but more insidious opposition of middle class students, professors and professionals who in the name of ‘liberal democracy’ and ‘pluralism’ seek to destroy cultural class solidarity. In other words, we have a struggle between the progressive minority from the middle class in the government against the majority of reactionary liberal middle class individuals embedded in academic institutions and in the community-based NGO’s. Only by gaining the support of the people outside the middle class, that is, the radical and exploited popular classes, can the cultural reformists in the Culture Ministry create a dominant popular hegemony.
Social Change: the Struggle of Popular Social Movements versus the Reactionary Middle Class Movements
To discuss the highly polarized social confrontation between the pro-Chavez popular movements and the US-backed oligarch-supported middle class movements, it is important to contextualize the social, political and economic relations, which preceded the ascendancy of the Chavez government. The United States was the key determinant of the economic conditions and the principal point of reference of Venezuela ’s oligarchy and middle class. US-Venezuelan relations were based on US hegemony in all spheres – from oil to consumerism, from sports to life style, from bank accounts to marriage partners. The role models and life styles of the Venezuelan middle class were found in the upscale Miami suburbs, shopping malls, condos and financial services. The affluent classes were upper class consumers; they never possessed a national entrepreneurial vocation.
The oil contracts between US and European firms and the PDVSA were among the most lucrative and favorable joint ventures in the world. They included negligible tax and royalty payments and long term contracts to exploit one of the biggest petroleum sites in the world (the Orinoco ‘tar belt’). The entire executive leadership of what was formally described as a ‘state enterprise’ was heavily engaged in dubious overseas investments with heavy overhead costs, which disguised what was really executive pillage and extensive cost overruns, that is, massive sustained corruption.
30 From the senior oil executives, the pillaged oil wealth flowed to the upper middle class, lawyers, consultants, publicists, media and conglomerate directors, a small army of upscale boutique retailers, real estate speculators and their political retainers and their entourage among middle level employees, accountants, military officials, police chiefs and subsidized academic advisers. All of these ‘beneficiaries’ of the oil pillage banked their money in US banks, especially in Miami, or invested it in US banks, bonds and real estate. In a word, Venezuela was a model case of a rentier-bureaucratic ruling class profoundly integrated into the US circuits of petroleum-investment-finance. Systematically, culturally and ideologically they saw themselves as subordinate players in the US ‘free trade-free market’ scheme of things. Chavez’ assertions of sovereignty and his policies re-nationalizing Venezuelan resources were seen as direct threats to the upper-middle class’ essential ties to the US , and to their visions of a ‘ Miami ’ life style.
This deep subordinated integration and the colonized middle class values and interests that accompanied it, was deeply shaken by the crash in the Venezuelan economy throughout the 1980’s and 1990’. Emigration and relative impoverishment of a wide swath of public employees, professionals and previously better-paid workers seemed to ‘radicalize’ them or create widespread malaise. The profound downward mobility of the impoverished working class and lower-middle class, as well as professionals, led to the discredit of the endemically corrupt leaders of the two major political parties, mass urban riots, strikes and public support for an aborted Chavez-led military uprising (1992). These events led to his subsequent election (1998) and the approval of the referendum authorizing the writing of a new, more profoundly democratic constitution. Yet the middle class rebellion and even protest vote in favor of Chavez, was not accompanied by any change in political ideology or basic values. They saw Chavez as a stepladder to overcome their diminished status, and paradoxically, to refinance their ‘ Miami ’ life-style, and gain access to the US consumer market.
Time and circumstance would demonstrate that when push came to shove, in November 2001-April 2002, when the US confronted and was complicit in the short-lived, but failed coup, the bulk of the middle class backed the US-Venezuelan elite.
31 The US-backed coup was a direct response to President Chavez’ refusal to support the White House-Zionist orchestrated ‘War on Terror’. Chavez declared, ‘You don’t fight terror with terror’ in answer to President Bush’s post-September 11, 2001 call to arms against Afghanistan . This affirmed Chavez’ principled defense of the rights of self-determination and his unwavering stand against colonial wars. US Undersecretary of State for Political Affairs, Mark Grossman personally led an unsuccessful mission to Caracas in the fall of 2001 to pressure Chavez to back down.
32 Chavez was the only president in the world prepared to stand up to the new militarist Bush doctrine and thus was designated an enemy. Even worse, from the point of view of the Bush Administration, President Chavez’ nationalist policies represented an alternative in Latin America at a time (2000-2003) when mass insurrections, popular uprisings and the collapse of pro-US client rulers (Argentina, Ecuador and Bolivia) were constant front-page news.
In the run-up to the April 2002 coup, the policies of the Chavez government were extremely friendly to what are reputed to be ‘middle class’ values and interests -- in terms of democratic freedoms, incremental socio-economic reforms, orthodox fiscal policies and respect for foreign and national property holdings and capitalist labor relations. There were no objective material reasons for the middle classes or even the economic oligarchy to support the coup except for the fact that their status, consumerist dreams, life style and economic investments were closely linked with the United States .
In a word, the US exercised near complete hegemony over the Venezuelan upper and middle classes. As a result, its policies and its global interests became identified as ‘the interests’ of the wealthy Venezuelans. Venezuelan elite identification with US policy was so strong that it compelled them to back a violent coup against their own democratically elected government. The Caracas ruling class supported the imposition of an ephemeral US-backed dictatorial political regime and an agenda, which, if fully implemented, would have reduced their access to oil revenues, and the trade and socio-economic benefits they had enjoyed under Chavez. The brief coup-junta proposed to withdraw from OPEC, weakening Venezuela’s bargaining position with the US and EU, expel over 20,000 Cuban physicians, nurses, dentists and other health workers who were providing services to over 2 million low income Venezuelans without receiving any reciprocal compensation from Washington.
33 The economic elite and the middle class’s second attempt to overthrow President Chavez began in December 2002 with a bosses and oil executive lockout. This lasted until February 2003 and cost over $10 billion dollars in lost revenues, wages, salaries and profits.
34 Many Venezuelan businessmen and women committed economic suicide in their zeal to destroy Chavez; unable to meet loan and rent payments, they went bankrupt. Over 15,000 executives and professionals at the PDVSA, who actively promoted the strike and, in a fit of elite ‘Luddite’ folly, sabotaged the entire computerized oil production process, were fired. The principal pro-US and long time CIA funded trade union confederation suffered a double defeat for their participation in the attempted coup and lockout, becoming an empty bureaucratic shell. The upper and middle classes ultimately became political and social losers in their failed attempts to recover their ‘privileged status’ and retain their ‘special relation’ with the US . While the privileged classes saw themselves as ‘downwardly mobile’ (an image which did not correspond with the reality of their new wealth especially during the commodity boom of 2004-2008), their frustrations and resentments festered and produced grotesque fantasies of their being ruled by a ‘brutal communist dictator’. In fact, under Chavez’ presidency (after 2003), they have enjoyed a rising standard of living, a mixed economy, bountiful consumer imports and were constantly entertained by the most creatively hysterical, rabidly anti-government private media in the entire hemisphere. The media propaganda fed their delusions of oppression. The hardcore privileged middle-class minority came out of their violent struggle against Chavez depleted of their military allies. Many of their leaders from the business associations and moribund trade union apparatus were briefly imprisoned, in exile or out of a job.
On the other hand, the pro-Chavez mass supporters who took to the streets in their millions and restored him to the Presidency and the workers who played a major role in putting the oil industry back in production and the factories back to work, provided the basis for the creation of new mass popular movements. Chavez never forgot their support during the emergency. One of the reasons he cited for nationalizing the steel industry was the support of the steel workers in smashing the bosses’ lockout and keeping the factories in operation.
Venezuela is one of the few countries where both the Left and the Right have built mass social movements with the capacity to mobilize large numbers of people. It is also the country where these movements have passed through intense cyclical volatility. The tendency has been for organizations to emerge out of mass struggle with great promise and then fade after a ‘great event’ only to be replaced by another organized ‘movement’, which, in turn, retains some activists but fails to consolidate its mass base.
In effect what has been occurring is largely sequential movements based on pre-existing class commitments which respond in moments of national crises and then return to everyday ‘local activities’ around family survival, consumer spending, home and neighborhood improvements. While this cycle of mobilization ‘ebb and flow’ is common everywhere, what is striking in Venezuela is the degree of engagement and withdrawal: the mass outpouring and the limited number of continuing activists.
Looking at the big picture over the past decade of President Chavez’s rule, there is no question that civil society activity is richer, more varied and expressive than during any other government in the last sixty years.
Starting from the popular democratic restoration movement that ousted the short-lived military-civilian junta and returned Chavez to power, local community based movements proliferated throughout the ranchos (slums) of the big cities, especially in Caracas . With the bosses lockout and actual sabotage, the factory and oil field workers and a loyal minority of technicians took the lead in the restoration of production and defeating the US-backed executive elite. The direct action committees became the nuclei for the formation of communal councils, the launching of a new labor confederation (UNT), and new ‘electoral battalions’, which decisively defeated a referendum to oust Chavez. From these ‘defensive organizations’ sprang the idea (from the government) to organize production cooperatives and self-governing neighborhood councils to by-pass established regional and local officials. Peasant organizing grew and successfully pressured for the implementation of the land reform law of 2001. As the left organized, the right also turned to its ‘normal institutional base’ – FEDECAMARAS (the big business association), the cattle and large landowner organizations, the retailers and private professionals in the Chambers of Commerce and toward neighborhood organizations in the up-scale neighborhoods of the elite centered in Altimar and elsewhere. After suffering several demoralizing defeats, the right increasingly turned its attention toward US funding and training from NGO’s, like SUMATE, to penetrate lower class barrios and exploit discontent and frustrations among the middle class university students whose street demonstrations became detonators of wider conflicts.
35 The Chavistas consolidated their organizational presence with health clinics, subsidized food stores and coops and educational programs. The Right consolidated its hold over the major ‘prestigious’ universities and private high schools. Both competed in trying to gain the allegiance of important sectors of the less politicized, sometimes religious low-income informal workers and higher paid unionized workers – both focused on immediate income issues. The Chavistas secured nearly 50% of the vote among the voters in a radical referendum spelling out a transition to socialism, losing by 1%. The right wing capitalized on the abstention of 3 million, mostly pro-Chavez, voters to defeat the referendum.
36 The right wing, via violence and sustained disinvestment in the country has polarized Venezuela despite nearly double-digit sustained growth over a 5 year period. This basic contradiction reflects the fact that the ‘socialist’ project’ of the government takes place in the socio-economic framework in which big capitalists control almost all the banking, financing, distribution, manufacturing, transport and service enterprises against the gas-oil-telecom, electricity, steel, cement and social service sectors of the government. In April 2008, Chavez launched a major offensive to reverse this adverse correlation of economic power in favor of the working classes by expropriating 27 sugar plantations, food distribution networks, meat packing chains, as well as the major cement and steel complexes.
In 2008 Chavez recognized that the populace mobilized ‘from below’ was stymied by the ‘commands’ issued by the economic elite ‘from above’. Whether it is food distribution or production, job creation or informal/contingent employment, funding small farmers or speculative landlords trading in bonds or financing oil derivative plants – all of these strategic economic decisions which affect class relations, class organization, class struggle and class consciousness were in the hands of the mortal enemies of the Chavez government and its mass base. By directly attacking these crucial areas affecting everyday life, Chavez is revitalizing and sustaining mass popular organization. Otherwise to remain subject to elite economic sabotage and disinvestment is to demoralize and alienate the popular classes from their natural gravitation to the Chavez government.
US-Venezuelan Relations
More than in most current Latin American societies, the Venezuelan ruling and middle classes have demonstrated a willingness to sacrifice their immediate economic interests, current remunerative opportunities, lucrative profits and income in pursuit of the high risk political interests of the US . How else can one explain their backing of the US-orchestrated coup of April 2002 at a time when Chavez was following fairly orthodox fiscal and monetary policies, and had adopted a strict constitutionalist approach to institutional reform? How else can one explain engaging in an executive and bosses 2-month lockout of industry and oil production, leading to the loss of billions in private revenues, profits and salaries and ultimately the bankruptcy of hundreds of private firms and the firing of over 15,000 well-paid senior and middle level oil executives?
Clearly the ‘ultra-hegemony’ of the US over the Venezuelan elite and middle class has a strong component of ideological-psychological self-delusion: a deep, almost pathological identification with the powerful, superior white producer-consumer society and state and a profound hostility and disparagement of ‘deep Venezuela ’ – its Afro-Indian-mestizo masses.
Typifying Theodor Adorno’s ‘authoritarian personality’, the Venezuelan elite and its middle class imitators are at the feet and bidding of those idealized North Americans above and at the throat of those perceived as degraded dark-skinned, poor Venezuelans below. This hypothesis of the colonial mentality can explain the pathological behavior of Venezuelan professionals who, like its doctors and academics, eagerly seek prestigious post-graduate training in the United States while disparaging the ‘poor quality’ of new neighborhood clinics for the poor where none had existed before and the new open admission policies of the Bolivarian universities – open to the once marginalized masses.
The deep integration – through consumption, investments and vicarious identification – of the Venezuelan upper and middle classes with the US elite forms the bed-rock of Washington ’s campaign to destabilize and overthrow the Chavez government and destroy the constitutional order. Formal and informal psychosocial ties are strengthened by the parasitical-rentier economic links based on the monthly/yearly consumer pilgrimages to Miami . Real estate investments and illegal financial transfers and transactions with US financial institutions, as well as the lucrative illegal profit sharing between the former executives of PDVSA and US oil majors provided the material basis for pro-imperialist policies.
US policy makers have a ‘natural collaborator class’ willing and able to become the active transmission belt of US policy and to serve US interests. As such it is correct to refer to these Venezuelans as ‘vassal classes’.
After the abject failures of Washington ’s vassal classes to directly seize power through a violent putsch and after having nearly self-destructed in a failed attempt to rule or ruin via the bosses’ lockout, the US State Department oriented them toward a war of attrition. This involves intensified propaganda and perpetual harassment campaigns designed to erode the influence of the Chavez government over its mass popular base.
Imperial academic advisers, media experts and ideologues have proposed several lines of ideological-political warfare, duly adapted and incorporated by the Venezuelan ‘vassal classes’. This exercise in so-called ‘soft-power’ (propaganda and social organizing) is meant to create optimal conditions for the eventual use of ‘hard power’ – military intervention, coup d’etat, terror, sabotage, regional war or, more likely, some combination of these tactics.
37 The predominance of ‘soft power’ at one point in time does not preclude selective exercises of ‘hard power’ such as the recent Colombian cross-border military attack on Venezuela ’s ally Ecuador in March 2008. Soft power is not an end in itself; it is a means of accumulating forces and building the capacity to launch a violent frontal assault at the Venezuelan government’s ‘weakest moment’.
Imperial-Vassal
Three Part ‘Soft Power’ Campaign: Drugs, Human Rights and Terrorism
In the period between 2007-2008, the US and the Venezuelan elite attempted to discredit the Venezuelan government through the publication and dissemination of a report fabricated to paint Venezuela as a ‘narco-center’. A DEA (US Drug Enforcement Agency) report named Venezuela as a ‘major transport point’ and ignored the fact that, under Washington ’s key client in Latin America President Alvaro Uribe, Colombia is the major producer, processor and exporter of cocaine, is beyond bizarre. Blatant omissions are of little importance to the US State Department and the private Venezuelan mass media. The fact that Venezuela is successfully intercepting massive amounts of drugs from Colombia is of no importance. For US academic apologists of empire, lies at the service of destabilizing Chavez are a virtuous exercise in ‘soft power’.
38 The US, its vassal classes and the Washington-financed human rights groups have disseminated false charges of human rights abuses under Chavez, while ignoring US and Israeli Middle East genocidal practices and the Colombian government’s long-standing campaigns of killing scores of trade unionists and hundreds of peasants each year.
Washington ’s attempt to label Venezuela as a supporter of ‘terrorists’ was resoundingly rejected by a United Nation’s report issued in April 2008.39 There is no evidence of systematic state sponsored human rights violations in Venezuela . There are significant human rights abuses by the opposition-backed big landowners, murdering over 200 landless rural workers. There are workplace abuses by numerous FEDECAMARAS-affiliated private employers.40 It is precisely in response to capitalist violations of workers rights that Chavez decided to nationalize the steel plants. No doubt Washington will fail to properly ‘acknowledge’ these human rights advances on the part of Chavez.
The point of the ‘human rights’ charges is to reverse roles: Venezuela, the victim of US and vassal class’ coups and assassinations is labeled a human rights abusers while the real executioners are portrayed as ‘victims’. This is a common propaganda technique used by aggressor regimes and classes to justify the unilateral exercise of brutality and repression.
