hat radicalization had popular support—Chávez won by a landslide in 2006, taking 63 per cent of the vote on a 75 per cent turnout?
To an extent. I would argue that after the election of 2006, the government moved into a third phase, characterized by growing state intervention in the economy and greater intolerance of internal ideological pluralism. The Chavista project became much more focused on nationalization, and far more dependent on oil-export revenues. Any pretence of building up the non-oil sector of the economy was abandoned. The nationalization process initially focused on key sectors of the economy, such as electricity and telecommunications, but then became more sporadic and ad hoc. The government never really had a strategy for managing the newly nationalized industries and distribution chains, or the huge liabilities it was taking on. That opened up schisms on the left as well: groups such as Marea Socialista argued for worker management of the new industries, but that’s not what happened. Instead, the government sought to manage them centrally, through the state, with the Labour Ministry hostile to the trade unions taking control of those nationalized sectors. All kinds of divisions emerged within the Chavista movement. Many of the intellectuals who had supported Chávez became disaffected, because they thought the government was repeating the mistakes of the past and not addressing problems of corruption and insecurity. Social organizations became disaffected with a perceived shift away from participatory democracy and towards a greater degree of centralization and localized PSUV control; the left polarized around the question of state management vs. worker management. In 2007, Chávez brought forward a very ambitious and complicated programme of constitutional reform, which was narrowly defeated—the first defeat that he had suffered at the ballot box since 1998. It seemed that much of the Chavista base was confused and unsure about the political direction that the government was taking. Debate inside the PSUV was limited, with ideological but not policy leadership filtering downwards from Chávez.
Chávez was always something of an intellectual magpie, who would pick up new ideas and run with them. At that point, he appeared to see the world as being full of infinite possibilities, with the oil price, the growing relationship with China and the perceived decline of US power. But I don’t think that mood was underpinned by the kind of strategic vision that was necessary to advance this model of twenty-first century socialism in Venezuela. It seemed to be quite an inchoate and eclectic set of ideas that were never put in a solid institutional framework. At the same time, many vestiges and cultures of the old Punto Fijo regime went unaddressed. Throughout the lifetime of the Chávez government, there was a constant turnover of personnel at the highest level. When a minister was removed from office, as happened frequently, it wouldn’t just be a case of one individual departing. They would take all of their cadre with them. As a result, there was no continuity of policy, with a constant cycle of new plans and strategic visions being unveiled every couple of years, but a lack of technical and administrative capacity for implementation.
One striking weakness of ‘twenty-first century socialism’ was that it didn’t appear to have a strong analysis of twenty-first century capitalism—how Venezuelan capitalism actually operated, which capitalists owned what and so on.
There was no serious critique of the Venezuelan economy, which is fundamentally a rentier economy based on oil. A small group of very wealthy families have dominated Venezuela for the last century, and they did a remarkably good job of insulating themselves from the Bolivarian Revolution. Some of their property was nationalized, but for the most part it was the assets of foreign investors that were targeted. That social layer is so dominant that you either have to reach an accommodation with them or else nationalize—you can’t take a middle path, which is what Chávez and later Maduro effectively did.
The nationalizations appear to have been quite limited, is that correct?
In fact, there were a lot of companies taken into state ownership, but they varied in size: some of them were just individual factories and mills. Often the government was responding to immediate pressure from workers, without having an overall strategic plan. Once they nationalized those firms, there was no follow-up investment, so it was very difficult to keep them ticking over. Sometimes the nationalized enterprises were handed over to cooperatives which lacked the skills and experience to run them properly. Another big problem was that the government never really developed systems for distribution. This is a country with a very poor road network, and the haulage companies were still controlled by the powerful family-based oligarchies. There was also a shortage of good technical cadres, which has always been a weakness for Venezuela. Remarkably, it doesn’t have a single university which specializes in the training of oil geologists, engineers and other technicians. In the health service, they relied upon the Cubans to supply the doctors; most of the Venezuelan doctors who had been trained in Europe or the US didn’t return to the country. The Bolivarian University initiative, which was initially a welcome expansion of access to education, did not connect teaching and training to the needs of society and the economy.
The economic picture was still relatively good as Chávez began his second term, although there were major structural challenges. But then they made the old mistake of borrowing heavily when oil prices were high, and gradually overextending themselves. Chávez and key figures in PDVSA and the energy ministry began to argue that the whole notion of a ‘resource curse’ was a myth: how could it possibly be a curse to have such abundant commodity resources? They thought they could use OPEC to lift oil prices and keep them sustainably high. Nobody anticipated then the huge increase in US domestic energy capacity, which has made it effectively self-sufficient, or the slowdown in the Chinese economy.
Venezuela’s economic decline began while Chávez was president. There was a contraction in 2009, followed by a recession the next year. The rectification measures that were taken at that point were actually understood as deepening the measures that had previously been taken: extending price controls, enforcing the exchange rate more rigorously, borrowing overseas, and keeping the bolívar very high against the dollar, when there should have been a devaluation. They also preserved many of the regressive universal subsidies, such as the annual $15 billion that kept the domestic gasoline price ultra-low, at just $0.01 a litre, to the benefit of the car-owning middle classes. There was no attempt to rein in expenditure, and when the electoral period of 2012–13 approached, the government announced some big spending increases that weren’t properly targeted or sustainable. Not for the first time, investment revenues were taken out of PDVSA, limiting its capacity to increase production.
Where did the borrowed money go?
