What is Going on in Venezuela?
Text from a talk March 5th, 2014 at Forum on Venezuela and the Ukraine at the Evergreen State College.
One year ago today on March 5th, 2013, Venezuelan President Hugo Chavez died of cancer. It is wrong to attribute all of the changes in Venezuela since 1998 to Chavez, whether pro or con, but he played an important ant positive role in what has happened there. Hugo Chávez’s death was a major loss for Venezuelans and all people around world who are concerned about economic justice and a world not dominated by global capitalism. I am sure many people in Venezuela will express their support for him today. Hugo Chávez presente!
The popular classes in Venezuela, 80% of the population, have gained not just economically but also by their inclusion in society. There has been a drop in poverty by over ½ and extreme poverty by 70% since the 1998 electoral victory of Chávez. The access to education and healthcare has been huge. This is also true in terms of access to food and food security. There has been a major increase in caloric intake, from 2000 to 3000 calories per capita per day, while both the quality and quantity of food has increased.
An Olympia, Washington resident who recently spent two years in a low-income barrio in Barquisimeto, Venezuela recently mentioned to me that he sees more hunger in a nearby Washington state community, Shelton, where he works, than he did in the Barquisimeto barrio where he lived.
Not only have the number of poor people declined so significantly in Venezuela, the formerly excluded are now involved in controlling their community and public resources. There are 40,000 communal councils in Venezuela. These communities democratically decide how to spend and manage a significant amount of public revenues. There has also been major land distribution in the countryside via the availability of affordable credit and also access to education and health in rural areas as well as in the cities.
The Venezuelan economy is still dependent on oil, but unlike earlier periods of Venezuelan history the oil money is now being used to meet people’s needs; and to a limited extent to build infrastructure and increase new production—agriculture, clothing, communication, aluminum, transportation oil and farm equipment, etc. The intent is there and there has been some growth in production. However, Venezuela has not been successful in maintaining sustained, continued and solid growth neither in key industries, including agriculture nor in a continual growth in the number of self-managed or worker controlled enterprises.
Venezuela has gone from being one of the most unequal countries in the world in the 1990s (in terms of wealth distribution) to the most equal country in the Americas. Its Gini coefficient, which measures social inequality, is around 40. This is the significantly lower than the United States coefficient of 57. (see CEPR.net)
Nicolás Maduro was elected President of Venezuela in October, 2013 in a very close election. Previously, he was a labor organizer, foreign minister and Vice President after the 2012 election. His politics, perspectives and vision for Venezuela seem similar to Chavez—“Socialism for the 21st Century”, the synthesis of socialism and democracy with a strong anti-imperialist politics. Maduro is taking crime seriously and for the most part, demonizes the opposition less than Chávez did. He has majority support but not the same love from the people that Chávez had.
There are some serious problems in Venezuela. The problems that the U.S. mainstream media focuses on are real but overstated. They are:
1) Inflation—this is a real problem; it is not new. Inflation was 56% last year yet poverty has still continued to decline in spite of high inflation. Poverty averaged about 25% since 1998 but was even higher in the 1990’s. Most, but not everyone’s wages increase at the same rate as inflation. This means that the real wage is maintained. This is certainly true of the minimum wage. Most people in the informal sector, still about 40% of the labor force although much less than the pre-1998 percentage of the labor force, can raise prices of goods they sell as prices rise, thus maintaining their real income.
Fundamentally, inflation in Venezuela is caused by an economy organized around oil; where oil generates significant income both for workers in oil and related sectors and also funds social programs. This general spending of oil revenues is inflationary because production in other sectors has not grown sufficiently to match increased demand so prices rise. This leads to a constant overvaluation of the Venezuelan currency which the government has tried to control. This spurs imports which end up being cheaper than domestically produced goods and inhibits exports which outside of oil are too expensive to sell. Venezuela exports little besides oil. Venezuela has tried to limit the outflow of capital and the convertibility of its currency (bolivars) to dollars. Consequently, a black market for dollars has run parallel to the official rate which is about six bolivars to the dollar. The black market rate for the Bolívar has reached about 80 to 1. This rate is fueled by the limited selling of dollars by the government and intense speculation against the Bolívar, i.e., betting the value of the Bolívar will continue to fall.