In line with its global militarist-imperialist ideology, Washington and its Venezuelan vassals have charged the Venezuelan government with aiding and abetting ‘terrorists’, namely the FARC insurgency in Colombia . Neither the Bush or Uribe regimes have presented evidence of material aid to the FARC. As mentioned above, a UN review of the Washington-Uribe charges against the Chavez government have rejected every allegation. This fabrication is used to camouflage the fact that US Special Forces and the Colombian armed forces have been infiltrating armed paramilitary forces into Venezuela ’s poor neighborhoods to establish footholds and block future barrio mobilizations defending Chavez.
The Hard Power Campaign - Three Part Strategy: Economic Boycotts, Low Intensity Warfare and the Colombia Card
Complementing the propaganda campaign, Washington has instumentalized a major oil producer (Exxon-Mobil) to reject a negotiated compensation settlement, which would have left the US oil giant with lucrative minority shares in one of the world’s biggest oil fields (the Orinoco oil fields). All the other European oil companies signed on to the new public-private oil contracts.
41 When Exxon-Mobil demanded compensation, PDVSA made a generous offer, which was abruptly rejected. When PDVSA agreed to overseas arbitration, Exxon-Mobil abruptly secured court orders in the US , Amsterdam and Great Britain ‘freezing’ PDVSA overseas assets. A London court quickly threw out Exxon-Mobil’s case. As with other countries’ experiences, such as Cuba in 1960, Chile in 1971-71 and Iran in 1953, the oil majors act as a political instrument of US foreign policy rather than as economic institutions respecting national sovereignty. In this case, Washington has used Exxon-Mobil as an instrument of psychological warfare – to heighten tensions and provide their local vassals with an ‘incident’ which they can elaborate into fear propaganda. The Venezuelan private media cite the threat of a US oil boycott and evoke a scenario of a collapsing economy causing starvation; they attribute this fantastic scene to the Chavez government’s ‘provocation’. By evoking this illusion of US power and Venezuelan impotence, they obfuscate the fact that the new oil contracts will add billions of dollars to the Venezuelan Treasury, which will benefit all Venezuelans.
US military strategy options have been severely limited by its prolonged and open-ended wars in Iraq and Afghanistan and its military-buildup threatening Iran . As a result, US military strategy toward Venezuela involves a $6 billion dollar military build-up of Colombia over the last eight years, including arms, training, combat advisers, Special Forces, mercenaries and logistics. US advisers encourage Colombian armed forces to engage in cross frontier operations including the kidnapping of Venezuelan citizens, armed assaults and paramilitary infiltration capped by the bombing in Ecuador of a campsite of a FARC negotiating team preparing a prisoner release. The US dual purpose of these low intensity military pressures is to probe Venezuela ’s response, its capacity for military mobilization, and to test the loyalties and allegiances of leading intelligence officials and officers in the Venezuelan military. The US has been involved in the infiltration of paramilitary and military operatives into Venezuela , exploiting the easy entrance through the border state of Zulia, the only state governed by the opposition, led by Governor Rosales.
The third component of the military strategy is ‘to integrate’ Venezuela’s armed forces into a ‘regional military command’ proposed by Brazilian President Lula da Silva and endorsed by US Secretary of State Condeleeza Rice.
42 Within that framework, Washington could use its friendly and client generals to pressure Venezuela to accept US military-political hegemony disguised as ‘regional’ initiatives. Unfortunately for Washington , Brazil ruled out a US presence, at least for now.
The US military strategy toward Venezuela is highly dependent on the Colombian Army’s defeat or containment of the guerrillas and the re-conquest of the vast rural areas under insurgent control. This would clear the way for Colombia ’s army to attack Venezuela . A military attack would depend crucially on a sharp political deterioration within Venezuela , based on the opposition gaining control of key states and municipal offices in the up-coming November elections. From advances in institutional positions Washington ’s vassals could undermine the popular national social, economic and neighborhood programs.
Only when the ‘internal circumstances’ of polarized disorder can create sufficient insecurity and undermine everyday production, consumption and transport can the US planners consider moving toward large-scale public confrontation and preparations for a military attack. The US military strategists envision the final phase of an air offensive -Special Forces intervention only when they can be assured of a large-scale Colombian intervention, an internal politico-military uprising and vacillating executive officials unwilling to exercise emergency powers and mass military mobilization. The US strategists require these stringent conditions because the current regime in Washington is politically isolated and discredited, the economy is in a deepening recession, and the budget deficit is ballooning especially its military expenditures in Iraq and Afghanistan . Only marginal extremists in the White House envision a direct military assault in the immediate future. But that could change to the degree that their vassals succeed in sowing domestic chaos and disorder.
Diplomatic and Economic Confrontation: Chavez Versus Bush Diplomatically and economically, President Chavez has gained the upper hand over the Bush Administration.
No country in Latin America supports Washington ’s proposals to intervene, boycott or exclude Venezuela from regional trade, investment or diplomatic forums. No country has broken diplomatic, economic or political relations with Caracas – nor has the US , despite strong moves in that direction by Bush in March 2008 (by labeling Venezuela a ‘terrorist’ country). Even Washington ’s principal vassal state, Colombia , shows no enthusiasm for shedding its $5 billion dollar food and oil trade with Venezuela to accommodate Bush. Chavez has successfully challenged US hegemony in the Caribbean . Through Petro-Caribe, numerous Caribbean and Central American states receive heavily subsidized oil and petroleum products from Venezuela , along with socio-economic aid in exchange for a more favorable diplomatic policy toward Caracas . The US no longer has an automatic voting bloc in the region following its lead against a targeted country.
The Venezuelan government has successfully contributed to the demise of the US-led Free Trade for the Americas (ALCA) proposal and has substituted a new Latin American free trade agreement (ALBA) with at least 6 member states. Venezuela ’s proposal for a Latin American Bank of the South, to bypass the US influenced IDB (BID) has been launched and has the backing of Brazil , Argentina and a majority of the other Latin American states.
43 Washington ’s arms embargo, that included Spain , has been a failure, as Venezuela turned to arms purchases from Russia and elsewhere. Washington’s effort to discourage foreign investment, especially in oil exploration is a complete failure, as China, Russia, Europe, Iran and every major oil producer has invested or is currently negotiating terms.
Despite vehement US opposition, Venezuela has developed a strategic complementary link with Cuba , exchanging subsidized oil and gas sales and large-scale investment for a vast health service contract covering Venezuela ’s needs in all poor neighborhoods.44 Venezuela has consolidated long-term finance and trade ties with Argentina through the purchase of Argentine bonds, which the latter has had difficulty selling given its conflict with the Paris Club.
Venezuela had significantly improved its image in Europe through Chavez’ positive role in mediating the release of FARC prisoners while the US vassal Uribe regime is perceived in Europe as a militaristic, dehumanized narco-driven entity. US militarism and its economic crisis have led to a sharp decline in its image and prestige in Europe , while eroding its economic empire and domestic living standards. Chavez’ opposition to Bush’s global war on terror and his calls for upholding human rights and social welfare has created a favorable international image among the poor of the Third World and within wide circles of public opinion elsewhere.
Vulnerability, Opportunities and Challenges
Presently and for the near future, Venezuela is vulnerable to attack on several fronts. It is experiencing several internal contradictions. Nevertheless it possesses strengths and great opportunities to advance the process of economic and social transformation. Key weaknesses can be located in the state, social economy and national security sectors.
In the sphere of politics, the basic issue is one of democratic representation, articulation and implementation of popular interests by elected and administrative officials. Too often one hears among the Chavista masses in public and private discussions that, ‘We support President Chavez and his policies but…’ and then follows a litany of criticism of local mayors, ministry officials, governors and Chavez’ ‘bad advisers’.
45 Some – not all – of the elected officials are running their campaign on the bases of traditional liberal clientele politics, which reward the few electoral faithful at the expense of the many. The key is to democratize the nomination process and not simply assume that the incumbent in office – no matter how incompetent or unpopular– should run for office again. Clearly the PSUV has to break free from the personality-based electoral politics and establish independent criteria, which respond to popular evaluations of incumbents and party candidates. Communal councils need to be empowered to evaluate, report and have a voice in judging inefficient ministries and administrative agencies which fail to provide adequate services.46 The dead hand of the reactionary past is present in the practices, personnel and paralysis of the existing administrative structures and worst of all influences some of the new Chavista appointments.
The tactic of creating new parallel agencies to overcome existing obstructionist bureaucracies will not work if the new administrators are ill prepared (late or miss appointments, derelict in rectifying problems, fail to meet commitments etc.). Nothing irritates the Chavista masses more than to deal with officials who cannot fulfill their commitments in a reasonable time frame. This is the general source of mass discontent, political alienation and government vulnerability. In part the issue is one of incompetent personnel and, for the most part, the solution is structural – empowering popular power organizations to chastise and oust ineffective and corrupt officials.
In the economic sphere there is a need for a serious re-thinking of the entire strategy in several areas. In place of massive and largely wasted funding of small-scale cooperatives to be run by the poor with little or no productive, managerial or even basic bookkeeping skills, investment funds should be channeled into modern middle and large scale factories which combine skilled managers and workers as well as unskilled workers, producing goods which have high demand in the domestic (and future foreign) markets. The new public enterprise building 15,000 pre-fabricated houses is an example.
The second area of economic vulnerability is agriculture where the Agriculture Ministry has been a major failure in the development of food production (exemplified by the massive food imports), distribution networks and above all in accelerating the agrarian reform program. If any ministry cost Chavez to lose the referendum, it was the Agriculture Ministry, which over 9 years has failed to raise production, productivity and availability of food. The past policies of controlling or de-controlling prices, of subsidies and credits to the major big producers have been an abysmal failure. The reason is obvious: The big land-owner recipients of the Government’s generous agricultural credits and grants are not investing in agricultural production, in raising cattle, purchasing new seeds, new machinery, new dairy animals. They are transferring Government funding into real estate, Government bonds, banking and speculative investment funds or overseas. This illegal misallocation of Government finance is abundantly evident in the gap between the high levels of government finance to the self-styled agricultural ‘producers’ and the meager (or even negative) growth of production-productivity on the large estates.
47 In April 2008, President Chavez recognized that fundamental changes in the use and ownership of productive land is the only way to control the use of government credit, loans and investment to ensure that the funds actually go into raising food and not purchasing or investing in new luxury apartments or real estate complexes or buying Argentine bonds. In March and April 2008, President Chavez, with the backing of the major peasant movements and workers in the food processing industry, expropriated 27 plantations, a meat processing chain, a dairy producer and a major food distributor. Now the challenge is to ensure that competent managers are appointed and resourceful worker-peasant councils are elected to insure efficient operations, new investments and equitable rewards. What is abundantly clear is that President Chavez has recognized that capitalist ownership even with government subsidies is incompatible with meeting the consumer needs of the Venezuelan people.
Thirdly, as mentioned above, inflation is eroding popular consumer power, fomenting wage demands by the unionized workers in the export sector while eroding wages and income for contingent and informal workers. The government has announced a decline in the rate of inflation in January-February 2008 (2.1%). This is a positive indication that urgent attention is being paid. The outrageous rates of profit in both consumer and capital goods industries has increased the circulation of excess money, while the lack of investment in raising productivity and production has weakened supply. The inflationary spiral is embedded in the structure of ownership of the major capitalist enterprises and no amount of regulation of profit margins will increase productivity. President Chavez moves into 2008 to accelerate the socialist transformation through the nationalization of strategic industries.
The key is to invest large sums of public capital in a vast array of competitive public enterprises run with an entrepreneurial vision under workers-engineers control. Relying on ‘incentives’ to private capitalists in order to increase productivity has run afoul in most instances because of their rentier, instead of entrepreneurial, behavior. When the government yields to one set of business complaints by offering incentives, it only results in a series of new excuses, blaming ‘pricing’, ‘insecurity’, ‘inflation’, and ‘imports’ for the lack of investment. Clearly counting on public-private cooperation is a failed policy.
The basis of the psychological malaise of business can be boiled down to one issue: They will not invest or produce even in order to profit if it means supporting the Chavez government and strengthening mass support via rising employment and workers’ income.48 They prefer to merely maintain their enterprises and raise prices in order to increase their profits.
In the social sphere, the government faces the problem of increasing political consciousness and above all encouraging the organizing of its mass supporters into cohesive, disciplined and class-conscious organizations. The government’s socialist project depends on mass social organizations capable of advancing on the economic elite and cleaning the neighborhoods of rightwing thugs, gangsters and paramilitary agents of the Venezuelan oligarchs and the Uribe regime.
The peasant movement, Ezequiel Zamora, is establishing the kind of political-educational cadre schools necessary to advance the agrarian reform. By pressuring the Agrarian Reform Institute, by occupying uncultivated land, by resisting landlord gunmen from Colombia , this emerging movement provides a small-scale model of social action that the government should promote and multiply on a national scale.
The principle obstacle is the counter revolutionary role of the National Guard, led by General Arnaldo Carreño. He directed a raid on the peasant training and educational school with attack helicopters and 200 soldiers, arrested and beat educators and students and wrecked the institute. No official action against the military officers responsible for this heinous action was taken.
49 Apart from the reactionary and counter-revolutionary nature of this assault on one of the most progressive Chavista movements, it is indicative of the presence of a military sector committed to the big landlords and most likely aligned to the Colombian-US military ‘golpistas’.
Labor legislation still lags. The new progressive social security law is tied up in Congress and/or buried by the dead hands of the Administration. Contingent (non-contracted, insecure) workers still predominate in key industries like oil, steel, aluminum, and manufacturing. The trade unions – both the pro-Chavez and the plethora of competing tendencies and self-proclaimed ‘class unions’ – are fragmented into a half dozen or more fractions, each attacking the other and incapable of organizing the vast majority (over 80%) of unorganized formal and informal workers. The result has been the relative immobilization of important sectors of the working class faced with big national challenges, such as the 12/2 referendum, the Colombian-US military threats and the struggle to extend the agrarian reform, public enterprises and social security.
The government’s relative neglect of the organized and unorganized manufacturing workers has changed dramatically for the better, beginning in the first half of 2008. President Chavez’ forceful intervention in the steel (Techint Sidor), cement (CEMEX), meatpacking and sugar industries has led to massive outpouring of worker support. A certain dialectic has unfolded, in which militant worker conflicts and strikes against intransigent employers has induced President Chavez to intervene on their behalf, which in turn has activated the spread and depth of worker and trade union support for President Chavez. This dialectic of reinforced mutual support has led to meetings of inter-sector union leaders and militants from the transport, metallurgic, food processing and related industries. In response to increased trade union organized support, Chavez has raised the prospect of nationalizing banks and the rest of the food production and distribution chain. Much depends upon the unification and mobilization of the trade union leaders and their capacity to overcome their sectarian and personalistic divisions and turn toward organizing the unorganized contingent and informal workers.
The sectarianism of the ultra-leftist sects and their supporters among a few trade union bureaucrats leads them to see Chavez and his government and trade union supporters as ‘the main enemy’ leading them to strike for exorbitant pay increases. They organize street blockades to provoke ‘repression’ and then call for ‘worker solidarity’. Most of the time they have had little success as most workers ignore their calls for ‘solidarity’. The unification of pro-Chavez union leaders around the current nationalizations and the growth of a powerful unified workers’ trade union movement will isolate the sects and limit their role. A unified working class movement could accelerate the struggle for social transformation of industry. It would strengthen the national defense of the transformative process in times of danger.
The National Security Threats The multi-country surveys reveal that most people in almost all countries think the US is the biggest threat to world peace. This is especially the case in Venezuela, a Caribbean country which has already been subject to a US-backed and orchestrated coup attempt, a employers and executives lockout of the vital petroleum industry, a US-financed recall-referendum, an international campaign to block the sale of defensive weapons and spare parts accompanied by a massive sustained military build-up of Colombia, its surrogate in the region. The violent efforts of the US to overthrow President Chavez have a long and ugly pedigree in the Caribbean and Central America . Over the past half century the US has directly invaded or attacked Guatemala, Panama, Cuba, the Dominican Republic, Grenada, Nicaragua and El Salvador; it organized death squads and counter revolutionary surrogate armies n Guatemala, El Salvador, Nicaragua and Honduras, which murdered nearly 300,000 people.
50 The US assault against Venezuela includes many of the strategies applied in its previous murderous interventions. Like in Guatemala , it has and continues to bribe, cajole and subvert individuals in the Venezuelan military and among National Guard officers. Their plan is to use Venezuelan military officials to organize a coup, collaborate with Colombian cross border infiltrators and to encourage defections to the pro-US opposition. Like in Central American , US operatives have organized death squad killers to infiltrate the Venezuelan countryside to attack peasant movements pursuing land reform and to consolidate support among big landowners.
