Venezuela: Expropriations of banks, PSUV congress and revival of the workers' movement

Recently we saw many important events happening in Venezuela, like the devaluation of the bolívar or the nationalisations in the banking sector, which needs to be analysed carefully. The movement of occupied factories made important steps forward last year, but still faces sabotage by counter-revolutionary managers and workers are still struggling for nationalisation under workers' control. In order to defend the conquests already made, the revolution must put the nationalisation of the commanding heights of the economy on the agenda. Only this can destroy capitalism and provide the necessary prerequisites for a socialist planned economy.

The Venezuelan revolution remains key to the understanding of developments in Latin America and indeed throughout the world. President Chávez recently visited Copenhagen, Denmark, where he was the only one – apart from Evo Morales – to point out that capitalism is the main root-cause behind the global climate crisis. In the words of Chávez; “If the climate had been a bank, they would already saved it.” The speeches of Chávez and Morales on the need to destroy capitalism and to build socialism on a world scale found an enthusiastic echo among thousands of workers and youth in Europe and also throughout Latin America where the speeches were broadcast on the continent-wide TeleSur.

From the very beginning of the Venezuelan revolution, the Marxists of the IMT have defended the revolution and highlighted its significance for revolutionaries throughout the world. This occurred, while many so-called leftists denied that a revolution was taking place and categorically wrote off the possibility of a turn towards a socialist path. Eleven years after the beginning of the revolution we can understand the extreme miscalculation of these people. Even though the revolution has not taken the decisive step towards socialism, it is clear that the idea of socialism has gained the ear of the masses who are fighting to achieve exactly this aim.

While defending the revolution against the attacks of imperialism and the national oligarchy, at the same time we defended the idea, that the revolution has not been carried to its conclusion and that this cannot take place while the bourgeois state of the 4th Republic is still in place and while the commanding heights of the economy are still in the hands of the oligarchy. As we shall see, this remains the main contradiction of the Venezuelan revolution to this day.

Venezuela's economy in recession

In his new year's speech of December 30, president Chávez had to admit that 2009 was a difficult year for his government. The world crisis of capitalism had a big impact on the Venezuelan economy which ended 2009 with a contraction by 2.9% in the GDP, compared to a 4.8% growth in 2008. The years 2003 to 2008 had seen a big upswing with one of the highest growth rates in Latin America. All figures point to a sharp downfall in production: manufacturing (which represents 16% of the GDP) fell by 7.2% in 2009^[i] and production of cars fell by 17.39%^[ii].

According to statistics from the Banco Nacional de Venezuela, the country's exports have fallen by an average of 5.1% per year over the last four years. Exports of non-traditional Venezuelan goods fell by an abrupt 60%. The same source indicated that overall oil export revenues dropped 35.3%, from US$ 89.1 billion in 2008 to US$ 57.61 billion in 2009^[iii].

This obviously created major problems for the government. Chávez has stayed firm on the line of no cuts in social spending or in the welfare reforms and projects financed by oil revenues. But with the fall of the price oil per barrel on the world market, the state budget has come under threat. To maintain public spending, Chávez had to take new measures. On January 8 he announced a devaluation of the Venezuelan currency, on two levels; the “normal” exchange will be 2.60 bolívares to the dollar and the “oil” exchange will be 4.60. This measure is aimed at giving the state much wider room for social spending, as the dollars obtained through oil sales can now be exchanged at 4.6 Bs.F compared to only 2 or 3 in the past.

The problem is that this measure will not help in the long run. On the contrary it will boost inflation, which has tormented Venezuelans during the last couple of years with rates of 30.9% for 2008 and 25.1% for 2009, the highest in Latin America. Just a couple of days after the devaluation, prices began to soar on all kinds of products; the cost of flights doubled and so did that of many electronic devices, such as computers and laptops, etc. The government has promised to fight against inflation, by sending out Eduardo Samán, the Minister of Trade, to all shops that speculate and raise prices artificially.