This means that lots of money can be made by getting dollars at the official rate of six Bolivars to one dollar, (e.g., for travel) and then selling the dollars on the black market. In addition, importers of goods can buy goods cheaply abroad using the six to one rate to get dollars but can then sell these goods in Venezuela in Bolivars with huge markups of the price. Naturally, this further fuels inflation. The government just decided to make more dollars available at a close-to-market determined exchange rate. This action may break the speculation against the Bolívar and substantially lower the black market price. Someone recently back from Venezuela told me that if one uses the official rate of 6 Bolivars to 1, when buying local currency. Venezuela is the most expensive country in the world. However, when using the black market foreign exchange rate to change dollars for Bolivars, Venezuela is the cheapest country.
2) Shortages—there are some increases in shortages of goods, e.g. flour, cooking oil, toilet paper. People often have to wait in lines many hours to purchase needed consumer items. It is a real inconvenience but there is no hunger or generalized shortages of food as a whole. Even in 2013, a year of high inflation and increased shortages, real consumption probably increased.
3) Crime is a real and serious problem. There is a high murder and robbery rate. This is not new and it is not clear if it has risen significantly in the last few years. As I mentioned, Maduro is taking crime seriously. A new national police force has been formed, hopefully to replace a violent, inefficient and often brutal and criminal force. The new police universities are stressing respect for human rights and more effective policing of violent crime. In those barrios where there are a lot of cultural activities for youths, violent crime, which is mainly committed by young men, has decreased.
All three of these social and economic problems cannot be blamed solely on the destabilization caused by the Venezuelan elites and by U.S. intervention and encouragement. Certainly the United States has done this type of destabilization in the past; for example, Chile in the early 1970s and Nicaragua in the 1980s. It is a probably a factor but probably not the main cause of these problems. A partial cause of the problem of shortages and inflation stems from holding back supplies of consumer goods by suppliers and retailers, either waiting for the price to rise further or to further dissatisfaction with a government they bitterly oppose. This is also likely true of some of the violent crime, including those crimes related to drug dealing.
Causes of Protest
The street protests in Venezuela began about a month ago, in early February, 2014. There are some legitimate grievances of many of the protesters, (see above.) There are also the continuing problems of nepotism, corruption, bureaucracy, and government inefficiency. The university students, who are protesting and are getting so much attention in US social and mainstream media, are not from the universities where the popular classes and their children attend–the Bolivarian Universities. The student protesters are from the private universities and from autonomous universities like the Central University in Caracas and the University of the Andes in Mérida. These universities, although public, draw primarily from middle income and upper class Venezuela and there are strong student movements there opposing the ongoing social changes in Venezuela. Their grievances are primarily about the society although most of the protesters also oppose opening their universities to the popular classes.
Students have been part of the anti-government protests including the more violent ones. The leadership is the right-wing of Venezuela; even to the right of Henrique Capriles, the governor of Miranda, and the 2012 and 2013 opposition candidate for President. They include Maria Corina Machado and Leopoldo Lopez, both active in the failed April 2002 coup against Chávez. Machado and Lopez and the new party he leads, the Popular Will Party, have made it clear their intent is to overthrow the government and move Venezuela far to the right, to an authoritarian neoliberalism. A February 12, 2014 protest that Lopez spoke at turned violent. He was arrested a few days later and has been held in prison since. His arrest and detention are understandable, although charges should be filed against him and he should be released to face trial.
The protests and the barricades are in the better off, wealthier parts of Caracas and in other cities such as Mérida and San Cristóbal that are in the State of Táchira. They are in all the major cities of Venezuela but almost all are in the middle income and richer communities, not in the barrios.
The U.S. is definitely playing a role in supporting the anti-government protests. The National Endowment for Democracy (which does not promote democracy nor respect self-determination for other societies) contributes at least five million a year to student and other right-wing groups that called for the overthrow of Chávez and now call for the overthrow of Maduro and the PSUV, the party of Chávez and Maduro, that have large majorities in the general assembly and at the State and municipal level. The NED supported the groups involved in the April, 2002 military coup against Chávez.
It is possible that the right-wing in Venezuela decided to organize militant street protests, including the use of Molotov cocktails against government buildings and public centers such as health clinics because they realized after their weak showing in the December 2013 municipal and governor’s elections that they were not going to win and retake power through the electoral path. From my reading of Chilean history, the decision to overthrow Salvador Allende was made after the Allende’s party Unidad Popular (UP), increased support in the 1972 municipal elections from their 1970 showing. The Chilean right-wing and Chilean military decided elections were not going to return them to power so they decided on a coup. Machado, Lopez and the right-wing may have reached a similar conclusion for Venezuela.
