Hugo Chávez: Yanquis destroying my economy!
By now, it's a story as old as the hills: a Socialist government takes power and the country goes broke as the state takes control of the economy. What could possibly be at fault here?
Hugo Chávez knows - it's those evil yanquis! Amidst reports that the Venezuelan Bolivar is now the worst performing currency in the entire world, Hugo Chávez predictably lashed out at his implacable foe, the United States, accusing America of planning to destroy the Venezuelan economy. It makes fine political theater, of course, but Chávez should be looking a little closer to home when it comes to apportioning the blame for his country's tanking economy.
After the Chávez government ordered the nationalization of the country's privately owned electricity and telecom sectors, foreign investors started pulling out assets faster than you can say "adios". Chávez's assaults on Venezuela's middle class resulted in a massive rush on the banks as people started converting their Bolivars into dollars - a move that forced Venezuela's central bank to spend billions of dollars to artificially prop up the value of the currency, causing rapid inflation. To reinforce his Socialist credentials, his economic cluelessness didn't stop there. Chávez compounded the central bank's inflationary policies by instituting imbecilic price controls. Surprise! That simply aggravates inflation! Chávez, like his hero Fidel Castro before him, is caught in an economic death spiral, where declining cash reserves and out of control spending have led to an economic free fall with no recovery in sight.
Ironically, the influx of American cash to the state owned petroleum sector is the last real source of hard currency Chávez can rely on - for now. Far from wrecking the Venezuelan economy, the Americans are the only thing keeping it afloat. Of course, Chávez could improve revenues if he stopped giving so much oil away as a political tool, but that's a story for another day.
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Chávez victory paves the way for fresh progress
The revolutionary nationalist masses in Venezuela continue to take great strides forward, in the teeth of imperialist and comprador bourgeois opposition
Last month, President Hugo Chávez again won the presidential elections in Venezuela, this time with a whopping 63 percent of the vote. His popularity is based on his record in office over the last decade, with its central programmes of land reform, negotiation of better deals with multinational corporations operating in Venezuela and use of oil profits for providing social benefits for the vast masses of the Venezuelan people, especially in the form of free education and healthcare.
Reform agenda continues apace
Chávez has undertaken, now that he is re-elected, to continue with his policy of popular reform. In particular, he will extend land reform to ensure that unused, privately-owned land is redistributed for productive use, with a view to Venezuela becoming self-sufficient in food, rather than importing 70 percent of its provisions as it does now. He has also promised to nationalise natural gas, just as he has already nationalised oil, and has immediate plans to take over strategic industries that his government considers should not be controlled by foreigners, in particular oil refining, telecommunications, power supply etc. Further, Chávez is intending to abrogate the independence of the central bank to ensure that its decisions assist, rather than hinder, the reform movement.
None of these reforms, naturally, are acceptable to imperialism, which has for long decades been looting Venezuela. When Venezuela becomes self-sufficient in agricultural produce, it will cease to be a market for the products of imperialist agribusiness. When it refines its own oil, the oil multinationals will lose another source of huge profits. Venezuela has announced it will nationalise the telephones and the electricity companies, and, as it happens, the current owners of these are US imperialist corporations – Verizon in the case of the telephones, and AES in the case of electricity. Apparently, Chávez is prepared to pay a ‘fair price’ for the controlling shares in the national supply companies, but, nevertheless, still more opportunities for imperialism to milk the Venezuelan economy will have been compulsorily snatched away.
Imperialist response
One might have expected US imperialism, which has the most to lose from Venezuela's moves to liberate its economy, to have responded with armed force. At this time, however, notwithstanding its massive military expenditure, the US is short of resources to pacify Iraq and Afghanistan, and, were it unexpectedly to be able to free up troops and materiel currently deployed in those countries, Iran would probably come to the top of its agenda before Venezuela. As a result, the US is for the moment not inclined to mount a military operation against Venezuela to protect its interests in that country, ie, the ‘right’ of its multinationals to plunder at will.