This has already taken place in a number of shops, where the government is threatening with closure, suspension of the enterprise or even with expropriation. In his weekly “Aló Presidente” of Sunday, January 18, Chávez announced the expropriation of the supermarket chain Éxito. He argued that this company had systematically speculated with its products and that this constituted a “robbery of the people”. He added more general threats against the capitalists; “Remember that they, the employers, are robbing the people […] It is robbery and I don't want to continue with that. This situation will end with the expropriation.”^[iv] In the same programme he ordered the expropriation of Sambil in Candelaria, a shopping centre in a Central Caracas neighbourhood.

The economic policies of the government are still very much contradictory. While nationalisations of small and medium size enterprises have continued, the commanding heights of the economy remain untouched. While the measure of devaluation is supposed to give an impulse to national production and to Venezuelan exports, the capitalists remain unwilling to make major investments. The Venezuelan oligarchy has always been completely parasitic and preferred to import all consumer goods instead of starting a national production. But with the Bolivarian revolution, they feel even more insecure, because they fear government regulations and the threat of expropriation. This dilemma was expressed very well in a recent editorial of the right-wing financial daily “Reporte diario de la economia”:

“Chávez is sending mixed signs to the private sector: he threatens with expropriating enterprises which raise prices without a good reason, but he offers 1 billion U.S. Dollars in credit and subsidies as incentives and calls for dialogue with the employers.
The weakening of the Bolívar makes the Venezuelan products relatively cheaper, but the employers are doubting whether to invest during a recession. Furthermore they have been through years of intimidations from the president, who has nationalised wide-ranging industrial sectors.”^[v]

The recent figures do not point to any increase in domestic production and exports. As we have seen, exports have declined over the last years. What is even worse, is that the idea of “soberania alimentaria” (food sovereignty), where a boost in agriculture was supposed to lower the dependence of imported foodstuffs, has not materialised at all; National agricultural production has seen a fall in most important products; Maize -26%, Coffee -27%, Sugar cane -12%, Potatoes -15% and Oranges -25%.^[vi]

The problem is that the task of developing the Venezuelan economy cannot be left to the capitalists. For decades they have shown a complete disinterest in this, preferring to maintain an economy with high oil incomes and very little domestic production. The problem is that the capitalist system remains. This was even admitted by the president of the Instituto Nacional de Estadística, who in a recent interview to El Universal reminded us of the fact that 70% of the GDP is still created by the private sector. “The economy remains capitalist”, he said.^[vii]

While capitalism remains in place, the Venezuelan workers and the poor will be haunted by the evils of inflation, unemployment and cuts in social spending. All attempts to manoeuvre within the bounds of the market economy will end up creating new contradictions. The continued existence of the conquests of the revolution, such as Barrio Adentro, the Misiones and the Universidades Bolivarianas, is doubtful if the economic situation continues to worsen. Chávez has refused to implement any cutbacks, but the measures taken are not at all sufficient to guarantee this. To really defend these conquests, the revolution must put the nationalisation of the commanding heights of the economy and a state monopoly on foreign trade on the agenda. Only this can destroy capitalism and provide the necessary prerequisites for a socialist planned economy.

Crisis in the banking sector and expropriations

Another remarkable development has been the recent bank crisis which took place from November last year and onwards. When major fraud, speculation and mismanagement was revealed in a number of banks, the government intervened. Of the banks taken over, Canarias Bank, BanPro, Baninvest and Banco Real were liquidated, while Confederado, Banco Bolivar, Banorte, and Central Banco Universal, were nationalised and merged with the state-owned bank Banfoandes to form a new public investment bank called Banco Bicentenario. A further 10 banks were sanctioned in January with fines totalling US$ 5.34 million, for failing to comply to Venezuelan laws, including the law on credit for peasants as an incentive towards agricultural production.