The central issue in Venezuela is that there is a fundamental divide over the nature of Venezuelan society. For the most part, as has been clear since 2002, the large majority of middle income and wealthy Venezuelan do not accept a society where they no longer call the shots, culturally and politically; where they no longer are at the center of Venezuela equal society. Racism is also connected. Those who do not accept this move towards a more socially and economically society are disproportionately “white” in a country where the large majority of people are of indigenous, African or mixed European, African and indigenous origin. The historically well-off have done well economically since the 1998 election of Hugo Chávez but have lost much of their political power and fear any direction towards a democratic socialist society although Venezuela is still a capitalist society. Of course, many poor or near poor people oppose Chavismo, and there are both people who were wealthy before 1998 or have become wealthy and powerful since 1998, who support the PSUV led government or are part of it. My point is that class and the class divide is the key; the issue of class is essential to understand Venezuela today and the current anti-government protests and barricades. Currently, there are few protests or even signs of mass protest against the Venezuelan government in the barrios, the low income and working class communities, and rural areas of Venezuela.
The U.S. and Venezuelan mainstream media have painted a picture of Venezuela as a place of massive popular protest with government suppression of the media and murderous repression.
The majority of the media in today’s Venezuela are private. Many of the private TV stations were actively involved in 2002 coup attempt. Today, the majority of Venezuelans still watch TV stations owned by private corporations. The majority of these stations and most of the main newspapers, although a little bit more diverse politically than in 2002, are anti-government and anti-Chavista. They have not been taken off the air, prevented from printing and the social media has not been shut down. Social media like Facebook and Twitter have been particularly active and inaccurate in portraying Venezuela as a repressive police state with total suppression of the media.
The mainstream U.S. media (e.g., CNN, Washington Post, New York Times, NBC, etc.) have a very strong anti-Chávez bias and a continued hostility to the building of 21st century socialism in Venezuela. For example, pictures that supposedly showed violent police brutality and repression in Venezuela were actually old photos from police repression in Bulgaria, Egypt and Chile. The New York Times, while generally hostile to the Venezuelan revolution with very biased reporting, has been slightly more balanced recently, even admitting that in the poorer areas of Caracas, there are no signs of protest,
As far as I have been able to research, 18 deaths over the last month have been linked to the protests. Of these, four anti-government protesters were killed by government security forces. Of the others killed, some have been pro-Chavista and a few have been accidents, not directly tied to protests. For example, a few were people who were very sick and could not get through the blockades in time to get medical help. At least one motorcyclist was beheaded by wires placed at neck level near protests. This was a suggestion tweeted by a right-wing ex-General, Angel Vivas. There has been some over use of force by police and other government security forces. The government has arrested some police and National Guard for use of excessive force and violence, thereby indicating that murderous repression is not government policy.
President Nicolás Maduro called for a national day long dialogue on Feb 27th, 2014. Community organizations, government officials, the main business associations, Fedecamaras attended. So did the owners of Polar, the largest food corporation in Venezuela and some opposition groups. The meeting was televised. It was also boycotted by the main opposition coalition, the MUD, Mesa de la Union Democratica and its Presidential candidate in 2012 and 2013, Henrique Capriles. He has supported the protests but not the violent ones. Not much came from this dialog but it may have been a start towards an ongoing discussion of important issues even the divide is huge. I think it would be a mistake to move the economics and politics in Venezuela in a more conservative direction to appease the right. The opposition is divided between those like Leopoldo Lopez and his Popular Will party who want to overthrow Maduro via escalating protests, and those such as Capriles, the 2013 opposition candidate for President, who is calling for a 2016 recall referendum that, if passed, would force Maduro to step down as President.
Future—it is possible that the anti-government protests may have peaked. Recently, the numbers seem to be diminishing.
A national dialogue about some serious problem in Venezuela is needed. However, the solution is not to bring the rightwing into the government in order to rule as a unity government. Rather, what is needed is the opposite of what the right-wing leadership of the protests wants. What is needed is a deepening of the revolution– the growth of the social economy and the growth and deepening of participatory democracy. It is essential that production be increased; socialism is about much more than providing for basic needs and reducing poverty; it must also be about producing most of what is consumed and also worker self-management at the work place coordinated with the communities around them. Along with workers, the consumers should be involved in production and consumption decisions—on the environment, and in coordination of production. Increasing productivity and production is essential to reducing shortages and inflation. Price controls have a role to play but will not work unless there are increases in production and more efficient distribution of inputs and final goods.
