Venezuela: Class Struggle Heats up over Battle for Workers’ Control

Federico Fuentes
Green Left Weekly
July 26th 2009

Federico Fuentes, Caracas - Green Left Weekly - On July 22, Venezuelan President Hugo Chavez again declared his complete support for the proposal by industrial workers for a new model of production based on workers' control.

This push from Chavez, part of the socialist revolution, aims at transforming Venezuela's basic industry. However, it faces resistance from within the state bureaucracy and the revolutionary movement.

Presenting his government's "Plan Socialist Guayana 2009-2019", Chavez said the state-owned companies in basic industry have to be transformed into "socialist companies".

The plan was the result of several weeks of intense discussion among revolutionary workers from the Venezuelan Corporation of Guayana (CVG). The CVG includes 15 state-owned companies in the industrial Guayana region involved in steel, iron ore, mineral and aluminium production.

The workers' roundtables were established after a May 21 workshop, where industrial workers raised radical proposals for the socialist transformation of basic industry.

Chavez addressed the workshop in support of many of the proposals.

But events between the May 21 workshop and Chavez's July 22 recent announcement reveal much of the nature of the class struggle inside revolutionary Venezuela.

Chavez's announcement is part of an offensive launched after the revolutionary forces won the February 15 referendum on the back of a big organisational push that involved hundreds of thousands of people in the campaign.

The vote was to amend the constitution to allow elected officials to stand for re-election - allowing Chavez, the undisputed leader of the Venezuelan revolution, to stand for president in 2012.

With oil revenue drying up due to the global economic crisis, the government is using this new position of strength to tackle corruption and bureaucracy, while increasing state control over strategic economic sectors. This aims to ensure the poor are not made to pay for the crisis.

Workers' control
On May 21, Chavez publicly threw his lot in with the Guayana workers, announcing his government's granting of demands for better conditions in state-owned companies and the nationalisation of a number of private companies whose workers were involved in industrial disputes.

"When the working class roars, the capitalists tremble", Chavez told the

To chants of "this is how you govern!", Chavez announced his agreement with a series of measures proposed by workers.

However, like an old train that begins to rattle loudly as it speeds up, more right-wing sectors within the revolutionary movement also began to tremble.

With each new attack against the political and economic power that the capitalist class still holds in Venezuela - and uses to destabilise the country - the revolution is also forced to confront internal enemies.

The radical measures announced at the May 21 workshop were the result of the workers discussion over the previous two days.

Chavez called on workers to wage an all-out struggle against the "mafias" rife in the management of state companies.

The workers of SIDOR conducted a long and hard struggle against the Argentinean multinational Techin.

Chavez then designated planning minister Jorge Giordani and labour minister Maria Cristina Iglesias, who both played a key role in the workshop, to follow up these decisions by establishing a series of workers' roundtables in the CVG industries.

The CVG complex is on the verge of collapse in large part due to the privatisation push by pre-Chavez governments in the 1990s. State companies were run down in preparation to be sold off cheaply.

The workers of SIDOR conducted a long and hard struggle against the Argentinean multinational Techin.

In the Sidor steel plant, for example, the number of workers dropped from more than 30,000 to less than 15,000 before it was privatised in 1998.

Chavez's 1998 election stopped further privatisation. But the government has had to confront large scale corruption within the CVG, continued deterioration of machinery and, more recently, the sharp drop in prices of aluminium and steel.

The plan drafted up by workers and given to Chavez on June 9 raised the possibility of "converting the current structural crisis of capitalism" into "an opportunity" for workers to move forward in "the construction of socialism, by assuming in a direct manner, control over production of the basic companies in the region".

The report set out nine strategic lines - including workers' control of production; improvement of environmental and work conditions; and public auditing of companies and projects.

Measures proposed include the election of managers and management restructuring; collective decision-making by workers and local communities; the creation of workers' councils; and opening companies' books.

The measures aim to achieve "direct control of production without mediations by a bureaucratic structure".

The report said such an experience of workers' control would undoubtedly act as an example for workers in "companies in the public sector nationally, such as those linked to hydrocarbons or energy companies".

Bureaucracy bites back
Sensing the danger such an example represents to its interests, bureaucratic sections within the revolutionary movement, as well as the US-backed counter-revolutionary opposition, moved quickly to try and stop this process.

Unidentified worker holding casing from National Guard rubber bullet as Sutiss Secretary General José Rodriguez Acarigua addresses striking workers at Portón 1
Credit: Jonah Gindin - Venezuelanalysis.com

A wave of strikes and protests were organised in the aluminium sector during June and July, taking advantage of workers' disgruntlement with corrupt managers and payments owed.

The protests were organised by union leaders from both the Socialist Bolivarian Force of Workers (FSBT), a union current within the mass party led by Chavez, the United Socialist Party of Venezuela (PSUV), and those aligned with opposition parties such as Radical Cause.

Revolutionary workers from Guayana condemned the unholy alliance of bureaucratic union leaders and opposition political forces, which aimed to stifling the process initiated on May 21.

This alliance was supported by Bolivar governor, retired General Francisco Rangel Gomez, who called on the national government to negotiate directly with local unions.

Opinion pieces began to appear in the local press, calling on the government to once again make Rangel president of the CVG in order to bring "stability".

The alliance between Rangel and union bureaucrats in Guayana is long running.

Officially part of the Chavista camp, Rangel has long been accused of being corrupt and anti-worker. During his term as CVG president before becoming governor in 2004, Rangel built up a corrupt clientalist network with local union and business figures.

He stacked CVG management with business partners and friends.

While on the negotiation commission to resolve the 15-month long dispute at Sidor, Rangel ordered the National Guard to fire on protesting Sidor workers.

Also on the commission was then-labour minister and former FSBT union leader from Guayana, Jose Ramon Rivero, who was similarly accused by Sidor workers of siding with management.

He was also criticised for using his position as labour minister to build the FSBT's bureaucratic powerbase by promoting "parallel unions" along factional lines and splitting the revolutionary union confederation, National Union of Workers (UNT).

In April last year, Chavez disbanded the Sidor negotiation commission and sent his vice president, Ramon Carrizales to resolve the dispute by re-nationalising the steel plant.

Rivero was then sacked. Today, he works as the general secretary in Rangel's governorship.

The forces behind Rivero and Rangel hoped not only to stifle the radical proposals from the May 21 workshop, but also remove basic industry minister Rodolfo Sanz.

Sanz has moved to replace Rangel's people with his own in the CVG management.

In the recent dispute, Sanz accused aluminium workers of being responsible for the crisis in that sector. He worked to undermine the proposals of the roundtable discussions.

After several days of negotiations union leaders - essentially sidelining the workers roundtables - Sanz agreed on July 20 not only to pay the workers what they were owed, but also to restructure the board of directors in the aluminium sector.

Through this process, the radical proposals for restructuring the CVG appeared to have been push aside - which suited both Sanz and Rangel.

Revolutionary leadership
However, Chavez intervened with his July 22 announcement, which came after a meeting with key ministers and advisors involved in the May 21 socialist transformation workshop.

Thousands of workers and activists launch the United Socialist Party of Venezuela (PSUV), April 19. Photo: Reuters/Jorge Silva

Chavez said his government was committed to implement the recommendations of the "Plan Socialist Guayana", placing himself clearly on the side of the workers.

He said the workers' proposals, embodied in the plan, would "guide all the new policies and concrete and specific measures that we are beginning to decide in order to consolidate a socialist platform in Guayana".

When a journalist directed her first question to Sanz regarding the plan, Chavez stepped in to respond, by-passing Sanz and handing the microphone over to Giordani, who many revolutionary workers identify as strongly committed to the process of socialist transformation.

Rangel, who had been at the May 21 workshop, was not at the July 22 meeting.

Chavez also appeared to differentiate himself from other sectors within the revolutionary movement, such as those behind the "A Grain of Maize" daily column, whose authors are linked to a political current involving oil minister Rafael Ramirez.

This current has recently been vocal in arguing that socialism simply entails state ownership and central planning from above - with minimum participation from workers.

For Chavez, state-owned companies "that continue to remain within the framework of state capitalism" have to be managed by their workers in order to become "socialist".

The Plan Socialist Guayana is Venezuela's first example of real "democratic planning from below", Chavez added.

The battle in Guayana is not over. Workers from the Alcasa aluminium plant told Green Left Weekly that management at aluminium plants met on July 25 to continue the process of restructuring agreed to by Sanz and union leaders - in direct opposition to Chavez's statements.

