Venezuela: Chavistas debate pace of change

Student supporters of the Bolivarian revolution march against opposition violence in Caracas on April 3. Photo via Venezuela Ana

The violent anti-government protests that shook Venezuela in February have again thrust the issue of the pace of change into the broader debate over socialist transformation.

Radical Chavistas, reflecting the zeal of the movement’s rank and file, call for a deepening of the “revolutionary process”. Moderate Chavistas favour concessions to avoid an escalation of the violence.

The same dilemma confronted Chile's socialist government of Salvador Allende in the early 1970s, but under different political circumstances. Unlike in Chile, Hugo Chavez and his successor Nicolas Maduro have won nearly all national elections over a period of 15 years by absolute majorities.

Also, Chavistas, since the early years, have maintained firm control of the two most important institutions in the country: the armed forces and the state oil company PDVSA.

The invigoration of the Chavista rank and file, along with mass mobilisations, became a must for the Maduro government’s survival in the face of the opposition’s at times violent tactics in February.

Thus,on successive days in late February, Maduro spoke at mass rallies of women, oil workers, motorcyclists, telephone workers, and finally peasants and indigenous people. On each occasion, social movement representatives called for the “deepening of the revolutionary process”, “radicalisation”, and “people’s power.”

Maduro, for his part, outlined popular measures and at times threatened the elite with radicalisation. This combination of expectations of radicalisation and announced programs favouring the popular sectors enabled Chavez to overcome situations of crisis in the past.

Ongoing radicalisation
Immediately after each triumph, the Chavez government announced bold initiatives.

For instance, after his victory in the recall election of 2004, Chavez defined himself as a socialist and expropriated several abandoned factories. After winning 63% of the vote in the 2006 presidential elections, Chavez nationalised strategic industries.

The impressive showing of the Chavistas in municipal elections last December appeared to follow the same patten. Immediately after, Maduro took calculated risks.

Opinion, however, has been divided within the movement as to whether his moves contributed to the deepening of the revolutionary process or represented a step backward. The measures he implemented were designed to confront acute shortages of basic commodities, price rises far above those set by the government, a 56% inflation rate (nearly triple that of the previous year), widespread currency speculation, and the refusal of the opposition to recognise the government’s legitimacy.

The favourable electoral results in December represented a turnaround for Maduro. Shortly after Chavez’s death in March last year, Maduro was elected president by an unexpectedly narrow margin of 1.7%. In interpreting the outcome, the opposition and private media stressed the fact that Maduro failed to measure up to Chavez’s leadership.

The International Herald Tribune, for instance, ran a story on disillusioned Chavistas and quoted one who claimed he still supported the government but, in reference to Maduro, added: “We don’t want a president who is a joke.”

New offensive

Maduro’s popularity recovered in November when he declared war on price speculation and in doing so, invigorated the Chavista base. As part of a well-publicised campaign, Maduro and government authorities inspected large commercial outfits.

They documented what he called “grotesque prices” of household appliances and other products imported with “preferential dollars”. These are dollars sold by the government to merchants at an artificially low price in Venezuelan bolivars.

The National Guard occupied the stores at the same time that prices were slashed. In several cases, the government detained and initiated legal proceedings against store owners.

This no-nonsense approach resonated among voters. Public opinion firm Hinterlaces said 70% of Venezuelans approved of the “economic offensive” and 62% supported measures to limit profits.

After the December elections, Maduro defined three strategies. First, he indicated his willingness to meet with opposition leaders and businesspeople to find ways to reduce tension and solve specific problems. Second, he announced stringent measures against speculators, hoarders, and contrabandists.

Finally, the president sought to “rationalise” government controls to narrow the disparity between regulated prices and the market value of goods and services.

All three approaches generated controversy in and out of the Chavista movement, and would not have been politically feasible had the Chavistas fared poorly in the December elections.

All three strategies were accompanied by specific actions. Just 10 days after the December elections, Maduro met with nearly all recently elected opposition governors and mayors to listen to their grievances and suggestions on specific local problems including personal security, housing construction, and health.

