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Opinion and Analysis: Bolivarian Project | Economy

Venezuela Confronts Capitalism's Crisis with More Revolution

In some countries, the severe crisis of capitalism has resulted in a realignment of respective governments with the imperialist powers - and the adoption of different forms of cut backs that affect the living conditions of the majority.

In the Venezuela, the opposite is occurring.

Before and after the victory for the pro-revolution forces in the referendum on February 15, to allow elected officials to stand for re-election more than once, the decision to push forward with the transition to socialism was ratified.

The world economic situation has also undoubtedly hit hard in Venezuela. The revolutionary government has already resolved to eliminate "all expenses that are not absolutely indispensable".

But these austerity measures, far from adversely affecting the course of the revolution that seeks to transform the country, are favouring it.

To the average politically trained eye, this has been evident since September 2008. President Hugo Chavez explicitly warned of his in this annual message to the nation on January 13.

Despite this, the right-wing opposition once again erred - Confident in the idea that the world crisis and the fall in oil prices would finally bled dry the revolution and put an end to Chavez.

Among their innumerous incorrect evaluations in the last few years, this is probably the most grave, and of greatest consequence.

Crisis hastens radicalisation

The opposite is occurring. The relative scarcity of resources caused by the abrupt drop in oil prices simply tightened the margin of concessions that the government has made, in all areas, to the coup-plotting forces entrenched in key sectors of production and finances.

In the final minutes of his January 13 speech, Chavez clarified: "There are prognoses coming from different quarters of the political opposition, and some media outlets, of an economic debacle in Venezuela.

"Moreover, [the media is proclaiming] that Chavez is preparing a neoliberal package.

"Instead, I want to repeat the following once again to the oligarchy and the Venezuelan bourgeoisie: they would be better off praying, instead of asking and clamouring for a debacle to fall upon Venezuela.

"To the opposition: pray that the great world crisis of capitalism, the great world capitalist economic crisis, doesn't reach here with the intensity that you are wishing for.

"Why? Because Carlos Andres Perez [a former social democratic president who, in 1989, implemented harsh anti-poor neoliberal policies that resulted in the Caracazo uprising] is not the person heading this government. Hugo Chavez is.

"Look, if they are thinking that I'm going to follow the policies of Carlos Andres Perez ... or that of George Bush now, over the last few months, of bailing out with thousands of millions of dollars, as was previously done here, to this financial oligarchy, this unpatriotic bourgeoisie, they are very mistaken.

"If the impact of the economic crisis of world capitalism reaches here with force, it is those sectors of national capitalism that are going to be hit hard.

"It won't be the people. It will not be the revolution."

The opposition played deaf.

Beginning with the unaltered pressure they receive from the US and their erroneous characterisation regarding the referendum, they have prolonged their favoured tactic for wearing down the government following their February 15 defeat: food shortages and price increases.

Parallel to this, opposition groups are fanning the flames of a plan to convert the opposition-governed states of Tachira and Zulia into territories out of the control of the central government - fomenting a separatist structure.

"With this separatist strategy, they are feeding the idea of sowing civil war in Tachira, Zulia, Barinas and Merida", explained the pro-government Diario Vea on February 25.

On the afternoon of February 28, Chavez responded by announcing the government take-over of rice plants that had been violating price controls: "There are sectors of agro-industry that are refusing to obey laws. Above all, those that process rice.

"I have ordered that they be intervened starting now."

To remove any doubt, the president instructed the commander of the National Guard, Major General Freddy Alonso Carrion, to guarantee the support needed to take over these rice factories, together with the agricultural minister and head of the Strategic Operation Command, Major General Jesus Gonzalez Gonzalez.

"We will not allow them to continue poking fun at the people and the revolutionary government", said Chavez during his national announcement broadcasted on radio and television.

"They are threatening to halt production. If they do that, I will expropriate them. I have no problem with that and I'll pay them with bonds.

"Don't count on me paying with hard cash", added Chavez.