Other fronts of intense class conflict have opened up. Various struggles have emerged involving different forces and interests in the electricity sector, as well as the still-emerging communes, which unite the grassroots communal councils, to name a few.

A central arena of struggle is the PSUV, which is in a process of restructuring ahead of its second congress in October.

But the battle in Guayana may be one of the most decisive as it involves the largest working-class population. This is in the context of a revolution whose weakest link has been the lack of a strong, organised revolutionary workers' movement.

Microsoft Versus Venezuela

Tamara Pearson
Venezuelanalysis.com
July 15th 2009

The MSN Spain home page yesterday

Yesterday, Microsoft MSN (Spain) featured a montage photo of Venezuelan president Hugo Chavez and the ex president of Cuba, Fidel Castro, wearing king's crowns, accompanied by the colourful title, "When power corrupts: Striving to be kings." The Venezuelan government and a grassroots technology movement here are both promoting the use and creation of open source (free) software, so it's no surprise that software tyrant, Microsoft, is lambasting Chavez.

Following the MSN headline was a slide show of photos of nine world leaders with paragraphs accompanying each, describing just how undemocratic and power hungry they all are. All of the leaders bar two are from Latin America or East Asia, reflecting the racist sentiment that the "West" is democratic perfection. Also, perhaps just a coincidence, East Asia and Latin America are regions with some of the strongest open source software movements.

Ironically, of the two Western leaders featured, the king of Spain is the one leader of the whole bunch who wasn't in any way elected, whilst the other, Napoleon, is long dead.

The paragraph accompanying Chavez's photo read, "Hugo Chavez is in it for the long run. He has touched up laws at his whim and for his own interest. And why not, he did the same with the constitution that he devised in 1999 but in which he made one mistake: term limits. After his first election (1999) and the two after that (2001 and 2007), the law hasn't allowed him the option of running again as president. And instead of accepting that, he changed the law."

First of all, MSN, do your research. The last presidential election was in 2006, not 2007. Secondly, the commentary does not mention that the constitution (created by a constitutional assembly with members elected by the public) and the constitutional amendment were both approved by popular referendum.

MSN, the default home page for Microsoft Internet Explorer, and a hub page of Microsoft services such as Hotmail, Messenger, downloads, "news", a search engine, advertisements and so on, is just an extension, or a facilitator, of the Microsoft software and technology empire.

It is hard to miss the irony of such an unaccountable, billion dollar, US based multinational corporation which monopolises its industry, calling a president who has held 15 elections (amendments, referendums, recalls, regional elections and so on) in 10 years, a wannabe king.

Microsoft, founded in 1975 by current billionaire Bill Gates, and Paul Allen, is the producer of Microsoft Windows, Word, Explorer, Messenger, and so on. It has risen to dominance by patenting products frequently based on other people's work or on common, global ideas. It monopolises the computer world through its ownership of the operating system Windows, and through a strategy of program compatibility. Then it multiplies its profits by convincing (and obliging) program users to buy upgrades every few years.

In 1994 Microsoft's operating system was driving 93% of the world's desktops, and its software- 90% of the market. The company has, what basically amounts to, tyrannical control over software, and by extension, computers, the internet, and modern communication. It's domination of information- how it is accessed, produced, processed, and organised, is dangerous.

The open source software movement is challenging such domination. The movement, which developed Linux, the free operating system, for example, sees information as vital to human development and something that should not be for profit, but rather for personal development, awareness, and expression. Software is a social creation rather than a private creation, where users around the world can add code to code, and fix bugs on a daily basis rather than via regular, purchasable, upgrades.

Edgar Gutierrez, a software activist in Merida, Venezuela, said technology is simply, "the extension of the capacity of man" and argued that it shouldn't be limited to first world countries or those who can afford to pay $100 for a program in order to design, write, express, photograph, use the internet, communicate, translate, learn languages or maths or science. He said, "When [software] is not free, there is a massive inequality of power."

Leandro Leon, also from Merida, Venezuela, speaking to alternative media, described the four freedoms of open source software, freedoms denied by private software like that made by Microsoft:

1. The freedom to use the program for whatever you want (Licensed software generally stipulates what the program should be used for).
2. The freedom to study the program.
3. The freedom to modify it, that is- to improve it, add to the coding and get rid of bugs.
4. The freedom to distribute the program.

Leon argues that Linux, a system developed by many people, is a far superior a system to Windows. "The lack of restrictions makes it possible for many people to participate," he said, "like the difference between solving a problem alone or in a group." When lots of people are involved, they discover the bugs and fix them much quicker as well, Leon argued. "A private model doesn't work like that."

In September 2004 the Venezuelan government announced its decision to switch all public administration and national industry over to open source software. Chavez explained the move was for "national scientific independence, so that we do not depend on privately owned software. If knowledge does not have owners, then intellectual property is a trap set by neo-liberalism." The change over will also save the government a lot of money on software purchasing, money which can be put to better use on social programs, health, and education.

However, getting whole sections of administration to change over their operating systems and programs is not an easy process, and at last count, the aim was to have 50% of public administration using free software by 2007.

The government has also set up the National Centre for Development and Research of Open Source Technology (CENDITEL), which has centres dedicated to creating open source software, training in open source software creation, organising its distribution, and promoting awareness around its use, among other things. It has organised technology fairs where locals can bring their computers and have Linux installed for free.

However, clearly it's not useful to talk about open source software when computers are still too expensive for the majority of the world's population. To combat this, since 2000 the government has been constructing ‘infocentres', places with up to 80 computers, located in the barrios, in rural and isolated areas, and city centres. These centres also often offer free computer training and internet access, and there are currently almost 700 such centres across the country.

Now that's democratic.

Chávez Promises Continuation of Project to Create Socialist Democracy in Venezuela

Tamara Pearson
Venezuelanalysis.com
February 16 2009

Tamara Pearson is a member of the Australia Venezuela Solidarity Network.

After it was officially announced that the “yes” vote had won the constitutional amendment with 54.4% of the vote, Venezuela’s President Hugo Chavez delivered a speech from the balcony of the Miraflores Presidential Palace, his two daughters beside him. He spent most of the speech talking about what problems need to be struggled against and what needs to be done next.

Celebrating, Chavez said, “Truth has won against lies, and the dignity of the people against those who disown the homeland … those who try to return Venezuela to … the Fourth Republic, have failed today and will always fail.”

However, he included the opposition in the victory, saying the day was historical, as for the first time the people were consulted about such an issue. “It’s a victory for Venezuela and they are part of Venezuela.”

Chavez also saw the result as a boost for the socialist project and invited the people to strengthen their effort towards the construction of true socialism.

“This path doesn’t have any other name, this path is called socialism, I want to ratify my commitment to socialism and I want to invite everyone to strengthen the march towards the construction of … socialist democracy.”

The president encouraged supporters to again go on a push with the “3R” campaign of “Revision, Rectification, and Revolutionary Re-launch.”

Chavez announced 2008 to be a year of the 3Rs at the start of last year. He had emphasized the need to review and re-evaluate everything in order to improve general administration and day-to-day governing.

“Government, party and people, I’d like us to re-take, with all our strength, in all areas of the government, that policy of the 3Rs…from this exact moment.”

He said he thought such a policy would enable the government to achieve, in the upcoming “four years that remain, of this constitutional period of the government, the highest amount of efficiency in public management and the push for the National Simon Bolivar Project.”

The National Simon Bolivar Project is the government’s overall plan for the rest of this presidential term, which lasts until early 2013.

He also committed himself and the government to a “battle that needs to be done with more intensity and effort and above all with more results that combat the insecurity in the streets of the people, the barrios, the suburbs, in the cities.”

He highlighted other issues against which the struggle needs to be intensified, “the struggle against corruption and its vile ways, the struggle against insecurity, the struggle against wastefulness, the struggle against bureaucracy and inefficiency.”

“I want us to dedicate ourselves completely in the struggle against all these problems that are so harmful to the health of the people, to the health of the government and to the health of the Republic.”

Chavez said the republic needs truly new institutions, with truly new men and women, and that it was also necessary to strengthen the five branches of the state: the executive branch, the legislative branch, judicial branch, citizen (or prosecutorial) branch, and electoral branch.

He then congratulated the people for their participation in the campaign and said it was “a big effort and a big victory.”

“Unless god stipulates something else, unless the people stipulate something else, this soldier will be a candidate for the presidency of the Republic for 2013-2019,” he said.

