The Venezuelan Revolution and the struggle for socialism — Part two

The present document is a shortened version of the draft document that the comrades of the Venezuelan Corriente Marxista Revolucionaria discussed at their 3rd National Congress in December 2005. Part one and part three of this document are also available. The current economic situation Venezuela’s Gross Domestic Product (GDP) grew by 9.3% (www.lanota.com.co) during the […]

Corriente Marxista Revolucionaria -- venezuela.elmilitante.org
Thu, Jul 6, 2006

The current economic situation

Venezuela’s Gross Domestic Product (GDP) grew by 9.3% (www.lanota.com.co) during the first quarter of 2005 compared with the same period in 2004. 2004 saw a growth of 23%, the beginning of a recovery after the disastrous fall of 18% during the previous two years.

The current high price of oil allows the Bolivarian government to respond to the demands of the masses, redistributing the national wealth and providing money for the missions and other social projects, public works, etc. They have even been able to implement a number of measures such as reduced interest rates and an expansion of credit, a reduction in mortgage rates, assistance in the purchase of homes and other products, and subsidies to basic goods in order to increase consumption. These measures can, for a time, create economic expansion and increase the purchasing power of sections of the population, particularly the middle classes. Combined with the defeats of the opposition forces, these have, at least temporarily, curbed the extent and hostility of the opposition to Chavez’s government among this section of the population. But, while recognising this, we have to understand that under capitalism none of these measures can permanently resolve any problem and are shoring up new contradictions.

While acknowledging the positive role of the missions, it is clear that the rates of poverty – as Chavez himself has said – are still extremely high, which is totally unacceptable in a revolution which seeks to advance and triumph permanently. 15.1 million people, over half the population, belong to category E, that is, those with the lowest incomes. The housing shortage – a further 1.8 million homes are still needed – will not be solved, according to official plans, for almost two decades. While the plan is to build 120,000 new homes this year, only 30,000 have been built so far. Not even plans to house the victims of the “vaguada” [five day of very heavy rainfall in February 2005] and other floods and disasters have been completed. Unemployment remains very high and more than half the economically active population still work in the black economy.

The advances that have been achieved generate new expectations. In health and education, the missions undoubtedly represent a step forward but are not enough to satisfy what the masses hope for and need: finding a decent job and home, to be able to study, better health services, etc. In a dialectical way, the President’s own speeches reflect and encourage these expectations. On the other hand, as we also predicted, there are contradictions between the wishes of the masses to deepen and control these social plans and improve them, and the counterrevolutionary role being played by sections of the bureaucracy who are trying to put a brake on the movement.

This is, of course, logical while we remain within the capitalist system. Even revolutionary initiatives such as the missions will find themselves subjected to the pressures of capitalist society, a society divided into classes and based on the struggle to survive, and the exploitation of man by man – that is, unless we expropriate the property of the capitalists and replace the bourgeois state with a revolutionary workers’ state. The bourgeois state tends towards reproducing internally the contradictions which exist within the capitalist mode of production. Furthermore, if there are no mechanisms to guarantee the control of the missions by the revolutionary rank and file (the participants and volunteers, as well as the workers’ and popular movements in general) with the right to elect and remove the coordinators, create student unions and organisations to defend their rights, etc., then the risk that a revolutionary project like the missions can also be sabotaged or corrupted by the bureaucracy and the capitalists increases.

From the point of view of the development of the organisations of the oil workers and their participation in the control and running of industry, which is fundamental to the development of the revolutionary process, the internal situation in PDVSA is very worrying. Since the old technocrats left, and with the disappearance of the elements of workers’ control which developed during the fight against the bosses’ lock-out of December 2002 and January/February of 2003, all indications are that a new technocratic bureaucracy is developing.

Oil revenues are acting as a blanket, and giving the government a certain room for manoeuvre. But how long can this last? Wastages, due to the lack of workers’ control, could have a serious effect on profitability in the medium term. For the moment PDVSA is able to generate enough income to allow public spending to continue expanding, at least while oil prices continue at their present level. The reformists are euphoric with the increase in oil prices. However, a more sober analysis shows that enormous contradictions are building up within the Venezuelan economy, which can stall at any moment and seriously threaten the development of the revolution.