In January, Maduro signed the Law for the Control of Fair Costs, Prices, and Profits, which establishes jail sentences of up to 14 years for those involved in trading contraband, 12 years for those found hoarding, and eight-to-10 years for merchants who sell above regulated prices.

The law also establishes a federal office to monitor prices and says that profits must not exceed about 30% of investment.

Finally, in a bid to put the economy in order, Maduro dramatically devalued the bolivar from 6.3 to 11.3 to the dollar for imports of non-essential goods.

To infuse flexibility into the economy, Maduro left open the possibility that the exchange rate could fluctuate on a regular basis, as could regulated prices for basic commodities. Oil and energy minister Rafael Ramirez floated the idea of raising gasoline prices, the cheapest in the world, to cover production costs.

Radical fears

In some respects, government discourse and actions have differed, albeit in degree, from the positions assumed by Chavez. Most importantly, ever since the early years of his rule, Chavez refused to negotiate with representatives of the political and economic elite in order to achieve national reconciliation.

Indeed, Chavez’s point of honour was that he would not take part in the old wheeling and dealing that had guided Venezuelan party politics since the ouster of dictator Marcos Perez Jimenez in 1958, and had left the popular sectors on the sidelines.

Radical Chavistas and many in the rank and file of the movement feared that Maduro’s overtures to the opposition signaled a softening of government positions and possible concessions to powerful interests.

This viewpoint was most forcefully put forward by former guerrilla Toby Valderrama. He argued that the only alternative to capitulation to economic elites was the expropriation of their companies, particularly those that convert food into a “commodity” by illegally jacking up prices to maximise profit.

While affirming his support for Maduro, Valderrama, in an essay titled “Rectify or Die”, questioned the logic of the president’s willingness to meet with businesspeople: “At a time when we should have deepened the process of socialism, we asked for help from the capitalists.

“True to form, the oligarchy [the capitalists] ate from our hand and then bit it.”

An announcement by several top government officials and then by Maduro himself last year came as a shock to Venezuelans and generated considerable support for Valderrama’s call for expropriations and jailings.

The public was told that, during the previous year, bogus companies had received preferential dollars allegedly to pay for imports of up to US$20 billion. Maduro placed part of the blame on government functionaries who were in cahoots with commercial interests.

Even though planning minister Jorge Giordani first leveled the charges in March last year, and the public rip-off was confirmed shortly thereafter by the head of the Central Bank, only in December did Maduro name a presidential commission to investigate the case.

Furthermore, while announcing that 1245 companies no longer qualified for preferential dollars due to the falsification of information, the government failed to reveal their names or take them to court. In early March, Vice-President Jorge Arreaza announced the government would shortly publish the names of the spurious companies that received preferential dollars.

It is puzzling that the Maduro government made the accusations if it lacked the willpower to proceed vigorously against powerful economic interests and state bureaucrats. Some Chavistas attributed the inconsistency to Maduro’s lack of political acumen or ingenuity.

An alternative explanation is that Maduro lacks Chavez’s prestige and power, and thus decided to avert a head-on confrontation with business groups, some with ties to sectors of his own government and movement. Proponents of this explanation feel that Maduro’s warnings and some of his actions ― such as the confiscation of warehouses that stored goods for contraband ― demonstrate that he is not willing to close his eyes to blatant abuses.

Maduro began his presidency with a commitment to combat corruption. Throughout last year, hundreds of government officials and others were jailed on charges of wrongdoing in the public sphere.

High-profile cases included the ex-governor of Guarico, the ex-head of the state iron company Ferrominera, and the mayor of the country’s third-largest city, Valencia.

All three were Chavistas who were not considered dissidents. They were jailed along with various businessmen and aides. The social democratic and social Christian governments that ruled Venezuela for four decades before Chavez came to power never took such concrete actions.

In early February, National Assembly president Diosdado Cabello led a campaign against merchants who made extraordinary profits by illegally exporting essential commodities whose prices were kept artificially low by the government to facilitate popular consumption.

Cabello presided over the confiscation of contraband in states bordering on Colombia. He insisted that the companies that produced and processed the goods appeared to be “accomplices” of the price-gouging merchants and consequently would be investigated.

Holding up a container of cooking oil of the recently expropriated Industrias Diana, Cabello accused state functionaries: “This cannot be pardoned because Diana is a company of the people.”