Like in Nicaragua , the US is combining support for the systematic sabotage of the economy by the business elite to foment discontent while financing opposition electoral campaigns to exploit the unstable economic circumstances. Like its economic blockade of Cuba, the US has organized a de facto arms and parts embargo as well as an international ‘freeze’ on Venezuela’s PDVSA overseas assets through international court processes initiated by Exxon-Mobil. Colombia ’s cross-border bombing of Ecuador is as much a ‘test’ of Venezuela ’s preparedness as it is an overt aggression against Ecuador ’s President Correa’s nationalist government’s cancellation of the strategic US military base in Manta ( Ecuador ).
Venezuela had taken several measures to counter the US-Colombian-Venezuelan Fifth Column threats to national security.
Following the coup President Chavez ousted several hundred military officers involved in the overthrow and promoted officers loyal to the constitution. Unfortunately the new group included several pro-US and anti-leftist officers open to CIA bribes, one of whom even became the Minister of Defense before he was ‘retired’ – and became a virulent spokesperson against Chavez’ transformative referendum.51 Worse still, Chavez amnestied the military and civilian coup makers and economic ‘lock-out’ saboteurs after they had served only a small fraction of their sentences – to the utter shock and dismay of the mass of popular forces that shouldered the burden of their violent coup and economic sabotage and who were not consulted.
Venezuela has purchased some light weapons (100,000 rifles and machine guns) and a dozen submarines from Russia and helicopters from Brazil to counter Colombia ’s $6 billion dollar light and heavy arms build-up. Clearly that is a step forward, but it is still inadequate given the massive arms deficit between the two countries. Venezuela needs to rapidly build up its ground to air defenses, modernize its fighter jets and naval fleet, upgrade its airborne battalions and vastly improve its ground forces capacity to engage in jungle and ground fighting. Colombia ’s army, after 45 years of counter-insurgency, has the training and experience lacking in Venezuela . Venezuela has taken positive steps toward organizing a mass popular militia – but the advances have a very mixed record, as training and enlistment lag far below expectations for lack of political organization and politico-military leadership.
While President Chavez has taken important steps to strengthen border defenses, the same cannot be said about internal defenses. In particular, several generals in the National Guard have been more aggressively dislodging peasant land occupiers than in hunting down and arresting landlord-financed gunmen who have murdered 200 peasant activists and land reform beneficiaries. Extensive interviews with peasant leaders and activists indicate active collaboration between high military officers and right-wing cattle barons, calling into question the political loyalties of rural based Guard garrisons.
There is an urgent need to accelerate the expropriation of big estates and to arm and train peasant militias to counter-act Guard complicity or negligence in the face of landlord-sponsored violence. There are thousands of peasants ready and willing to enlist in militias because they have a direct stake in defending their families, comrades and their land from the ongoing paramilitary attacks.
Today the most immediate and enduring threat to internal security takes the form of a blend between a mass of hardened Venezuelan criminal gangs and narco-paramilitary infiltrators from Colombia , which are terrorizing the populace in low income neighborhoods. Police investigations, arrests and government prosecution are inadequate, incompetent, and corrupt and occasionally point to complicity. To this day the infamous broad daylight assassination of the respected Attorney General Danilo Anderson has not been solved and the current Attorney General has essentially buried the investigation and, even more importantly, buried the investigation into the economic elite networks planning future coups that Anderson was carrying out at the time of his murder.
Anderson was the chief investigator of the forces behind the April 2002 failed coup, the economic sabotage and a series of political assassinations. Venezuelans close to the case state that Anderson had compiled extensive documentation and testimony implicating top opposition political, economic and media figures and some influential figures in the Chavez administration. With his death, the investigations came to an end, no new arrests were made and those already arrested were subsequently granted amnesties. Some of Anderson ’s top suspects are now operating in strategic sectors of the economy. There are two hypotheses: Either sheer incompetence within the office of the new Attorney General, the Ministry of Justice and related agencies of government has derailed the investigation; or there is political complicity on the part of high officials to prevent undermining the present socialization strategy. In either case the weakness of law enforcement, especially with regard to a dangerous capitalist class operating an extensive network supporting the violent overthrow of the elected government, opens the door to a re-play of another coup. Indeed the amnesty of the elite coup-makers and economic saboteurs and the case of Danilo Anderson weighs heavily on the minds of militant Venezuelans who see it as an example of the continued impunity of the elite.
Factory and anti-crime ‘neighborhood watches’ and defense militias are of the utmost importance given the rising internal and external national security threats and crime wave. With the greater cooperation of communal councils, sweeps of local gangs is a top priority. Neighborhood police and militia stations must saturate the poor neighborhoods. Large-scale lighting must be established to make streets and sidewalks of the ranchos safer. The war against drug traffic must delve into their bourgeois collaborators, bankers and real estate operators who launder money and use illegal funds to finance opposition activities. Petty and youth delinquents should be sentenced to vocational training programs and supervised rural and community service. Large-scale illegal financial transactions must be prosecuted by the confiscation of bank accounts and property. National and internal security is the sine quo non of maintaining any political order dedicated to transforming the socio-economic system.
On April 9, 2008 President Chavez took a major step toward reducing crime, strengthening community-police relations and improving the security of the people by passing a National Police Law through presidential law decree. Under the new law, a new national revolutionary police of the people will be established ‘demolishing the old repressive police model with education, conscience, social organization and prevention’. He contrasted the past capitalist police who abused the poor with the new communal police who will be close to the citizens and dialogue oriented. To that end the newly formed communal councils will be encouraged to join and help select a new type of police based on rigorous selection process and on their willingness to live and work with the neighborhood. The PSUV and the communal councils will become the backbone of creating the new political solidarity with the newly trained police from the neighborhoods. Chavez’ recognition of the security issue in all its political and personal dimensions and his pursuit of democratic and egalitarian approach highlights his commitment to both maintaining law and order and advancing the revolutionary process.52
Conclusion: Advantages and Opportunities for Socialist Transformation
Venezuela today possesses the most advantageous economic, political and social conditions for a socialist transformation in recent history despite the US military threats, its administrative weaknesses and political institutional limitations.
Economically, Venezuela’s economy is booming at 9% growth, world prices for exports are at record levels (with oil at over $100 a barrel), it has immense energy reserves, $35 billion dollars in foreign exchange reserves and it is diversifying its overseas markets, although much too slow for its own security.53 With the introduction in April 2008 of an excess profit tax which will take 50% of all revenues over $70 dollars a barrel and an additional 60% of all revenues over $100 a barrel, several billion dollars in additional income will swell the funds for financing the nationalization of all strategic sectors of the economy.
Venezuela benefits from a multi-polar economic world eager to purchase and invest in the country. Venezuela is in the best possible condition to upgrade the petroleum industry and manufacture dozens of downstream petrochemical products from plastics to fertilizers – if public investment is efficiently and rationally planned and implemented. Venezuela has over a million productive landless workers and small farmers ready and willing to put the vast tracts of oligarch-owned under-utilized lands to work and put Venezuela on the road to food self-sufficiency – if not an agro-exporting country. Millions more hardworking Colombian refugee-peasants are eager to work the land along side their Venezuelan counterparts. There is no shortage of fertile land, farmers or investment capital. What is needed is the political will to organize expropriations, cultivation and distribution.
Politically, President Chavez provides dynamic leadership backed by legislative and executive power, capable of mobilizing the vast majority of the urban and rural poor, organized and unorganized workers and youth. The majority of the military and the new academy graduates have (at least up to now) backed the government’s programs and resisted the bribes and enticements of US agents. New Bolivarian-socialist military instructors and curricula and the expulsion of US military ‘missions’ will strengthen the democratic link between the military and the popular government.
The intelligence and counter-intelligence services have detected some subversive plots but remain the weakest link both in terms of information collecting, direct action against US-Colombian infiltration, detecting new coup plans and providing detailed documentation to expose US-Colombian assassination teams. Clearly housecleaning of dubious and incompetent elements in the intelligence agencies is in order. New training and recruitment processes are proceeding, rather slowly and have to demonstrate competence.
Socially the Chavez government retains the support of over 65% of the electorate and nearly 50% of the people were in favor of an overtly socialist agenda in the referendum of December 2, 2007. If the communal councils take off, and the militias gain substance and organization and if the PSUV develops mass roots and the popular nationalization accelerates, the government could consolidate its mass support into a formidable organized force to secure a huge majority in a new referendum and to counter the US-backed counter-revolution.
A lot will depend on the government’s deepening and extending its social-economic transformation – increasing new public housing from 40,000 to 100,000 a year; reducing the informal labor sector to single digits and encouraging the trade unions to organize the 80% of the unorganized labor force into class unions with the help of new labor legislation.
Given the availability of mass social support, given the high export earnings, given the positive social changes, which have occurred, the objective basis for the successful organization of a powerful pro-socialist, pro-Chavez movement exists today.
The challenge is the subjective factor: The shortages of well trained cadres, political education linked to local organizing, the elaboration of a socialist political-ideological framework and the elimination of personality-based liberal patronage officials in leading administrative and party offices. Within the mass Chavista base, the struggle for a socialist consciousness is the central challenge in Venezuela today.
NOTES:
1 Weisbrot, Mark and Luis Sandoval 2008, “Update: The Venezuelan Economy in the Chavez Years”, Washington D.C. Center for Economic and Policy Research.
2 Mark Weisbrot, “An Empty Research Agenda: The Creation of Myths About Venezuela :, March 2008. Center for Economic and Policy Research, Washington D.C.
3 Ibid. Also see “Letter From Venezuela’s Communication Minister to the Washington Post”, March 26, 2008 by Andres Izarra printed on March 28, 2008.
4 A good example can be found in the Socialist Register 2008. For an example of rampant propaganda disguised as ‘scholarship, see Francisco Rodriguez, “An Empty Revolution: The Unfulfilled Promises of Hugo Chavez”, Foreign Affairs March/April 2008.
5 Weisbrot, Op cit page 10.
6 Weisbrot, Op cit
7 Interview with peasant leaders of the Frente Nacional Campesino Eqzquiel Zamora in Caracas , Feb. 27, 2008. Boston Globe April 11, 2008
8 Interview with President Chavez, Caracas , March 2,2008
9 Dario Vea, February 25, 2008 p.2
10 Interview with President Chavez, March 2, 2008
11 Weisbrot, Op cit
12 Hyperinflation brought down the social democratic Alfonsin regimes in Argentina (1989) and Garcia in Peru (1990); weakened the Allende regime in 1973 and led to right wing take over. Hyperinflation has also led to the collapse of right wing regimes in China (1945-49) and the rise of Communism as well as regime change in Brazil in the 1990’s.
13 Reuters News Service April 9, 2008; BBC News April 2, 2008.
14 “La grave represion de los trabajadores siderúgicos” Argenpress March 24, 2008.
15 El Universal, March 5, 2008. page 1.
16 Izarra, Op cit
17 ‘Partido Socialista Unido de Venezuela: Herramiento de Masas in Gestión’, Rebelion, March 25, 2008.
18 ibid
19 Interview in Caracas with PSUV delegates, March 1, 2008.
20 Interviews and meetings of neighborhood delegates of Communal Councils, February 29, 2008.
21 Interview with Minister of the Interior Ramon Rodriguez Chacun, La Jornada, March 31, 2008.
22 Interview with Communal Councils, February 29, 2008. According to a poll by the respected polling group, Barometro, in early April 2008, 66.5% of Venezuelans approved Chavez presidency.
23 Commentaries from Communal Council delegates and peasant activists in Caracas , ‘Popular Power Meeting’ at the Ministry of Culture and Popular Power. February 29, 2008
24 Interview with Carmen Boqueron, Ministry of Culture, February 25, 2008.
25 Interview with Miquel Marquez, President Editorial El Perro y la Rana, State Publishing House, March 5, 2008.
26 See La Plena Voz, Memórias, Política Exterior y Soberania, among other magazines.
27 Interview with Carmen Boquerón, February 26, 2008
28 Interview with Minister of Culture, March 1, 2008.
29 Interview February 29, 2008. Even at the new Bolivarian Universities, only a minority of working class students are involved in political activities, most concentrate on their studies and future job prospects. However among active students at the new universities, the great majority are pro-Chavez.
30 From the beginning of the first nationalization in 1976 under President Carlos Andres Perez, the fundamental question was ‘nationalization for whom?’ In the 1970’s to the re-privatizations, the answer was the wealthy elites. See James Petras, Morris Morley and Steven Smith, The Nationalization fof Venezuelan Oil, (New York Praeger Press. 1977)
31 Eva Golinger’s detailed documentary study based on files secured from the US Government through the Freedom of Information Act which provide ample evidence of US intervention.
32 Interview with Venezuelan Presidential adviser, Paris November 2001.
33 http://www.rebelion.org/ April 13, 2002
34 Weisbrot Op cit
35 Eva Golinger, The Chavez Code: Cracking US Intervention in Venezuela ( Havana : Cuba Book Institute 2005). Golinger provides extensive documentation of US financing of the self-styled NGO’s through AID and NED (National Endowment for Democracy, a government conduit for destabilizing regimes critical of the US ).
36 For a more detailed analysis, see James Petras “El referendo Venezolano: analisis y epilogo”, http://www.rebellion.org/ Dec 17, 2007.
37 The phrase ‘soft power’ is credited to Harvard political science professor and long time US presidential adviser, Joseph Nye, who offers his expertise on empire management and the uses of imperial power. See Joseph Nye, Soft Power: The Means to Success in World Politics 2004
38 Venezuelan drug interdiction has captured 360 tons of drugs between 2000-2007, according to the National Anti-Drug Office, January 2008.
39 On the Colombian State ’s mass terror, see the annual reports of the International Labor Organization, Via Campesino, Human Rights Watch and Amnesty International.
40 Interview with peasant leaders from the Frente Nacional Campesino Ezequiel Zamora, February 27, 2008.
41 Throughout the dispute between Exxon-Mobil and the PDVSA, the European press sided with their more conciliatory multi-nationals while the Washington Post, NY Times and Wall Street Journal engaged in vituperative attacks on Venezuela .
42 While Condeleeza Rice gave her backing to the ‘Regional Command’, Lula immediately informed her that the US was not part of it.
43 The Bank of the South is already financing development projects without the usual onerous conditions imposed by the World Bank and IMF.
44 In interviews with both Fidel Castro (Feb 10, 2006 Havana ) and with Hugo Chavez (March 2, 2008) both confirm the long-term, large-scale ties, which bind them in a strategic alliance.
45 The testimony of a militant female peasant leader at a meeting organized by the Ministry of Popular Power was very demonstrative: ‘We support President Chavez; we defend President Chavez; but he has to replace those incompetent officials in the ministry who fail to provide us with credit so we can buy seed and fertilizer in time to plant our crops.’ February 27, 2008. Ministry of Popular Power
46 While I have noticed improvements in the punctuality and preparation of more agency officials, there are still too many highly placed functionaries who fail to keep appointments, comply with their professional responsibilities or inform themselves about the subject matter of their ministries.
47 The anti-production behavior of the big land owners and cattle barons has been the practice for decades. Back in the mid-1970’s, President Carlos Andres Perez also pumped hundreds of millions into ‘making Venezuela food self-sufficient’ in a program he called ‘ploughing the oil wealth into agriculture’ with the same miserable results as the present. The reason is clear, many of the big landlords are the same people. The lessons from the past are very clear: As long as the present government tries to develop agriculture through the existing land owners it is doomed to repeat the failures of the past.
48 Interview with an oil executive from British Petroleum, Caracas , March 6, 2008.
49 ‘El Frente Nacional Campesino Ezequiel Zamora es atacado por militares’ March 22, 2008 report from the FNCEZ.
50 See Petras and Morley, Empire or Republic (NY Routledge 1995).
51 General Baduel was always a virulent anti-communist who is said to have received a seven-figure payoff and threats of exposure of unseemly personal revelations if he didn’t ‘turn’ against Chavez.
52 James Suggett, “Venezuela Passes National Police Law”, http://www.venezuelanalysis.com// April 11, 2008.
53 See Weisbrot, Op cit
Source:
GlobalResearch.ca
Printer-friendly version
Bookmark/Search this post with:
Related Articles
Venezuela Six Years after the Coup
United Socialist Party of Venezuela is an Instrument for Socialism
Venezuela: Revolution, Party and a New International
Venezuelan Socialists Discuss the Struggle for Revolutionary Party
Why the Barrios Still Love Hugo
Opinion & Analysis
The Bolivarian Project
Venezuela: Democracy, Socialism and Imperialism
James Petras - Globalresearch.ca
The Bolivarian Project
Venezuela Six Years after the Coup
Jorge Martín
International Relations
Bush Administration, More Isolated in Latin America, Cries "Terrorism"
Mark Weisbrot - San Diego Union Tribune
Political Developments
Radical Chavismo Bares Its Teeth
George Cicariello-Maher
Labor
Chavez Emboldens Venezuelan Workers with Takeover Precedent
Frank Jack Daniel - Reuters
Media Watch
BBC v. Hugo Chavez
Stephen Lendman
International Relations
Vote for My Colombia Deal or I'll Brand You a Chavez Supporter!