The nationalisation and merging of these banks, has increased state-control of the financial market to around 20-25%.^[viii] The interesting thing is that these measures did not just hit the financial bourgeoisie, but even a number of Chávez’s close allies, such as Arné Chacón Escamillo, (the owner of Banco Real and brother of former Science and Technology Minister Jesse Chacón), and Antonio Márquez, (the former president of the National Securities Commission) who were both arrested and charged with bank fraud. Chávez said that he would clean up the mess in the financial sector, “no matter who falls”. The arrest of Arné Chacón provoked the resignation of former Science and Technology Minister Jesse Chacón, who was always part of the endogenous right-wing of the government. According to opinion polls, the measures adopted by the government were approved by 61% of the Venezuelan population, while 39% disapproved.^[ix]

The nationalisation of these banks is indeed a step forward, which should be welcomed by all revolutionaries. The capitalists of the financial sector have plundered the economy for years and will now attempt to let the workers pay the crisis. But the nationalisations of these banks are far from enough. A socialist planned economy will never materialise unless we can control credit on a large scale. The major banks must all be nationalised in order to plan investments and benefit the masses of workers, peasant and small shopkeepers with cheap credit. If this is not done, we will see much more speculation and fraud in the future by the capitalists of the financial sector.

Workers fight for trade union unity

The crisis has already been felt by the working class. Although unemployment has grown relatively little (from 7.4 to 8%^[x]), there has been an overall attack of the bosses against the working class. In the car industry this was seen both in Valencia with the temporary lay off of the workforce in General Motors and in Barcelona, Anzoátegui state with the continued struggle at Mitsubishi (MMC). In the latter, the employers first tried to sack 250 sub-contracted workers in the month of January, which resulted in a factory occupation starting on January 11, 2009. The bosses wanted to teach the workers a lesson and bribed regional police forces to make an assault on the occupied factory on January 29, which resulted in the death of two workers. While a temporary agreement was reached in early March, the struggle between the trade union and the bosses continued and in August an illegal lockout was attempted on the part of the latter. This was declared illegal by the Venezuelan Minister of Labour and the lockout was defeated towards the end of August. However, the bosses remained hell-bent on crushing the trade union and went on to sack 11 of its main leaders. Unfortunately this action was endorsed by the Ministry of Labour.

The struggle at Mitsubishi acted as a warning for workers throughout Venezuela and pushed them to fight for a renewal of the workers' movement and concretely for the reunification of the UNT (National Workers' Union) which had been paralysed since fractional struggles broke up its 2006 congress. By mid-October 2009 the UNT federation of workers in the car industry held a gathering of more than 200 workers which argued for unity. On November 4, 2009, a successful regional congress of the UNT Anzoátegui was held with representatives of 40 trade unions. Finally on December 5, a national assembly of the UNT was held in Caracas with some 700 workers from all over the country. The preparations have now begun for a national congress to be held in April.

This congress will undoubtedly be very important for the future of the Venezuelan workers' movement. The criminal division of the UNT in 2006 had an extremely negative impact on the class struggle and was a big factor in the defeat of several factory occupations, such as that of Sanitarios Maracay in 2006-7. The pressure from below has now forced the leaders of the different wings to come together and try to unite the UNT. But any lasting unity of the UNT can only be achieved on the basis of a plan of action, linked to the perspective of putting the working class as the vanguard of the revolution. The question of price speculation and food scarcity provides a golden opportunity for the UNT to draw up a plan of factory occupations of all the industries that conduct sabotage against the revolution. A new wave of factory occupation, led by the UNT, in defence of the revolution, could push the government to take decisive action against the bourgeoisie. Such a policy could change the whole course of the revolution.

Occupied factories and struggle for workers' control

Workers in the movement of occupied factories are still struggling for nationalisation under workers' control. On August 31, 2009, a partial victory was won, when president Chávez publicly announced the nationalisation of INAF, a factory located in Maracay, state of Aragua, which produces mechanics for the train industry. Since the owner abandoned the plant in 2006 the workers had continued production under workers' control and set up a factory committee to manage all operations. From the very beginning they demanded nationalisation under workers' control. The declaration of Chávez meant that they now have been provided with more raw material in order to step up production, but apart from this no action has been taken and no decree has been signed. The workers, all of them active PSUV members, are now campaigning for the fulfilment of Chávez’s decision.

