Juan Guaidó’s Policy Proposals: 'The Venezuela to Come' or the Venezuela That Has Already Been?

Juan Guaidó has a plan to end the emergency in Venezuela—but his vision looks a lot like the elite-led, violently unequal Venezuela of the 1990’s.

By Barry Cannon - NACLA
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Juan Guaidó meets with the Senate of Brazil on February 28, 2019 (Presidência do Senado/Flickr).
Juan Guaidó meets with the Senate of Brazil on February 28, 2019 (Presidência do Senado/Flickr).

On Thursday, January 31, at the Central University of Venezuela (UCV), Juan Guaidó, self-proclaimed “interim” president of Venezuela, presented a PowerPoint on his vision for Venezuela: Plan País: La Venezuela que Viene (Country Plan: The Venezuela to Come). This presentation was written, according to Guaidó himself, by unnamed “economic experts and National Assembly deputies,” although it is not clear if it has been adopted as official National Assembly policy. While Guaidó’s presentation was widely reported in the international media, the actual contents of the presentation received very little attention.

Guaidó’s Plan País, as well as the closely-associated Venezuela Energética (Energized Venezuela)— Guaidó’s party leader Leopoldo López’s 2017 plan for the nation’s hydrocarbons industry—lay out Guaidó’s vision of a healthy and economically sustainable Venezuela. However, upon a closer reading, it is clear that Guaidó’s vision fails to adequately address social and economic inequality, a key goal of chavismo. In reality, Juan Guaidó’s “Venezuela to Come” is a Venezuela we have seen before—one for the elites, at the expense of lower socioeconomic sectors and the working class.

Guaidó’s presentation begins by outlining the opposition case for Venezuela as a “failed state,” providing an account, compiled from various sources, on the country’s economic and social implosion, the basic facts of which are by now well known. The plan is presented as the antidote to this catastrophic situation, blamed squarely on the “failed economic system of Socialism of the 21st century” by “destroying the country’s productive apparatus, [with] arbitrary regulations and controls leading to appropriations which are then corruptly plundered.” Here the key theme of individual effort is introduced, as he claims such measures have destroyed the “citizen’s capacity to stand on their own two feet” by “punishing anyone who looks to provide for their family in a dignified manner.” By focusing on three main goals—giving state power back to the people, economically empowering Venezuelans, and re-establishing democracy—Guaidó proposes a plan to recover Venezuela from the current crisis.

Free Market Faith

With regard to giving state power back to the people, Guaidó emphasized that democracy and the state should be put at the people’s (gente) service, so that “society can develop itself freely and with dignity” to help “promote entrepreneurship [and] competition.” According to this logic, empowering Venezuelans to overcome structural poverty is directly tied to a reestablishment of free-market principles, which will supposedly enable society to “organize itself in an autonomous manner to solve its problems.” Guaidó, therefore, believes that economic prosperity in Venezuela can only come about by removing state controls on private property. He argues that this return to free-market policies will solve Venezuela’s emergency and will allow Venezuelans to reach their full potential, therefore reinserting Venezuela in “the concert of free nations of the world” and restoring the country’s supposedly lost sovereignty. Guaidó also outlined a few short-term priorities to help achieve these larger goals. These are to stabilize the economy; attend to the Complex Humanitarian Emergency (CHE); reactivate the oil industry; assure “universal” access to “quality” public services; guarantee comprehensive citizen security; and generate confidence and judicial security. To achieve these aims, Guaidó stated that Venezuela will obtain “massive” financing from four fundamental sources: “multilateral finance organizations and countries interested in the restoration of democracy and development in Venezuela”; a “profound” debt restructuring; macro-economic and regulatory restructuring to attract international investment; and, recuperation of illegally sourced wealth.