Nikolas Kozloff - CounterPunch
International Relations
U.S. Native Americans Lead Opposition to Designation of Venezuela as Terrorist Nation
Gale Courey Toensing - Indian Country Today
Economy
The Booming Venezuelan Economy, and how it affects Monte Carmelo
Steve Brouwer - Venezuelanotes
International Relations
Venezuela Steps Up Efforts To Thwart Cocaine Traffic
Juan Forero - Washington Post
License
This article is not a work of venezuelanalysis.com. For that reason we cannot assign a license.More info about Creative Commons Licensing
venezuelanalysis.com :: website realized with drupal using free software only :: site best viewed with mozilla firefox
Menu
us online - donate to Venezuela Analysis
Home » Opinion & Analysis » The Bolivarian Project
Venezuela: Democracy, Socialism and Imperialism
April 18th 2008, by James Petras - Globalresearch.ca
Introduction
Venezuela ’s President Hugo Chavez remains the world’s leading secular, democratically elected political leader who has consistently and publicly opposed imperialist wars in the Middle East, attacked extra-territorial intervention and US and European Union complicity in kidnapping and torture.
Venezuela plays the major role in sharply reducing the price of oil for the poorest countries in the Caribbean region and Central America, thus substantially aiding them in their balance of payments, without attaching any ‘strings’ to this vital assistance. Venezuela has been in the forefront in supporting free elections and opposing human right abuses in the Middle East, Latin America and South Asia by pro-US client regimes in Iraq , Afghanistan and Colombia.
No other country in the Americas has done more to break down the racial barriers to social mobility and the acquisition of land for Afro-Latin and Indio Americans. President Chavez has been on the cutting edge of efforts toward greater Latin American integration – despite opposition from the United States and several regional regimes, who have opted for bilateral free trade agreements with the US .
Even more significant, President Chavez is the only elected president to reverse a US backed military coup (in 48 hours) and defeat a (US-backed) bosses’ lockout, and return the economy to double-digit growth over the subsequent 4 years.
1 President Chavez is the only elected leader in the history of Latin America to successfully win eleven straight electoral contests against US-financed political parties and almost the entire private mass media over a nine-year period. Finally President Chavez is the only leader in the last half-century who came within 1% of having a popular referendum for a ‘socialist transformation’ approved, a particularly surprising result in a country in which less than 30% of the work force is made up of peasants and factory workers.
President Chavez has drastically reduced long-term poverty faster than any regime in the region,
2 demonstrating that a nationalist-welfare regime is much more effective in ending endemic social ills than its neo-liberal counterparts. A rigorous, empirical study of the socio-economic performance of the Chavez government demonstrates its success in a whole series of indicators after the defeat of the counter-revolutionary coup and lockout and after the nationalization of petroleum (2003).
GDP has grown by more than 87% with only a small part of the growth being in oil. The poverty rate has been cut in half (from 54% in 2003 at the height of the bosses’ lockout to 27% in 2007; and extreme poverty has been reduced from 43% in 1996 to 9% in 2007), and unemployment by more than half (from 17% in 1998 to 7% in 2007). The economy has created jobs at a rate nearly three times that of the United States during its most recent economic expansion. Accessible health care for the poor has been successfully expanded with the number of primary care physicians in the public sector increasing from 1,628 in 1998 to 19,571 by early 2007. About 40% of the population now has access to subsidized food. Access to education, especially higher education, has also been greatly expanded for poor families. Real (inflation adjusted) social spending per person has increased by more than 300%.
3 His policies have once and for all refuted the notion that the competitive demands of ‘globalization’ (deep and extensive insertion in the world market) are incompatible with large-scale social welfare policies. Chavez has demonstrated that links to the world market are compatible with the construction of a more developed welfare state under a popularly-based government
The large-scale, long-term practical accomplishments of the Chavez government, however have been overlooked by liberal and social democratic academics in Venezuela and their colleagues in the US and Europe, who prefer to criticize secondary institutional and policy weaknesses, failing to take into account the world-historic significance of the changes taking place in the context of a hostile, aggressively militarist-driven empire.
4 No reasonable and rigorous contemporary analysis can seriously provide an accurate assessment of Venezuela while glossing over the tremendous accomplishments achieved during the Hugo Chavez presidency.
It is within the framework of Chavez’ innovative and courageous political-social breakthroughs that we should proceed to an analysis of the advances, contradictions and negative aspects of specific political, economic, social and cultural policies, practices and institutions.
The Advances and Limitations of Economic Policy
Venezuela has made tremendous advances in the economy since the failed coup of April 11, 2002 and the employers’ lockout of December 2002-February 2003, which led to a 24% decline in the GDP.
5 Under President Chavez’ leadership and with favorable terms of trade, Venezuela grew by over 10% during the past 5 years, decreasing poverty levels from over 50% to less than 28%, surpassing any country in the world in terms of the rate of poverty-reduction. The economy has, in contrast to the past, accumulated over $35 billion dollars in foreign exchange reserves despite a vast increase in social spending and has totally freed itself of dependence on the onerous terms imposed by the self-styled ‘international banks’ (IMF, World Bank and Inter-American Development Bank) by paying off its debt.
6 The government has nationalized strategic enterprises in the oil and gas industries, steel, cement, food production and distribution, telecommunications and electricity industries. It has passed new excess profits taxes, doubling its revenues. It has signed new petroleum and gas joint ventures with over a dozen European, Asian and Latin American multinationals giving the Venezuelan state majority control. It has expropriated several million acres of uncultivated farm land from speculators and absentee owners and, more recently, an additional 32 under-producing plantations.
7 The importance of these structural changes cannot be understated. In the first place they increased the capacity of the Chavez government to make or influence strategic decisions regarding investment, re-investment, pricing and marketing. The increase in state ownership increases the flow of revenues and profits into the federal treasury, enhancing financing of productive investments, social programs and downstream processing plants and services. The government is slowly diversifying its petroleum markets from a hostile adversary (the USA ) to trade and investment with countries like China , Brazil , Iran and Russia , thus reducing Venezuela ’s vulnerability to arbitrary economic boycotts.
The government has started a large-scale, long-term project to diversify the economy, and especially to become food self-sufficient in staples like milk, meat, vegetables and poultry.
8 Equally important investments in processing raw petroleum into value-added products like fertilizers and plastics are now operative, albeit at a slow pace. New refineries are on schedule to substitute dependence on US based operations and to add value to their exports. New public transport systems are advancing as is visible in the new metro being built in Caracas , which will lessen the traffic jams and air pollution. Over 2.5 billion Strong Bolivars, the new Venezuelan currency (over $1 billion dollars) has been allocated in the form of incentives, credit and subsidies to promote the increase in agricultural production and processing.
9 Investments in new lines of production linked to social programs are underway, including new enterprises manufacturing 15,000 prefabricated houses per year.
10 Venezuela, like the rest of the world (China, EU, USA, Australia and so on) is deeply affected by inflation, especially of imported food. Inflation has escalated over the last 3 years rising from 14% in 2005, to 17% in 2006 and 22% in 2007, threatening to undermine the gains in living standards made over the last 5 years.
11 Government attempts to impose price controls has had limited effect as big food producers have cut back on production, food distributors have decrease shipments and even hoarded essential goods and retail sellers have traded on the black market. On the surface, the problem is that consumer power has increased faster than productivity, increasing demand relative to supply. However, the deeper structural reason is the decline in capitalist investment in production and distribution – despite high profits. Many capitalist food producers and food processors have diverted their profits into investments in speculative activity, including imports of luxury goods and real estate where there is a higher rate of return. Some have lessened investment because of opposition to the government, others because of fears of agrarian reform, while all complain about ‘price controls’ leading to a ‘profit squeeze’. These complaints do not account for low productivity, which existed before price controls and continued even after the government lifted the controls. Inflation and the resultant negative impact is one of the principal reason for popular abstention during the December 2007 referendum and is the cause of popular discontent today in Venezuela . Both the far right and the ultra-left (especially in some neighborhoods and trade unions) have been exploiting this discontent.
Inflation is one of the principal reasons for the decline of the popularity of various regimes (Left, Center and Right) throughout history in Europe, as well as in Latin America .
12 In large part this is because the great majority of workers in Venezuela are self-employed and have no organization or wage and income indexes to keep up with the rise in prices. In Venezuela , even the major industries, like petroleum, steel and aluminum, have ‘sub-contracted’ most of their workers who lack any power to negotiate for wage increases tied to inflation. Government subsidies and promotional incentives to industrial and agricultural capitalists to promote productivity has led to increased profits – without commensurate increases in wage income.
During the period from February to April 2008, the state intervened directly in the productive process, through the takeover of unproductive companies and farms. New worker and peasant demands include ‘opening the books’ of the profitable firms and farms in pursuit of wage and collective bargaining negotiations, re-opening closed firms and investments in new public enterprises. Chavez recognized that the problem of production (supply) will continue to lead to too many Bolivars chasing too few consumer goods – inflation, discontent and political vulnerability – unless he accelerates the nationalization process and deepens public ownership.
To effectively intervene and take control of strategic economic sectors, the government requires working class organizations, cadres and leaders able to co-manage the enterprises, ‘opening the books’ on investments, profits and wages and establish work discipline. Under present capital-labor relations, capitalists totally neglect investment in technology and innovations, employ temporary or contingent workers under precarious conditions and depend on the Venezuelan state to enforce harsh labor codes.
In advancing the Bolivarian road to Socialism, President Chavez has to deal with incompetent and reactionary officials in his own government. For example, prior to Chavez’ nationalization of the major steel multinational SIDOR, the Minister of Labor, an incompetent and inexperienced functionary with no prior relation to labor, sided with the company and approved of the Governor of the state of Bolivar in calling out the National Guard to break the strike. Throughout 2007-2008, management of SIDOR refused to negotiate in good faith with the unions, which provoked strikes in January in February and March 2008. The intransigence of the steel bosses increased the militancy of the workers and led to Chavez’ intervention. In defense of his order to nationalize, Chavez cited the positive role of the steel workers in opposing the coup, the ‘slave-like’ work conditions and the export strategies, which denied the domestic construction industry the steel it needed for high-priority homebuilding. He called on the nationalized industry to be run under ‘workers councils’ in a efficient and productive manner.
13 Government repression of strikes provoked regional union solidarity and worker-led marches against the National Guard and calls for the resignation of the ineffective Labor Minister. After Chavez nationalized steel, trade unions from major industrial sectors met to coordinate support for President Chavez and press for further moves toward public ownership. Equally ominous, brutality and excess use of force ordered by the general in charge of the National Guard is indicative of a profoundly anti-working class, pro-big business bias of the Guard officers, a potentially dangerous threat to the Chavez government in the future.
14 By confronting the problem of inflation and the overvalued, strong Venezuelan Bolivar Chavez is dealing with an issue that is real and deeply felt by most workers. Failure by the government to deal with its structural roots makes it vulnerable to demagogic appeals by the right and the sectarian ultra-left and its principle beneficiary, the US imperialism.
New public investments in fertilizer plants, prefabricated housing, positive measures reducing inflation by one third in the first 2 months of 2008 and policies sharply increasing food supply by 20% indicate that the Chavez government is beginning to confront some of the economy’s weak points. In visits to several public and private retail markets during the last part of February and early March, we did not find any shortages of essential items, contrary to the opposition, and the US and European media reports. An opposition organized protest of shortages of liquid gas in Catia (a popular neighborhood in Caracas ) was front-page news (with blown-up photos) in the opposition daily, El Universal, but with no follow up reports when the government sent in supplies the next day.
15 By the beginning of 2008, public spending, which is not always efficiently invested or entirely free of corruption, reduced unemployment 8.5%, the lowest in decades.
16 However a government goal of 5.5% seems over optimistic, especially in light of the fall-out from the US recession and decline in European demand.
The big challenge to Chavez’ economic policy in 2008, a year of important state and local elections in November, is to ensure that the inevitable mid-year increase in public spending is directed toward productive investments and not to populist short-term programs, which will ignite another wave of inflation. We can expect that, as the elections approach, the capitalist class will once again resort to ‘planned shortages’, distribution blockages, as well as other politically induced economic problems in order to blame and discredit the government.
Unless the government reduces its reliance on the private sector for investments, employment, production, finance and distribution, they will be forced into taking costly and improvised measures to avoid electoral losses and popular abstention. The indivisible ties between private business control over strategic economic decisions and their paramount interest in pursuing political measures designed to undermine the Chavez government, means that the government will remain under constant threat unless it takes control of the commanding heights of the economy. In recognition of those structural factors Chavez has announced plans to nationalize strategic sectors. The Chavez government has become pro-active, anticipating shocks from the economic elite and displacing them from power. Depending on the private sector will force the government to continue to be ‘reactive’, improvising responses to economic attacks during and after the fact and suffering the negative political consequences.
Politics: The Chavistas Strike Back
During the latter half of 2007, in the run-up to the referendum, and early 2008, the rightwing offensive (aided by the ultra-left) took hold and put the government on the defensive. Early March 2008, the pro-Chavez forces regrouped and launched a new political party – The Venezuelan United Socialist Party (PSUV) at a national convention in Maracaibo . In response to the defeat of the referendum, President Chavez called on his supporters to engage in a ‘Three R’s Campaign’: Review, Rectify and Re-launch. This initiative has led to the election of new party leaders, a decline in old guard paternalistic bosses in the leadership of the PSUV, a rejection of sectarianism toward other pro-Chavez parties and a revitalization of grass roots activism.
17 The party is intended to oversee the mobilization of the Chavez supporters and to educate and organize potential working and lower middle class constituents. The party is mandated to evaluate, criticize and correct the implementation of policies by local officials and engage the mass social movements in common struggle. To succeed the party must organize local popular power to counter-act corrupt Chavez-affiliated as well as opposition policy-makers, press local demands and initiatives, counter rightwing infiltration of neighborhoods by Colombian and local terrorists and turn out the vote at election time.
For the PSUV to succeed as a political organization it needs to take power away from the local clientelistic political machines built around some of the state, regional and municipal level Chavista officials. It needs to overcome the tendency to appoint leaders and candidates from above and to deepen rank and file control over decisions and leaders.
18 Even during the founding congress of the PSUV several delegations criticized the process of electing the national leadership – for neglecting popular representation and overloading it with much criticized political officials.
19 Active communal councils under democratic control have been effective in giving voice and representation to a large number of urban and poor neighborhoods. They have secured popular loyalty and support wherever they have delivered needed services and led struggles against incompetent or recalcitrant Chavista officials.
Violence, crime and personal insecurity are major issues for most poor and lower middle class supporters of the Chavez government and the police are viewed as ineffective reducing crime and securing their neighborhoods and as, at times, complicit with the gangsters.
20 Proposals by the government for greater cooperation between neighborhood committees and the police in identifying criminals have had little effect. This is in part because police have shown little interest in developing on-the-ground, day-by-day relations in the poorer barrios, which they tend to view as ‘criminal breeding grounds’.
Armed gangs controlling the poor neighborhoods commit most of the crime. Local residents fear retaliation if they cooperate or worse, they think that the police are complicit with the criminals. Even more seriously reports from reliable intelligence sources have identified large-scale infiltration of Colombian death squad narco traffickers who combine drugs peddling and rightwing organizing, posing a double threat to local and national security. While the government has taken notice of the general problem of individual insecurity and the specific problem of narco-political infiltration, no national plan of action has yet been put into practice, apart from periodic routine round-ups of low-level common criminals.
21 Venezuela should learn from the example of Cuba, which has had successful crime fighting and anti-terrorist programs for decades organized around a tight network of local ‘committees to defend the revolution’ and backed by a politically trained rapid action internal security force and an efficient judiciary. Individual security and political freedom depends on the collective knowledge of crime groups’ infiltration and the courage of local committees and individuals. Their cooperation requires trust in the integrity, respect and political loyalty of the internal security forces. Their intelligence, evidence collection and testimony depend on the protection of local citizens by the internal security forces against gangster retaliation.
A new type of ‘police official’ needs to be created who does not view the neighborhood and its committees as hostile territory – they must live and identify with the people they are paid to protect. To be effective at the local level, the Chavez government must display exemplary behavior at the national level: It must prosecute and jail criminals and not grant amnesty or give light sentences to coup-makers and economic saboteurs, as Chavez did in early 2008. The failure of the current Attorney General to pursue the murderers of her predecessor, Attorney General Danilo Anderson, was not only a shameful act but set an example of incompetent and feeble law enforcement which does not create confidence in the will of the state to fight political assassins.