The nearby factory Gotcha, which produces t-shirts, is another example of the militancy of Venezuelan workers. The female workers at this factory have fought for several years for different labour demands and since 2008 the factory has been occupied. They are continuing production of t-shirts, which they are selling to national distributors, but they are demanding nationalisation as the only way to produce t-shirts that can benefit the wider population: school-children, public employees, and so on.

The situation in industries that have been nationalised recently is quite critical. This is especially the case in Guayana, where several industries have been nationalised from 2008-2009. In SIDOR, workers complain that sabotage by counter-revolutionary managers who are still in place, is having a disastrous effect on production outcome. A fire broke out in MITREX, one of the smelters of the plant, which caused a sharp fall in production. Mismanagement and corruption seems to have worsened this. Normally SIDOR produces 4.6 million tons of iron per year, but in 2009 only 3 million has been produced. Workers organised in the Revolutionary Front of Steelworkers are fighting for the implementation of workers' control as the only way to open the books, elect managers and put the company on a sound basis. They have denounced that the conscious sabotage on part of a sector of the managers is aimed at lowering production and thus “proving” that the nationalisation of the company in 2008 was a mistake. Similar experiences are being made by the workers in Orinoco Iron and the other four briquette factories that were nationalised by Chávez in May 2009.

The workers' in the newly nationalised companies have thus learned in a very short space of time, that nationalisation in and of itself does not solve everything. Without the democratic control and leadership of the workers, counter-revolutionary elements can infiltrate and conspire to sabotage production. Mismanagement and corruption can only be fought effectively if the workers use their collective strength to impose their will and take over the very running of the factories, linked to a socialist plan of development in the whole of Venezuela.

Internal struggles in the Socialist Party

The First Extraordinary Congress of the PSUV was opened on November 21, at a huge rally in Caracas with Chávez giving a very left-wing speech and calling for the creation of a new Fifth Socialist International. The congress was originally planned to last only towards the end of December, but president Chávez proposed to the delegates that it should be prolonged until the month of April, so that the documents can be discussed thoroughly. This proposal was approved by the delegates.

From the very beginning, it was clear that this congress would be characterised by a struggle between left and right. This was even seen in the process of the election of delegates, when the Caracas PSUV rank and file rioted against irregularities in the electoral committee that was supposed to supervise the process. At a mass assembly towards the end of October, the representatives of the PSUV branches voted to recall this committee and replace it with other people that could be entrusted with this task^[xi]. Similar protests against irregularities happened in other places of the country and in the campaign for the delegate elections of November 15 left-wing alliances were formed on a local and regional basis.

In the congress itself the revolutionary mood of a big sector of the delegates has been felt. The top has tried to control this by organising the workshop-discussion on a state by state level rather than in mixed commissions where delegates from different states can discuss together, regardless of their origins. In spite of this, they have failed to prevent the organisation of the embryo of a left-wing among the delegates. The prolongation of the congress has allowed the delegates to travel back from congress sessions (which are held in weekends) in between the week and discuss the proposals with the representatives of each branch who in turn is responsible for discussing with his or her branch.

Up until now, the congress has discussed themes such as the political and economic situation in the country, the bank crisis, the plans for saving energy and water, the creation of a national police force and the conformation of the V International. In the last December session of the congress, the delegates were presented with a new proposal for a draft Programme and draft Declaration of Principles. This ignored all the old documents of the 2008 Founding Congress, where the left was clearly able to leave its mark on the Declaration of Principles. The proposal to ignore the old documents was rejected by a majority of the delegates. The discussion on these documents will now take place in the weeks ahead and will surely be a point of polemic between right and left.

The left must urgently organise around a concrete programme of clear demands, including the expropriation of the commanding heights of the economy. The potential is there for a big left tendency, which organises tens and even hundreds of delegates in the congress and in turn thousands of rank and file activists in their respective regions. The PSUV has 2.5 million members who are registered in branches (“patrullas”). The vast majority have joined to fight for a revolutionary victory. It is the duty of all revolutionary socialists to organise these workers and the poor, beginning with the vanguard, in a Marxist tendency capable of winning the majority in the party and fight against the bureaucratic right-wing. Upon this question will depend the future of the Bolivarian revolution.

