Venezuela's "Revolution" Faces Capital & "Human Capital" Strikes
Source Yoshie Furuhashi
Date 02/12/12/00:07

***** _In These Times_ 9 November 2001
But Venezuela's "revolution" faces many obstacles.
by John Marshall and Christian Parenti

From the 23rd-story offices of the Venezuelan Ministry of Planning,
the slums can be seen stretching out across the verdant mountainsides
and far into the distance. Equally clear, on the highway just below,
are the swank SUVs of the upper classes, streaming out of town and
back to their gated redoubts. Inside the office, the walls are
covered from floor to ceiling with dry-erase boards and butcher paper
illustrating elaborate visions of an alternative future.

"We're trying to have a revolution with the enemy inside," explains
Enrique Vila, a poet, professor, artist and now a leading planner in
Venezuela's populist government. "It's not easy." Vila is in charge
of building a series of large, experimental, economically
self-sufficient, ecologically sustainable rural communities, complete
with local currencies and organic farming-the kind of thing most
Berkeley anarchists only dream about.

But Vila's planned communities are just one example of a broader,
frequently overlooked social experiment that began here with the
election of President Hugo Chavez in late 1998. Attacked by the
American right as a military thug -- his first bid at power was a
failed coup attempt in 1992 -- Chavez remains something of an enigma.
Is he a populist blowhard, talking tough but doing little? An
old-school Marxist, minus the Soviet subsidies? A far-left
authoritarian, waiting to blossom? Or a doomed balcony socialist in
the tradition of Peru's Gen. Juan Velasco or Panama's Omar Torrijos?

Or, perhaps most interesting, how is it that Chavez and his posse
haven't learned the famous Thacherite lesson: "There Is No

Since taking office, Chavez has done more than just hire bohemian
planners. His "Bolivarian Revolution" -- named for Simon Bolivar, the
19th-century South American liberator -- has ratified a new
constitution, abolished Venezuela's plutocratic upper house and
overhauled the country's corrupt judiciary. His party, the MVR (or
Fifth Republic Movement), also has won big in congressional, state
and local elections. More important for the impoverished majority,
Chavez has reined in inflation, boosted growth rates, beefed up
social spending, launched a massive public works program and clamped
down on tax evasion.

On the international front, Chavez has been just as daring. He has
brought Venezuela closer to Fidel Castro -- swapping Venezuelan oil
for Cuban doctors and sports instructors -- and has sharply
criticized the policies of "savage neoliberalism" imposed on Latin
America by the United States. Chavez has even withdrawn the
Venezuelan military from regional naval exercises in the Caribbean
and denied the U.S. military access to Venezuelan airspace, thus
hampering Washington's proxy war in Colombia. Most recently, he has
criticized U.S. bombing of Afghanistan as "fighting terrorism with

Chavez's trump card is oil: Venezuela has the largest petroleum
reserves outside the Middle East and is the largest U.S. source of
gasoline and heating oil. Petroleum revenues account for a third of
Venezuela's economic activity and three-quarters of its exports. Oil
also pays for Chavez's redistributive social projects and gives
little Venezuela major clout on the world stage. Through the efforts
of its former minister of energy and mines, Ali Rodriguez (a former
Marxist guerrilla turned statesman), Venezuela has led a
revitalization of OPEC, which in turn has boosted the price of crude
oil from $8 a barrel to as high as $35 a barrel.

"The government knows how to play chess. I am trying to teach them
how to play Go," says Vila, referring to the Chinese board game in
which a player attempts to surround and absorb his opponent's pieces
rather than strike and remove them. The metaphor helps explain the
whole Bolivarian project, which aims to develop some sort of
semi-socialist mixed economics without alienating the private sector.
[Yoshie: That's impossible, but we all know that now.]

In practical terms, that means diversifying and restructuring a
distorted and oil-fixated economy in which 80 percent of all food and
consumer goods are imported. According to government and
international figures, 45 percent of Venezuelans are marginally
employed in the "informal economy"; 80 percent are defined as "poor";
half of those are "critically poor," meaning they can't afford an
adequate diet. Thus, the immediate task of the Chavez government has
been to redistribute wealth and services down the social hierarchy by
beefing up services, creating jobs for the poor and making the rich
pay higher taxes.

At the same time, the Chavistas want to redistribute population and
investment more evenly across the country. "We're not talking about
forcing anyone out of cities," Vila says, "but rather about
attracting them back to the countryside with economic opportunities."
Sixty percent of the nation's capital is currently invested in a
narrow coastal belt around Caracas. As a result, 85 percent of the
population has concentrated in the city and a handful of other
northern coastal urban centers. Vila's planned communities -- the
largest will house 3,400 people -- are prototypes of what a more
balanced and sustainable form of development might look like.