Barely hours later, the vice minister of agriculture, Richard Canan, confirmed in front of state TV cameras the take over of the installations of Arroz Primor, which belongs to the Polar Company. "Right now we are initiating a process of temporary occupation of the Arroz Primor company, here in Calabozo", declared Canan.

He explained that the installations have a capacity to process more than 7500 tonnes per month but that it was processing less than 3000 tonnes. "Pure flavoured rice", he underlined, which is more expensive, as it avoids the price controls set by the government.

Combatting sabotage and crisis

Although undoubtedly the political impact of the referendum victory (made against an intense opposition campaign for a "no" vote) outweighs these measures, as expected as they were controversial, the take-overs can be understood in light of the world crisis.

For at least six years, the government has had to counteract food shortages and disruptions with the massive purchasing of food imports, while undertaking the labourious and slow process of increasing internal production - which is now considerably advanced.

However, this was only possible with money available from over-priced oil sales in the last period. With this extraordinary surplus cut down, the government's response has come.

One year ago - when the revolution suffered a setback with the defeat of the 2007 referendum to reform the constitution and an emboldened opposition sought to worsen the food shortages opposition-aligned large food producers and distributers had manufactured in the lead up to the referendum - it was clear that the continuation of the revolution required the revolutionary forces to have direct control over key centres of food production, importation and distribution.

This is a sector that, together with some private banks, still maintains the capacity to control the quantity, quality and price of primary food staples for the population.

In apparent contradiction with the relationship of forces at that stage, some voices began to raise the forbidden word: expropriation.

Chavez advanced step by step, continuing the program of nationalisation begun in 2007 that involved nationalisations in the electrical and telecommunications sectors. In 2008, his government expropriated the giant Sidor steel company, cement companies and the Bank of Venezuela.

Now, in the wake of the nationalisation flurry in the imperialist nations in order to combat the economic crisis, one of the biggest confusions raised in the course of the Bolivarian revolution has been cleared up - that of equating nationalisations with socialism.

Moreover, Chavez paid compensation for those expropriations. (It is possible to imagine the shock waves that went through the managers of the expropriated companies that have not finalised these transactions in light of Chavez's allusions to paying "in bonds".)

Arguments criticising the pace of nationalisations were made by certain sectors of the left who deny the existence of a strategy of transition towards socialism in Venezuela.

Sectors of the bourgeoisie acted on the same premise, thinking they could continue pulling the strings.

Here is the result. In perfect continuity, but presumably at a speed uniformly accelerated by the pressure of the world crisis, Venezuela continues down the path of the transition to socialism.

Advancing to socialism

Five days after the referendum victory, Chavez insisted on some key concepts: "For there to be socialism, we have to transform Venezuela's economic structures, we have to work towards social property of the means of production, which will allow us to generate the conditions required to achieve social justice, for there to be no misery, poverty or crime in Venezuela", adding "socialism is scientific or it is nothing".

"Socialism can not be just simply a dream, a hope, a sentiment, Chavez argued. "Socialism needs to have real body, muscle, skeleton, nerve system, meat, life ...

"We have to transform the economic model, basing it on social property over land, industry, the means of production. This is part of life or death, of the hope that the Bolivarian revolution will not fail. We can not fail again ...

"We did not get to where we are to make small reforms, we are here to deeply transform the social, political and economic structures."

In his message to the nation, the president had also warned: "There are countries that pride themselves on economic growth. What a surprise! But at the same time that gross domestic product grows, so does poverty.

"What's the point of that?

"Not here: here the country is growing economically, under its own sovereign model, and moreover with the reduction of poverty, of exclusion, of marginality and improvements in living conditions."

The world economic crisis, explained Chavez, will of course also affect Venezuela.

But, at the same time as the minister of economy, Ali Rodriguez, ordered "the elimination of all expenses that are not absolutely indispensable", Chavez made clear that "the budget for the [pro-poor] social missions will not be cut".

"The missions are sacred; they are the lifeblood of the people: food, education, health, housing, culture, ecology. We will continue investing the necessary resources."

Nothing new. Except that the money that is no longer coming from oil will be sought by the revolution from the sources where it is.

From: International News, Green Left Weekly issue #787