A mural of Simón Bolívar in Caracas. (photo: Gabriel Hetland)
Venezuela:
Chavismo in Crisis
By Gabriel Hetland, NACLA
News
18 May 16
To stay in office, the Venezuelan government must address its
major weaknesses.
Seventeen
years have passed since Hugo Chávez took office in February 1999. During
Chávez’s fourteen years as president, Venezuela rejected free-market orthodoxy
and embraced a model of stateled redistributive development. This model was
successful on a number of fronts. Under Chávez, Venezuela more than doubled
state spending on healthcare and education, cut poverty and unemployment in
half (with extreme poverty reduced by almost two-thirds), and became the most
equitable country in Latin America. Robust oil-driven economic growth fueled
these social gains, with countercyclical spending offsetting periods of
economic decline.
Critics
continue to label Chávez a dictator, but his democratic credentials were
considerable. Chávez’s party won sixteen of seventeen elections held between
1998 and 2012, in many cases by large margins, with Jimmy Carter labeling
Venezuela’s electoral system “the best in the world.” Electoral participation
increased substantially during this time. And Venezuela made progress towards
becoming a “protagonistic and participatory democracy.” Chávez also helped
usher in an era of greater Latin American independence vis-à-vis the U.S. and
did more than any other leader in recent decades to popularize socialism.
Since
Chávez’s death in March 2013, however, the government has faced several serious
challenges. Nicolás Maduro, Chávez’s handpicked successor, narrowly won the
April 2013 election to succeed Chávez. This led to violent protests from the
opposition, which along with the U.S. government, initially refused to accept
the result. Following the ruling party’s convincing victory in the December
2013 municipal elections, a new round of violent protests consumed Venezuela,
beginning in early 2014. Protestors succeeded in disrupting the country for
months but failed in their goal of removing Maduro from office.
In the
wake of the crushing defeat of the ruling United Socialist Party of Venezuela
(PSUV) in the December 2015 parliamentary elections, Chavismo faces
what is arguably its most severe crisis yet. The election has empowered the opposition,
which has a two-thirds supermajority in the National Assembly and enjoys full
support from the U.S. government and regional right-wing forces. The most
serious threat to Chavismo is from the radical-right
opposition, which has already indicated plans to roll back the social gains
achieved by the Bolivarian Revolution and remove Maduro from office through a
recall referendum.
To
avoid this scenario, the government must begin to rapidly and effectively
confront the economic and political challenges it faces. In particular, the
Maduro government, and the popular movements that constitute Chavismo,
must address three critical weaknesses that have plagued Chavismo for
years: Venezuela’s extreme dependence on oil; the contradictions generated by a
political-economic model that combines aspects of capitalism, socialism, and
statism in an ad hoc rather than planned manner; and the PSUV’s highly
centralized leadership structure.
Venezuela’s
dependence on oil is a perennial problem that, while not beginning with Chávez,
did become more acute during Chávez’s presidency. Between 1998 and the present,
the percentage of Venezuela’s export earnings derived from oil increased from
68.7% to 96%. Oil revenues continue to account for nearly half (40-45%) of the
government’s budget. The high price of oil from 2003 to 2008 and 2010 through
mid-2014 made the social gains achieved by Chavismo possible.
It is important, however, to point out that these gains would not have been
possible had Chávez not wrested control of the state oil company, PDVSA, away
from managers who ran it in a quasiprivate manner through early 2003. Chávez’s
efforts to assert state control over PDVSA were a leading factor in the 2002
coup against him and the 2002-2003 management lockout.
Between
June 2014 and December 2015 the price of oil fell by two-thirds, from over
$100/barrel to less than $37/barrel. This is one of the key factors behind the
severe economic crisis that currently engulfs Venezuela. Official data is not
available—the government stopped releasing it in early 2014—but, at the time of
this article’s writing, it is estimated that Venezuela’s economy contracted by
four percent in 2014 and by ten percent, or more, in 2015. Inflation was
estimated at 62.2% in 2014 and may have topped 200% in 2015. Poverty and
unemployment have been rising—though it is unclear by how much. There have also
been widespread, persistent shortages of innumerable goods, from coffee, eggs,
and toilet paper to auto parts, cement, and industrial inputs. One of the reasons
the opposition won the December 2015 elections so handily was widespread
popular frustration with shortages and long lines found throughout the country
to purchase regulated goods, withdraw money from banks, or even take a bus
home. While talking with voters on the day of December parliamentary elections,
I was repeatedly told that Venezuelans wanted “change” and “an end to the
lines.”
The
government blames the shortages and long lines on an “economic war” waged by
the opposition and big business. The argument is that businesses have been
hoarding goods in an effort to generate opposition to the government. For their
part, business owners say they have cut back on production because they lack
the dollars needed to obtain imported inputs necessary for production. Polls
suggest that a majority of Venezuelans do not see the economic war as the
primary factor leading to the economic crisis, and that even those Chavistas blaming
the economic war feel that the government is losing the battle.
To a
significant extent Venezuela’s economic crisis— and the economic war itself—
should be seen as a result of the contradictions of the country’s highly uneven
“transition to socialism.” Under Chávez (and continuing under Maduro) important
sectors of the economy have been partially decommodified, in particular the
areas of healthcare, education, social service provisioning, and the sale of
food staples and basic goods. Chávez re-nationalized oil production in 2001 and
nationalized the country’s steel, telecommunications, and electric industries
in 2007 and 2008. These actions have been framed as furthering the construction
of “twenty-first century socialism.” In practice, however, the government has
done relatively little to advance the socialist goal of establishing genuine
worker and community control over economic decision making. Most state-owned
enterprises in Venezuela approximate statism, with state actors, rather than
private property owners or workers and communities, controlling economic
decisions. Additionally, capitalism has certainly not disappeared in Venezuela:
between 1998 and 2008 the private sector actually increased its
share of economic activity, from 65.2% to 70.9%. Finally, the growth of a black
market for goods means that the government’s efforts to decommodify areas of
social and economic life have been considerably hampered.
