Former Venezuelan Vice President: Produce Yes, Privatize No

Elias Jaua Milano questions if recent trends to part-privatize state-owned industries is really the way to increase national productive capacity.

Elias Jaua

Elias Jaua is a long time Venezuelan leftist revolutionary and politician who has held numerous high-level positions in the governments of Hugo Chavez and Nicolas Maduro, including vice president, agriculture minister, and foreign minister. In September, Jaua was dismissed from his most recent post as education minister in what was widely viewed as retaliation for his high-profile criticisms of fellow leaders of the ruling United Socialist Party of Venezuela (PSUV). He continues to be a member of the PSUV, and critically supportive of Maduro’s government. During the party’s congress in August, Jaua submitted a proposal for the direct election of the party leadership by the rank-and-file, which was defeated, and Maduro was re-elected as PSUV president by the Congress delegates (or PSUV leadership?). More recently, the former vice president made headlines when he took to Twitter earlier this month to criticize Agriculture and Land Minister Castro Soteldo’s controversial comment that the government should support the creation of a “revolutionary bourgeoisie.” In what follows, Jaua hits back at those he considers advocates of privatization within the Bolivarian government and revolutionary process.

Since the mid-80s of the 20th century, a systematic policy of disinvestment in state enterprises was developed which decreased their performance, coupled with the abandonment of any mechanism of fiscal control, which allowed their dismantling through various corruption schemes. Conditions were created so that a fierce media-based campaign of headlines, editorials, special programs and writers justified the process of firesale privatizations during the neoliberal period in the 90’s.

In recent days, we have seen the start of a similar campaign in major print press and on social networks. There is no doubt that some sectors appear to be interested in opening the debate on privatization in order to put their hands on assets that belong to all Venezuelans.

In this regard, we must remember that the results of the privatization process in the neoliberal decade – layoffs and outsourcing of jobs – did not contribute to the reduction of the fiscal deficit, given that the state had to maintain constant financial support to the privatized companies, such as [iron firm] Sidor. Many companies were sold or shut down by the new owners that were only interested in removing them from the market, such as the emblematic case of [airline] VIASA. There were no large increases in production and in the sectors where there were, this was mainly due to exports, or in the case of telecommunications, improvements which were achieved as a result of the exclusion of important sectors of the population from telephone services. He or she who remembers this must reflect on it.

One of the reasons that explains the historical emergence of the Bolivarian Revolution is precisely the reaction of the society of the 1990s against this disastrous process of denationalization. Thus it is expressed in the various documents of the 200 Bolivarian Movement (MBR-200) and of the Fifth Republican Movement (MVR), mainly in the Alternative Bolivarian Agenda of 1996, proposed by Hugo Chávez as a way out of the neoliberal maze. This is where one of the principles enshrined in our Bolivarian Constitution of 1999 – protection of the ownership of national assets – comes from.

The process of planned re-nationalisation, developed by Commander Chávez from 2006 onwards, looked to recover the property of the nation that had been auctioned off or illegally occupied, as well as stopping the bailing out of private managements of the firms through the transfer of foreign currency and other financial aid from the state. It also looked to democratize access to goods and services for the population.

Whenever and wherever [the pro-privatization advocates] want, we can, with figures at hand, debate and verify the stability and the sustained productive growth of, and expansion in, the services of the nationalized companies of all sectors, at least until the year 2014.

Accordingly, I recommend reading the article titled, “Only the People can Save the People” in my blog, Disputed Horizon, from July 9, 2016, which explains the causes, achievements and mistakes made in the nationalization process.

It is necessary to evaluate the process of strategic partnerships initiated in 2016, where an undetermined number of state-owned enterprises’ management was transferred to the private sector alongside a policy of intervention with externally trained managers in a large number of state-owned enterprises. It is not true that these companies are today managed by their workers.

From the pragmatic point of view, we affirm that privatization of our assets is not the solution to the problems of production. Firstly, because the weight of most of these in supplying the national market, except the strategic industries, is not decisive. Secondly, because they would not contribute anything to reduce the fiscal deficit, since they would continue demanding foreign currency and state funding to operate. Thirdly, because any privatisation would have a social and political impact on our employees, workers, peasants and farmers.

We must not make a mistake in the diagnosis of the problem. If the origin of the shortages was found in the mismanagement of social property, how could one explain the lack of drugs, [which are monopolised by] the private pharmaceutical industry. The explanation is that this [industry], as well as public companies, the [multinational food and beverage company] Polar and other “successful” private firms, depend on the dollars of the state [to function]. Structural deviation from the Venezuelan capitalist model, which is the main source of distortions in our economy, [is necessary].

Compatriots do not let us be seduced, like in the 90s, by smoke and mirrors. The real solution is in producing. For this reason, I welcome the recommendations issued by the Constituent Congress of the Working Class and approved by President Nicolas Maduro regarding the management of public enterprises. Now we must fight so that those interested in privatization allow these actions to be executed.

With regard to the approved plan, I dare to make some recommendations, which I have introduced at various levels of the [ruling United Socialist] party and the government so as to achieve the recovery of the, private and communal production:

1. Develop a program of transparent stimulus and support to the productive sectors of the economy, especially in agriculture and industry (financing, free access to raw materials, comprehensive assistance and guarantee of legal marketing, public safety).

2. Dismantling and criminalization of the mafias which have taken over production and commercialization, both in the public and private sectors.

3. Management of public companies with professional technical personnel, trained over the years in the management of the same workplace, and that in the period of the Bolivarian Revolution have been able to specialize in Venezuela and in various countries of the world. They know how to, and in particular they want to, revitalize our companies.

4. A program of bringing back conscious workplace discipline, through training, but also the exercise of authority mechanisms provided for in the Law of the Social Process of Labour and Workers.

5. Free exchange of currency amongst the private sector. Guarantee access to foreign currency, supplies and spare parts linked to productive goals for public and communal companies.

6. Develop a system of crossed prices and subsidies for producers of agricultural goods and prioritized industrial consumer goods.

7. A program of scientific technological innovation and financing of the growth of successful experiences in technical schools, universities and institutes of science and technology, so as to achieve import substitution.

Finally, I want to point out three final considerations for the recovery of production. The first is the need to reestablish democratic coexistence in our country. The second is that the preservation of our national companies is not incompatible with the actually existing international and national private sector investment; it is not task of the revolution to create new entrepreneurs in the same areas where they work. Third is that we must continue persevering in the promotion and expansion of a socialist communal economy in territories where the people have developed successful experiences, as it was our Commander Chávez who entrusted them with this task.

A mixed, transparent, honest, and inclusive economy of all sectors is the way for a good future. This is the path that we planned as revolutionaries, from the early nineties to the 21st century: the path of Chavez.

The views expressed in this article are the author’s own and do not necessarily reflect those of the Venezuelanalysis editorial staff. Translation by Venezuelanalysis.