Chavez declared his life at the service of the people, saying, “On this road now, from today, we’ll continue … constructing the homeland. On this road I devote myself and I will be consumed in this for the rest of what remains of my life, I swear it, I promise it, in front of the people and in front of my children and grandchildren.”

However, he also suggested that the following week be a “week of love”, that everyone enjoy it with happiness and moderation, as a deserved rest after all the political activity. It will be a week free of political themes, and to make up for the Day of Love (Valentine’s Day) on February 14, which most would have spent in electoral campaign.

Celebrations and messages of congratulations
Chavez announced from the balcony that the first message he had received was from Fidel Castro, revolutionary leader of Cuba, just 10 minutes after the official results were broadcast.

“Dear Hugo, congratulations to you and your people for a victory that for its magnitude is impossible to measure,” Fidel had written.

Later, Evo Morales, president of Bolivia and the government of Spain also congratulated Chavez for the results.

Outside the presidential palace, along Avenue Urdenata, and filling up multiple other roads across Caracas, on hearing the news, people came out into the streets to listen to Chavez and to celebrate.

Likewise, around the country in main and local plazas, people waved red flags, danced, played drums, chanted political slogans and set off fireworks. Spontaneous motorcades of honking cars and motorbikes paraded through the streets.

An Important but Risky Victory for Venezuela and for Socialism

Gregory Wilpert
Venezuelanalysis.com
February 18, 2009

Gregory Wilpert is a German-American sociologist, a former U.S. Fulbright scholar in Venezuela, and editor of www.venezuelanalysis.com, a site that provides regular news and analysis on Venezuelan society and politics. His most recent book is Changing Venezuela by Taking Power: The Policies of the Chavez Government (Verso Books, 2007).

The ten percentage point victory (55-45%) that President Chávez and his movement achieved on Sunday, February 15, 2009, in favor of amending Venezuela's constitution so that Chávez may run for president again in 2012, represents a very important victory for the effort to create socialism in this oil producing Latin American nation. However, Chávez and his supporters ought to recognize that this victory comes with a certain degree of risk because it increases the Bolivarian movement's dependency on its charismatic leader. In other words, even though Chávez is the best guarantor for socialism and progressive social change in Venezuela today, his movement's dependency on him was strengthened by the referendum victory, which is an Achilles heel for the movement.

But before we can examine the consequences and meaning of this particular electoral result for Venezuela and for the socialist project, it makes sense to first briefly go over the reasoning behind eliminating term limits in general and in the specific case of Venezuela.

In General: Term Limits - Good or Bad?
Opinions on term limits are as varied as opinions about politics go. Also, this is one of the few issues that does not fall neatly along the left-right political divide. For example, sometimes it is progressives who advocate term limits because of the ridiculous obstacles challengers face against incumbents, particularly in elections for the U.S. Congress and U.S. state legislatures where incumbents enjoy massive fundraising advantages against challengers. In this case, so the argument goes, the lack of term limits for elected representatives entrenches the status quo and makes progressive change extremely difficult. It is well known, for example, that historically 97% of incumbents win their reelection bids in the United States and a vast majority of those running are incumbents.

The most famous term limit, though, is the two-term limit on the U.S. presidency, which was implemented by Republicans in 1951 because they sought to prevent another more than two-term presidency such as Franklin Roosevelt's.

In other words, the arguments in favor of term limits cut both ways. On the one hand it is said that not having term limits makes needed change more difficult because of the power that long-time office holders amass. On the other hand, term limits can also be seen as an obstacle to long-term needed political change because it forces a change of leadership at a time when the leader's project might not be ready for such change (along the lines of, "You don't switch horses in the middle of the race"). Also, some add the argument that it is more democratic to allow citizens decide if they want a long-serving representative to continue to serve, rather than to force them out via an artificially determined time limit.

In the case of Venezuela, Chávez supporters generally argue that since the Bolivarian Revolution represents a long-term project, and since Chávez is the best leader for seeing this project to its conclusion, he ought to be able to hold office for more than two presidential terms. Already when Chávez was first elected in 1998, he argued it would take about 20 years to complete the Bolivarian Revolution, which is why he favored a seven-year term in office for the president (as used to be the case for France), with at least one reelection possibility, when the 1999 constitution was drafted. Constitutional Assembly members, though, convinced Chávez to accept a six-year presidency with one single opportunity for reelection.

Unfortunately, the recent debate about term limits in Venezuela was generally quite distorted. Rather than discussing the pros and cons of allowing people to run for office repeatedly, the opposition tried to make people believe that the amendment proposal was really about whether Chávez should be "president for life" and that holding this constitutional amendment vote somehow violated Venezuela's constitution. [1] Meanwhile, Chávez supporters presented the issue as one that was merely about "expanding citizens' right to choose" whomever they want for an office, without the restriction a two-term limit imposes. Supporters of the proposal practically never addressed the underlying issue that holding office for several terms in a row could lead to the accumulation of power and the unfair and illegal use of one's office to get reelected.

Indeed, unfair advantage is enjoyed on both sides in the Venezuelan conflict. Media owners and the wealthy face few restrictions in campaigning and the government has been known to make use of some of its advantages to compensate (an accusation, though, that the opposition massively exaggerated).

If the opposition had managed to focus on the real issue, supporters of the amendment would have been forced to address this issue and Venezuela would have enjoyed a more serious debate about the pros and cons of term limits. The ultimate result could have included better legislation to protect against using one's office for reelection and better legislation to protect against the advantages that wealth and private media ownership convey when running for office on behalf of the wealthy.

In Specific: Eliminating the Two-Term Limit for Chávez
Leaving aside the more general arguments for and against term limits, why eliminate the two-term limit for President Chávez? The main reason for this is that the Bolivarian project needs Chávez in order to continue and to be carried to its completion. First, he is the only undisputed leader who has so far proven to be able to unite an otherwise notoriously fractious coalition of Venezuela's progressive and radical left forces.

Second, not enough time has passed for the Chávez government to implement its vision of 21st century socialism (also known as Bolivarian Socialism and as Socialist Democracy). While ten years in office might seem like a long time, the Chávez government's program did not get off to a good start because of the vehement and often violent opposition it faced. Also, it was not really until late 2005, once the opposition in Venezuela had been soundly defeated, [2] that Chávez fully embraced socialism and anti-capitalism. So, in effect, the Bolivarian Socialist project has only been pursued in earnest from 2006 to 2008 - a mere full three years until now.

In addition, even though Chávez has a mandate for building 21st century socialism because he won the presidency with 63% of the vote in December 2006 on a platform of establishing 21st century socialism, in December 2007 the project suffered an important setback when Chávez narrowly lost the constitutional reform referendum, which was supposed to provide the constitutional groundwork for the socialist project. To a large extent this defeat was self-inflicted, in that it was a confusing proposal, the campaign was poorly conducted, and many voters felt that too many issues remained unresolved for whose resolution a constitutional reform was not necessary. Nonetheless, Chávez has appealed to the Venezuelan people that he needs more time and a majority of the Venezuelan people has now agreed to give him this time.

What the Victory Means
Given the importance of Chávez for leading the Bolivarian project to its conclusion, the February 15 victory is extremely important for Venezuela and for creating a real progressive alternative to capitalist democracy as usual. As the sociologist Max Weber pointed out about 100 years ago, there are times when charismatic leaders are necessary to break through the ossified social institutions in order to create something new. In other words, according to Weber, charismatic authority is often the only way that old institutions can be transformed. Examples of this type of charismatic leadership would be Lenin, Mao, Gandhi, Martin Luther King, or Nelson Mandela. This is not to say that Chávez is on a par with these leaders in every respect, but he probably is with respect to his ability to lead and inspire. And such leadership should not be wasted if a people democratically decide that the cost of losing such leadership far outweighs the possible benefit of maintaining term limits.

The recent referendum victory becomes all the more important if we consider that the world is currently in a process of entering its worst economic crisis since the Great Depression 80 years ago. Back then people were desperate for an alternative to capitalism and there is no reason to believe that a similar development will not take place this time around. Viable alternatives to capitalism, whether under the heading of 21st century socialism or some other name, will become more important than ever. For better or worse, Chávez has become one of the few leaders in today's world to forge a path in the direction of this alternative.

