What is Going on in Venezuela?

Talk given in Seattle, Washington on April 5, 2014.

[This article was updated on 7 April to include an updated version of a talk originally given in March, 2014. The newer talk presented below includes some updated information.]

There are two different stories about Venezuela—one view is that the protesters there are part of a world- wide protest upsurge such as what has been happening in Turkey, Brazil, Chile, Ukraine and Egypt in 2011, against an increasingly repressive and poorly functioning economic system. In this narrative, the protesters in Venezuela want more democracy, less corruption and an economy where goods are available.

My view is quite different. It is based on my study and teaching about Venezuela and Latin America and taking classes of over 30 students each with another faculty member from the Evergreen State College, where I teach political economy, to Venezuela for two months each in 2009 and 2012, and spending another two months there between 2009 and 2012.

First, a little context! Hugo Chávez was elected President of Venezuela in 1998 and died a year ago in office after being reelected three times. 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. Yet, it is wrong to reduce our analysis or opinion of Venezuela to Chávez, pro or con. Most important is the changes in the daily lives of people in Venezuela, economically, politically, and culturally. That is my focus.

The popular classes in Venezuela, 80% of the population, workers in the formal and informal sector, the unemployed, small business and campesinos, have improved their lives significantly 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 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. (Barrios are the name for the urban communities where the popular classes live.)

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. They have become protagonists, subjects of history. 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. Access to decent housing has also grown significantly although not as substantially as to education and quality health-care.

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, construction materials, oil and farm equipment, etc. The intent is to increase production of goods and there has been some growth although slow. Venezuela has not been successful in maintaining sustained, continued and solid growth neither in key industries, including agriculture nor in another goal, 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 income distribution to the most equal country in the Americas. Its Gini coefficient which measures income inequality, and where zero represents total income equality; and where is total inequality, is around 40. This is the significantly lower than the United States coefficient of 47 although still more unequal than the Scandinavian countries.

Nicolás Maduro was elected President of Venezuela in October, 2013 as the candidate of the governing party, the United Socialist Party of Venezuela (the PSUV) 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 participatory 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; but it is not new. Inflation was 56% last year; it has averaged about 25% since 1998 but was even higher in the 1990’s. Yet poverty still continued to decline slightly in spite of this very high inflation rate. Most workers wages increased at a rate close to the rate of inflation. This means that the real wage is maintained. This applies to those earning the minimum wage which was raised by almost 60% last year. 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. By informal sector I mean people of all ages including kids selling goods on the street, in buses, at small stalls, at the markets, etc.

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 continually rise. This spurs imports which end up being cheaper than domestically produced goods. For example, because of the continual rise in prices in Venezuela it is cheaper to buy goods, e.g., rice from Colombia, than to grow it at home.

Venezuela exports little besides oil as Venezuelan goods are too expensive to export at the going official exchange rate of the Bolívar to the dollar. In order to limit inflation, prices from rising even more, Venezuela has tried to fix the value of its currency to the dollar fearing devaluing the Bolívar, i.e., increasing the number of Bolivars to the dollar, would increase the cost of living as the price of imports would rise. The Venezuelan government has limited the convertibility of its currency, limiting the trading of Bolivars for dollars or other major world currencies.

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 reached 90 to one by February, 2014. This high exchange rate for the dollar is fueled by the limited selling of dollars by the Venezuelan government and intense speculation against the Bolívar, i.e., gambling that the value of the Bolívar will continue to fall and the dollar will rise by buying dollars with Bolivars.

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 abroad) and then selling the dollars on the black market for 50 or 60 or 90 to 1. 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 decided in the last month early March, 2014 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. It is necessary and the price of the dollar on the black market has fallen to about 55 to 1; it will fall more.

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 in private stores and in the Mercals, government run and subsided food stores to purchase needed consumer items. Often their shelves are empty. 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 increased slightly.

Increasing domestic production of food and other goods is essential to end the mismatch between growing demand which is also the result of the greater purchasing power of the popular classes and the much slower increases in supply over the last 15 years.