Part of it was spent on social programmes, and on nationalizations. They also had to deal with some very expensive arbitration cases arising from the nationalization of companies. But it’s difficult to say, because Venezuela’s accounting procedures are so opaque. There were problems of waste and profligacy, and no real monitoring or evaluation of the Misiones and the social policy initiatives. The opposition would claim that a lot of the money has gone straight into the back pockets of government officials. We may see some shocking revelations if and when the Chavistas are removed from office. Chávez and Maduro both promised to launch anti-corruption drives, but nothing was really done. A lot of the rumours are linked to contracting deals with foreign companies from China, Russia or Iran: great plans were drawn up, and money paid, for houses, hotels and factories that were never delivered. There was a vast haemorrhage of resources from every pore of the Venezuelan state, because there was no oversight or accountability.
That’s damning.
Yes. Although this is a long-running problem in Venezuela: it’s not something that was new to the Chavistas.
After Chávez went through his first health scare with cancer, the question of who his successor would be came to the fore. Who were the principal candidates, and how did Nicolás Maduro prevail over the rest?
Maduro almost seemed to come from nowhere. He hadn’t been an especially dynamic or effective PSUV leader or foreign minister. Apart from Maduro, the most significant candidate was Diosdado Cabello, who had been the president of the National Assembly and was considered a vital bridge between Chávez and the military. There was a lot of talk about Cabello standing in for Chávez when he was sick. But there was also a sense that the nominee had to reach out to all parts of the Chavista coalition: the popular classes, the trade unions, social organizations, intellectuals, as well as the military. Maduro came from a union background. He was also much closer to the Cubans than Cabello was.
Would Cabello have made a better president?
The real challenge at that point was wider than the question of individuals. The Chavista movement had been in power for more than a decade, and they were increasingly losing touch with a new demographic cohort who had come of age since 1998. Many people had been alienated by the direction taken in 2006, but there was no scope for them to re-examine or redefine what Chavismo stood for at that time. The movement was still dominated by men who tended to be quite individualistic figures rather than broad coalition-builders. The best approach would have been to open up the succession through some kind of internal primary, rather than allowing Chávez to decide who would replace him. That put an awful lot of pressure on Maduro; it stifled debate inside the party, and obstructed the renewal that was necessary.
What was the internal culture of the PSUV at this point?
It was fragmented and factionalized along the same lines as the wider Chavista movement. There was little sense of critical debate among party supporters—something that was strongly criticized by left-wing activists around the website Aporrea. There had been an initial surge of participation when the party was founded, with millions of people signing up as members, but that enthusiasm gradually waned. They did move towards primaries and gender quotas for the 2015 elections, but the PSUV never really took shape as a democratic party in the way that people had expected it to. The primaries have ended up being more like a caucus system: elections to a committee, which then elects another committee, which chooses the candidate. It remains the largest political party in Venezuela today, and quite an effective electoral machine, but popular engagement with the PSUVdoesn’t really translate into influence over Maduro.
How has Maduro’s record in power differed from that of Chávez?
The most important difference is that Maduro has been governing in a manifestly different economic context, a period of rapid economic decline. With the loss of oil revenue, the money is no longer there to pay for initiatives like ALBA or PetroCaribe. Maduro also inherited many problems from the Chávez administration that he simply hasn’t addressed. The exchange-rate and price controls have remained in place and generated huge problems. They could have moved to straighten out the complexities of the exchange-rate system, which has three different tiers. Even a serious devaluation of the currency would have stabilized the fiscal position to a considerable extent. There were high expectations when Maduro took office that there would be some kind of major economic-policy shift, but that never came. It’s extraordinary how little has been done to address these grave dysfunctionalities. This has been the most astonishingly static government Latin America has seen for many years. There is a whole group of people in charge of managing the economy, but nobody has overall control.
That was one of the main critical points made by Jorge Giordani after he was removed as planning minister for the second time in 2014: there is no coherence or direction in economic policy, and certain people have interests in various aspects of that policy continuing to follow the same path. They retain the price controls in the hope of maintaining popular access to foodstuffs, but the effect has simply been to fuel a gigantic black market, which is now pervasive across Venezuelan society. If you live in one of the regions bordering Colombia, you can fill a lorry with subsidized rice or flour, drive it across the border and make a profit of several thousand per cent. The Chavistas have created an economic system which makes participation in the black-market economy essential for survival.
The price controls operate through government supermarkets?
Yes, but they also try to impose those controls on local shops, and at rural farmers’ markets. That’s why people aren’t taking goods to market, because they won’t get the value of their chicken or their eggs. That contributes to food shortages. The pharmaceutical sector has been nationalized, but once again, there has been no follow-up strategy for supply and distribution. The result has simply been to maintain price controls on a reduced quantity of available goods. The scarcity index is now estimated to be in the region of 80 per cent, so all basic services and goods are in short supply. People are struggling financially, finding it hard to obtain loans or keep up with basic expenses, and much of their time is spent trying to obtain scarce goods. Inflation is sky-high: the IMF predicts that it will be over 700 per cent this year. Venezuelan government officials used to say that the shortage of dollars was not a problem for them, since it was only the wealthy class that needed dollars. But the lack of dollars has become so chronic that it has undermined all economic capacity—especially the capacity to import. The overall picture is one of profound economic insecurity, with the popular classes hit hardest.
Again portraying this as a unilateral American move, when it has the support of all the countries shaded ( minus Mexico and Ecuador which isnt shaded in this map).
WE NEED TO SHUT DOWN THE GOVERNMENT AND NOT PAY 800K PEOPLE FOR A MONTH BECAUSE OF IT