However, while this might be true on a global scale, Chávez's electoral success bears some inherent risks for the Bolivarian movement. That is, it is precisely the dependency of the Bolivarian movement on Chávez that is simultaneously its greatest strength and one of its greatest weaknesses. This dependency is a strength in the sense previously mentioned, that Chávez unites what would otherwise be a very fractious movement. But it is also a weakness because such dependency makes the movement somewhat fragile. First, if anything were to happen to Chávez, the movement would probably fall apart into its component parts in no time. Second, given this fragility, questioning the leader is quite difficult because criticism rapidly threatens to undermine the movement's stability and main strength. As a result, debate within the movement tends to be possible as long as it does not question the leader's decisions or opinions. This, in turn, makes movement self-criticism difficult and makes the potential for errors all the greater.

Tasks for the Next Period
One of the first tasks for the Bolivarian movement thus is that it must continue to develop the United Socialist Party of Venezuela (PSUV) so that the Bolivarian movement becomes less dependent on Chávez and more stable and more open to wide-ranging debate. This means, first of all, developing alternate leaders and strengthening party structures so that the whole party is more movement-driven and less leader-dependent. The recent referendum victory has expanded the time-horizon for this task because without the elimination of the two-term limit this development would have had to happen within the next four years. Expanding this time horizon, though, carries the risk that the task of strengthening the party and decreasing the dependency on Chávez is postponed until Chávez loses a presidential election or a recall referendum or is otherwise removed from fulfilling his office (via assassination, perhaps).

Second, as Chávez himself recognized during his victory speech, his government must take the fight against insecurity and the high crime rate far more seriously. In a recent interview with CNN Chávez said that one of the reasons he has not pursued the reduction of crime with stronger police measures is because he believes that crime is primarily caused by inequality and poverty and that reducing these ought to reduce crime. While it is an established fact that poverty and crime correlate very highly, it is also true that all available statistics indicate that reducing poverty in Venezuela has not meant a reduction of crime. Rather, that crime increased in tandem with the decrease in poverty and inequality. In other words, the government needs to complement poverty reduction with other measures in order to reduce crime. Along with the fight against crime also belongs the general fight against corruption and increasing the state's efficiency and effectiveness.

Third, as some opposition critics have noted, [3] the real test of Chávez's economic policies is yet to come, when the price of oil is declining at a time when he cannot argue that the opposition caused the economic problems (as was the case during the oil industry shutdown 2002/2003). That is, the government will have to find ways to strengthen its efforts to create social justice in a time of fewer (oil revenue derived) resources. This would probably either mean going into debt so as to stave off a recession and/or taxing the country's rich far more heavily.

Finally, the fourth outstanding task for the next period is the deepening of participatory democracy against the resistance of chavismo's mid-level managers: the ministries, mayors, and governors. If popular power, as the system of direct democratic communal councils is often known, is the heart of Bolivarian Socialist democracy, then this will be the true testing ground for the viability of an alternative to capitalist democracy. So far, the communal councils have achieved much, but only in their own localities of 200-400 families. The real challenge, which Chávez has repeatedly announced, but which has yet to happen, is to bring these structures to a higher level, to the municipalities and perhaps even to state and national level. However, as many have observed, this is going to be difficult because few mayors and governors are willing to let go of their power.

If Chávez and his movement manage to tackle these four tasks in the next two to four years, then the future of Bolivarian Socialism will be bright indeed. Even though Chávez won this referendum, the next period is going to be quite short because if these tasks are not tackled successfully before the end of 2010, then Chávez faces the real possibility of losing his two-thirds majority in the National Assembly, or perhaps even his 50% majority, which would be a devastating blow. [4]

If things should go very wrong, such as if the economy were to crash for some reason (this does not seem likely, but cannot be discounted), then Chávez could even face a recall referendum in 2010. Should he weather these hurdles, though, the next real test will be the presidential election in late 2012.

In other words, even though the victory in the constitutional amendment referendum bought Chávez and his movement more time to complete the Bolivarian Socialist revolution, Chávez must deliver significant change in a relatively short amount of time if this project is to succeed in the long term. And even though the referendum has strengthened Chávez's hand in order to make these changes, it has also (paradoxically) potentially weakened the Bolivarian movement.
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[1] This argument made very little sense, but was based on the fact that the 2007 constitutional reform referendum already included the proposal to eliminate the two-term limit on the presidency and was voted down and the constitution prohibits voting on the same reform proposal twice in the same legislative period. However, Venezuela's constitution is very clear in distinguishing between a constitutional reform and a constitutional amendment, which is not subject to the same restriction as the reform.

[2] The opposition was defeated militarily with the failure of the coup attempt of 2002, economically in the oil industry shutdown of 2003, and politically with the recall referendum of 2004 and the national assembly elections of 2005

[3] See, "Is Hugo Chavez Ready for the Coming Fall [6]?" by Francisco Toro, Huffington Post, January 29, 2009

[4] While many say that Venezuela is a very presidentialist system, most are not aware that the National Assembly is quite powerful. Not only does it approve of the budget, but it can also initiate impeachment proceedings against most government officials, it appoints the members of the electoral, judicial, and prosecutorial branches of government, and it can block any of the president's legislative initiatives (the only reason Chávez could periodically legislate by decree is because the AN allowed him to do so).

Venezuela : The Revolution Stumbles

Richard Gott
Comment Is Free
The Guardian
http://www.guardian.co.uk/commentisfree/2008/nov/24/venezuela-hugo-chavez

Putting a brave face on a major electoral setback [1] early on Monday morning, president Hugo Chavez quoted from a Guardian editorial [2] that had referred to Venezuela's "vibrant democracy". The result of Sunday's regional elections, Chavez suggested, had been "a great victory for the country, for its constitution, and for its political system".

And indeed it was true that his recently created United Socialist Party [3] of Venezuela had won the governorship of 17 states, whereas the conservative opposition to his Bolivarian Revolution had only secured five. Yet the president of the National Electoral Council [4], close to tears, had announced earlier that the Chavez government had lost the city of Caracas and its outer suburb of Miranda, as well as the important western state of Zulia, on the Colombian frontier. Later results showed that the Chavistas had also lost the state of Carabobo and Tachira, as well as the municipality of Sucre (which includes the vast working class town of Petare in the eastern outskirts of the capital).

Although the former vice-president Jorge Rodriguez won the state of El Libertador, in which two million people live in shanty towns of western Caracas, Venezuela's most important urban centres - Maracaibo, Valencia, and Caracas - are now in the hands of the opposition. This appears to follow the recent trend in Latin America, where the right have won great cities like Buenos Aires in Argentina and Sao Paulo in Brazil. As a result of this unfavourable vote in the urban areas, Chavez has lost the services of important long time colleagues, including Aristobulo Isturiz, Jesse Chacon, and Diosdado Cabello.

Yet in spite of this electoral reverse, this is a country that remains in a state of revolutionary change, a vast upheaval involving politics, culture, patterns of work, or new ways of thinking, the relationship between men and women, the adoption of new technologies, the explosion of community media, the revival of historical memory, and the mobilisation of millions of people to overcome the tedium of daily life.

New schools, new posts for medical assistance, and new cultural centres have been springing up in every shanty town throughout the country. Health and education have been a priority in other Latin American countries in recent years - an area of social transformation which Cuba has long been in the lead - yet only in Venezuela has the prosaic task of providing people with the basic necessities of life been accompanied by this revolutionary awakening of the people to the possibilities of what they themselves can do to achieve improvement, betterment, and change.

Sunday's elections took place in a disciplined atmosphere of suppressed excitement as people rose to the task of bringing out the vote and thereby ensuring the continuity of the revolutionary process, yet as the day wore on a more sombre mood prevailed as people began to contemplate the possibility of defeat.

It is true, of course, that half the population - for reasons of class or race or family upbringing - remains adjacent to this unique revolutionary process, and prefers to remain on the sidelines of history. Yet many Venezuelans, after 10 years of upheaval under the leadership of Hugo Chavez, remain solidly supportive of the project of which they see themselves to be an integral part.

All this is now under threat. The Chavez government was expecting to lose three or four states in Sunday's elections, since the opposition had foolishly called for an electoral boycott at the last regional elections four years ago, but the loss of the principal cities is a huge blow; the analysis of what happened and why has already begun. One failing today seems obvious: although the Bolivarian Revolution [5] has gone a long way towards addressing the problems of health and education throughout the country, a number of specifically urban phenomena have not been adequately tackled. Crime, housing, transport, and rubbish collection are all areas where the Chavista [6] governors have failed to produce results - and their candidates have paid the price.

Opposition politicians, some of whom supported the anti-Chavez coup in 2002, face the challenge of trying to deal with the mess, inherited from way back before the Chavez era. Antonio Ledezma, the new mayor of Caracas [7], has already mentioned the introduction of neighbourhood policing to tackle the crime wave. Yet in a country that remains deeply polarised, the new urban authorities are faced with an superhuman task, while the Chavistas will look on in dismay.