The capitalists are not able to develop the country

The lack of productive investment, both by the Venezuelan industrialists and the multinationals, means that a large part of oil profits go to finance the trade and budget deficit and to satisfy the growth of internal demand. The major share of public expenditure goes towards social projects and public works in progress. A very significant part goes to help industrialists, to encourage them to invest. It is a symptom of the weakness and parasitism of the Venezuelan capitalists that a large part of this state income is used to import goods from other Latin American countries, since the Venezuelan private sector is incapable of satisfying internal demand, especially for basic consumer goods such as food.

As we have already explained in other documents, given the present state of capitalism on a world scale, and even more so in Venezuela, the development of a new bourgeois class is impossible, just as it is impossible for the old parasitic bourgeois class to change. In the present epoch of capitalism, characterised by the growth of the domination of imperialist multinationals in every corner of the globe and the abandonment of productive investment in favour of financial speculation, this is even more true. This has been clear from the capitalists’ refusal to invest over the past five years and it is clear from their failure to create employment and develop any kind of serious national industry despite all the subsidies the government currently gives them.

Even before a fall in oil prices, when these contradictions would break out openly, oil profits will not be enough to allow Venezuelan capitalism a sufficient margin to hold back the mobilisation and radicalisation of the masses and allow a minimum of stability. This is the big contradiction which has given rise to, and continues to fuel, the revolutionary process. In embryonic form, the crisis of capitalism (which is worldwide but has been particularly clear in Venezuela since the early 1980s) together with the counterrevolutionary sabotage of the economy, are doing their work and undermining, below the surface, the foundations of the economy. Despite declarations from Fedecamaras, and a business association such as Fedeindustria which declares itself pro-Chavez (or at least distances itself from the opposition), these publicly admit that, despite growth and an effective negative interest rate (the latest available figures show that while the annual inflation rate was around 19%, interest rates were around 16%), the private sector is not creating any significant increase in employment. Of the latest 200,000 new jobs created, 145,000 were created by the state, and only 55,000 by the private sector. As if that were not enough, the great majority of jobs created by the private sector offer super-exploitation and massive job insecurity.

The business organisations (including those which call themselves Bolivarian) complain that price and exchange controls, and above all, inflexibility in the labour market, are responsible for the fact that there is not more investment and more job creation. Businesses, of course, ask the government for more ‘help’, measures to ‘encourage investment’ and a relaxation of the labour market; that is to say, more exploitation and more suffering for the workers.

Despite an unprecedented boom in oil prices and with one of the largest economic growth rates on the planet in 2004, businesses are operating at 54% of productive capacity. The percentage of private investment in the GDP as a whole is around 10-12%. During the 1960s and 1970s the percentage of private investment was over 50% of GDP. In any other country where oil did not play the role it does in Venezuela, this would mean a total economic collapse.

The capitalists’ refusal to invest has been a feature since 1983 although, clearly, this tendency not to invest, together with speculation and the flight of capital from the country have intensified under the Chavez government, as happens in all revolutionary situations. Private Investment as a Percentage of Overall Investment, according to El Nacional, has been on average 13.8% under Chavez’s presidential mandate, which is a lower level than under the previous nine governments. According to figures published by El Nacional, from an average of 16.7% under Perez Jimenez and 31.5% under the first CAP [Carlos Andres Perez] government, this figure fell to 19.9% under the Lusinchi government (1984-89), 18.2% under the second CAP government (1989-1994), 17.5% under the second Caldera government (1994-98), with the lowest ever figures to date from 1999 to the present time. This has been the tendency within the capitalist system on a world scale since 1973 – a tendency towards stagnation and even decline. In Venezuela in particular, this represents a steep fall. Under capitalism there is no way out of the contradictions that have built up in Venezuelan society.