Thanks to consultation with regular Venezuelans, the visionary
settlements will also be pragmatic. "This will be cooperative living,
not utopian collectivism," Vila says. Toward that end, the
settlements are composed of individual, private homes with familial
land plots for subsistence crops, such as yucca and beans. But there
will also be larger communally owned parcels for producing cash crops
such as melons, oil palms and livestock. Much of the community's
waste will be recycled in state-of-the-art "biodigesters," producing
fertilizer and biogas fuel. The goal, Vila says, is to create a
zero-pollution "circular metabolism."

Politically and educationally, the communities are designed to be
relatively autonomous and self-governing with decision-making
councils that ascend from the level of the neighborhood to the
community as a whole. Most of the families, all of whom are now
marginally housed and willing to participate in such an experiment,
have already been chosen. The first settlers are due to move in at
the end of this year. But the communities are still under
construction; their layouts look like dusty crop circles in the

Meanwhile, Chavez is proceeding in more traditional ways. Last year
the government created a thousand "Bolivarian Schools," which provide
students with additional hours of instruction and two hot meals a
day. Teachers' salaries were doubled, and public schools were
forbidden from charging parents "supplementary fees." As a result,
primary school enrollment increased by a million students. The goal
for 2001 is to convert 3,000 more schools to the Bolivarian model and
to keep the school kitchens open throughout the summer.

The rather backward, USAID-inspired curriculum too is being
overhauled. Leading the educational revamp is a Marxist sociologist
and former guerrilla named Carlos Lanz. He wants a curriculum that
teaches Venezuelans to reject "individualism and competitiveness" and
the "concentration of property among few people, classes or social
layers." But the schools have been derided in the U.S. press as
militarized brainwashing academies and denounced by critics at home
as a sign of creeping "Cubanization."

The government also has quadrupled spending on health care, is
constructing rural clinics, and now provides free emergency care in
Venezuela's public hospitals. The state funds a nationwide chain of
subsidized pharmacies called SUMED, where drugs sell for 30 to 40
percent below market prices. Similarly, the military has created
subsidized "popular markets" in which soldiers with otherwise idle
military vehicles are sent into the countryside to buy produce from
farmers, transport it to towns and cities, then sell it at below cost
to small vendors who pass on a 30 percent savings to consumers.

To deal with unemployment, the government is attempting to create
100,000 new jobs through "civic-military production units," in which
soldiers and civilians work together on road-building, forest
restoration and agricultural projects. At times the role of this
military involvement in social projects takes on absurd dimensions.
When university student Manuel Bazo first heard the helicopters and
then saw them dropping leaflets, he feared the worst. "I thought it
was a coup," he recalls. Not quite. It was just an informational
literature drop to inform people in a nearby barrio when the army
would be sending in dentists, barbers and other free services.

Most of the money for the reform program comes from recently buoyant
oil prices, but the Chavez government is also seeking to redirect
state funds that are currently consumed by a corrupt and inefficient
bureaucracy. "We may have political power, but we still don't control
the government," says Gilberto Buenano, vice minister of regional
planning, who, like Vila, got his Ph.D. at Berkeley in the late '60s.
"Here in Venezuela, those are two very different things."

According to Buenano, the country's vast oil wealth -- as much as $20
billion in annual revenues -- has created not just oligarchs, but
also a parasitic middle class. Venezuela's financially flush,
labyrinthine state sector has plenty of room for nepotism, patronage,
corruption and sheltered incompetence. The World Bank says the only
solution is mass privatization. The Chavistas agree with the
diagnosis but refuse the neoliberal medicine. They want to make the
state efficient, not sell it off to foreign interests.

Using his weekly radio call-in show, Aló Presidente, Chavez routinely
urges workers and consumers to denounce corruption where they see it.
And although the government has raised wages across the board, it
also has tried to eliminate thousands of government jobs -- which the
Chavistas insist are sinecures. For example, one steel mill in Ciudad
Guyana is said to have as many 6,000 people on the payroll who don't

But attempts to eliminate this sort of bloat have caused a massive
backlash from the country's unions, which have staged scores of
strikes in every sector of the economy. Though vexed by the labor
disputes, the government is also proud of its record in handling
them. "In all these strikes not a single person has been killed,
there are no political prisoners," Buenano says. "Not even our most
rabid opponents can accuse us of repression."

Yet the president's electoral successes have yet to translate into
grassroots participatory structures. Nowhere is such failure more
apparent than in the unions. Shown in numerous opinion polls to be
among the least credible and least respected institutions in the
nation, the old-guard trade union leadership was dealt a serious blow
in December 2000, when 67 percent of voters passed a referendum
mandating the direct election of union leaders by the rank and file.
The plan was simple: force the unions to democratize, then take power
from the old guard hacks in clean elections. But now those internal
elections are underway, the Bolivarian activists are losing badly.