Victory for Venezuela’s Socialists in Crucial Elections – November 2008

James Petras

The pro-Chavez United Socialist Party of Venezuela (PSUV) won 72% of the governorships in the November 23, 2008 elections and 58% of the popular vote, dumbfounding the predictions of most of the pro-capitalist pollsters and the vast majority of the mass media who favored the opposition.

PSUV candidates defeated incumbent opposition governors in three states (Guarico, Sucre, Aragua) and lost two states (Miranda and Tachira). The opposition retained the governorship in a tourist center (Nueva Esparta) and won in Tachira, a state bordering Colombia, Carabobo, and the oil state of Zulia, as well as scoring an upset victory in the populous state of Miranda and taking the mayoralty district of the capital, Caracas. The socialist victory was especially significant because the voter turnout of 65% exceeded all previous non-presidential elections. The prediction by the propaganda pollsters that a high turnout would favor the opposition also reflected wishful thinking.

The significance of the socialist victory is clear if we put it in a comparative historical context:

1. Few if any government parties in Europe, North or South American have retained such high levels of popular support in free and open elections.

2. The PSUV retained its high level of support in the context of several radical economic measures, including the nationalization of major cement, steel, financial and other private capitalist monopolies.

3. The Socialists won despite the 70% decline in oil prices (from $140 to $52 dollars a barrel), Venezuela’s principal source of export earnings, and largely because the government maintained most of its funding for its social programs.

4. The electorate was more selective in its voting decisions regarding Chavista candidates – rewarding candidates who performed adequately in providing government services and punishing those who ignored or were unresponsive to popular demands. While President Chavez campaigned for all the Socialist candidates, voters did not uniformly follow his lead where they had strong grievances against local Chavista incumbents, as was the case with outgoing Governor Diosdado Cabello of Miranda and the Mayor of the Capital District of Caracas. Socialist victories were mostly the result of a deliberate, class interest based vote and not simply a reflex identification with President Chavez.

5. The decisive victory of the PSUV provides the basis for confronting the deepening collapse of world capitalism with socialist measures, instead of pouring state funds to rescue bankrupt capitalist banks, commercial and manufacturing enterprises. The collapse of capitalism facilitates the socialization of most of the key economic sectors. Most Venezuelan firms are heavily indebted to the state and local banks. The Chavez government can ask the firms to repay their debts or handover the keys – in effect bringing about a painless and eminently legal transition to socialism.

The election results point to deepening polarization between the hard right and the socialist left. The centrist social-democratic ex-Chavista governors were practically wiped from the political map. The rightist winner in Miranda State, Henrique Capriles Radonsky, had tried to burn down the Cuban embassy during the failed military coup of April 2002 and the newly elected Governor of Zulia, Pablo Perez, was the hand picked candidate of the former hard-line rightwing Governor Rosales.

While the opposition controlled state governorships and municipal mayors can provide a basis to attack the national government, the economic crisis will sharply limit the amount of resources available to maintain services and will increase their dependence on the federal government. A frontal assault on the Chavez Government spending state and local funds on partisan warfare could lead to a decline of federal welfare transfers and would provoke grassroots discontent. The rightwing won on the basis of promising to improve state and city services and end corruption and favoritism. Resorting to their past practices of crony politics and extreme obstructionism could quickly cost them popular support and undermine their hopes of transforming local gains into national power. The newly elected opposition governors and mayors need the cooperation and support of the Federal Government, especially in the context of the deepening crisis, or they will lose popular support and credibility.

Conclusion

There is no point in expecting the mass media to recognize the Socialist victory. Its effort to magnify the significance of the opposition’s 40% electoral vote and their victory in 20% of the states was predictable. In the post-election period, the Socialists, no doubt, will critically evaluate the results and hopefully re-think the selection of future candidates, emphasizing job performance on local issues over and above professed loyalty to President Chavez and ‘Socialism’. The immediate and most pressing task facing the PSUV, President Chavez, the legislators and the newly elected Chavez officials is to formulate a comprehensive socio-economic strategic plan to confront the global collapse of capitalism. This is especially critical in dealing with the sharp fall in oil prices, federal revenues, and the inevitable decline in government spending. Chavez has promised to maintain all social programs even if oil prices remain at or below $50 dollars a barrel. This is clearly a positive and defensible position if the government manages to reduce its huge subsidies to the private sector and doesn’t embark on any bailout of bankrupt or nearly bankrupt private firms. While $40 billion dollars in reserves can serve as a temporary cushion, the fact remains that the government, with the backing of its majorities in the federal legislature and at the state levels, needs to make hard choices and not simply print money, run bigger deficits, devalue the currency and exacerbate the already high rates of annual inflation (31% as of November).

The only reasonable strategy is to take control of foreign trade and directly oversee the commanding heights of the productive and distributive sectors and set priorities that defend popular living standards. To counter-act bureaucratic ineptness and neutralize lazy elected officials, effective power and control must be transferred to organized workers and autonomous consumer and neighborhood councils. The recent past reveals that merely electing socialist mayors or governors is not sufficient to ensure the implementation of progressive policies and the delivery of basic services. Liberal representative government (even with elected socialists) requires at a minimum mass popular control and mass pressure to implement the hard decisions and popular priorities in the midst of a deepening and prolonged economic crisis.

The Larger Meaning of the Venezuelan Elections of November 23, 2008

James Petras

Global Research
November 20th 2008

James Petras is a Bartle Professor (Emeritus) of Sociology at Binghamton University, New York.

Introduction
The Venezuelan gubernatorial and municipal elections, taking place on November 23 of this year, are the most polarized and significant in the country's history. A great deal has changed for the better since my first teaching invitation at the Central University over 40 years ago: The Chavez government has build hundreds of medical and educational facilities serving the vast majority of the poor, vastly reduced underemployment, subsidized food for the slum residents of the ‘ranchos' and raised living standards for ordinary Venezuelans. Equally significant, this year a new pro-Chavez political party, the Venezuelan United Socialist Party (PSUV), with a formal membership of over a million members is facing its first test - in action in 23 states and over 300 municipalities. The elections and their results will tell us a great deal about the popular response to two conflicting versions of the recent past: Whether the government's positive efforts toward building socialism compensates for local political and economic deficiencies or whether the pro-US/capitalist-led opposition with its control of the mass media and its new ‘grass roots' strategies have penetrated and influenced at least some sectors of the Chavista mass base. The elections are in effect a judgment of the performance of the great majority of state and local governments ruled by Chavista incumbents as well as a political statement about the support and ‘drawing power' of President Chavez. The outcome of these elections will have a profound impact on the future political direction of the Chavez government's transition to socialism as well as on the possibilities of a future referendum allowing for Chavez' re-election.

Equally important, the electoral outcome will have an important impact on the policies of the incoming Obama regime: A decisive victory or defeat of the Chavistas will entail important tactical and strategic adjustments in the new Administrations policies.

Contrasting Electoral Campaign Strategies: The Government and the Opposition
The right-wing, pro-Washington opposition has dramatically changed their electoral strategy in these elections. Instead of focusing on personal insults of the President or spouting ideological bromides, they have concentrated on local issues, officials and the inefficiencies in delivering services. The opposition and its mass media have launched frontal attacks on deficiencies in garbage collection and the accumulation of rotting waste in the popular neighborhoods, increasing personal insecurity due to crime, unresponsiveness of some officials to individual/community petitions, corruption and, above all, inflation, which is running at 30%. The opposition has downplayed attacks on Chavez and his popular macro-social programs: The "misiones," the popular brigades promoting literacy and health care; the community based councils, the municipal universities, government-sponsored municipal banks and access to soft credit. Instead, the opposition has criticized the implementation of these programs by an inefficient or inadequate local administration. Above all, the opposition has done everything possible to avoid polarizing the vote between pro and anti-Chavez, since the President has popularity ratings above 60%. The PSUV-led campaign has generally taken a different approach emphasizing national policy successes; the recent nationalization of steel, cement, banking enterprises; pay raises for public sector employees; the end of food shortages and above all, emphasizing the close links between local candidates and President Chavez, whose photo is present next to the local candidates on most electoral posters.

