Sunday, June 19, 2016

The bitter fruit of reformism in Venezuela

Today's New York Times article on Venezuela can be found here:

A Starving Country -

The Militant has been covering this story from a revolutionary socialist perspective for years.

Some recent highlights:

From 2016:

....Chávez and Maduro used the nation’s oil profits — Venezuela has the largest oil reserves in the world — to subsidize housing, food, health care and social programs. Many of the social programs have been carried out with the help of revolutionary Cuba, which has tens of thousands of health-care workers, teachers and other volunteers who go to some of the most impoverished and least accessible areas of the country.

The Venezuelan government in return has provided cheap oil to Cuba.

The world capitalist economic crisis has had a devastating affect on Venezuela. A precipitous drop in the price of oil — which accounts for 95 percent of the country’s export earnings — was countered by printing money. Policies aimed at managing the crisis, such as price controls and a special exchange rate for dollars for companies that import and export, fueled inflation and shortages of goods, as many capitalists found it more profitable to speculate on the exchange rates instead of manufacturing.

The country’s oil exports fell 49 percent in 2015, according to the Inter-American Development Bank. A drought made matters worse, bringing the water level at the Guri hydroelectric dam, which generates 75 percent of the country’s electricity, to a record low.

Venezuela’s currency, the bolivar, has tumbled in relation to the dollar by 99.1 percent since 2012. Imports of basic foodstuffs, including sugar, flour and eggs have declined. People have to stand in line for hours hoping to buy products, often to find empty shelves. The inflation rate is estimated at 720 percent — likely the highest in the world — up from 180 percent in 2015.

Starting April 26, Maduro placed most government employees, more than 30 percent of the workforce, on a two-day workweek to conserve energy. Public hospitals are exempt. The government has also initiated rolling four-hour blackouts throughout the country, and pushed the clocks forward 30 minutes to increase daylight hours.

The Militant - May 30, 2016 -- Washington uses crisis to push for pro-US gov’t in Venezuela

From 2014:

....In a 2008 interview, Christopher Hitchens asked Chávez what the difference was between him and Cuban revolutionary leader Fidel Castro. “Fidel is a communist. I am not. I am a social democrat,” Chávez replied. “Fidel is a Marxist-Leninist. I am not. Fidel is an atheist. I am not.”

Since Chávez was elected, the number of government employees increased by more than 1 million. Today nearly one of every five workers is employed by the government.

Through cooperative agreements between the Venezuelan and Cuban governments, Havana helped establish social programs known as “missions,” staffed by tens of thousands of Cuban volunteers, from teachers and sports instructors to agronomists. Barrio Adentro, staffed by 20,000 Cuban doctors, today provides free medical care to working people across the country.

Anti-imperialist trade policies

Venezuela gives Cuba 100,000 barrels of oil a day at preferential prices, which has been a lifeline for Cuba, replacing oil it used to receive from the Soviet Union before it collapsed.

Caracas’ ties with Havana and the two governments’ initiation of new trade and diplomatic alliances in Latin America and the Caribbean to counter U.S. imperialist domination of the region have provoked the ire of Washington.

This includes the Bolivarian Alliance for the Peoples of Our America (ALBA), a trade bloc of nine Latin American countries formed in 2004, and the Community of Latin American and Caribbean States (CELAC), an alternative to the U.S.-dominated Organization of American States. In 2005 the Venezuelan government launched PetroCaribe, which provides Cuba and 13 other Caribbean countries with oil at preferential prices, weakening the stranglehold of imperialist-dominated oil monopolies.

Government subsidies and social programs since 1998 have helped improve living conditions of working people. At the same time they have strengthened workers’ dependence on the capitalist state and promoted the illusion that something other than independent working-class political action can advance their interests. Today, many government programs are in decline, while the government is weaker without the strong Bonapartist leader it had with Chávez.

Oil production in crisis

Maintaining subsidies for fuel, food, housing and an expanding state bureaucracy has become increasingly difficult. Venezuela’s oil production has declined by roughly 25 percent since 1999, a major problem for a country that depends on oil for 95 percent of its export earnings and 45 percent of federal budget revenues.

Venezuela owes more than $60 billion to foreign creditors and Maduro has made sure that they are paid on time. Domestic capitalists are owed some $50 billion.

Maduro had floated reducing subsidies for gas prices, which stand at roughly 6 cents a gallon. But he has shelved the idea since the latest wave of opposition protests began.

The government has implemented a complicated auction of U.S. dollars for Venezuelan businesses at the official exchange rate of 6.3 bolivars to the dollar, one tenth the black market rate.

Some capitalists, especially those with ties to the government, are taking advantage of the gap. They are making fortunes in currency speculation buying dollars at the official rate, ostensibly to import needed goods, and selling them on the black market.

The government has tried to impose price controls and passed a law stating that capitalists will be allowed a 30 percent maximum profit rate, leading to acute shortages of goods at the official prices and a thriving black market at whatever price the market will bear.

While chastising greedy capitalists, Maduro has also criticized workers who demand higher wages. He labeled steelworkers on strike at the Sidor company in September and October as “labor criminals, anarcho-syndicalists.”

In a move to head off opposition in the armed forces, the government announced in September that it was giving members of the military a pay raise and vehicles, furniture and appliances for their homes. According to the Christian Science Monitor, Maduro has appointed more than 300 active duty or retired military officials to government posts.

Although the crisis is hitting working people the hardest, “the protests shaking the capital this month have been dominated by the city’s middle- and upper-class residents,” the New York Times reported Feb. 28. “Yet in the city’s poorer sections, life has mostly gone on as usual.”

The Militant - April 28, 2014 -- Venezuela workers distrust pro-imperialist opposition

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