The tactics of Imperialism and the counter-revolution

When Chávez spoke to the UN General Assembly in New York last October, he explained that there were two faces of Obama – the smiling and diplomatic Obama on the one hand, and on the other hand the Obama who accepts the legitimacy of the fraudulent Honduran elections and the installation of seven military bases in Colombia. “Who are you, Obama? Obama number one or Obama number two?” Chávez asked. There is indeed a grain of truth in this statement. Obama is and remains the representative of U.S. Imperialism and those who thought that his foreign policies would differ radically from Bush's must now be very disappointed.

Imperialism is hell-bent on putting an end to the revolutionary process that is taking place in Latin America. Venezuela is the undisputed vanguard of this process and the internationalist policies of Chávez and his continued calls for world revolution, even in its limited and confused form, is a beacon of light to all anti-imperialist fighters throughout the world. The Venezuelan revolution represents a mortal danger for the ruling classes throughout the Americas. This explains why U.S. Imperialism has taken new steps to control the situation: the installation of seven military bases in Colombia, the coup d'etat in Honduras and last but not at least the agreement for setting up new military bases in Panama, which will effectively surround Venezuela with U.S. Military presence.

The lackeys of imperialism, i.e. the Venezuelan counter-revolutionary opposition, are trying to take advantage of each and every mistake committed by the government. Unsolved problems such as housing, the growth in crime-rate and recently the blackouts in the energy system, leaving many houses without electricity for long hours, are being used by the opposition to generate apathy among the masses that support the revolution. The same is happening with issues such as inflation and food scarcity. The fact that the opposition was able to win the elections for mayors and governors in poor areas, such as Petare in November 2008, is a clear warning sign. If the government does not take decisive action to solve the needs of the masses, demoralisation can spread and manifest itself in the form of abstention in forthcoming elections.

The next electoral test will be the September parliamentary elections. If no big change in the situation occurs, the opposition stands a fair chance of winning a sizeable number of seats in the new National Assembly. They will then proceed to use these MP's to sabotage the workings of the government, mobilise the middle class and provoke unrest wherever possible. Their ultimate goal is to destabilise the country and create a situation where they can get rid of Chávez, be it by parliamentary or extra-parliamentary means.

The creation of action committees in the factories, poor neighbourhoods, schools and universities is on the order of the day. Their tasks would be to take up the great tradition of dual power from 2002, link up on a local, regional and national level, with elected representatives subject to the right of recall, and make concrete plans to defeat the counter-revolution in all areas of society. In many places such embryos of dual power will stem from the PSUV branches and/or the communal councils.

If the counter-revolutionaries sabotage, say food production, the UNT and local PSUV branches should show the way forward by occupying the plants concerned and running them under workers' and peoples' control. An element of this has already been present with the constant controls of INDEPABIS (the price and quality control commission, led by Eduardo Samán), which in many cases has encouraged workers to take over the processing plants and demand expropriation. The recent nationalisation of the Éxito super market chain found the whole-hearted support of the vast majority of the workers. This example must be followed in every corner of Venezuelan society.

The strengthening of the Marxist tendency inside the ranks of the PSUV, the PSUV Youth and the UNT would be a powerful tool in advancing this process and defeating the counter-revolution once and for all by destroying its economic power and thus completing the Venezuelan Socialist Revolution.

Caracas, January 23, 2010

[i] El Mundo, 12 de enero, 2010, pag. 3

[ii] Últimas Noticias, 8 de enero, 2010, pag. 14

[iii] Venezuelanalysis.com, December 31, 2009

[iv] Correo de Orinoco, 18 de enero, 2010, pag. 2

[v] Reporte diario de la economía, 13 de enero, 2010, pag. 11

[vi] Últimas Noticias, 18 de diciembre, 2009, pag. 19

[vii] El Universal, 9 de enero de 2010

[viii] Venezuelanalysis.com, December 229 2009

[ix] Ibid.

[x] Venezuelanalysis.com, December 31, 2009

[xi] Aporrea.org, 24 de octubre de 2009