A substantial increase in government spending on local programs, the completion of immediate impact programs, the rapid implementation of local public lending policies to thousands of co-operatives in the ‘ranchos' has in the last weeks of the campaign improved the poll results of government candidates. Each side has tried to exploit the others' weaknesses and overcome internal problems. The key problem for the opposition is their inability to unite behind a single candidate in several states and municipalities, dividing the right-wing vote and opening up the possibility of a Chavista victory with less than 50% of the electorate. The right wing cannot count on the massive abstention of 3 million Chavistas, which allowed them to squeak by with a 1% victory in the November 2007 referendum. The Chavista mass is expected to turn out en masse. The higher turn out is expected to favor the Chavistas. The opposition cannot exploit the expected negative impact of the world economic crisis, which, thanks to the government's reserves, has not yet hit Venezuelan voters. An election a year from now would have adversely affected the Chavista vote.

On the government side, the rising rate of inflation has deteriorated living standards of the poor: The wage and salary increases of the poorest sectors have not kept up with prices. Crime and local predators have increased insecurity and government anti-crime programs have not been effectively implemented - by lax, corrupt or complicit local police and political officials. The biggest threat to the Chavista candidate slate and local majority comes form the ineffective officials who have not solved ‘local problems'. A big question is whether unpopular Chavista governors and mayors can return to power on the coattails of the popular President Chavez.

The Complex and Contradictory International and Domestic Context of the Elections
The international political and economic context of the elections is complicated, but mostly favorable at this moment for the government and the PSUV candidates. The world economic recession and financial crash is just at the beginning phase and has not yet impacted on the daily life of most voters - luckily for the government. Cushioned by the $40 billion dollars in foreign reserves and high levels of public expenditures, the falling price of Venezuelan oil (from $146/barrel in mid-2008 to $52/barrel in November) has not cut deeply into living standards or social programs.

Venezuela's new and growing economic, military and cultural ties, especially with China, Russia and Iran, and its improved relations with the European Union and Center-Right and Center-Left regimes in Latin and Central America has isolated the US, and undermined its diplomatic campaign against the Chavez Government.

The US is tied down in wars in the Middle East and South Asia, and the severe downturn in its economy has eroded Washington's economic levers and military resources for any direct military intervention. It appears that the Pentagon's assets in the Venezuelan National Guard and military are too weak to organize a new coup and they do not appear capable of carrying out a full-scale offensive without direct US intervention or support from Washington's Colombian surrogate, President Alvaro Uribe, who, despite tactical gains against the guerrillas, now faces a huge upsurge in popular mobilizations especially among the indigenous movements and their allies and from millions of defrauded lower middle class ‘investors' of pyramid schemes.

Though the international climate today is favorable to the Chavistas, the immediate future is a different story. Venezuela will suffer from the fall of oil revenue and the world recessions; capital flight despite capital controls is rampant; and private capital is disinvesting or withholding credit despite massive incentives. The government cannot continue large-scale financing of public social and economic projects and still subsidize private exporters, agro-business and, especially, luxury importers.

The year 2009, by necessity, is the year of hard class decisions: Either the government cuts spending for the capitalists or the workers and peasants. Either social programs are drastically reduced or state subsidies to private business are ended. The vast army of publicly-funded (and unproductive) employees are put to work in the productive sector or they will be laid off. In any case, the business elite, the army of importers of high status automobiles and luxury items, and their consumers will be adversely affected and aroused into an adversarial frenzy. When the full impact of the world recession hits Venezuela, the class polarization will explode and spill over and out of the institutional/electoral channels.

Domestic Correlation of Forces
The PSUV has organized a vast electoral organization with some success; the pro-Chavez trade unions in some sectors have been strengthened and advanced, especially through Chavez nationalization of basic industries. The Chavista cultural and social programs and their mass media have deepened and extended the influence and support of the government in many sectors of the urban and rural poor. Yet there are troubling issues: The trade unions represent no more than 20% of the workforce. Few in the contracted and informal sectors are organized. The union members are largely ‘economistic' (focused on wages) and not politically active. The official TV outlet (Telesur) has not succeeded in securing a mass audience - its reach is only a fraction of that of the private right-wing television stations. The Right almost totally dominates the daily print media. The majority of the military and security establishment still supports Chavez, but there is a strong minority contingent in the National Guard, police and army, which is allied with the big landowners, big business and the Pentagon. Above all, there is a large sector of the population - lower middle class, public employees, small business informal workers -- who are of wavering political loyalties and allegiances. They support the Chavista candidates when the economy is booming, public expenditures are soaring, cheap credit is readily available, incomes outpace inflation and imports flood the market. What is unknown is how this wide sector of the voters will react when these conditions change for the worse. Much depends on how the government confronts the world recession and the internal measures, which it adopts. Can an oil-dependent government sustain and deepen the advance toward socialism or will the crisis force it to retreat toward greater austerity and accommodation to capitalism at the expense of its mass base?

In the end, the world recession will greatly impact the Venezuelan economy and force upon the Chavez government and PSUV the most difficult political decision: either the socialization of the strategic economic sectors to channel investment toward domestic production and popular consumption (the Bolivarian socialist option) or the transfer of scarce public resources to bailing out the private sector (the Obama/Wall Street solution). There does not appear to be any ‘third ways'-the center-left economic position of Chavez' current allies in Latin America are fast disintegrating.

The outcome of the November 23 elections is a very important determinant of the future direction, which the Chavez government will or may take. Big advances by the Right will increase pressure against Chavez re-election hopes and a socialist response to the coming economic challenges. A big Chavista victory will make more likely the adoption of a socialist response to the capitalist crash.

Venezuela: Second wave of nationalisations launched
Federico Fuentes
Correspondent in Caracas, Venezuela
Green Left Weekly, Australia
[ Green Left Weekly issue #765 ]

September 3, 2008 -- On August 27, Venezuela's President Hugo Chavez announced the end of negotiations with former owner Ternium over the nationalisation of the Sidor steel factory, stating that the government would "take over all the companies that it has here", and that Ternium "can leave". Speaking during a televised broadcast, Chavez explained that Ternium "did not recognise our sovereignty".

"The deadline for reaching an agreement has expired. We will move ahead and pay them what it really costs. Moreover, it will not be all in one go as they wanted. No, we will pay them at a pace that is appropriate for us."

Until the April 9 decision to nationalise Sidor, the Ternium consortium, whose biggest shareholder is the Italian-Argentine transnational Techint, had 60% control of one of the largest steel factories in Latin America, located in the industrial state of Bolivar.

Chavez stated in his August 27 broadcast that a tentative agreement on the purchase price, reached the previous week, had broken down when Ternium tried to impose unacceptable conditions. Among the transnational's demands was a law giving it immunity from any future lawsuits related to abuses committed by Ternium against the Sidor workforce.

The decision to nationalise Sidor came after a 15-month dispute between the workers and the transnational over a collective contract. Having intervened in order to help reach a resolution, Venezuela's vice-president, Ramon Carrizalez, declared that negotiations with Sidor's management were no longer possible, due to its "coloniser attitude" and "barbarous exploitation".

"This is a government that protects workers and will never take the side of a transnational company", Carrizalez said.

Nationalisation push
During the August 27 broadcast, Chavez stood alongside business owners from the cement industry, with whom the government has also been negotiating since the April 3 announcement that it plans to nationalise the three largest cement companies, which control 90% of the sector.

The government had reached agreements to buy out the majority of shares from the French company, Lafarge, and the Swiss company, Holcim, but negotiations had stalled with the largest company, the Mexican-owned Cemex.

On August 18, after the negotiation period expired, the government announced that it would expropriate Cemex, and ordered the takeover of its installations.

By law, there is a 60-day period starting from the declaration of intent to expropriate during which the two parties can reach an agreement. Cemex is asking for US$1.3 billion, but the government has stated it will not pay more than $650 million.

However, Chavez said that, in contrast to the record with Ternium, there were positive signs that an agreement could be reached.

Chavez also used the broadcast to explain a new law, approved in the first round of discussion by the National Assembly, that will put the distribution of fuel back into government hands. The state oil company PDVSA will supply fuel directly to the 60% of the country's service stations that are privately owned (many by small proprietors), eliminating the capitalist intermediaries who now sell to them for a profit.

Negotiations will now begin with the seven largest companies, including Texaco and BP, and 650 other firms that currently finance a majority of private service stations. Energy minister Rafael Ramirez also announced that the government was looking at similar measures regarding the distribution of Liquid Petroleum Gas (LPG) cylinders.

Last month, Chavez announced plans to nationalise Spanish-owned Banco de Venezuela, an action that will almost double the state's control of the financial sector from its previous 10%.

