I wrote this piece as a flyer to hand out at the Dan Kovalik talk in Berkeley. This version contains all the links.
Venezuela is suffering today under a set of failed policies and unkept promises made by the late President Hugo Chávez and maintained by the “chavista” loyalists under Nicolás Maduro. Chávez promised to end corruption, develop the internal economy of Venezuela (“endogenous development”) to make the country self-sufficient in food, and meet the needs of the country’s poorest. These goals are precisely why so many around the world supported Chávez’s “Bolivarian Revolution.”
Venezuela is suffering today under a set of failed policies and unkept promises made by the late President Hugo Chávez and maintained by the Chavista loyalists under Nicolás Maduro. Chávez promised to end corruption, develop the internal economy of Venezuela (“endogenous development”), make the country self-sufficient in food, and meet the needs of the country’s poorest. These goals are precisely why so many around the world supported Chávez’s Bolivarian Revolution.
Nevertheless, those who supported those goals need to withdraw their solidarity from the elite in control of the Venezuelan government now that it is amply clear that this regime has 1) increased corruption dramatically over its two decades in power; 2) destroyed all productive enterprises and made the country more dependent on imports of basic necessities; 3) impoverished the poorest, and even the middle and working classes through inflationary economic policies, economic mismanagement and irresponsibility so that Venezuela, that in the 1970s had a living standard comparable to Italy’s, today at $7 US per month, has the lowest minimum wage in Latin America. And there are more reasons too lengthy to detail here.
The decade-long oil boom (2004-2014), which could have benefitted the majority, was embezzled, mismanaged, and squandered with impunity, leaving the country in a far worse state even than before Chávez took power. In a 2015 investigation carried out by Chavistas themselves estimated that members of the government they had supported had robbed nearly half a trillion dollars from the treasury.
Why do international solidarity activists continue supporting the Bolivarian government?
Their support rests on three fallacious arguments:
- There are no problems
This is the approach of Max Blumenthal, notoriously used in his video that shows him shopping in an abundantly supplied supermarket to discredit verified reports hunger in Venezuela. Never mind the consensus of the reports of the international press, international organizations like the UN, IMF, World Bank, governments all around the world, and the testimony of the millions of Venezuelans fleeing the country: Blumenthal has found a richly-supplied “Potemkin” supermarket.
This argument can get no traction within Venezuela itself since everyone there knows the problem not only exists, but is so severe as to threaten the health and lives of the great majority of the population, especially the children (see UNICEF’s report, or Caritas).
- Venezuela’s economic problems result from sabotage by imperialists and the right wing.
This argument holds that the Bolivarian revolution comes under attack because it represents an alternative to the neoliberal consensus: capitalists have quit producing, or are hoarding what they produce. Venezuela does indeed have a problem, but capitalists are to blame, rather than the government policies demonstrated by most economists and other experts to be the problem.
Consider this: when the rest of the world offers a profitable business climate, why should anyone risk their capital in a country with such a terrible climate for investment and profit? Venezuela is the only country in Latin America to have lost 1/3 of its GDP in just the past four or so years, and is expected to lose another 1/3 in just the next year or so. Why would anyone wish to invest in such a climate? And what reasonable person would expect them to do so?
While some extremists on the left see capitalists withdrawing from the economy as a positive, the real problem is that the government hasn’t replaced capitalist production with anything but the usual: imports, that is, by exploiting its neighbors’ labor. Yet the import process is so rife with fraud that the US government is now sanctioning participants in the Bolivarian food import program.
As for hoarding, no one hoards in a good business climate where products are easily produced and freely available at consistent prices. But in a context like that of Venezuela where nothing is produced and everything is imported and where inflation runs in the millions percent, only a fool who has resources doesn’t hoard since money loses value by the second while commodities increase in value. In other words, hoarding is the result of a wrecked economy, not its cause.
- US sanctions and low oil prices caused the disaster unfolding in Venezuela today.
As noted elsewhere, many have refuted the claim of causality of the sanctions as an element in Venezuela’s crisis. Suffice to say that UN High Commissioner on Human Rights Michelle Bachelet’s Report, acknowledges that the sanctions “exacerbated” but did not cause the crisis.
Similarly, low oil prices negatively impacted Venezuela, but its economy was already collapsing before the price of oil dropped in late 2014. As early as July 2013 Chavistas were already issuing alarming reports based on information in the Venezuelan business press at a time when oil prices were well over $100/barrel. When the oil prices dropped in late 2014-early 2015 Venezuela experienced the beginnings of an even greater shock because Chávez had borrowed enormous amounts and spent extravagantly through the decade-long boom, saving nothing for the inevitable downside of the market cycle. In response, from 2014 on Maduro began drastically cutting imports so he could meet obligations to international lenders. Goldman Sachs, for instance, was delighted to buy what was called “hunger bonds” issued by the Maduro government.
To put all this in context, however, it should be recalled that oil prices are today still relatively high, in fact double what they were in the 1960s when, emerging from dictatorship, presidents like Romulo Betancourt and others managed to build up the nation’s capital with electrification, free and universal education, health care and other elements of the new social democracy. But in contrast with prior administrations that made of Petróleos de Venezuela S.A. (PDVSA), an internationally respected, efficient and profitable state oil company, former Chavista PDVSA President Rafael Ramírez himself said that Chávez wrecked the company and killed the goose that laid the golden eggs. In 2003 after the oil strike, he fired the PDVSA state oil company’s most skilled workers en masse and replaced them with unqualified party-loyalists. Then from 2004 on Chávez drained income from the oil company that was required for capital maintenance and improvements, spending wildly on “Missions” which, though temporarily alleviating poverty, led to little or no lasting economic development.
Today PDVSA, responsible for bringing in 96-98% of the country’s foreign currency, is in shambles. Years of reckless expropriations, decapitalization, and negligence of critical infrastructure have made Venezuela even more dependent on foreign imports precisely at a time when it can no longer afford them.
But beyond the incompetence and irresponsibility, negligence and corruption, are arbitrary detentions, summary executions and other human rights violations outlined in the recent UN Human Rights Commission report. By the government’s own admission, its security forces (death squads) are responsible for fully one third of the murders in the country—between 5-7 thousand people per year.
It’s time to end all support for the Venezuelan regime and join in solidarity with the Venezuelan people to support them as they demand free, internationally monitored and fair elections now.