22 ‘Popular power’ will only become meaningful to the mass of the poor when they feel secure enough to walk their streets without assaults and intimidation, when the gangs no longer break into homes and local stores, and when armed narco-traffickers no longer flaunt the law. In Venezuela , the struggle against the oligarchs, George Bush and Colombia ’s Uribe begins with a community-based war against local criminals, including a comprehensive tactical and strategic sweep of known criminal gangs followed by exemplary punishment for those convicted of terrorizing the residents. This is one way to make the government respected at the grass roots level and to re-assert and make operative the term popular sovereignty. In every barrio today it is not only the ‘right wing NGO’s’, which challenge Chavez’ authority, it is the armed criminal elements, increasingly linked with reactionary political groups. To successfully confront the external threats, it is incumbent on the government to defeat the gangsters and narco-traffickers that represent a real obstacle to mass mobilization in time of a national emergency, like a new coup attempt.
Failures by some middle level Chavez officials to ensure security and resolve local problems have eroded popular support for political incumbents. The majority of local residents, popular leaders and activists still voice support for President Chavez even as they are critical of the ‘people around him’, ‘his advisers’, and ‘the opportunists’.
23 How this will play out in the November election is not totally clear. But unless fundamental changes take place in candidates and policies, it is likely that the opposition will increase their current minimal representation in state and municipal governments.
Social and Cultural Advances and Contradictions
Venezuela , under the leadership of President Chavez, has made unprecedented social and cultural changes benefiting the broad majority of the urban and rural poor, and working and lower middle classes. Nine new Bolivarian universities and dozens of technical schools have been established with over 200,000 students.
24 Over 2.5 million books, pamphlets and journals have been published by the new state-financed publishing houses, including novels, technical books, poetry, history, social research, natural sciences, medical and scientific texts.
25 Two major television studios and communitarian-based TV stations provide international, national and local news coverage that challenges opposition and US-based (CNN) anti-government propaganda. A major news daily, Vea, and several monthly and weekly magazines debate and promote pro-Chavez politics.
26 Several government-funded missions, composed of tens of thousands of young volunteers, have reduced urban and (to a lesser degree) rural illiteracy, extended health coverage, while increasing local participation and organization in the urban ‘ranchos’ or shantytowns. Major cultural events, including musical, theater and dance groups regularly perform in working class neighborhoods. The Ministry of Culture and Popular Power has initiated a vast number of overseas and local programs involving the Caribbean and Latin American countries.
27 Sports programs, with the aid of Cuban trainers, have received large scale government funding for physical infrastructure (gymnasiums, playing fields, uniforms and professional trainers) and have vastly increased the number of athletes among the urban poor. Major funding to defend and promote indigenous and Afro-Venezuelan culture is in the works, and some movement to ‘affirmative action’ is envisioned, though cultural representation in fields other than sports, music and dance is still quite limited. There is no question that Venezuela is going through a ‘Cultural Revolution’ – reconstructing and recovering its popular, historical and nationalist roots buried below the frivolous and imitative artifacts of a century of culturally colonized oligarchs and their middle class followers.
Cultural Contradictions and Challenges
While the Venezuelan cultural reformation has made a massive impact in raising educational and cultural levels, it has not yet decisively displaced the cultural hegemony of the bourgeoisie and US imperialism. The latter still holds sway over the vast majority of the upper and affluent middle class professionals, Central University academics and students, and important sectors of the public and especially private professional groups (doctors, lawyers, publicists, engineers etc). Despite substantial pay increases and additional stipends, these middle class professionals still cling to their reactionary beliefs in a fit of ‘status panic’.
President Chavez, speaking at the first graduating class of the new inclusive (open admission) Venezuelan Bolivarian University, cited a doctoral thesis which found that 94% of students at the tax-payer funded elite ‘public’ university, Venezuelan Central University (UCV), were from the upper and middle class, while 99% of the students at the private Simon Bolivar University (SBU) were from the same privileged classes. What was especially disturbing was the increasingly exclusive and privileged nature of the UCV and SBU: in 1981 the UCV enrolled 21% from the lower classes compared to 6.5% in 2000; the SBU went from 13% to 1% in the same period. To open higher education to the working class, the poor and the peasants, the Chavez government has begun the construction of 29 public universities, upgrading 29 vocational-technical schools into Polytechnic Universities, and increasing the number of full scholarships from 6,000 to 10,000.
While the vast number of lower class neighborhoods and individuals have benefited from state health, educational and cultural programs, popular education in creating collective solidarity and class consciousness still has had a limited impact. Some individuals from the lower class who had set up economic cooperatives were either incapable of operating them or absconded with state funds. Similar theft and corruption afflicted some of the ‘missions’, where poor accounting practices facilitated waste and losses. Populist paternalism and official negligence (and corruption) weakened the effort to create a new nationalist class-consciousness linked to a new popular hegemony. On the other hand, President Chavez’ intervention in nationalizing the steel industry during the labor-capital dispute heightened class-consciousness and factory worker identification with the Venezuelan road to socialism.
Over the past 5 years the state-financed television programs have greatly improved in terms of their professionalism and programming. They still have not fully overcome the continued hegemonic hold of the bourgeois media over sectors of the popular majority. In terms of entertainment and breaking news coverage, especially during the run-up and the day of the December 2, 2007 referendum, the bourgeois media dominated public attention due, in large part, to the absence of pro-government media coverage.
One of the least effective pro-government print media is the daily newspaper Vea, which is read by few people because of its poor news reporting (big headlines, no content) and mediocre columns and essays. The Minister of Culture and Popular Power told me that substantial changes would soon take place.
28 The wide reaching cultural programs have improved cultural levels but has not led to the growth of mass Chavista cultural movements. Less than 10% of the students at the Central University of Venezuela (UCV) are active members of Chavista student movements or affiliated organizations (according to a Chavista student leader), despite significant improvements in university salaries and facilities.
29 Apparently family and class identification takes precedence over cultural egalitarianism. The vast majority of students and professors at the UCV are apolitical, indifferent or into strictly vocational training and individual mobility. An active minority supports opposition groups; some are linked to US universities and CIA-funded ‘leadership training’ programs while small Trotskyist, Maoist and other sects agitate against the government.
The emergence of the autonomous pro-Chavez communal councils, linked to the Ministry of Culture and Popular Power, is probably the most effective counter-hegemonic movement. The political and social activities of party activists and leaders of the PSUV can succeed in creating a new class consciousness so long as they involve the masses in solving their own practical problems and assume local responsibility for their actions.
Chavista cadres, which act paternally, create patron-client consciousness vulnerable to quick switches to oligarchic-client relations. The key contradiction in the cultural reformation is in the ‘middle class’ Chavista configuration which carries over its paternal orientation in implementing its ‘class conscious programs to the popular classes.
There is a great need for recruitment and education of young local cadres from the barrios, who speak the language of the people and have the class bonds to integrate the masses into a nationalist and socialist cultural-social program. The government’s cultural and popular power movement is a formidable force but it faces tenacious opposition from the virulent and disreputable mass media aligned with the oligarchy.
As the Venezuelan process moves toward egalitarian socialist values, it faces the more subtle but more insidious opposition of middle class students, professors and professionals who in the name of ‘liberal democracy’ and ‘pluralism’ seek to destroy cultural class solidarity. In other words, we have a struggle between the progressive minority from the middle class in the government against the majority of reactionary liberal middle class individuals embedded in academic institutions and in the community-based NGO’s. Only by gaining the support of the people outside the middle class, that is, the radical and exploited popular classes, can the cultural reformists in the Culture Ministry create a dominant popular hegemony.
Social Change: the Struggle of Popular Social Movements versus the Reactionary Middle Class Movements
To discuss the highly polarized social confrontation between the pro-Chavez popular movements and the US-backed oligarch-supported middle class movements, it is important to contextualize the social, political and economic relations, which preceded the ascendancy of the Chavez government. The United States was the key determinant of the economic conditions and the principal point of reference of Venezuela ’s oligarchy and middle class. US-Venezuelan relations were based on US hegemony in all spheres – from oil to consumerism, from sports to life style, from bank accounts to marriage partners. The role models and life styles of the Venezuelan middle class were found in the upscale Miami suburbs, shopping malls, condos and financial services. The affluent classes were upper class consumers; they never possessed a national entrepreneurial vocation.
The oil contracts between US and European firms and the PDVSA were among the most lucrative and favorable joint ventures in the world. They included negligible tax and royalty payments and long term contracts to exploit one of the biggest petroleum sites in the world (the Orinoco ‘tar belt’). The entire executive leadership of what was formally described as a ‘state enterprise’ was heavily engaged in dubious overseas investments with heavy overhead costs, which disguised what was really executive pillage and extensive cost overruns, that is, massive sustained corruption.
30 From the senior oil executives, the pillaged oil wealth flowed to the upper middle class, lawyers, consultants, publicists, media and conglomerate directors, a small army of upscale boutique retailers, real estate speculators and their political retainers and their entourage among middle level employees, accountants, military officials, police chiefs and subsidized academic advisers. All of these ‘beneficiaries’ of the oil pillage banked their money in US banks, especially in Miami, or invested it in US banks, bonds and real estate. In a word, Venezuela was a model case of a rentier-bureaucratic ruling class profoundly integrated into the US circuits of petroleum-investment-finance. Systematically, culturally and ideologically they saw themselves as subordinate players in the US ‘free trade-free market’ scheme of things. Chavez’ assertions of sovereignty and his policies re-nationalizing Venezuelan resources were seen as direct threats to the upper-middle class’ essential ties to the US , and to their visions of a ‘ Miami ’ life style.
This deep subordinated integration and the colonized middle class values and interests that accompanied it, was deeply shaken by the crash in the Venezuelan economy throughout the 1980’s and 1990’. Emigration and relative impoverishment of a wide swath of public employees, professionals and previously better-paid workers seemed to ‘radicalize’ them or create widespread malaise. The profound downward mobility of the impoverished working class and lower-middle class, as well as professionals, led to the discredit of the endemically corrupt leaders of the two major political parties, mass urban riots, strikes and public support for an aborted Chavez-led military uprising (1992). These events led to his subsequent election (1998) and the approval of the referendum authorizing the writing of a new, more profoundly democratic constitution. Yet the middle class rebellion and even protest vote in favor of Chavez, was not accompanied by any change in political ideology or basic values. They saw Chavez as a stepladder to overcome their diminished status, and paradoxically, to refinance their ‘ Miami ’ life-style, and gain access to the US consumer market.
Time and circumstance would demonstrate that when push came to shove, in November 2001-April 2002, when the US confronted and was complicit in the short-lived, but failed coup, the bulk of the middle class backed the US-Venezuelan elite.
31 The US-backed coup was a direct response to President Chavez’ refusal to support the White House-Zionist orchestrated ‘War on Terror’. Chavez declared, ‘You don’t fight terror with terror’ in answer to President Bush’s post-September 11, 2001 call to arms against Afghanistan . This affirmed Chavez’ principled defense of the rights of self-determination and his unwavering stand against colonial wars. US Undersecretary of State for Political Affairs, Mark Grossman personally led an unsuccessful mission to Caracas in the fall of 2001 to pressure Chavez to back down.
32 Chavez was the only president in the world prepared to stand up to the new militarist Bush doctrine and thus was designated an enemy. Even worse, from the point of view of the Bush Administration, President Chavez’ nationalist policies represented an alternative in Latin America at a time (2000-2003) when mass insurrections, popular uprisings and the collapse of pro-US client rulers (Argentina, Ecuador and Bolivia) were constant front-page news.
In the run-up to the April 2002 coup, the policies of the Chavez government were extremely friendly to what are reputed to be ‘middle class’ values and interests -- in terms of democratic freedoms, incremental socio-economic reforms, orthodox fiscal policies and respect for foreign and national property holdings and capitalist labor relations. There were no objective material reasons for the middle classes or even the economic oligarchy to support the coup except for the fact that their status, consumerist dreams, life style and economic investments were closely linked with the United States .
In a word, the US exercised near complete hegemony over the Venezuelan upper and middle classes. As a result, its policies and its global interests became identified as ‘the interests’ of the wealthy Venezuelans. Venezuelan elite identification with US policy was so strong that it compelled them to back a violent coup against their own democratically elected government. The Caracas ruling class supported the imposition of an ephemeral US-backed dictatorial political regime and an agenda, which, if fully implemented, would have reduced their access to oil revenues, and the trade and socio-economic benefits they had enjoyed under Chavez. The brief coup-junta proposed to withdraw from OPEC, weakening Venezuela’s bargaining position with the US and EU, expel over 20,000 Cuban physicians, nurses, dentists and other health workers who were providing services to over 2 million low income Venezuelans without receiving any reciprocal compensation from Washington.
33 The economic elite and the middle class’s second attempt to overthrow President Chavez began in December 2002 with a bosses and oil executive lockout. This lasted until February 2003 and cost over $10 billion dollars in lost revenues, wages, salaries and profits.
34 Many Venezuelan businessmen and women committed economic suicide in their zeal to destroy Chavez; unable to meet loan and rent payments, they went bankrupt. Over 15,000 executives and professionals at the PDVSA, who actively promoted the strike and, in a fit of elite ‘Luddite’ folly, sabotaged the entire computerized oil production process, were fired. The principal pro-US and long time CIA funded trade union confederation suffered a double defeat for their participation in the attempted coup and lockout, becoming an empty bureaucratic shell. The upper and middle classes ultimately became political and social losers in their failed attempts to recover their ‘privileged status’ and retain their ‘special relation’ with the US . While the privileged classes saw themselves as ‘downwardly mobile’ (an image which did not correspond with the reality of their new wealth especially during the commodity boom of 2004-2008), their frustrations and resentments festered and produced grotesque fantasies of their being ruled by a ‘brutal communist dictator’. In fact, under Chavez’ presidency (after 2003), they have enjoyed a rising standard of living, a mixed economy, bountiful consumer imports and were constantly entertained by the most creatively hysterical, rabidly anti-government private media in the entire hemisphere. The media propaganda fed their delusions of oppression. The hardcore privileged middle-class minority came out of their violent struggle against Chavez depleted of their military allies. Many of their leaders from the business associations and moribund trade union apparatus were briefly imprisoned, in exile or out of a job.
On the other hand, the pro-Chavez mass supporters who took to the streets in their millions and restored him to the Presidency and the workers who played a major role in putting the oil industry back in production and the factories back to work, provided the basis for the creation of new mass popular movements. Chavez never forgot their support during the emergency. One of the reasons he cited for nationalizing the steel industry was the support of the steel workers in smashing the bosses’ lockout and keeping the factories in operation.
Venezuela is one of the few countries where both the Left and the Right have built mass social movements with the capacity to mobilize large numbers of people. It is also the country where these movements have passed through intense cyclical volatility. The tendency has been for organizations to emerge out of mass struggle with great promise and then fade after a ‘great event’ only to be replaced by another organized ‘movement’, which, in turn, retains some activists but fails to consolidate its mass base.
In effect what has been occurring is largely sequential movements based on pre-existing class commitments which respond in moments of national crises and then return to everyday ‘local activities’ around family survival, consumer spending, home and neighborhood improvements. While this cycle of mobilization ‘ebb and flow’ is common everywhere, what is striking in Venezuela is the degree of engagement and withdrawal: the mass outpouring and the limited number of continuing activists.
Looking at the big picture over the past decade of President Chavez’s rule, there is no question that civil society activity is richer, more varied and expressive than during any other government in the last sixty years.
Starting from the popular democratic restoration movement that ousted the short-lived military-civilian junta and returned Chavez to power, local community based movements proliferated throughout the ranchos (slums) of the big cities, especially in Caracas . With the bosses lockout and actual sabotage, the factory and oil field workers and a loyal minority of technicians took the lead in the restoration of production and defeating the US-backed executive elite. The direct action committees became the nuclei for the formation of communal councils, the launching of a new labor confederation (UNT), and new ‘electoral battalions’, which decisively defeated a referendum to oust Chavez. From these ‘defensive organizations’ sprang the idea (from the government) to organize production cooperatives and self-governing neighborhood councils to by-pass established regional and local officials. Peasant organizing grew and successfully pressured for the implementation of the land reform law of 2001. As the left organized, the right also turned to its ‘normal institutional base’ – FEDECAMARAS (the big business association), the cattle and large landowner organizations, the retailers and private professionals in the Chambers of Commerce and toward neighborhood organizations in the up-scale neighborhoods of the elite centered in Altimar and elsewhere. After suffering several demoralizing defeats, the right increasingly turned its attention toward US funding and training from NGO’s, like SUMATE, to penetrate lower class barrios and exploit discontent and frustrations among the middle class university students whose street demonstrations became detonators of wider conflicts.