At the same time Lactea Venezolana, a subsidiary of the Italian dairy corporation Parmalat, received hefty fines for hoarding powdered milk in its Caracas installations.

Long-time leftist political analyst Vladimir Acosta hailed the government’s February counteroffensive as “positive news”, particularly because the business-induced scarcity was designed to “bleed Venezuela to death”.

Acosta, however, went on to refer to the government’s announcement that 32 companies had been held responsible for many abandoned containers in a Venezuelan port, “but not one word was said about who the businesspeople were, what measures if any were taken against them and where the merchandise was found”.

In short, the government has waged a counter-offensive against the “economic war” of powerful interests. The radical critique, while undoubtedly failing to give the Maduro presidency sufficient credit for facing up to corrupt functionaries and what it calls the “parasitic bourgeoisie”, points to shortcomings in the government’s campaign.

That is, the effort has not been ongoing; names of those involved in illegal and corrupt dealings have not always been revealed; local government and community groups have not played a central role in choosing targets; and the government has often failed to follow up on its threats of judicial proceedings.

Negotiating with the enemy

Similarly, the government’s strategy of an opening towards business and political adversaries has been met with mixed reactions on the left and in the labour movement. Worker leaders of the radical UNETE faction and, to a lesser extent, the more moderate Bolivarian Socialist Workers Central, expressed apprehension.

UNETE national coordinator Servando Carbone told me he feared that negotiations could be a prelude to the abandonment of key labour gains, especially the provision of 2012's Labour Law of 2012 that decrees outsourcing would be banned three years after its passing.

The government, to its credit, has incorporated large numbers of contractor-firm workers into the payrolls of state industrial companies, but it continues to hire employees in the public administration on a contractual basis.

Carbone insisted: “Implicit in all negotiations is the willingness to grant concessions; this is what may be in store for the ban on the vile practice of outsourcing.”

Some grassroots radicals also reject conciliation with opposition political leaders. However, the government’s discourse in favour of dialogue appeared as a logical and effective response to opposition-promoted violence and aggressiveness.

The meeting between Maduro and opposition governors and mayors in December, for instance, was an implicit recognition of the president’s legitimacy by leaders who had refused to accept the results of the presidential elections in April last year.

Various opposition politicians, including the executive secretary of the Movement toward Socialism (MAS) along with the top business group Fedecamaras, which led the coup against Chavez in 2002, took part in the “National Peace Conference” organised by Maduro in late February. Their call for an end to political violence represented a blow to the opposition alliance, the Roundtable for Democratic Unity (MUD), which boycotted the meeting.

Maduro’s decision to negotiate with anti-Chavista political leaders was premised on the existence of a rift within the MUD. According to this view, what the Chavistas call the “fascist” faction, which organised the demonstrations calling for Maduro’s removal in February, is pitted against a “democratic” one, which focuses on specific issues rather than regime change.

Former vice president and long-time leftist Jose Vicente Rangel has advocated this differentiation strategy for years. In February, on his weekly talk show Jose Vicente Hoy, Rangel said support for dialogue is producing “a pressure cooker effect on the MUD; the alliance’s days are numbered”.

Nevertheless, the protests that rocked Venezuela in February have another reading. According to Cabello, MUD leader Henrique Capriles and others are playing the role of “good cop” and are working hand in glove with the “bad cops” ― the so-called fascists.

Even peaceful protests that were applauded by the entire opposition involved daily disruption of traffic designed to paralyse urban transport. Also, Capriles, in his role as Miranda governor, along with other opposition governors and mayors, refrained from containing the violence in their areas.

Also, the opposition as a whole, and not just the radical fringe, refused to recognise Maduro’s legitimacy after he was elected, as was the case for much of Chavez’s rule. Chavista leaders vacillated between appeals to the democratic commitment of “responsible” opposition leaders and condemnation of the conspiratorial plans of the entire opposition.

Internal tensions

Another relative change since the Chavez years is the tension between the Chavista leaders and radicals, the latter expressing the concerns of the movement’s rank and file. Maduro railed against radical Valderrama, even though he is a minor figure in the Chavista movement, calling his writing “stupidity”.