Reversing neoliberalism
Together with the announcements made earlier this year to take control of more than 30% of milk production and food distribution, and last year's decision to take majority control of the oilfields in the Orinoco Belt, these moves are part of a second wave of nationalisations, focused on industries related to production.

The first wave, begun at the start of 2007, was directed at telecommunications and electricity, to guarantee all Venezuelans access to basic services.

The August 25 edition of the Caracas daily El Universal reported that since last year 11 industries have passed into state hands.

While pro-capitalist governments privatised a number of important industries during the 1990s (including Sidor, part of the electrical sector and telecommunications company CANTV), they always had their eyes set on the big prize, PDVSA. Chavez's election in 1998 halted that privatisation plan. Since then the government, backed by the majority of the population, has worked towards rolling back neoliberalism.

Unsurprisingly, the first major showdown was a result of government attempts to gain full control over the nominally state-owned PDVSA. Fierce resistance by the parasitic capitalist class, accustomed to leeching off the rent produced by PDVSA, led to a military coup that briefly overthrew Chavez in April 2002 followed by a shutdown of the oil industry by the pro-capitalist management in December 2002.

Both attempts by the capitalist class to bring down Chavez were carried out in alliance with the corrupt trade union bureaucracy of the Confederation of Venezuelan Workers (CTV).

During more than two months of intense struggle caused by the shutdown, oil workers, working alongside poor communities and the armed forces, reopened PDVSA and restarted it under workers' control.

This victory was crucial in ensuring that the government could begin to redirect PDVSA's profits away from the capitalists and towards funding the social missions that provide, among other things, free health care and education. The missions also helped organise the Chavista grassroots supporters.

Publicly declaring in January 2005 that he had become convinced that his project for national liberation and the eradication of poverty could not be achieved within the bounds of capitalism, Chavez argued for the need to move towards a "new socialism of the 21st century".

That same month, he announced the nationalisation of the Venepal paper company, whose workers had been fighting to reopen it after the bosses shut down operations in December 2002. Renamed Invepal, the company was handed over to the workers as a joint state-worker cooperative. Since then, a number of other smaller companies that had been shut down and then taken-over by their workers have been nationalised.

However, the nationalisations initiated in 2007 marked a qualitative leap in the process of state recuperation of control over strategic sectors.

State planning
These nationalisations have been carried out in accordance with the government's overall economic plan, which seeks state control over strategic industries in order to direct production towards the needs of the Venezuelan nation.

Now under state control, the three cement companies will be merged into the new National Cement Corporation and will integrate its production plans with PDVSA and Sidor — focusing on infrastructure development, creating new industrial centres and pushing forward the government's badly needed housing construction plans.

The Steel Corporation of Venezuela is also being created — it will manage the whole steel production chain that is now 80% under state control, from primary material to finished products. Production will be directed towards the needs of small and medium companies, the oil industry and the housing sector.

And, while no specific public statements have been made, it seems likely that the nationalisation of Banco de Venezuela will lead to reorganisation of the public banking sector into a single national public bank.

The new Public Administration Law, decreed on July 29 as part of the package of 26 laws issued by Chavez, states that where various state companies exist they should be grouped into one. This can include companies in different industrial sectors that, due to their nature, work together.

With the recent nationalisations, the number of workers in the state sector will increase by 41,400 to just over 2 million, according to the National Institute of Statistics. This does not include those in the fuel distribution and LPG cylinder distribution sectors, which are slated to come under state control.

This represents a 53.5% increase in the number of public sector workers in the last nine years. Importantly, Chavez has raised the need to eradicate the practice of contracting out labour in the state sector, which will further increase this number.

In the same period, employment in the (formal and informal) private sector grew from 7.3 million to 9.4 million.

Worker and community participation
Almost none of the recent nationalisations are the direct result of workers' struggles in favour of such measures, although in many cases labour disputes were factors. This was the case with fuel distribution, where unions have been warning that the bosses were trying to manufacture shortages and provoke strikes to undermine the government.

In contrast to most of the earlier nationalisations involving small factories, only in Sidor can it be said that the demand for nationalisation came from the workers. Even then, the demand was raised only in the last period of the struggle after persistent campaigning by a small nucleus of Sidor workers.

Yet, the future of the nationalised companies depends on the political and organisational capacity of the working class in running these industries, and the working class currently finds itself in a state of dispersion and fragmentation.

Unofficially, according to the daily newspaper Ultimas Noticias (April 27), there are no fewer than 3600 unions in Venezuela. This fragmentation is due to numerous factors, but two in particular stand out. First, with the coming to power of Chavez and the expansion of workers' rights and union freedom, workplaces across the country experienced an explosion of union organising.

In the aftermath of the defeat of the bosses' lockout, a majority of the pro-revolution unions came behind the formation of the National Union of Workers (UNT), which rapidly overtook the CTV as the largest union federation. However, the UNT is plagued by bitter internal disputes. These divisions deepened earlier this year when two currents left the UNT to form a new union federation.

Added to this are negative experiences in some cooperative-run factories, including the exploitation of contract labour and self-enrichment by co-op owners.

Second, actions by sections of the government and state bureaucracy have also worked against the self-organisation of workers and their participation in running state industries. Under the previous labour minister, Jose Ramon Rivero (who actively worked against the Sidor workers), parallel unionism was promoted in order to favour the union current from which he came and to dampen labour disputes.

In PDVSA and the state electrical company, workers have faced attacks at the hands of a bureaucracy that is afraid of losing power if workers take on a greater role in management.

The recent nationalisations have coincided with the launch of the "April 13 Mission". Chavez has stated that part of the mission's aim is to transfer control over services to organised communities through communal councils and communes, and the creation of productive units and factories that will be socially owned and run.

Without the participation of workers and organised communities in the running of industries and in democratic planning, control of state companies will remain in the hands of bureaucrats who are more interested in maintaining their share of power and privileges. This would restrict the ability of workers to fully develop their creative potential, boxing them into their role as simple providers of labour power.

This has created situations like the one in the nationalised Inveval valve factory, run under workers' management. It has the capacity to produce valves for PDVSA, but it has been pushed aside by PDVSA bureaucrats who prefer to continue their contracts with private companies.

Significantly, it was reported on August 28 that Inveval will become a mixed company, jointly owned with PDVSA, and will directly supply the state oil company with valves.

A crisis threatens the electrical sector, where, despite repeated warnings by the workers, power generation and distribution plans have failed to take into consideration increased demand caused by the boom in industrial and housing projects.

Speaking on the eve of this year's May Day demonstrations, Chavez once again repeated his call for the working class to take the lead in the struggle for socialism. "There is no revolution without the workers, and I would add, there is no socialism without the working class", he insisted. "That is why the working class that the revolution needs has to be very conscious, very united", he said.

"The Bolivarian revolution … needs to be ‘proletarianised' … the ideology of the proletariat should dominate in all spheres, a transformational, truly revolutionary ideology, and overcome petty bourgeois currents that always end up being … counter-revolutionary".

Venezuela - Second wave of nationalisations launched

Federico Fuentes
Correspondent in Caracas, VenezuelaGreen Left Weekly, Australia

September 3, 2008 -- On August 27, Venezuela's President Hugo Chávez announced the end of negotiations with former owner Ternium over the nationalisation of the Sidor steel factory, stating that the government would “take over all the companies that it has here”, and that Ternium “can leave”. Speaking during a televised broadcast, Chávez explained that Ternium “did not recognise our sovereignty”.

“The deadline for reaching an agreement has expired. We will move ahead and pay them what it really costs. Moreover, it will not be all in one go as they wanted. No, we will pay them at a pace that is appropriate for us.”

Until the April 9 decision to nationalise Sidor, the Ternium consortium, whose biggest shareholder is the Italian-Argentine transnational Techint, had 60% control of one of the largest steel factories in Latin America, located in the industrial state of Bolívar.

Chávez stated in his August 27 broadcast that a tentative agreement on the purchase price, reached the previous week, had broken down when Ternium tried to impose unacceptable conditions. Among the transnational’s demands was a law giving it immunity from any future lawsuits related to abuses committed by Ternium against the Sidor workforce.

The decision to nationalise Sidor came after a 15-month dispute between the workers and the transnational over a collective contract. Having intervened in order to help reach a resolution, Venezuela's vice-president, Ramon Carrizalez, declared that negotiations with Sidor’s management were no longer possible, due to its “coloniser attitude” and “barbarous exploitation”.

“This is a government that protects workers and will never take the side of a transnational company”, Carrizalez said.