Guaidó’s plan to revitalize the economy will involve anchoring the exchange rate to slow inflation, dismantling present systems of state control and regulations, recapitalizing the banks and reactivating the capital markets, promoting international investment including in public companies, and in the provision of public services. It will address the humanitarian crisis through effective social protection programs, as well as through promoting “quality jobs and protection of the family income.” It will place special attention on health, education and nutrition, and promote jobs through community entrepreneurship programs, increasing the minimum wage, and creating a “new census of beneficiaries” to help identify those who need help.

While some of these goals don’t sound particularly malfeasant in theory, the presentation’s emphasis on the involvement of the private sector through competitive tendering in the provision of public services is deeply concerning. The state will only “be responsible for the regulation and strict fulfillment of contracts” [while] “maintaining the ownership of the assets.” Direct subsidies will be provided initially, “according to the payment capacity of the different sectors of the population,” but the aim will be to eventually eliminate all subsidies.

The Oil Industry

Reactivating the oil industry is absolutely central to Guaidó’s program. His government would approve a new Hydrocarbons Law which will include “preserving the property of the Nation over the oil fields”; permitting private capital as majority shareholder in oil projects; designing a competitive fiscal regime; maximizing production of gas and oil; and creating a Venezuelan Hydrocarbons Agency (Agencia Venezolana de Hidrocarburos – AVH) to supervise the sector.”

One of the most interesting and innovative aspects of Guaidó’s proposal relates to the notion of democratizing oil. According to his plan, drawn from the afore-mentioned document Venezuela Energética, each Venezuelan citizen over 18 years old will receive direct benefits from the oil through a new Assets Fund for Venezuelans, based, the document reassuringly states, on Norway’s Oil Fund, one of the richest sovereign wealth funds in the world. This entity will have the following essential characteristics: direct financing from oil sales, that is from royalties, taxes on profits, and shareholding dividends; direct ownership by the people, with each Venezuelan citizen, on becoming 18 years old, obtaining a personal account in the FPV, with “directly owned shares which will grow based on oil and gas sales”. This personal fund can only be used to finance “essential needs”, i.e. medical insurance, mortgages, and education costs, and will also be the basis of future pension entitlements. According to Guaidó, the fund will be “totally transparent,” with monthly statements on personal accounts provided to each citizen, who will also be able to access a webpage to monitor daily activity of the fund. It will also be controlled by an “independent board without governmental interference.” The state (or as the authors repeatedly insist, “the government”) will be financed by a 50% tax on each citizen’s fund, thus, ensuring it’s “accountability to citizens.” It is not clear if this will be in addition to existing taxes on income and wealth or replace them.

Through this fund, the Venezuela Energética document makes clear how the other two objectives of Guaidó’s plan will be achieved: the diversification of the economy and the transition to renewable energy. The FPV will finance the development of new industries and a “robust service sector” including “hundreds of small businesses”, again citing Norway as an example—despite the fact that Norway rarely uses its oil fund for these purposes. Similarly, while most of the oil would be exported, these sales would finance the development of Venezuela’s hydroelectric, solar, and wind energy sources. The document, however, is not clear what mechanisms it will use to achieve these goals. The plan closes with two other key promises. First, comprehensive citizen security via the implementation of a new Citizen Security Strategy, which, while vague on details, promises a thorough structural reform of the Public Ministry and the National Forensic and Technical Police (CICPC), including recruiting 120,000 well-trained and equipped police. Additionally, the plan promises international cooperation alliances, increased preventative policing, some form of citizen participation in policing, better illuminated streets, and renovated and new-built prisons. Notably, there is no timeline or financing details provided for these measures— which seems to contradict Guaidó’s promise to reduce the role of the state.

He also promises a profound review of the justice system, including doubling the number of judges in the first year, who would be competitively selected and trained in a proposed new school for the judiciary. Other notable proposals are eliminating indefinite elections of public representatives (a key measure introduced by referendum in 2009), combatting corruption, among other measures including decentralizing individual states by increasing their powers at the local level while limiting those at the national level. Overall, the plan aims to “empower Venezuelans…to stand on their own two feet,” and Guaidó argues that this can be achieved only with necessary financial support, provided under the “full rule of law,” which will thereby “liberate the productive forces of the Nation.”