Corruption, nepotism, bureaucracy, waste, as well as violent crime need to be honestly and fully addressed and significantly reduced. This will require government commitment to root out corruption, as well as grass roots movements making demands and building power to challenge the government and the PSUV, the ruling political party.
So there are real problems in Venezuela. However, not all protests are good just because they are protests. The aim of the current protests is to stop the advance of the gains of the Venezuelan proceso, the major and positive although very incomplete changes since 1998. This does not mean we should demonize all protesters, but must realize that the overall objective of the last month of street actions has been to move Venezuela to the right. That is, to a society dominated by middle income people and especially those who used to rule Venezuela. The protests in Venezuela have nothing in common with Occupy Wall Street or the anti-austerity protests in other countries.
Also not all states or governments are bad. On balance, the Venezuelan state with Hugo Chávez and now, Nicolás Maduro, have enabled some major and positive changes, domestically and internationally. Be suspicious of governments but remember one size doesn’t fit all.
What Should We Do Here?
1) We should demand the end of U.S. funding of the opposition in Venezuela and an end to all forms of U.S. intervention in Venezuela. Imagine if China, Iran or Russia openly supported the overthrow of the U.S. government. Kerry and Obama have been open about their support for the opposition to Chávez and Maduro. The U.S. supported the attempted 2002 military coup in Venezuela. The U.S. government has no right to intervene in Venezuela. The right of self-determination of Venezuela means the Venezuelan people should decide their future, not the United States which has played such an oppressive role in Venezuelan and Latin American history. Demand that the United States government not intervene in any way; oppose U.S. government resolutions that condemn the Venezuelan government!
2) Learn more what is going on in Venezuela and write letters to the editor; post alternatives views to the mainstream portrayal of Venezuela on Facebook, social media, etc.
I suggest we, as people, activists, and concerned human beings critically support the Venezuelan government against the attacks on it. Alternatives to capitalism and current global capitalism are so urgently needed; let us support and be in solidarity with radical social movements but also more than that. Venezuela is a positive example, of a society where the lives of the majority are improving and of a government that is supporting with its resources and policy the building of power from below. These are the communal councils, the communes, community media, and (even though very slowly) self-managed workplaces. The growth in access to health care and education is inspiring. There is too much reliance on oil and oil money but more than any country in the world the revenues from oil are being used to reduce and end poverty. There is a growth of indigenous rights written into the Constitution, and growing economic and social rights, although insufficient, for women and for LGBT people. There are small steps forward towards food sovereignty and an anti-GMO policy. All of this is imperfect but what other country is doing more? We should practice critical support as opposed to condemnation, indifference or uncritical support.
We should learn about Venezuela and be humble and modest in our criticisms. Let us not idealize and romanticize Chávez and the Venezuelan government but don’t let cynicism dominate our understanding and actions. There have there been fundamental improvements in the lives of Venezuelans, especially the inclusion of the poor—those who were formerly excluded and marginalized. Also very significant has been Venezuela’s role in Latin America and internationally. By playing a major role in the formation of group such as The Bolivarian Alternative for the Americas (ALBA), and the Community of Latin American and Caribbean States (CELAC), Venezuela has challenged and is challenging United States and transnational capital’s domination of Latin America and the world. That and “the threat of a good example” is Venezuela’s “crime “to the rulers of the United States and the global capitalist class in Venezuela. Don’t fall for the CNN perspective on what is going on in Venezuela.
Our responsibility is to challenge distortions about Venezuela from our government and the media and to oppose all forms of U.S. intervention. Solidarity means not only solidarity with the people and groups in Venezuela working for economic and social justice but also with their government. It does not mean supporting those whose goal is a neoliberal Venezuela under the domination of the U.S. government and U.S. corporations. It also does not mean standing idly by. The overthrow of the Venezuelan government would be a huge setback for people all over the world committed to ending poverty and to creating an alternative to global capitalism and neoliberalism.
Peter Bohmer is a longtime antiracist, antiwar and solidarity activist. He teaches political economy at The Evergreen State College in Olympia, Washington and has spent several weeks in Venezuela including studying there with students and another faculty member in 2009 and 2012.