The private sector also is being leaned on to help pay for the reform
and development campaign. In June, government officials announced
plans to clamp down on tax evasion by large businesses. Investigators
plan to audit about a thousand companies, but among the first
targeted are a major television network, a bank and a leading
telecommunications firm. Despite all appearances of profitability,
these firms claim they cannot afford to pay taxes. "I don't believe
them," Chavez said in a mid-June radio broadcast. "Either they pay,
or their bones will end up in prison."

Yet another hurdle for the Chavistas is a quiet "human capital
strike" among the professional classes. There is an internal brain
drain: engineers, accountants and agronomists-hopped-up on
anti-Chavez propaganda -- refuse to participate in alternative
development projects, while local doctors prefer to focus on plastic
surgery for the country's legendary beauty queens rather than tend to
the needs of the rural poor. This lack of support is particularly
frustrating because much of Chavez's macroeconomic program has
benefited the professional classes. Since taking office, the
administration has cut inflation from around 40 percent to a
projected 12 percent for this year. Meanwhile, the Venezuelan economy
is expected to grow by a healthy 4 percent this year, according to
Credit Suisse First Boston.

Yet the middle-class-oriented news media remain uniformly hostile.
Not a day passes without anti-Chavez calumny covering almost every
front page. Both print and broadcast outlets routinely fabricate
stories about impending martial law, economic collapse or new medical
evidence that Chavez is psychotic. Along with the frenzied
red-baiting, the media attack Chavez for being "vulgar" and
"uncultured" -- code that is widely understood as a reference to his
African and indigenous origins and working-class mannerisms.

Amid this self-induced paranoia, Venezuelan capitalists have reduced
domestic investment, citing "political instability." Instead, much of
the country's liquid assets are piped to Miami; one economist
estimated such capital flight at more than $10 billion last year
alone. The government is trying to incubate small firms with a new
micro-lending law and cheap loans from newly created state banks. But
these banks have already become mired in corruption and inefficiency.

Some Chavez supporters are urging the president to publicly court the
middle classes and national bourgeoisie. "The problem is that Chavez
has to talk tough or lose some of his base," explains Walter
Sandoval, an economic journalist with the Caracas daily El Nacional.
Sandoval says the poor want change -- and lots of it -- right now.
And while government's increased social spending has positive
impacts, the economic position of most people has not changed
fundamentally. Nor are the poor likely to wait patiently if Chavez
coddles and coaxes cooperation from the spooked shopping-mall set.
All of this has left Chavez in a bizarre predicament: economically
serving but politically alienating the middle-class professionals his
development plans desperately need.

Despite all of the obstacles, many Chavistas remain hopeful. "Little
by little, it'll happen," says Don Julio Cezar, a restaurateur in the
small beach town of Santa Fe. "The people are learning, the economy
is developing. This is not a violent revolution-it'll take time."

Officially, the United States has taken a "wait-and-see" attitude
toward Chavez, but Washington's stance may be hardening. "I am
concerned sometimes when I see what [Chavez] does," Vice President
Dick Cheney told The Associated Press in early June. "He was
democratically elected by the people of Venezuela, and that counts
for something. Sometimes, I wish he had other friends is the way I'd
describe it."

More threatening are the bellicose allegations from the State
Department's specialist on Latin America, Peter Romero, who has
called Chavez and his civilian defense minister, Jose Vincente
Rangel, "professional agitators." "There are indications that the
government of Chavez has supported violent indigenous movements in
Bolivia and, in the case of Ecuador, military coup members," Romero
told the Washington Post.

Shortly after these statements, the Miami Herald reported that
Washington was reducing its intelligence cooperation with Venezuela
because, as one official explained, "There was a sense that anything
we gave the Venezuelans would wind up in Havana." And in late
October, angered by Chavez's public criticisms of the "slaughter of
innocents" in Afghanistan, the United States called its ambassador
back to Washington for "consultations."

Another serious threat is Washington's ability to exert economic
pressure on Venezuela. In an attempt to diversify the economy, Chavez
sought to join the Andean Trade Preferences Act (ATPA) and thus gain
better access to U.S. markets, but American officials have signaled
their reluctance to permit Venezuela's entry. "On ATPA, Venezuela is
going to have an uphill battle because a lot of folks here are
concerned about reaching out to Chavez at a time when he's not being
very friendly to us," a Republican congressional aide told the Herald.

None of this American hostility is lost on Venezuelans. Before
departing Caracas, we eat the traditional dish of arrepas and drink
rum with a diehard trade unionist. He says the Chavistas are ready to
arm themselves to defend the revolution at all costs. "Any coup
attempt will lead to civil war," he warns, adding: "I wonder if the
oil-hungry United States is really ready for that."

John Marshall is a researcher and analyst working in the U.S. labor
movement. Christian Parenti is the author of Lockdown America and
teaches at the New College of California in San Francisco.

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