Nationalisation push

During the August 27 broadcast, Chávez stood alongside business owners from the cement industry, with whom the government has also been negotiating since the April 3 announcement that it plans to nationalise the three largest cement companies, which control 90% of the sector.

The government had reached agreements to buy out the majority of shares from the French company, Lafarge, and the Swiss company, Holcim, but negotiations had stalled with the largest company, the Mexican-owned Cemex.

On August 18, after the negotiation period expired, the government announced that it would expropriate Cemex, and ordered the takeover of its installations.

By law, there is a 60-day period starting from the declaration of intent to expropriate during which the two parties can reach an agreement. Cemex is asking for US$1.3 billion, but the government has stated it will not pay more than $650 million.

However, Chávez said that, in contrast to the record with Ternium, there were positive signs that an agreement could be reached.

Chávez also used the broadcast to explain a new law, approved in the first round of discussion by the National Assembly, that will put the distribution of fuel back into government hands. The state oil company PDVSA will supply fuel directly to the 60% of the country’s service stations that are privately owned (many by small proprietors), eliminating the capitalist intermediaries who now sell to them for a profit.

Negotiations will now begin with the seven largest companies, including Texaco and BP, and 650 other firms that currently finance a majority of private service stations. Energy minister Rafael Ramírez also announced that the government was looking at similar measures regarding the distribution of Liquid Petroleum Gas (LPG) cylinders.

Last month, Chávez announced plans to nationalise Spanish-owned Banco de Venezuela, an action that will almost double the state’s control of the financial sector from its previous 10%.

Reversing neoliberalism

Together with the announcements made earlier this year to take control of more than 30% of milk production and food distribution, and last year’s decision to take majority control of the oilfields in the Orinoco Belt, these moves are part of a second wave of nationalisations, focused on industries related to production.

The first wave, begun at the start of 2007, was directed at telecommunications and electricity, to guarantee all Venezuelans access to basic services.

The August 25 edition of the Caracas daily El Universal reported that since last year 11 industries have passed into state hands.

While pro-capitalist governments privatised a number of important industries during the 1990s (including Sidor, part of the electrical sector and telecommunications company CANTV), they always had their eyes set on the big prize, PDVSA. Chávez’s election in 1998 halted that privatisation plan. Since then the government, backed by the majority of the population, has worked towards rolling back neoliberalism.

Unsurprisingly, the first major showdown was a result of government attempts to gain full control over the nominally state-owned PDVSA. Fierce resistance by the parasitic capitalist class, accustomed to leeching off the rent produced by PDVSA, led to a military coup that briefly overthrew Chávez in April 2002 followed by a shutdown of the oil industry by the pro-capitalist management in December 2002.

Both attempts by the capitalist class to bring down Chávez were carried out in alliance with the corrupt trade union bureaucracy of the Confederation of Venezuelan Workers (CTV).

During more than two months of intense struggle caused by the shutdown, oil workers, working alongside poor communities and the armed forces, reopened PDVSA and restarted it under workers’ control.

This victory was crucial in ensuring that the government could begin to redirect PDVSA’s profits away from the capitalists and towards funding the social missions that provide, among other things, free health care and education. The missions also helped organise the Chavista grassroots supporters.

Publicly declaring in January 2005 that he had become convinced that his project for national liberation and the eradication of poverty could not be achieved within the bounds of capitalism, Chávez argued for the need to move towards a “new socialism of the 21st century”.

That same month, he announced the nationalisation of the Venepal paper company, whose workers had been fighting to reopen it after the bosses shut down operations in December 2002. Renamed Invepal, the company was handed over to the workers as a joint state-worker cooperative. Since then, a number of other smaller companies that had been shut down and then taken-over by their workers have been nationalised.

However, the nationalisations initiated in 2007 marked a qualitative leap in the process of state recuperation of control over strategic sectors.

State planning

These nationalisations have been carried out in accordance with the government’s overall economic plan, which seeks state control over strategic industries in order to direct production towards the needs of the Venezuelan nation.

Now under state control, the three cement companies will be merged into the new National Cement Corporation and will integrate its production plans with PDVSA and Sidor — focusing on infrastructure development, creating new industrial centres and pushing forward the government’s badly needed housing construction plans.

The Steel Corporation of Venezuela is also being created — it will manage the whole steel production chain that is now 80% under state control, from primary material to finished products. Production will be directed towards the needs of small and medium companies, the oil industry and the housing sector.

And, while no specific public statements have been made, it seems likely that the nationalisation of Banco de Venezuela will lead to reorganisation of the public banking sector into a single national public bank.

The new Public Administration Law, decreed on July 29 as part of the package of 26 laws issued by Chávez, states that where various state companies exist they should be grouped into one. This can include companies in different industrial sectors that, due to their nature, work together.

With the recent nationalisations, the number of workers in the state sector will increase by 41,400 to just over 2 million, according to the National Institute of Statistics. This does not include those in the fuel distribution and LPG cylinder distribution sectors, which are slated to come under state control.

This represents a 53.5% increase in the number of public sector workers in the last nine years. Importantly, Chávez has raised the need to eradicate the practice of contracting out labour in the state sector, which will further increase this number.

In the same period, employment in the (formal and informal) private sector grew from 7.3 million to 9.4 million.

Worker and community participation

Almost none of the recent nationalisations are the direct result of workers’ struggles in favour of such measures, although in many cases labour disputes were factors. This was the case with fuel distribution, where unions have been warning that the bosses were trying to manufacture shortages and provoke strikes to undermine the government.

In contrast to most of the earlier nationalisations involving small factories, only in Sidor can it be said that the demand for nationalisation came from the workers. Even then, the demand was raised only in the last period of the struggle after persistent campaigning by a small nucleus of Sidor workers.

Yet, the future of the nationalised companies depends on the political and organisational capacity of the working class in running these industries, and the working class currently finds itself in a state of dispersion and fragmentation.

Unofficially, according to the daily newspaper Ultimas Noticias (April 27), there are no fewer than 3600 unions in Venezuela. This fragmentation is due to numerous factors, but two in particular stand out. First, with the coming to power of Chávez and the expansion of workers’ rights and union freedom, workplaces across the country experienced an explosion of union organising.

In the aftermath of the defeat of the bosses’ lockout, a majority of the pro-revolution unions came behind the formation of the National Union of Workers (UNT), which rapidly overtook the CTV as the largest union federation. However, the UNT is plagued by bitter internal disputes. These divisions deepened earlier this year when two currents left the UNT to form a new union federation.

Added to this are negative experiences in some cooperative-run factories, including the exploitation of contract labour and self-enrichment by co-op owners.

Second, actions by sections of the government and state bureaucracy have also worked against the self-organisation of workers and their participation in running state industries. Under the previous labour minister, José Ramón Rivero (who actively worked against the Sidor workers), parallel unionism was promoted in order to favour the union current from which he came and to dampen labour disputes.

In PDVSA and the state electrical company, workers have faced attacks at the hands of a bureaucracy that is afraid of losing power if workers take on a greater role in management.

The recent nationalisations have coincided with the launch of the “April 13 Mission”. Chávez has stated that part of the mission’s aim is to transfer control over services to organised communities through communal councils and communes, and the creation of productive units and factories that will be socially owned and run.

Without the participation of workers and organised communities in the running of industries and in democratic planning, control of state companies will remain in the hands of bureaucrats who are more interested in maintaining their share of power and privileges. This would restrict the ability of workers to fully develop their creative potential, boxing them into their role as simple providers of labour power.

This has created situations like the one in the nationalised Inveval valve factory, run under workers’ management. It has the capacity to produce valves for PDVSA, but it has been pushed aside by PDVSA bureaucrats who prefer to continue their contracts with private companies.

Significantly, it was reported on August 28 that Inveval will become a mixed company, jointly owned with PDVSA, and will directly supply the state oil company with valves.

A crisis threatens the electrical sector, where, despite repeated warnings by the workers, power generation and distribution plans have failed to take into consideration increased demand caused by the boom in industrial and housing projects.

Speaking on the eve of this year’s May Day demonstrations, Chávez once again repeated his call for the working class to take the lead in the struggle for socialism. “There is no revolution without the workers, and I would add, there is no socialism without the working class”, he insisted. “That is why the working class that the revolution needs has to be very conscious, very united”, he said.

“The Bolivarian revolution … needs to be ‘proletarianised’ … the ideology of the proletariat should dominate in all spheres, a transformational, truly revolutionary ideology, and overcome petty bourgeois currents that always end up being … counter-revolutionary”.