The Crisis and the Venezuelan Working Class: A Conversation with Pedro Eusse

A political bureau member of the Communist Party of Venezuela talks about the current situation of the working class.
pedro eusse - cira pascual

Pedro Eusse joined the Communist Party of Venezuela (PCV) in 1979 when he was just 17 and working in a chicken factory. Now, Eusse is a member of the party’s political bureau and charged with coordinating worker and trade union issues. Eusse is also the General Coordinator of the Cruz Villegas Class-conscious Workers’ Current and of the National Front of Struggle of the Working Class (FNLCT). In this interview, Eusse talks to us about the working class struggles in today’s Venezuela.

When analyzing Venezuela’s crisis from a left perspective, there is a tendency to talk about the sanctions and the blockade as the only causes of its current crisis. The PCV has a more complex understanding of the situation. What can you tell us about the party’s position on this issue?

Indeed, the economic and social problems that Venezuelan people face now did not begin with the US blockade and the sanctions, although the latter have worked to deepen the crisis. Venezuela’s inflationary spiral began in 2013, and with that, the purchasing power of salaries began to shrink. This made for a difficult situation for workers and people in general.

There is another factor that is key to understanding the crisis: the deterioration of public enterprises did not begin with the blockade either. Early in Nicolás Maduro’s government, there were massive layoffs in some state enterprises and neglect of maintenance.

To give you two examples, large scale layoffs were carried out in state-owned sugar mills. This came hard on the heels of an executive decree liquidating the Corporación Venezolana del Azúcar [state sugar processing corporation] in 2014.

That same year there was a gradual dismantling of Abastos Bicentenario [state-owned supermarket chain]. Then it was decreed that this supermarket chain, which President Chávez had nationalized, would be “transformed,” which really meant privatized, as eventually happened. Abastos Bicentenario was a key link in the public supply network that had become very important for the people, particularly in the context of what the government called “the economic war.”

At the time of the layoffs – the first step in the privatization process – it was particularly important to have a state-owned mass distribution network so that people could escape the tyranny of the capitalist market. Instead, the government opted for privatizing it.

The government carried out this “dismantling” process in a deliberate manner. Remember, all this happened before sanctions.

To that we should add that during the early years of Maduro’s presidency, he prioritized paying foreign debt. At the same time as the economy was suffering due to the fall in oil prices and the drop in oil production, enormous amounts of money were being paid out to the international financial system [debt service]. This, of course, had a huge impact on the state’s economic capacity.

However, the deepest roots of the crisis are really in the exhaustion of the dependent capitalist and rentier economic model, which Chávez did not transform.

To be sure, when the crisis hit, the bourgeois state passed the burden onto the most vulnerable people: wage earners and pensioners.

PDVSA - Cira Pascual Marquina

So, you argue that the crisis really began around 2013, which was a few years before the financial sanctions kicked in?

That’s right. The financial sanctions began in mid-2017, and then came the oil embargo in early 2019. That amounts to an approximately five-year crisis period before they take place.

That is why claiming that the coercive measures are the sole cause of the crisis is dishonest or at least not the whole story. Of course, with the blockade, the economic situation worsened. However, it is also true that the economic policies that the state implemented as early as 2013 reduced its capacity to face the crisis and address the needs of the people.

They administered the crisis in a way aimed at protecting the capitalist sectors. Further, the government’s objective of attracting foreign investment also affected the popular economy. To achieve that goal [protecting capitalists], one of the policies was devaluing the labor force. In other words, wages were destroyed and social benefits and other acquired rights were dismantled, thus dismantling the social security framework.

This is a very perverse mechanism from a revolutionary point of view.

What are the day-to-day conditions of working men and women in Venezuela?

The purchasing power of active workers, retired people, and pensioners has been pulverized. This is especially true in the public sector since most private sector employees get supplements to the minimum wage with bonuses paid in dollars.

The devaluation of the salary began with the phenomenon of hyperinflation. Then came the president’s decision to either freeze collective bargaining agreements or modify their clauses. Memorandum 2792, signed by Minister [Eduardo] Piñate in October 2018, made this policy formal. This document eliminates collective bargaining agreements in the context of the Plan for Economic Recovery, Growth and Prosperity, which aimed to cheapen the cost of the labor force and turn Venezuela into an attractive market for foreign investment.

The cheapening of labor hit public sector workers particularly hard for the following reason: when the crisis took hold, there was massive migration. Of course, the loss of skilled labor did not suit the private sector, so they began to supplement the salary with bonuses paid in dollars. The bonuses help capitalists retain workers, but they also have a long-term impact: social benefits such as retirement or unemployment [calculated in relation to the salary] vanish.

In fact, there has been a rapid destruction of formal labor relations: the achievements of the working class – won through historical struggles – began to disappear in 2013.

We are also concerned about matters of health and safety at work. Medical coverage is gone while maintenance in many workplaces is precarious. This exposes workers to very dangerous conditions. In short, we are facing the devaluation of work; labor flexibilization and deregulation; loss of medical coverage; and the annihilation of social security and other acquired rights.

The flexibilization of labor conditions happened first not by decree, but through the state’s decision not to intervene in the affairs of the capitalists. Many companies are replacing permanent workers with precarious ones. For example, the Polar Group [the largest Venezuelan food conglomerate] laid off some three thousand workers. And, although many obtained reinstatement orders, Polar did not comply and replaced them with non-contracted workers without rights.