A Country without a Social Policy

In a previous article in 2014, I identified the preference of opposition parties for private sector activity over state activity both in the economy and in terms of poverty reduction. As Julio Borges, the now-exiled leader of conservative party Primero Justicia (Justice First), explained to me in an interview in February 2012, state-led social provision aims at maintaining citizen dependence on the state, whereas his preferred “social policy is that the country does not need a social policy.”

In other interviews conducted at that time with a variety of political and social actors linked to the Venezuelan opposition, there was a lack of concern for inequality—be this socio-economic, racial or gender inequalities. Indeed, many opposition-linked actors I interviewed viewed this concern as more of a discursive strategy employed by chavismo to maintain its power, rather than actual, empirical social phenomena. The current opposition proposals in Plan País and Venezuela Energética continue to reflect these biases.

Plan País is quite clear that the eventual aim in social provision is to eliminate it entirely by privatizing it. The state will maintain ownership of assets and infrastructure, but service provision itself will be entirely privatized and marketized. Despite references to universality, these services will not be universal in the sense of equal access to all regardless of income, as the document suggests that those deemed able will have to pay. Moreover, health and education services will also be financed by the individualized income from the FPV assets fund. A similar fate awaits PdVSA, the state oil giant, which would remain in state hands but be operated by private investors and removed from direct state management to that of an “independent” board, the selection and composition of which remains unclear.

Both documents are characterized by a negative attachment to the “state,” with a preference for terms such as “government.” Additionally, they shun the concept of collectivity, with “the people” (pueblo) replaced by the much more general and less political “people” (gente). Politics and the state, therefore, are demonized in favor of private, individualized initiative, which is depicted as the true nature of the Venezuelan people, and most perfectly expressed by the market.

This vision is reflected in the FPV assets fund, whereby state oil reserves will be transformed into personalized accounts, similar to bank accounts, and funds allocated with no account taken for social, racial, or gender inequality. The dividends for these are to be used to individually consume privatized essential services, which are, as is “government,” subjected to a demand-led, consumer-oriented model of citizen control.

The comparison with Norway here is instructive. Norway is generally viewed as being one of the most equal countries in the world, due in large part to a mix of universal welfare state access, strong progressive taxation regimes, and fair, equitable employment regulations. The Norwegian Oil Fund then exists in the context of high levels of social equality brought about by a strong state. Moreover, as noted, Norway does not provide citizens with individualized payments and investment from the Fund in state spending is limited to around 4% per annum.

The Venezuela of Old

The Venezuela of Juan Guaidó’s proposed Plan País will by no means be a welfare state. While the plan mentions consensual salary and labor regulations along International Labor Organization lines, there is no mention of progressive taxation policies—or tax policy at all for that matter. One of the main aims of the Country Plan is to reduce and weaken the state rather than, as in Norway, maintain its strength. Hence, the FPV asset fund will most probably not reduce inequality and indeed may increase it, as each citizen will be allocated an equal amount regardless of income, in the context of a weak or almost non-existent commitment to reducing inequality of any type. Rich Venezuelans could conceivably use their FPV dividends to pay for expensive medical care or education services in the United States, whereas the poor could not, reinforcing existing class and other inequalities. The plan then has little in common with the Norwegian model and, indeed, seems its opposite. Moreover, with the promise to immediately involve the IMF and other international financial institutions in debt restructuring, the opposition is further increasing the likelihood of exacerbating inequality, as recent IMF involvement in Argentina shows. In conclusion, there is little in these proposals for poor Venezuelans—the “Venezuela to come” looks conspicuously like the pre-Chávez , unequal, elite-led Venezuela of old.

Barry Cannon is a lecturer in politics at Maynooth University, Ireland. His latest book is The Right in Latin America (Routledge, 2016).

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

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