3) Violent 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 violent crime seriously. A new national police force has been formed, hopefully to replace a violent, inefficient and often brutal and criminal police 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 such as music, sports and art, 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 the U.S. Certainly the United States has done this type of economic destabilization in the past; for example, Chile in the early 1970s and Nicaragua in the 1980s. The U.S. attempt to defeat what is called in Venezuela, the Bolivarian revolution or “el proceso’ or Chavismo, is a real factor in Venezuela and we should of course oppose it but is probably not the main cause of these problems. A partial cause of the problem of shortages and inflation stems from 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

Causes of the Protests

The street protests in Venezuela began about two months ago, in early February, 2014. There are some legitimate grievances of many of the protesters, e.g., the inflation, crime and shortages I just mentioned. 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 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, and leaders of the small and right-wing political party, the Popular Will Party. They have made it clear their intent is to overthrow the government, what they call, La Salida, 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 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 in the State of Táchira where they started. . 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 National Endowment for Democracy supported the groups involved in the April, 2002 military coup against Chávez and have given money to groups led by Lopez and Machado. .

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 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. Leopoldo 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 the failed 2002 right-wing coup, that 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. Racism is also central and hardly disguised by the opposition. Those who gained from this ongoing economic and social transformation have been the popular classes, overwhelmingly people who are of indigenous, African or mixed European, African and indigenous origin. These gains in health care, jobs, education, social programs, and inclusion would be under severe attack if the opposition comes back top power.

Those who do not accept this move towards a more socially and economically just society are disproportionately “white” in a country where the large majority of people are not. 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 and the connected racial divide are key; class and also “race” are 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.

Media

The majority of the major media in today’s Venezuela are private. There is also public and community media. 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. 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.

Since 2003, there has been a growth of community media, mainly radio and TV, that is usually supported financially by the Venezuelan government but not under its control. It growth is central to the development of a participatory democracy in Venezuela.

Repression

As far as I can tell, 40 deaths over the last two months have been linked to the protests (See Venezuelanalysis.com, April 5, 2014). Of these, five were anti-government protesters killed by government security forces. Of the others killed, at least five have been pro government civilians, six have been National Guard, and a few have been accidents, indirectly tied to the protests. For example, a few of the deaths were people who were very sick and could not get through the blockades in time to get medical help. Two motorcyclists were 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 over use of force by some police and other government security forces. The government has arrested some police and National Guard for use of excessive force and violence, and fired others, thereby indicating that murderous repression is not government policy. President Nicolás Maduro just set up a Human Rights Council with national and international members, including non government controlled human rights groups in Venezuela policies “aimed at guaranteeing the free exercise of human rights and their protection and preservation. ”It will investigate the recent protests and disturbances. It is a hopeful sign.

There has begun a national dialogue on the current situation beginning Feb 27th, 2014. Community organizations, government officials, the church, main business associations, Fedecamaras attended. So did the owners of Polar, the largest food corporation in Venezuela and some opposition groups. It and the Human Rights Council are so far being boycotted by the main opposition coalition, the MUD, Mesa de la Union Democratica., Not much has came so far from this dialog but it may be a start towards an ongoing discussion of important issues even the divide is huge.

Dialog is good although I think it would be a mistake to move the economics and politics in Venezuela in a more conservative direction to appease the right-wing. The opposition is divided between those like Leopoldo Lopez and Maria Corina Machado who are committed to overthrow Maduro via escalating protests and disorder, and those such as Henrique Capriles, the 2012 and 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 seems that the anti-government protest, although continuing may have peaked. Recently, the numbers in the protests and in the blockades and barricades in the streets 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. By social economy, I mean production that is not for profit, that is publicly or worker owned, and worker and community controlled.

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, consumers should be involved in production and consumption decisions—on the environment, and in coordination and participatory planning of production and distribution. 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 productivity 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. There are many, many good and honest people in the PSUV committed to a Venezuelan socialism for the 21srt century but there are also many who use these words to advance themselves, who oppose participatory democracy and popular power.

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 two months of street actions has been to move Venezuela to the right. That is, to a society dominated by those who used to rule Venezuela and organized around the needs of the privileged and as a close ally of the United States. The protests in Venezuela have nothing in common with Occupy Wall Street or the anti-austerity protests in Europe and 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 and call for sanctions!

2) Learn more what is going on in Venezuela–write letters to the editor; post alternatives views to the mainstream portrayal of Venezuela on Facebook, social media; organize discussions about Venezuela in your community group, church, college, with neighbors, friends, 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 critically 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 towards transformation? We should practice critical support as opposed to condemnation, or 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), and Bank of the South (Banocsur), 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, Seattle Times, Huffington Post, or National Public Radio 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 and economic system. It also does not mean standing by cynically. 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.

Si Se Puede. Thank You!

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 months in Venezuela including taking Evergreen students with another faculty member, Anne Fischel, to study there for two months in 2009 and two months in 2012.