35 The Chavistas consolidated their organizational presence with health clinics, subsidized food stores and coops and educational programs. The Right consolidated its hold over the major ‘prestigious’ universities and private high schools. Both competed in trying to gain the allegiance of important sectors of the less politicized, sometimes religious low-income informal workers and higher paid unionized workers – both focused on immediate income issues. The Chavistas secured nearly 50% of the vote among the voters in a radical referendum spelling out a transition to socialism, losing by 1%. The right wing capitalized on the abstention of 3 million, mostly pro-Chavez, voters to defeat the referendum.
36 The right wing, via violence and sustained disinvestment in the country has polarized Venezuela despite nearly double-digit sustained growth over a 5 year period. This basic contradiction reflects the fact that the ‘socialist’ project’ of the government takes place in the socio-economic framework in which big capitalists control almost all the banking, financing, distribution, manufacturing, transport and service enterprises against the gas-oil-telecom, electricity, steel, cement and social service sectors of the government. In April 2008, Chavez launched a major offensive to reverse this adverse correlation of economic power in favor of the working classes by expropriating 27 sugar plantations, food distribution networks, meat packing chains, as well as the major cement and steel complexes.
In 2008 Chavez recognized that the populace mobilized ‘from below’ was stymied by the ‘commands’ issued by the economic elite ‘from above’. Whether it is food distribution or production, job creation or informal/contingent employment, funding small farmers or speculative landlords trading in bonds or financing oil derivative plants – all of these strategic economic decisions which affect class relations, class organization, class struggle and class consciousness were in the hands of the mortal enemies of the Chavez government and its mass base. By directly attacking these crucial areas affecting everyday life, Chavez is revitalizing and sustaining mass popular organization. Otherwise to remain subject to elite economic sabotage and disinvestment is to demoralize and alienate the popular classes from their natural gravitation to the Chavez government.
US-Venezuelan Relations
More than in most current Latin American societies, the Venezuelan ruling and middle classes have demonstrated a willingness to sacrifice their immediate economic interests, current remunerative opportunities, lucrative profits and income in pursuit of the high risk political interests of the US . How else can one explain their backing of the US-orchestrated coup of April 2002 at a time when Chavez was following fairly orthodox fiscal and monetary policies, and had adopted a strict constitutionalist approach to institutional reform? How else can one explain engaging in an executive and bosses 2-month lockout of industry and oil production, leading to the loss of billions in private revenues, profits and salaries and ultimately the bankruptcy of hundreds of private firms and the firing of over 15,000 well-paid senior and middle level oil executives?
Clearly the ‘ultra-hegemony’ of the US over the Venezuelan elite and middle class has a strong component of ideological-psychological self-delusion: a deep, almost pathological identification with the powerful, superior white producer-consumer society and state and a profound hostility and disparagement of ‘deep Venezuela ’ – its Afro-Indian-mestizo masses.
Typifying Theodor Adorno’s ‘authoritarian personality’, the Venezuelan elite and its middle class imitators are at the feet and bidding of those idealized North Americans above and at the throat of those perceived as degraded dark-skinned, poor Venezuelans below. This hypothesis of the colonial mentality can explain the pathological behavior of Venezuelan professionals who, like its doctors and academics, eagerly seek prestigious post-graduate training in the United States while disparaging the ‘poor quality’ of new neighborhood clinics for the poor where none had existed before and the new open admission policies of the Bolivarian universities – open to the once marginalized masses.
The deep integration – through consumption, investments and vicarious identification – of the Venezuelan upper and middle classes with the US elite forms the bed-rock of Washington ’s campaign to destabilize and overthrow the Chavez government and destroy the constitutional order. Formal and informal psychosocial ties are strengthened by the parasitical-rentier economic links based on the monthly/yearly consumer pilgrimages to Miami . Real estate investments and illegal financial transfers and transactions with US financial institutions, as well as the lucrative illegal profit sharing between the former executives of PDVSA and US oil majors provided the material basis for pro-imperialist policies.
US policy makers have a ‘natural collaborator class’ willing and able to become the active transmission belt of US policy and to serve US interests. As such it is correct to refer to these Venezuelans as ‘vassal classes’.
After the abject failures of Washington ’s vassal classes to directly seize power through a violent putsch and after having nearly self-destructed in a failed attempt to rule or ruin via the bosses’ lockout, the US State Department oriented them toward a war of attrition. This involves intensified propaganda and perpetual harassment campaigns designed to erode the influence of the Chavez government over its mass popular base.
Imperial academic advisers, media experts and ideologues have proposed several lines of ideological-political warfare, duly adapted and incorporated by the Venezuelan ‘vassal classes’. This exercise in so-called ‘soft-power’ (propaganda and social organizing) is meant to create optimal conditions for the eventual use of ‘hard power’ – military intervention, coup d’etat, terror, sabotage, regional war or, more likely, some combination of these tactics.
37 The predominance of ‘soft power’ at one point in time does not preclude selective exercises of ‘hard power’ such as the recent Colombian cross-border military attack on Venezuela ’s ally Ecuador in March 2008. Soft power is not an end in itself; it is a means of accumulating forces and building the capacity to launch a violent frontal assault at the Venezuelan government’s ‘weakest moment’.
Imperial-Vassal
Three Part ‘Soft Power’ Campaign: Drugs, Human Rights and Terrorism
In the period between 2007-2008, the US and the Venezuelan elite attempted to discredit the Venezuelan government through the publication and dissemination of a report fabricated to paint Venezuela as a ‘narco-center’. A DEA (US Drug Enforcement Agency) report named Venezuela as a ‘major transport point’ and ignored the fact that, under Washington ’s key client in Latin America President Alvaro Uribe, Colombia is the major producer, processor and exporter of cocaine, is beyond bizarre. Blatant omissions are of little importance to the US State Department and the private Venezuelan mass media. The fact that Venezuela is successfully intercepting massive amounts of drugs from Colombia is of no importance. For US academic apologists of empire, lies at the service of destabilizing Chavez are a virtuous exercise in ‘soft power’.
38 The US, its vassal classes and the Washington-financed human rights groups have disseminated false charges of human rights abuses under Chavez, while ignoring US and Israeli Middle East genocidal practices and the Colombian government’s long-standing campaigns of killing scores of trade unionists and hundreds of peasants each year.
Washington ’s attempt to label Venezuela as a supporter of ‘terrorists’ was resoundingly rejected by a United Nation’s report issued in April 2008.39 There is no evidence of systematic state sponsored human rights violations in Venezuela . There are significant human rights abuses by the opposition-backed big landowners, murdering over 200 landless rural workers. There are workplace abuses by numerous FEDECAMARAS-affiliated private employers.40 It is precisely in response to capitalist violations of workers rights that Chavez decided to nationalize the steel plants. No doubt Washington will fail to properly ‘acknowledge’ these human rights advances on the part of Chavez.
The point of the ‘human rights’ charges is to reverse roles: Venezuela, the victim of US and vassal class’ coups and assassinations is labeled a human rights abusers while the real executioners are portrayed as ‘victims’. This is a common propaganda technique used by aggressor regimes and classes to justify the unilateral exercise of brutality and repression.
In line with its global militarist-imperialist ideology, Washington and its Venezuelan vassals have charged the Venezuelan government with aiding and abetting ‘terrorists’, namely the FARC insurgency in Colombia . Neither the Bush or Uribe regimes have presented evidence of material aid to the FARC. As mentioned above, a UN review of the Washington-Uribe charges against the Chavez government have rejected every allegation. This fabrication is used to camouflage the fact that US Special Forces and the Colombian armed forces have been infiltrating armed paramilitary forces into Venezuela ’s poor neighborhoods to establish footholds and block future barrio mobilizations defending Chavez.
The Hard Power Campaign - Three Part Strategy: Economic Boycotts, Low Intensity Warfare and the Colombia Card
Complementing the propaganda campaign, Washington has instumentalized a major oil producer (Exxon-Mobil) to reject a negotiated compensation settlement, which would have left the US oil giant with lucrative minority shares in one of the world’s biggest oil fields (the Orinoco oil fields). All the other European oil companies signed on to the new public-private oil contracts.
41 When Exxon-Mobil demanded compensation, PDVSA made a generous offer, which was abruptly rejected. When PDVSA agreed to overseas arbitration, Exxon-Mobil abruptly secured court orders in the US , Amsterdam and Great Britain ‘freezing’ PDVSA overseas assets. A London court quickly threw out Exxon-Mobil’s case. As with other countries’ experiences, such as Cuba in 1960, Chile in 1971-71 and Iran in 1953, the oil majors act as a political instrument of US foreign policy rather than as economic institutions respecting national sovereignty. In this case, Washington has used Exxon-Mobil as an instrument of psychological warfare – to heighten tensions and provide their local vassals with an ‘incident’ which they can elaborate into fear propaganda. The Venezuelan private media cite the threat of a US oil boycott and evoke a scenario of a collapsing economy causing starvation; they attribute this fantastic scene to the Chavez government’s ‘provocation’. By evoking this illusion of US power and Venezuelan impotence, they obfuscate the fact that the new oil contracts will add billions of dollars to the Venezuelan Treasury, which will benefit all Venezuelans.
US military strategy options have been severely limited by its prolonged and open-ended wars in Iraq and Afghanistan and its military-buildup threatening Iran . As a result, US military strategy toward Venezuela involves a $6 billion dollar military build-up of Colombia over the last eight years, including arms, training, combat advisers, Special Forces, mercenaries and logistics. US advisers encourage Colombian armed forces to engage in cross frontier operations including the kidnapping of Venezuelan citizens, armed assaults and paramilitary infiltration capped by the bombing in Ecuador of a campsite of a FARC negotiating team preparing a prisoner release. The US dual purpose of these low intensity military pressures is to probe Venezuela ’s response, its capacity for military mobilization, and to test the loyalties and allegiances of leading intelligence officials and officers in the Venezuelan military. The US has been involved in the infiltration of paramilitary and military operatives into Venezuela , exploiting the easy entrance through the border state of Zulia, the only state governed by the opposition, led by Governor Rosales.
The third component of the military strategy is ‘to integrate’ Venezuela’s armed forces into a ‘regional military command’ proposed by Brazilian President Lula da Silva and endorsed by US Secretary of State Condeleeza Rice.
42 Within that framework, Washington could use its friendly and client generals to pressure Venezuela to accept US military-political hegemony disguised as ‘regional’ initiatives. Unfortunately for Washington , Brazil ruled out a US presence, at least for now.
The US military strategy toward Venezuela is highly dependent on the Colombian Army’s defeat or containment of the guerrillas and the re-conquest of the vast rural areas under insurgent control. This would clear the way for Colombia ’s army to attack Venezuela . A military attack would depend crucially on a sharp political deterioration within Venezuela , based on the opposition gaining control of key states and municipal offices in the up-coming November elections. From advances in institutional positions Washington ’s vassals could undermine the popular national social, economic and neighborhood programs.
Only when the ‘internal circumstances’ of polarized disorder can create sufficient insecurity and undermine everyday production, consumption and transport can the US planners consider moving toward large-scale public confrontation and preparations for a military attack. The US military strategists envision the final phase of an air offensive -Special Forces intervention only when they can be assured of a large-scale Colombian intervention, an internal politico-military uprising and vacillating executive officials unwilling to exercise emergency powers and mass military mobilization. The US strategists require these stringent conditions because the current regime in Washington is politically isolated and discredited, the economy is in a deepening recession, and the budget deficit is ballooning especially its military expenditures in Iraq and Afghanistan . Only marginal extremists in the White House envision a direct military assault in the immediate future. But that could change to the degree that their vassals succeed in sowing domestic chaos and disorder.
Diplomatic and Economic Confrontation: Chavez Versus Bush Diplomatically and economically, President Chavez has gained the upper hand over the Bush Administration.
No country in Latin America supports Washington ’s proposals to intervene, boycott or exclude Venezuela from regional trade, investment or diplomatic forums. No country has broken diplomatic, economic or political relations with Caracas – nor has the US , despite strong moves in that direction by Bush in March 2008 (by labeling Venezuela a ‘terrorist’ country). Even Washington ’s principal vassal state, Colombia , shows no enthusiasm for shedding its $5 billion dollar food and oil trade with Venezuela to accommodate Bush. Chavez has successfully challenged US hegemony in the Caribbean . Through Petro-Caribe, numerous Caribbean and Central American states receive heavily subsidized oil and petroleum products from Venezuela , along with socio-economic aid in exchange for a more favorable diplomatic policy toward Caracas . The US no longer has an automatic voting bloc in the region following its lead against a targeted country.
The Venezuelan government has successfully contributed to the demise of the US-led Free Trade for the Americas (ALCA) proposal and has substituted a new Latin American free trade agreement (ALBA) with at least 6 member states. Venezuela ’s proposal for a Latin American Bank of the South, to bypass the US influenced IDB (BID) has been launched and has the backing of Brazil , Argentina and a majority of the other Latin American states.
43 Washington ’s arms embargo, that included Spain , has been a failure, as Venezuela turned to arms purchases from Russia and elsewhere. Washington’s effort to discourage foreign investment, especially in oil exploration is a complete failure, as China, Russia, Europe, Iran and every major oil producer has invested or is currently negotiating terms.
Despite vehement US opposition, Venezuela has developed a strategic complementary link with Cuba , exchanging subsidized oil and gas sales and large-scale investment for a vast health service contract covering Venezuela ’s needs in all poor neighborhoods.44 Venezuela has consolidated long-term finance and trade ties with Argentina through the purchase of Argentine bonds, which the latter has had difficulty selling given its conflict with the Paris Club.
Venezuela had significantly improved its image in Europe through Chavez’ positive role in mediating the release of FARC prisoners while the US vassal Uribe regime is perceived in Europe as a militaristic, dehumanized narco-driven entity. US militarism and its economic crisis have led to a sharp decline in its image and prestige in Europe , while eroding its economic empire and domestic living standards. Chavez’ opposition to Bush’s global war on terror and his calls for upholding human rights and social welfare has created a favorable international image among the poor of the Third World and within wide circles of public opinion elsewhere.
Vulnerability, Opportunities and Challenges
Presently and for the near future, Venezuela is vulnerable to attack on several fronts. It is experiencing several internal contradictions. Nevertheless it possesses strengths and great opportunities to advance the process of economic and social transformation. Key weaknesses can be located in the state, social economy and national security sectors.
In the sphere of politics, the basic issue is one of democratic representation, articulation and implementation of popular interests by elected and administrative officials. Too often one hears among the Chavista masses in public and private discussions that, ‘We support President Chavez and his policies but…’ and then follows a litany of criticism of local mayors, ministry officials, governors and Chavez’ ‘bad advisers’.
45 Some – not all – of the elected officials are running their campaign on the bases of traditional liberal clientele politics, which reward the few electoral faithful at the expense of the many. The key is to democratize the nomination process and not simply assume that the incumbent in office – no matter how incompetent or unpopular– should run for office again. Clearly the PSUV has to break free from the personality-based electoral politics and establish independent criteria, which respond to popular evaluations of incumbents and party candidates. Communal councils need to be empowered to evaluate, report and have a voice in judging inefficient ministries and administrative agencies which fail to provide adequate services.46 The dead hand of the reactionary past is present in the practices, personnel and paralysis of the existing administrative structures and worst of all influences some of the new Chavista appointments.
The tactic of creating new parallel agencies to overcome existing obstructionist bureaucracies will not work if the new administrators are ill prepared (late or miss appointments, derelict in rectifying problems, fail to meet commitments etc.). Nothing irritates the Chavista masses more than to deal with officials who cannot fulfill their commitments in a reasonable time frame. This is the general source of mass discontent, political alienation and government vulnerability. In part the issue is one of incompetent personnel and, for the most part, the solution is structural – empowering popular power organizations to chastise and oust ineffective and corrupt officials.
In the economic sphere there is a need for a serious re-thinking of the entire strategy in several areas. In place of massive and largely wasted funding of small-scale cooperatives to be run by the poor with little or no productive, managerial or even basic bookkeeping skills, investment funds should be channeled into modern middle and large scale factories which combine skilled managers and workers as well as unskilled workers, producing goods which have high demand in the domestic (and future foreign) markets. The new public enterprise building 15,000 pre-fabricated houses is an example.
The second area of economic vulnerability is agriculture where the Agriculture Ministry has been a major failure in the development of food production (exemplified by the massive food imports), distribution networks and above all in accelerating the agrarian reform program. If any ministry cost Chavez to lose the referendum, it was the Agriculture Ministry, which over 9 years has failed to raise production, productivity and availability of food. The past policies of controlling or de-controlling prices, of subsidies and credits to the major big producers have been an abysmal failure. The reason is obvious: The big land-owner recipients of the Government’s generous agricultural credits and grants are not investing in agricultural production, in raising cattle, purchasing new seeds, new machinery, new dairy animals. They are transferring Government funding into real estate, Government bonds, banking and speculative investment funds or overseas. This illegal misallocation of Government finance is abundantly evident in the gap between the high levels of government finance to the self-styled agricultural ‘producers’ and the meager (or even negative) growth of production-productivity on the large estates.