For the moment, imperialism is confining itself to a propaganda war, with the media for the most part carrying articles bemoaning the 'loss of democracy' and belittling the benefits reaped by the masses from the reforms, while the public relations industry has recruited a host of individuals who will sidle up to you and tell you how Chávez and his colleagues are corrupt. And of course imperialism has its allies within Venezuela in the form of the various compradors whose wealth was based on facilitating imperialist looting, and who now have become redundant, along with the landowners who invested in land only to let it lie fallow.
Constituting 5 percent of the population but holding some 75 percent of the land, Venezuela's landowners are an extremely powerful group, whose domination in the countryside is reflected in the collaboration they get both from political parties and the legal system in the countryside. In many areas, these landlords have been using their power to block land reform, and in the struggle against its implementation they have been responsible for the murder of many rural leaders – 150 in the first three years alone.
Not allowing himself to be intimidated, however, Chávez is announcing that his country is now advancing towards socialism. Closely allied to Cuba, Chávez says he has been a communist since at least 2002, and he has even appointed one member of the Communist Party of Venezuela as a minister in his government. Johann Hari, of The Independent is not convinced:
"Chavez is a European-style social democrat who believes in an active government that lifts up the poor alongside a vigorous market economy. He calls this '21st century socialism'. The tragedy is that in Latin America, under the heel of the IMF and US power, it takes a revolutionary to be a social democrat.
"The evidence for this is pretty overwhelming. During Chavez's presidency, the proportion of Venezuela's GDP that is in the private sector has actually increased, and the Caracas stock exchange is at an all-time high. Chavez has not nationalised land; instead he has redistributed it, breaking the vast unused landed estates of the rich into smaller packages for landless peasants. For all his rhetorical praise for Fidel Castro, Chavez's policies are more like Abraham Lincoln's Homestead Act of 1862, which doled out land in the West to poor people who wanted to settle there." ('The lies being told about Hugo Chavez', 11 December 2006)
Our view
Nevertheless, despite the fact that Chávez is at this stage merely implementing bourgeois democratic reforms – ie, reforms designed to create optimum conditions for the development of capitalism, it has to be understood that, in the context of modern imperialism, the struggle for such reforms in oppressed countries is, as Johann Hari quite rightly, if somewhat regretfully, points out, absolutely revolutionary.
As Mao Zedong explained: "In this era, any revolution in a colony or semi-colony [or neo-colony, one might add] that is directed against imperialism, ie, against the international bourgeoisie or international capital … is no longer part of the old bourgeois, or capitalist, world revolution, but is part of the new world revolution, the proletarian-socialist world revolution. Such revolutionary colonies and semi-colonies can no longer be regarded as allies of the counterrevolutionary front of world capitalism; they have become allies of the revolutionary front of world socialism."
And further: "Such a revolution attacks imperialism at its very roots, and is therefore not tolerated but opposed by imperialism. However, it is favoured by socialism and supported by the land of socialism and the socialist international proletariat." ('On new democracy', Selected Works, Vol 2, pp343-4)
To implement the bourgeois-democratic reforms in the teeth of the opposition of both imperialism and Venezuela's traditional comprador ruling class – which still remains highly influential quite apart from enjoying every support from imperialism – Chávez has mobilised the masses of the people. It is not decrees alone that bring about land reform. These decrees need to be implemented, and implemented in the face of organised obstruction on the part of the reactionary class – and they will only become a reality if masses and masses of people take the initiative to ensure that this is done.
Once the bourgeois-democratic stage of the revolution has been completed, however, if the masses of the people allow themselves to be subjected to the economic laws of capitalism, then poverty will once more become rampant. But, once mobilised for revolution, the masses are perfectly capable of shifting their rifles from one shoulder to the other to ensure that they destroy capitalism before capitalism destroys them. The task of the Venezuelan communists is to spread knowledge and understanding among the masses so that when the time comes they will, on the one hand, be equipped to defend themselves against counterrevolution and, on the other, not hesitate to do what is necessary to overthrow capitalism and establish the socialist planned economy.
They, Chávez and the entire progressive bloc, are very much helped in the necessary ideological preparation by the advice and guidance given by the Cuban Communist Party. Furthermore, the mass campaigns that are currently eliminating illiteracy in Venezuela are opening the doors of the masses of Venezuelan proletarians to the science of revolutionary Marxism Leninism, by grasping which they will be able to advance their cause to the maximum.
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