Nationalisations push Venezuela further toward socialism

As Venezuela's Bolivarian revolution continues to deepen and accelerate, President Hugo Chavez has announced a spate of pro-worker changes, which mark a continuation of the Chavez government's orientation toward the country's oppressed, and a victory against the right-wing offensive that has heightened since Chavez's re-election in December.

Following the 20% minimum wage increase on May 1, Chavez announced the extension of Venezuela's free health and education programs on May 27, including the opening of 19 new diagnostic health clinics that are part of the Barrio Adentro II program. Chavez reinforced the importance of free, universally accessible health in the creation of a socialist society, and hinted at further expansion in the area.

Chavez also announced plans for 28 new universities (including 13 specialised universities in areas such as languages, art and communication), the abolition of entrance exams (which previously benefited the wealthy who could afford private tuition) and salary rises of 28-36% for all university staff.

The nationalisation of CANTV, Venezuela's main telecommunications supplier, was followed with an announcement on May 23 that phone rates will be cut by as much as 20%, and coverage will be extended into regional areas, with aims to reduce the class divide that currently exists in home phone services. Chavez said that the role of the state-owned company is to provide an essential social service to which all Venezuelans are entitled, and that it will be run differently to a capitalist state-run company: "We have nationalised [CANTV] after so many years [since privatisation in 1991], but it will not become what it was prior to privatisation, when it was a company of a capitalist state", he said. "Now we have to make a leap from a private capitalist company to a socialist state-owned company, which is not seeking profit, even when with a good management there will not be economic losses." Further, the expansion of the network will include the provision of internet access to all schools, and will be carried out in conjunction with a new national rail service.

The recent wave of nationalisations is part of a move to reclaim ownership and control over Venezuela's strategic industries. Minister of energy and petroleum Rafael Rodriguez announced on May 14 that 18 oil exploration rigs that were previously controlled by multinational corporations would now come under state control and be run according to the needs of the Venezuelan people.

Further, two of the six foreign corporations with investments in the Orinoco Belt have been confronted with massive tax bills after refusing to comply with Chavez's announcement on May 1 that oil investments in the region would be nationalised. The Petrozuta oil project, led by ConocoPhillips, was fined US$465 million, a record in Venezuelan corporate history, indicating Chavez's refusal to let business interests reign in Venezuela.

By contrast, Argentinian-owned steel company Sidor avoided nationalisation by agreeing to deprioritise profitable exports over the provision of low-cost products to Venezuela to assist the expanding social programs.

These changes come amidst an overall rise in the living conditions of Venezuelans, and a strengthening of the economy. ElUniversal.com reported on May 16 that poverty levels are now at 30.4%, and extreme poverty levels are at 9.1%. While these numbers are still substantial, they represent a steep decline since 2003, when 54% lived in poverty and 25.1% in extreme poverty. Since Chavez's election in 1998, average household income has increased by 34.7%. Economic growth remains strong, with diversification continuing in non-oil sectors, marked by an overall growth of 37% since 1998. In the first quarter of this year, there has been an overall increase in GDP of 8.8%.

Unemployment is steadily declining — it is now at 10.2%, down from 14.6% in 1999. Contrary to mainstream press reports of economic mismanagement, the economy has grown by almost 4% per year on average since Chavez's 1998 election (despite an initial capital flight), in contrast to minimal growth of 0.4% per year in the preceding six years.

In other words, the gains of the revolution have not come at the expense of economic growth — in fact, not only is Chavez's economic approach continuing to outperform the previous neoliberal model of development, but the economic gains are being consciously used and more evenly distributed to uplift and improve the circumstances of the country's poor majority. Chavez is continuing to call for the further reorientation of the economy to satisfy the needs of people, rather than capital, warning on June 2 that capitalist companies that refuse to comply with this socialist reorientation will be nationalised.

"If the Venezuelan bourgeoisie continues to desperately assault, using the refuges it has remaining, well then the Venezuelan bourgeoisie will continue to lose, one by one, [these] refuges … We respect you as Venezuelans, you [should] respect Venezuela, respect the homeland, respect our constitution, respect our laws. If you do not, you will regret it, if you do not, we will make you obey Venezuela's laws."