The
coexistence of capitalist, socialist, and statist features—and the lack of a
clear plan for moving away from capitalism and statism and towards
socialism—has generated a number of perverse consequences.Atenea Jiménez, a
founder of the Red Nacional de Comuneros (National Communards
Network), which brings together 500 of Venezuela’s 1,000 communes, commented on
the challenges of guaranteeing the population access to cheap food when private
businesses play an integral role. “It’s amazing that right now the private
sector controls all of this [food],” Jiménez said. “Even for Mercal and Bicentenario[
state-run stores that sell food and basic goods at highly subsidized prices],
the trucks that bring the goods are privately owned. So we’re just handing
everything right to the bourgeoisie!”
Two of
the main problems in Venezuela—inflation and scarcity—are related to the
country’s dysfunctional currency exchange system. Chávez implemented currency
controls in 2003 to combat capital flight. This led to a gap between the
official and black market exchange rates. In the last year this gap has widened
at a galloping pace: in late 2015 the black market rate was 150 times greater
than the official rate. To facilitate needed imports, the government provides
certain businesses and individuals dollars at the preferential rate of 6.3 to
the dollar. There is an immense incentive for these individuals and businesses
to turn around and re-sell these dollars on the black market, where profits of
up to 15,000% are possible. Since needed goods are not being imported, this
perpetuates problems of scarcity and rampant inflation.
Economists
sympathetic to the government have argued for years that Venezuela should
abandon its system of currency controls and implement a “managed float.” This
would involve a series of devaluations of the bolívar until
the gap between the official and black market rates is eliminated. To bring
this about, the government must, however, confront privileged sectors inside
and outside the state that benefit from the current system. The existence of
these sectors, in particular the so-called boliburguesía, is a
consequence of the country’s hybrid political-economic model, underlining the
need to move beyond it.
To
make progress on these issues, the PSUV must confront the gap between its
leadership and base. A week before the December 2015 election, Omar Machado, a
community organizer from the 23 de Enero neighborhood in Caracas, told
me, “People are upset because part of the party has become embedded in
power. The party doesn’t recognize true leaders, grassroots leaders,” he
argued. “It’s led by candidates who have been parachuted in.”
Jiménez
echoed this view, commenting that, “There’s a rupture within Chavismo,
between grassroots Chavismo, which is living through the most
difficult situation of sixteen years of revolution, and the state and party
leadership, which are one and the same. There’s a big difference between what
the base is feeling [and what the leadership sees],” Jiménez said. “There’s no
space for articulation between the popular movement and the party." The
only way to eliminate corruption is with more participation.
Grassroots Chavistas are
not ready to abandon Maduro or the government. Yet they are demanding that the
government correct its course and listen to their ideas. According to Jiménez,
“The people are asking for a rectification and for a solution to the most basic
problem we have: food. The government hasn’t done enough to resolve this. As
the popular movement, we have concrete plans for how to resolve this, which
we’ve put forward to Maduro, but unfortunately they haven’t paid attention to
this.” The proposal of the Red de Comuneros, Jiménez explained, is
to create a network for the production, distribution, and consumption of food,
which would be controlled not by the state or the private sector, but by the
communes themselves.
Jiménez
said this proposal can only work if there are high levels of popular
participation and genuine popular control. This is necessary to avoid the
corruption and bureaucracy that has engulfed other projects put forward by the
government, such as communal council distribution of cell phones (which are
increasingly expensive and hard to find in private and state-run stores). “The
only way to eliminate corruption is with more participation,” Jiménez
maintained, adding that during “200 workdays” focused on community-led food
distribution “not a single item was misplaced, and nothing was resold” because
it was a “collective process.”
Johnny
Murphy, an activist from Carora, a city in Lara state, put forward a similar
argument. Like Jiménez, Murphy said the threat of the opposition means that
revolutionaries must support the PSUV. Doing so, however, is just the
beginning. “Yes, we have to vote for the revolutionary deputies,” Murphy told
me. “But we have to think of a process of rectification, to put forward a new
revolutionary direction, and to create a collective leadership. We are
committed to giving all of our support to Nicolás Maduro, whom Chávez
designated as the head of the revolution. But we say Nicolás
Presidente, el pueblo insurgente.”
Murphy
advocated for movement leaders to “occupy more spaces, create more spaces for
popular power, and create a communal state and a communal economy,” which, in
his words, “doesn’t rob people, doesn’t damage people, doesn’t destroy and
doesn’t harm people.”
In the
weeks following the government’s December loss there have been a number of
proposals, made by the government and the Chavista movement,
to “deepen the revolution” and engage in a process of renovation.
Unfortunately, it is unclear if the government is prepared to fully acknowledge
its errors and take on the powerful interests that are likely to resist efforts
to dismantle bureaucracy and corruption and move towards socialism. Unless the
government does this, and quickly, its days are likely numbered.
C 2015 Reader Supported News
Donations can be sent
to the Baltimore Nonviolence Center, 325 E. 25th St., Baltimore, MD
21218. Ph: 410-323-1607; Email: mobuszewski [at] verizon.net. Go to http://baltimorenonviolencecenter.blogspot.com/
"The master class
has always declared the wars; the subject class has always fought the battles.
The master class has had all to gain and nothing to lose, while the subject
class has had nothing to gain and everything to lose--especially their
lives." Eugene Victor Debs
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