Of course, the trigger for the current situation was Memorandum 2792, but there was also a fraudulent interpretation of Article 148 of the Organic Labor Law. The article says that when a company faces economic difficulties, a protection committee can be established to agree upon conditions that will make it possible for the entity to keep its doors open. This has been used by many powerful companies such as Coca-Cola, Inlaca, and Mondelez [former Kraft Foods].

Through the use of Memorandum 2792 and the reinterpretation of Article 148, these companies suspended most of their personnel. After that, they proceeded to hire temporary workers who have no acquired rights, thus reducing costs while obtaining juicy profits.

Additionally, Ministry of Labor practices facilitate these sorts of actions: it is common for corrupt ministry officials to receive money to accept employers’ fraudulent and illegal actions in relation to their workers.

Some say that the neoliberal governments of Carlos Andrés Pérez [1989-1993] and Rafael Caldera [1994-1999] were not able to go this far. That may be true, but the issue here is not only the government: capitalists impose conditions on the government, and the government yields. To ride out the crisis, capitalists are imposing their approach: destroying rights, wages, and social benefits.

Is the working class doing anything to express its dissent?

Yes, workers are fighting back. Last year PDVSA workers, whose collective contract evaporated with Memorandum 2792, were out on the street demanding better working conditions. Whereas these public-sector wages were around three or four dollars a month, private-sector oil workers received bonuses in dollars. PDVSA workers also demanded that their medical coverage be reinstated. However, these protests receded due to the promise of a new collective agreement.

The hotspot now is in the state-owned basic industries in Guayana [Bolivar state], particularly SIDOR and Ferrominera. There are a large number of non-active employees in these enterprises: workers who don’t go to work because the employer told them they should stay home. Then came an unfair decision: active personnel are to receive bonuses but non-active workers are cut out, which has caused a sort of social explosion in Guayana.

The pandemic has been used to justify many things. Here I’m not only talking about salary discrimination. Minimally staffing at the basic industries in Guayana leads to overexploitation and an increase in occupational risks and accidents.

All this goes hand in hand with the government’s obvious intention of privatizing state enterprises including the basic industries. Private capital is much more likely to invest in enterprises with fewer existing employees and with the option of hiring new workers in precarious conditions.

Finally, the government is creating favorable circumstances for privatizations not only with its labor policies, but also by passing the Anti-blockade Law [October 2020] and other legislation that opens the doors to opaque deals, exempts taxes for investors, etc.

SIDOR - Cira Pascual Marquina

Are the workers’ protests forcing the government to reconsider its policies?

The demonstrations are very important, but they are somewhat disorganized: at the moment there is no unified leadership and there is no collective plan for carrying out the struggle. Additionally, when protests happen, workers face dismissals and criminalization, which makes organization harder.

The state’s tactic when it comes to working-class struggle is to repress and/or identify those protesting as sympathizers of the opposition. It also tries to divide the struggle by creating spaces of bargaining with the management.

Given these dire circumstances, it is urgent to bring together the different struggles and build a unified but diverse revolutionary front.

The PCV and other organizations are now doing a campaign for a living wage. What can you tell us about this initiative? Does it just claim that wages should be higher or is there a strategy to achieve the goal?

Yes, we are currently working in the context of what you call a “campaign” for living wages. However, our proposal is an integral one. It is not enough to demand wage increases; it is necessary to outline a plan to make living wages viable. In fact, our end goal is not just wage increases. We are pushing for a change in the government’s overall economic and labor policies.

When people demand living wages, the government says: “It is not possible to raise wages because of the blockade.” To that, we argue that, far from becoming an excuse, the blockade should mobilize the government so that workers have minimum conditions to survive its devastating effects.

At the root of the problem is the government’s commitment to the capitalist sectors of the economy, who are making huge profits in dollars and are not paying taxes! Venezuela is one of the countries with the lowest tax burden on the rich in the continent. The current arrangement comes from the neoliberal 1990s Caldera government. With this in mind, one important step toward living wages would be to tax the rich and corporations, both national and foreign.

Regarding international corporations, we must eliminate the clauses against double taxation in our legislation [these clauses allow foreign corporations to not pay income taxes in Venezuela]. This is a country under a blockade and capitalists don’t pay taxes!

Instead, the government is moving toward privatizations, arguing that state enterprises are inefficient. Indeed, quite a few enterprises came to a halt, but people should understand that what “failed” was not worker control. The state enterprises were practically all under government administration, both military and civilian. For years, the government allocated enormous resources to these companies and many of the administrators got rich during their tenure. This is a well-known fact. So we propose that all public enterprise administrators be investigated, and the state should confiscate the assets of those administrators whose wealth is the result of corruption.

Finally, we propose that rather than handing public enterprises over to the private sector, a new democratic management model should be put in place: workers, the government, and the neighboring community (campesinos, communes, associated producers, etc.) should collectively run the enterprises…

Again, it is important to highlight here that what failed was the state’s management of public enterprises, not the capacity of society to manage its assets in a democratic manner.

In synthesis, we propose the following: tax the bourgeoisie and the corporations, locate embezzled resources and return them to the state coffers, and promote a democratic management of the state-owned companies. These steps, if combined with other economic policies such as planning, are sure to improve the state’s productive apparatus.

This is a time that demands working-class unity and independence. A movement subordinated to the state will not be able to struggle successfully.

It is time to take the next step and direct our own collective struggles for a living wage, for collective bargaining rights, for collective contracts, and for the right to strike. But our goals must go beyond that: we must conquer spaces of democracy within the workplace in a process aimed at recovering state-owned enterprises while confronting capital.