47 In April 2008, President Chavez recognized that fundamental changes in the use and ownership of productive land is the only way to control the use of government credit, loans and investment to ensure that the funds actually go into raising food and not purchasing or investing in new luxury apartments or real estate complexes or buying Argentine bonds. In March and April 2008, President Chavez, with the backing of the major peasant movements and workers in the food processing industry, expropriated 27 plantations, a meat processing chain, a dairy producer and a major food distributor. Now the challenge is to ensure that competent managers are appointed and resourceful worker-peasant councils are elected to insure efficient operations, new investments and equitable rewards. What is abundantly clear is that President Chavez has recognized that capitalist ownership even with government subsidies is incompatible with meeting the consumer needs of the Venezuelan people.
Thirdly, as mentioned above, inflation is eroding popular consumer power, fomenting wage demands by the unionized workers in the export sector while eroding wages and income for contingent and informal workers. The government has announced a decline in the rate of inflation in January-February 2008 (2.1%). This is a positive indication that urgent attention is being paid. The outrageous rates of profit in both consumer and capital goods industries has increased the circulation of excess money, while the lack of investment in raising productivity and production has weakened supply. The inflationary spiral is embedded in the structure of ownership of the major capitalist enterprises and no amount of regulation of profit margins will increase productivity. President Chavez moves into 2008 to accelerate the socialist transformation through the nationalization of strategic industries.
The key is to invest large sums of public capital in a vast array of competitive public enterprises run with an entrepreneurial vision under workers-engineers control. Relying on ‘incentives’ to private capitalists in order to increase productivity has run afoul in most instances because of their rentier, instead of entrepreneurial, behavior. When the government yields to one set of business complaints by offering incentives, it only results in a series of new excuses, blaming ‘pricing’, ‘insecurity’, ‘inflation’, and ‘imports’ for the lack of investment. Clearly counting on public-private cooperation is a failed policy.
The basis of the psychological malaise of business can be boiled down to one issue: They will not invest or produce even in order to profit if it means supporting the Chavez government and strengthening mass support via rising employment and workers’ income.48 They prefer to merely maintain their enterprises and raise prices in order to increase their profits.
In the social sphere, the government faces the problem of increasing political consciousness and above all encouraging the organizing of its mass supporters into cohesive, disciplined and class-conscious organizations. The government’s socialist project depends on mass social organizations capable of advancing on the economic elite and cleaning the neighborhoods of rightwing thugs, gangsters and paramilitary agents of the Venezuelan oligarchs and the Uribe regime.
The peasant movement, Ezequiel Zamora, is establishing the kind of political-educational cadre schools necessary to advance the agrarian reform. By pressuring the Agrarian Reform Institute, by occupying uncultivated land, by resisting landlord gunmen from Colombia , this emerging movement provides a small-scale model of social action that the government should promote and multiply on a national scale.
The principle obstacle is the counter revolutionary role of the National Guard, led by General Arnaldo Carreño. He directed a raid on the peasant training and educational school with attack helicopters and 200 soldiers, arrested and beat educators and students and wrecked the institute. No official action against the military officers responsible for this heinous action was taken.
49 Apart from the reactionary and counter-revolutionary nature of this assault on one of the most progressive Chavista movements, it is indicative of the presence of a military sector committed to the big landlords and most likely aligned to the Colombian-US military ‘golpistas’.
Labor legislation still lags. The new progressive social security law is tied up in Congress and/or buried by the dead hands of the Administration. Contingent (non-contracted, insecure) workers still predominate in key industries like oil, steel, aluminum, and manufacturing. The trade unions – both the pro-Chavez and the plethora of competing tendencies and self-proclaimed ‘class unions’ – are fragmented into a half dozen or more fractions, each attacking the other and incapable of organizing the vast majority (over 80%) of unorganized formal and informal workers. The result has been the relative immobilization of important sectors of the working class faced with big national challenges, such as the 12/2 referendum, the Colombian-US military threats and the struggle to extend the agrarian reform, public enterprises and social security.
The government’s relative neglect of the organized and unorganized manufacturing workers has changed dramatically for the better, beginning in the first half of 2008. President Chavez’ forceful intervention in the steel (Techint Sidor), cement (CEMEX), meatpacking and sugar industries has led to massive outpouring of worker support. A certain dialectic has unfolded, in which militant worker conflicts and strikes against intransigent employers has induced President Chavez to intervene on their behalf, which in turn has activated the spread and depth of worker and trade union support for President Chavez. This dialectic of reinforced mutual support has led to meetings of inter-sector union leaders and militants from the transport, metallurgic, food processing and related industries. In response to increased trade union organized support, Chavez has raised the prospect of nationalizing banks and the rest of the food production and distribution chain. Much depends upon the unification and mobilization of the trade union leaders and their capacity to overcome their sectarian and personalistic divisions and turn toward organizing the unorganized contingent and informal workers.
The sectarianism of the ultra-leftist sects and their supporters among a few trade union bureaucrats leads them to see Chavez and his government and trade union supporters as ‘the main enemy’ leading them to strike for exorbitant pay increases. They organize street blockades to provoke ‘repression’ and then call for ‘worker solidarity’. Most of the time they have had little success as most workers ignore their calls for ‘solidarity’. The unification of pro-Chavez union leaders around the current nationalizations and the growth of a powerful unified workers’ trade union movement will isolate the sects and limit their role. A unified working class movement could accelerate the struggle for social transformation of industry. It would strengthen the national defense of the transformative process in times of danger.
The National Security Threats The multi-country surveys reveal that most people in almost all countries think the US is the biggest threat to world peace. This is especially the case in Venezuela, a Caribbean country which has already been subject to a US-backed and orchestrated coup attempt, a employers and executives lockout of the vital petroleum industry, a US-financed recall-referendum, an international campaign to block the sale of defensive weapons and spare parts accompanied by a massive sustained military build-up of Colombia, its surrogate in the region. The violent efforts of the US to overthrow President Chavez have a long and ugly pedigree in the Caribbean and Central America . Over the past half century the US has directly invaded or attacked Guatemala, Panama, Cuba, the Dominican Republic, Grenada, Nicaragua and El Salvador; it organized death squads and counter revolutionary surrogate armies n Guatemala, El Salvador, Nicaragua and Honduras, which murdered nearly 300,000 people.
50 The US assault against Venezuela includes many of the strategies applied in its previous murderous interventions. Like in Guatemala , it has and continues to bribe, cajole and subvert individuals in the Venezuelan military and among National Guard officers. Their plan is to use Venezuelan military officials to organize a coup, collaborate with Colombian cross border infiltrators and to encourage defections to the pro-US opposition. Like in Central American , US operatives have organized death squad killers to infiltrate the Venezuelan countryside to attack peasant movements pursuing land reform and to consolidate support among big landowners.
Like in Nicaragua , the US is combining support for the systematic sabotage of the economy by the business elite to foment discontent while financing opposition electoral campaigns to exploit the unstable economic circumstances. Like its economic blockade of Cuba, the US has organized a de facto arms and parts embargo as well as an international ‘freeze’ on Venezuela’s PDVSA overseas assets through international court processes initiated by Exxon-Mobil. Colombia ’s cross-border bombing of Ecuador is as much a ‘test’ of Venezuela ’s preparedness as it is an overt aggression against Ecuador ’s President Correa’s nationalist government’s cancellation of the strategic US military base in Manta ( Ecuador ).
Venezuela had taken several measures to counter the US-Colombian-Venezuelan Fifth Column threats to national security.
Following the coup President Chavez ousted several hundred military officers involved in the overthrow and promoted officers loyal to the constitution. Unfortunately the new group included several pro-US and anti-leftist officers open to CIA bribes, one of whom even became the Minister of Defense before he was ‘retired’ – and became a virulent spokesperson against Chavez’ transformative referendum.51 Worse still, Chavez amnestied the military and civilian coup makers and economic ‘lock-out’ saboteurs after they had served only a small fraction of their sentences – to the utter shock and dismay of the mass of popular forces that shouldered the burden of their violent coup and economic sabotage and who were not consulted.
Venezuela has purchased some light weapons (100,000 rifles and machine guns) and a dozen submarines from Russia and helicopters from Brazil to counter Colombia ’s $6 billion dollar light and heavy arms build-up. Clearly that is a step forward, but it is still inadequate given the massive arms deficit between the two countries. Venezuela needs to rapidly build up its ground to air defenses, modernize its fighter jets and naval fleet, upgrade its airborne battalions and vastly improve its ground forces capacity to engage in jungle and ground fighting. Colombia ’s army, after 45 years of counter-insurgency, has the training and experience lacking in Venezuela . Venezuela has taken positive steps toward organizing a mass popular militia – but the advances have a very mixed record, as training and enlistment lag far below expectations for lack of political organization and politico-military leadership.
While President Chavez has taken important steps to strengthen border defenses, the same cannot be said about internal defenses. In particular, several generals in the National Guard have been more aggressively dislodging peasant land occupiers than in hunting down and arresting landlord-financed gunmen who have murdered 200 peasant activists and land reform beneficiaries. Extensive interviews with peasant leaders and activists indicate active collaboration between high military officers and right-wing cattle barons, calling into question the political loyalties of rural based Guard garrisons.
There is an urgent need to accelerate the expropriation of big estates and to arm and train peasant militias to counter-act Guard complicity or negligence in the face of landlord-sponsored violence. There are thousands of peasants ready and willing to enlist in militias because they have a direct stake in defending their families, comrades and their land from the ongoing paramilitary attacks.
Today the most immediate and enduring threat to internal security takes the form of a blend between a mass of hardened Venezuelan criminal gangs and narco-paramilitary infiltrators from Colombia , which are terrorizing the populace in low income neighborhoods. Police investigations, arrests and government prosecution are inadequate, incompetent, and corrupt and occasionally point to complicity. To this day the infamous broad daylight assassination of the respected Attorney General Danilo Anderson has not been solved and the current Attorney General has essentially buried the investigation and, even more importantly, buried the investigation into the economic elite networks planning future coups that Anderson was carrying out at the time of his murder.
Anderson was the chief investigator of the forces behind the April 2002 failed coup, the economic sabotage and a series of political assassinations. Venezuelans close to the case state that Anderson had compiled extensive documentation and testimony implicating top opposition political, economic and media figures and some influential figures in the Chavez administration. With his death, the investigations came to an end, no new arrests were made and those already arrested were subsequently granted amnesties. Some of Anderson ’s top suspects are now operating in strategic sectors of the economy. There are two hypotheses: Either sheer incompetence within the office of the new Attorney General, the Ministry of Justice and related agencies of government has derailed the investigation; or there is political complicity on the part of high officials to prevent undermining the present socialization strategy. In either case the weakness of law enforcement, especially with regard to a dangerous capitalist class operating an extensive network supporting the violent overthrow of the elected government, opens the door to a re-play of another coup. Indeed the amnesty of the elite coup-makers and economic saboteurs and the case of Danilo Anderson weighs heavily on the minds of militant Venezuelans who see it as an example of the continued impunity of the elite.
Factory and anti-crime ‘neighborhood watches’ and defense militias are of the utmost importance given the rising internal and external national security threats and crime wave. With the greater cooperation of communal councils, sweeps of local gangs is a top priority. Neighborhood police and militia stations must saturate the poor neighborhoods. Large-scale lighting must be established to make streets and sidewalks of the ranchos safer. The war against drug traffic must delve into their bourgeois collaborators, bankers and real estate operators who launder money and use illegal funds to finance opposition activities. Petty and youth delinquents should be sentenced to vocational training programs and supervised rural and community service. Large-scale illegal financial transactions must be prosecuted by the confiscation of bank accounts and property. National and internal security is the sine quo non of maintaining any political order dedicated to transforming the socio-economic system.
On April 9, 2008 President Chavez took a major step toward reducing crime, strengthening community-police relations and improving the security of the people by passing a National Police Law through presidential law decree. Under the new law, a new national revolutionary police of the people will be established ‘demolishing the old repressive police model with education, conscience, social organization and prevention’. He contrasted the past capitalist police who abused the poor with the new communal police who will be close to the citizens and dialogue oriented. To that end the newly formed communal councils will be encouraged to join and help select a new type of police based on rigorous selection process and on their willingness to live and work with the neighborhood. The PSUV and the communal councils will become the backbone of creating the new political solidarity with the newly trained police from the neighborhoods. Chavez’ recognition of the security issue in all its political and personal dimensions and his pursuit of democratic and egalitarian approach highlights his commitment to both maintaining law and order and advancing the revolutionary process.52
Conclusion: Advantages and Opportunities for Socialist Transformation
Venezuela today possesses the most advantageous economic, political and social conditions for a socialist transformation in recent history despite the US military threats, its administrative weaknesses and political institutional limitations.
Economically, Venezuela’s economy is booming at 9% growth, world prices for exports are at record levels (with oil at over $100 a barrel), it has immense energy reserves, $35 billion dollars in foreign exchange reserves and it is diversifying its overseas markets, although much too slow for its own security.53 With the introduction in April 2008 of an excess profit tax which will take 50% of all revenues over $70 dollars a barrel and an additional 60% of all revenues over $100 a barrel, several billion dollars in additional income will swell the funds for financing the nationalization of all strategic sectors of the economy.
Venezuela benefits from a multi-polar economic world eager to purchase and invest in the country. Venezuela is in the best possible condition to upgrade the petroleum industry and manufacture dozens of downstream petrochemical products from plastics to fertilizers – if public investment is efficiently and rationally planned and implemented. Venezuela has over a million productive landless workers and small farmers ready and willing to put the vast tracts of oligarch-owned under-utilized lands to work and put Venezuela on the road to food self-sufficiency – if not an agro-exporting country. Millions more hardworking Colombian refugee-peasants are eager to work the land along side their Venezuelan counterparts. There is no shortage of fertile land, farmers or investment capital. What is needed is the political will to organize expropriations, cultivation and distribution.
Politically, President Chavez provides dynamic leadership backed by legislative and executive power, capable of mobilizing the vast majority of the urban and rural poor, organized and unorganized workers and youth. The majority of the military and the new academy graduates have (at least up to now) backed the government’s programs and resisted the bribes and enticements of US agents. New Bolivarian-socialist military instructors and curricula and the expulsion of US military ‘missions’ will strengthen the democratic link between the military and the popular government.
The intelligence and counter-intelligence services have detected some subversive plots but remain the weakest link both in terms of information collecting, direct action against US-Colombian infiltration, detecting new coup plans and providing detailed documentation to expose US-Colombian assassination teams. Clearly housecleaning of dubious and incompetent elements in the intelligence agencies is in order. New training and recruitment processes are proceeding, rather slowly and have to demonstrate competence.
Socially the Chavez government retains the support of over 65% of the electorate and nearly 50% of the people were in favor of an overtly socialist agenda in the referendum of December 2, 2007. If the communal councils take off, and the militias gain substance and organization and if the PSUV develops mass roots and the popular nationalization accelerates, the government could consolidate its mass support into a formidable organized force to secure a huge majority in a new referendum and to counter the US-backed counter-revolution.
A lot will depend on the government’s deepening and extending its social-economic transformation – increasing new public housing from 40,000 to 100,000 a year; reducing the informal labor sector to single digits and encouraging the trade unions to organize the 80% of the unorganized labor force into class unions with the help of new labor legislation.
Given the availability of mass social support, given the high export earnings, given the positive social changes, which have occurred, the objective basis for the successful organization of a powerful pro-socialist, pro-Chavez movement exists today.
The challenge is the subjective factor: The shortages of well trained cadres, political education linked to local organizing, the elaboration of a socialist political-ideological framework and the elimination of personality-based liberal patronage officials in leading administrative and party offices. Within the mass Chavista base, the struggle for a socialist consciousness is the central challenge in Venezuela today.
NOTES:
1 Weisbrot, Mark and Luis Sandoval 2008, “Update: The Venezuelan Economy in the Chavez Years”, Washington D.C. Center for Economic and Policy Research.
2 Mark Weisbrot, “An Empty Research Agenda: The Creation of Myths About Venezuela :, March 2008. Center for Economic and Policy Research, Washington D.C.
3 Ibid. Also see “Letter From Venezuela’s Communication Minister to the Washington Post”, March 26, 2008 by Andres Izarra printed on March 28, 2008.
4 A good example can be found in the Socialist Register 2008. For an example of rampant propaganda disguised as ‘scholarship, see Francisco Rodriguez, “An Empty Revolution: The Unfulfilled Promises of Hugo Chavez”, Foreign Affairs March/April 2008.