Furthermore, while under the Chavez presidency there were always several Chavistas in leading positions with whom the radicals could identify ― Fernando Soto Rojas (former National Assembly president) and Eduardo Saman (former head of the consumer protection agency), for example ― but this has been less the case under Maduro, particularly with Saman’s exit in January.

Finally, several critical Chavistas with talk shows on the main state TV channel and radio station encountered problems and now broadcast their programs on the independent Chavista web page and elsewhere.

More troublesome for the radicals is the top-down nature of the governing United Socialist Party of Venezuela (PSUV). All seven of the PSUV’s vice-presidents representing different regions are governors or members of Maduro’s cabinet.

Furthermore, in 2012 the party discarded the system of primaries that the Chavistas had employed in the past. The PSUV’s congress to be held in late July, unlike the previous one in 2009 when delegates were chosen in internal elections, will consist of 361 delegates who are governors, mayors, and national deputies, and a slightly larger number chosen by “consensus”.

At the heart of the division within the Chavista movement are the ties between the government and business groups dating back to the two-month general strike that almost toppled the government in 2002-2003.

With the aim of breaking the strike, the government enlisted the support of businesspeople, some of whom were self-serving anti-Chavistas, others who believed that the strike was professionally unethical, and others who to varying degrees supported Chavismo.

Subsequently, the Chavista leadership rejected the thesis that the government should maintain the entire private sector at arm’s length. Instead, the Chavistas in power opted for a favorable treatment in the granting of public works projects and the like to those who had collaborated with the government during the general strike.

Regardless of their motivation, these businesspeople were considered more reliable than the established business group Fedecamaras, which led several attempts to overthrow Chavez.

While a special relationship with certain businesspeople was useful from a pragmatic viewpoint, it generated corruption. The scandal of the 20 billion preferential dollars, more than any other development, exposed the strategy’s pitfalls.

Maduro himself recognised the extent of the problem when he promised to investigate the possible existence of a bolibourgeoisie ― a term previously used mainly by the opposition to refer to businesspeople who had entered the ranks of the capitalist class as a result of their connections with the Chavista Bolivarian government.

The Chavista radicals are convinced that businesspeople ― such as Wilmer Ruperti, who made the biggest killing of all during the general strike and went on to purchase a TV channel ― would be the first to go over to the enemy camp should the opposition be on the verge of returning to power.

In an interview, a Venezuelan Communist Party (PCV) leader Perfecto Abreu contrasted his own party with the PSUV, with its multi-party makeup. “The PSUV takes in businesspeople who are organised as such within the Chavista movement and reap benefits,” he said.

As an example, Abreu pointed to the business group Fedeindustria, headed by the politically ambitious Chavista Miguel Angel Perez Abad.

Socialists in capitalism

In short, while the Venezuelan economic system continues to be capitalist, leaders committed to socialism hold power within the state. The case of the 20 billion preferential dollars shows the close ties between the capitalist structure and the socialist government.

Socialist transformation in Venezuela will be a long and difficult process, and an understanding of the complexity of this process is necessary to avoid disillusionment ― which the radical critique of the government runs the risk of encouraging ― among those who opt for a peaceful road to socialist and democratic change.

All this points to the overriding importance of truly democratic political parties and social movements, which, unlike the state, are independent of the capitalist base.

Precisely for this reason, the final outcome of the process of transformation in Venezuela will be determined not so much by those on top, but rather by the rank and file of the PSUV, allied parties and social movements in a variety of venues including, to a great extent, the streets.

This dynamic was made evident during the violence-ridden month of February. The Chavista mobilisations, along with the perception at the grassroots level of a continuous process of change, were more important in facing the subversive threat than government-opposition conversations, which included some political leaders with no intention of abandoning their regime-change tactics.

[This piece originally appeared at NACLA -- North American Congress on Latin America. Steve Ellner has taught economic history at the Universidad de Oriente in Puerto La Cruz, Venezuela since 1977 and more recently in the Mission Sucre university program. He is the editor ofLatin America’s Radical Left: Challenges and Complexities of Political Power in the Twenty-First Century, recently released by Rowman and Littlefield.]