5 Weisbrot, Op cit page 10.
6 Weisbrot, Op cit
7 Interview with peasant leaders of the Frente Nacional Campesino Eqzquiel Zamora in Caracas , Feb. 27, 2008. Boston Globe April 11, 2008
8 Interview with President Chavez, Caracas , March 2,2008
9 Dario Vea, February 25, 2008 p.2
10 Interview with President Chavez, March 2, 2008
11 Weisbrot, Op cit
12 Hyperinflation brought down the social democratic Alfonsin regimes in Argentina (1989) and Garcia in Peru (1990); weakened the Allende regime in 1973 and led to right wing take over. Hyperinflation has also led to the collapse of right wing regimes in China (1945-49) and the rise of Communism as well as regime change in Brazil in the 1990’s.
13 Reuters News Service April 9, 2008; BBC News April 2, 2008.
14 “La grave represion de los trabajadores siderúgicos” Argenpress March 24, 2008.
15 El Universal, March 5, 2008. page 1.
16 Izarra, Op cit
17 ‘Partido Socialista Unido de Venezuela: Herramiento de Masas in Gestión’, Rebelion, March 25, 2008.
18 ibid
19 Interview in Caracas with PSUV delegates, March 1, 2008.
20 Interviews and meetings of neighborhood delegates of Communal Councils, February 29, 2008.
21 Interview with Minister of the Interior Ramon Rodriguez Chacun, La Jornada, March 31, 2008.
22 Interview with Communal Councils, February 29, 2008. According to a poll by the respected polling group, Barometro, in early April 2008, 66.5% of Venezuelans approved Chavez presidency.
23 Commentaries from Communal Council delegates and peasant activists in Caracas , ‘Popular Power Meeting’ at the Ministry of Culture and Popular Power. February 29, 2008
24 Interview with Carmen Boqueron, Ministry of Culture, February 25, 2008.
25 Interview with Miquel Marquez, President Editorial El Perro y la Rana, State Publishing House, March 5, 2008.
26 See La Plena Voz, Memórias, Política Exterior y Soberania, among other magazines.
27 Interview with Carmen Boquerón, February 26, 2008
28 Interview with Minister of Culture, March 1, 2008.
29 Interview February 29, 2008. Even at the new Bolivarian Universities, only a minority of working class students are involved in political activities, most concentrate on their studies and future job prospects. However among active students at the new universities, the great majority are pro-Chavez.
30 From the beginning of the first nationalization in 1976 under President Carlos Andres Perez, the fundamental question was ‘nationalization for whom?’ In the 1970’s to the re-privatizations, the answer was the wealthy elites. See James Petras, Morris Morley and Steven Smith, The Nationalization fof Venezuelan Oil, (New York Praeger Press. 1977)
31 Eva Golinger’s detailed documentary study based on files secured from the US Government through the Freedom of Information Act which provide ample evidence of US intervention.
32 Interview with Venezuelan Presidential adviser, Paris November 2001.
33 http://www.rebelion.org/ April 13, 2002
34 Weisbrot Op cit
35 Eva Golinger, The Chavez Code: Cracking US Intervention in Venezuela ( Havana : Cuba Book Institute 2005). Golinger provides extensive documentation of US financing of the self-styled NGO’s through AID and NED (National Endowment for Democracy, a government conduit for destabilizing regimes critical of the US ).
36 For a more detailed analysis, see James Petras “El referendo Venezolano: analisis y epilogo”, http://www.rebellion.org/ Dec 17, 2007.
37 The phrase ‘soft power’ is credited to Harvard political science professor and long time US presidential adviser, Joseph Nye, who offers his expertise on empire management and the uses of imperial power. See Joseph Nye, Soft Power: The Means to Success in World Politics 2004
38 Venezuelan drug interdiction has captured 360 tons of drugs between 2000-2007, according to the National Anti-Drug Office, January 2008.
39 On the Colombian State ’s mass terror, see the annual reports of the International Labor Organization, Via Campesino, Human Rights Watch and Amnesty International.
40 Interview with peasant leaders from the Frente Nacional Campesino Ezequiel Zamora, February 27, 2008.
41 Throughout the dispute between Exxon-Mobil and the PDVSA, the European press sided with their more conciliatory multi-nationals while the Washington Post, NY Times and Wall Street Journal engaged in vituperative attacks on Venezuela .
42 While Condeleeza Rice gave her backing to the ‘Regional Command’, Lula immediately informed her that the US was not part of it.
43 The Bank of the South is already financing development projects without the usual onerous conditions imposed by the World Bank and IMF.
44 In interviews with both Fidel Castro (Feb 10, 2006 Havana ) and with Hugo Chavez (March 2, 2008) both confirm the long-term, large-scale ties, which bind them in a strategic alliance.
45 The testimony of a militant female peasant leader at a meeting organized by the Ministry of Popular Power was very demonstrative: ‘We support President Chavez; we defend President Chavez; but he has to replace those incompetent officials in the ministry who fail to provide us with credit so we can buy seed and fertilizer in time to plant our crops.’ February 27, 2008. Ministry of Popular Power
46 While I have noticed improvements in the punctuality and preparation of more agency officials, there are still too many highly placed functionaries who fail to keep appointments, comply with their professional responsibilities or inform themselves about the subject matter of their ministries.
47 The anti-production behavior of the big land owners and cattle barons has been the practice for decades. Back in the mid-1970’s, President Carlos Andres Perez also pumped hundreds of millions into ‘making Venezuela food self-sufficient’ in a program he called ‘ploughing the oil wealth into agriculture’ with the same miserable results as the present. The reason is clear, many of the big landlords are the same people. The lessons from the past are very clear: As long as the present government tries to develop agriculture through the existing land owners it is doomed to repeat the failures of the past.
48 Interview with an oil executive from British Petroleum, Caracas , March 6, 2008.
49 ‘El Frente Nacional Campesino Ezequiel Zamora es atacado por militares’ March 22, 2008 report from the FNCEZ.
50 See Petras and Morley, Empire or Republic (NY Routledge 1995).
51 General Baduel was always a virulent anti-communist who is said to have received a seven-figure payoff and threats of exposure of unseemly personal revelations if he didn’t ‘turn’ against Chavez.
52 James Suggett, “Venezuela Passes National Police Law”, http://www.venezuelanalysis.com// April 11, 2008.
53 See Weisbrot, Op cit
Source:
GlobalResearch.ca
Printer-friendly version
Bookmark/Search this post with:
Related Articles
Venezuela Six Years after the Coup
United Socialist Party of Venezuela is an Instrument for Socialism
Venezuela: Revolution, Party and a New International
Venezuelan Socialists Discuss the Struggle for Revolutionary Party
Why the Barrios Still Love Hugo
Opinion & Analysis
The Bolivarian Project
Venezuela: Democracy, Socialism and Imperialism
James Petras - Globalresearch.ca
The Bolivarian Project
Venezuela Six Years after the Coup
Jorge Martín
International Relations
Bush Administration, More Isolated in Latin America, Cries "Terrorism"
Mark Weisbrot - San Diego Union Tribune
Political Developments
Radical Chavismo Bares Its Teeth
George Cicariello-Maher
Labor
Chavez Emboldens Venezuelan Workers with Takeover Precedent
Frank Jack Daniel - Reuters
Media Watch
BBC v. Hugo Chavez
Stephen Lendman
International Relations
Vote for My Colombia Deal or I'll Brand You a Chavez Supporter!
Nikolas Kozloff - CounterPunch
International Relations
U.S. Native Americans Lead Opposition to Designation of Venezuela as Terrorist Nation
Gale Courey Toensing - Indian Country Today
Economy
The Booming Venezuelan Economy, and how it affects Monte Carmelo
Steve Brouwer - Venezuelanotes
International Relations
Venezuela Steps Up Efforts To Thwart Cocaine Traffic
Juan Forero - Washington Post
License
This article is not a work of venezuelanalysis.com. For that reason we cannot assign a license.More info about Creative Commons Licensing
venezuelanalysis.com :: website realized with drupal using free software only :: site best viewed with mozilla firefox
Non Popular Political Parties Boycott Elections: Venezuelans Vote National Assembly on 4 December 2007
http://www.venezuelanalysis.com/
Navigation
HomeLibraryHIGHLIGHTS
Evo to SA - Prensa
Evo-lution - speech
Evolution Vs. Intelligent Design YCLsLatin AmericaPeopleBlogsWiki Family
Communist University
Domza.net
Umbutho (ANC)
SSN Canada Links
Wayne Madsen
CPB
SACP
MIA
MIA Africa
Peter McLaren
Prensa Latina
Just World News
Counterpunch
Iraq-war.ru
Venezuelanalysis
Venezuela Info UK Reaction
Sour Grapes, James TweedieProtected
"Sour Grapes-Unpopular parties boycott Venezuelan elections"
by James Tweedie
On Sunday the 4th December 2005, the Venezuelan electorate went to the polls for the eleventh time in seven years. The elections were for the National Assembly, Venezuela’s parliament. The turnout was 25%. This may seem low, even by British standards, but in fact it continued a steady upward trend in electoral participation since 1998.But this exercise in popular power was marred by the last-minute withdrawal of four opposition parties from the elections. Democratic Action (AD), the Social Christian Party (Copei), Justice First (PJ) and Project Venezuela (PV) raised various objections to the electoral, including to the use of electronic voting machines and a government campaign to increase voter registration, “Mission Identity”.Despite the National Electoral Council (CNE) acceding to 16 out of 17 opposition demands (including a manual recount of 45% of electronically cast votes), despite an agreement with independent observers from the Organisation of American States (OAS) that the electoral system was free and fair and that they would participate, these four opposition parties withdrew mere days before polling. The only national opposition party to participate was the Movement to Socialism (MAS).The result was that the Bloque del Cambio (Coalition for Change), which supports popular left-wing president Hugo Chavez won 88.8% of the vote. Chavez’s own Movement for the Fifth Republic (MVR) won 68% of National Assembly seats. This gives the MVR alone the necessary legislative majority to make changes to the constitution.Why did these four parties commit such political suicide? The truth is that the boycott was an attempt to discredit elections they knew they were going to lose, and lose badly. The opposition was divided, competing with each other for votes. Their policies are unpopular with the increasingly politicised working class of Venezuela.The political right in Venezuela has been in retreat since the election of Hugo Chavez in 1998. Chavez won the support of Venezuela’s poor and oppressed and defeated the parties that had done nothing to lift them from grinding poverty.In Venezuela the gap between the haves and have-nots is stark. To drive from a wealthy district of Caracas to one of the outlying “Barrios” is like travelling from Chelsea to Soweto in half an hour.
As in South Africa, most of the working class are unemployed, and must make a living as informal labourers and hawkers. They live in breeze-block shacks with tin roofs, built on squatted land and on 45-degree slopes. When it rains hard these shanties are often carried away in mudslides, their occupants killed.The coalition government led by President Chavez has done a great deal for the ordinary people of Venezuela. They have brought free healthcare and education, affordable food, clean water, electricity, and the beginnings of a social housing program.
But in doing so it has also won the enmity of the United States government. The Bush administration sees the government of Venezuela as a threat to its interests in Latin America.
These interests lie in promoting uniform free-market economics throughout the continent, for the benefit of big business in the US, through the Free Trade Agreement of the Americas (FTAA). The effect of such economic policies on the ordinary people of Latin America would be ruinous. The dumping of surplus commodities on local markets, the privatisation of public services, the mass relocations of industries with resulting unemployment forcing people to become migrant workers.
Chavez’s opposition to the FTAA, his support for other left-wing Latin American governments and movements (such as the socialist state of Cuba and Bolivia’s Movement Toward Socialism), but most of all his great influence in the region have made him into Washington’s latest bogeyman.And so we have Thomas Shannon, US secretary of state for Latin American Affairs, declaring two weeks ago that democracy in Venezuela is in “grave peril”. So we have Pat Robertson, the evangelist preacher, calling earlier this year for the assassination of the democratically elected president of a sovereign nation.
And so we have a group of political parties in Venezuela, marginalised by their own policies but supported by a foreign power, attempting to discredit an election which they knew they were going to lose. The US Government will no doubt proclaim this act of political petulance as proof that Venezuela is in the grip of a dangerous tyrant. This is the same kind of rhetoric the White House uses against any government it wishes to overthrow by covert or overt means.
Now is the time for solidarity with Venezuela.http://www.vicuk.org/http://www.venezuelanalysis.com/http://www.guardian.co.uk/comment/story/0,,1658890,00.html
Navigation
HomeLibraryHIGHLIGHTS
Evo to SA - Prensa
Evo-lution - speech
Evolution Vs. Intelligent Design YCLsLatin AmericaPeopleBlogsWiki Family
Communist University
Domza.net
Umbutho (ANC)
SSN Canada Links
Wayne Madsen
CPB
SACP
MIA
MIA Africa
Peter McLaren
Prensa Latina
Just World News
Counterpunch
Iraq-war.ru
Venezuelanalysis
Venezuela Info UK Reaction
Sour Grapes, James TweedieProtected
"Sour Grapes-Unpopular parties boycott Venezuelan elections"
by James Tweedie
On Sunday the 4th December 2005, the Venezuelan electorate went to the polls for the eleventh time in seven years. The elections were for the National Assembly, Venezuela’s parliament. The turnout was 25%. This may seem low, even by British standards, but in fact it continued a steady upward trend in electoral participation since 1998.But this exercise in popular power was marred by the last-minute withdrawal of four opposition parties from the elections. Democratic Action (AD), the Social Christian Party (Copei), Justice First (PJ) and Project Venezuela (PV) raised various objections to the electoral, including to the use of electronic voting machines and a government campaign to increase voter registration, “Mission Identity”.Despite the National Electoral Council (CNE) acceding to 16 out of 17 opposition demands (including a manual recount of 45% of electronically cast votes), despite an agreement with independent observers from the Organisation of American States (OAS) that the electoral system was free and fair and that they would participate, these four opposition parties withdrew mere days before polling. The only national opposition party to participate was the Movement to Socialism (MAS).The result was that the Bloque del Cambio (Coalition for Change), which supports popular left-wing president Hugo Chavez won 88.8% of the vote. Chavez’s own Movement for the Fifth Republic (MVR) won 68% of National Assembly seats. This gives the MVR alone the necessary legislative majority to make changes to the constitution.Why did these four parties commit such political suicide? The truth is that the boycott was an attempt to discredit elections they knew they were going to lose, and lose badly. The opposition was divided, competing with each other for votes. Their policies are unpopular with the increasingly politicised working class of Venezuela.The political right in Venezuela has been in retreat since the election of Hugo Chavez in 1998. Chavez won the support of Venezuela’s poor and oppressed and defeated the parties that had done nothing to lift them from grinding poverty.In Venezuela the gap between the haves and have-nots is stark. To drive from a wealthy district of Caracas to one of the outlying “Barrios” is like travelling from Chelsea to Soweto in half an hour.
As in South Africa, most of the working class are unemployed, and must make a living as informal labourers and hawkers. They live in breeze-block shacks with tin roofs, built on squatted land and on 45-degree slopes. When it rains hard these shanties are often carried away in mudslides, their occupants killed.The coalition government led by President Chavez has done a great deal for the ordinary people of Venezuela. They have brought free healthcare and education, affordable food, clean water, electricity, and the beginnings of a social housing program.
But in doing so it has also won the enmity of the United States government. The Bush administration sees the government of Venezuela as a threat to its interests in Latin America.
These interests lie in promoting uniform free-market economics throughout the continent, for the benefit of big business in the US, through the Free Trade Agreement of the Americas (FTAA). The effect of such economic policies on the ordinary people of Latin America would be ruinous. The dumping of surplus commodities on local markets, the privatisation of public services, the mass relocations of industries with resulting unemployment forcing people to become migrant workers.
Chavez’s opposition to the FTAA, his support for other left-wing Latin American governments and movements (such as the socialist state of Cuba and Bolivia’s Movement Toward Socialism), but most of all his great influence in the region have made him into Washington’s latest bogeyman.And so we have Thomas Shannon, US secretary of state for Latin American Affairs, declaring two weeks ago that democracy in Venezuela is in “grave peril”. So we have Pat Robertson, the evangelist preacher, calling earlier this year for the assassination of the democratically elected president of a sovereign nation.
And so we have a group of political parties in Venezuela, marginalised by their own policies but supported by a foreign power, attempting to discredit an election which they knew they were going to lose. The US Government will no doubt proclaim this act of political petulance as proof that Venezuela is in the grip of a dangerous tyrant. This is the same kind of rhetoric the White House uses against any government it wishes to overthrow by covert or overt means.
Now is the time for solidarity with Venezuela.http://www.vicuk.org/http://www.venezuelanalysis.com/http://www.guardian.co.uk/comment/story/0,,1658890,00.html
Suscribirse a:
Entradas (Atom)
