Sending shockwaves through the corporate elite, on January 8 Venezuelan President Hugo Chavez declared his government's intention of reversing the privatisations that had been carried out by previous governments. Declaring "We're on our way to socialism, and nothing and no-one can prevent it", Chavez insisted, "All that was privatised, let it be nationalised", according to a January 9 Associated Press report.
Swearing in his new cabinet after winning the December 3 presidential election with nearly 63% of the vote, Chavez announced a series of far-reaching measures to deepen the pro-poor revolution his government is leading. According to a January 8 Venezuelanalysis.com report, Chavez described the first eight years of his government from 1998-2006 as a now-completed "phase of transition", and insisted "we are entering a new era, the National Simon Bolivar Project of 2007-2021", which aims to construct "Bolivarian socialism".
In a ceremony where the new ministers swore to dedicate themselves to the struggle for socialism, Chavez set out "five motors" to advance the revolution. These include: an "enabling law" that will allow Chavez, for a set period of time, to pass laws by decree in order to implement changes rapidly; a constituent assembly that will oversee constitutional reforms to provide the legal framework for planned changes; developing a "Bolivarian" education system to create socialist values; changes in Venezuela's geographical power structure to give more say to marginalised regions; and moves to "dismantle the bourgeois state", to be replaced by an "explosion of communal councils".
Chavez also said the government should gain control over the autonomous Central Bank of Venezuela, which has attempted to resist handing over parts of its sizeable reserves to fund development projects, stating that this autonomy was a "neoliberal idea".
However it was the call for the re-nationalisation of privatised companies that grabbed headlines in the corporate-owned media across the world and sent markets into a spin. "Not since the 1970s has the world seen anything like it", exclaimed the Times Online on January 9, while the Washington Post reported on January 10 that financial markets "from Buenos Aires to Caracas reeled" following the declaration. Spokespeople for both the White House and US energy department expressed opposition to the plan — not surprisingly, considering it is US corporations that stand to lose the most.
Chavez named Venezuela's largest publicly traded company, the telecommunications firm C.A. Nacional Telefonos de Venezuela (CANTV), which was privatised in 1991, as a target for nationalisation. AP reported that well-known names on Wall Street with significant holdings in CANTV include Deutsche Bank Securities Inc. and Morgan Stanley & Co., with the largest US holdings belonging to a California-based investment firm.
Chavez also indicated that electricity companies should be state-run, leading many to speculate about the possible nationalisation of Electricidad de Caracas, owned by US company AES Corp. The price of both CANTV and AES shares plummeted after Chavez's speech.
Chavez also said that four major oil projects in the Orinoco river belt should be brought under the control of the state, a move that would affect significant investments by oil giants ExxonMobil, Chevron, BP, Total, CononcoPhilips and Statoil.
Beyond the panic among corporate circles is the simple fact that the plan to reverse privatisations is nothing more than the legitimate exercising of Venezuela's right to national sovereignty. In the 1990s, thousands of formerly state-owned firms across Latin America shifted into the hands of multinational corporations — a direct factor in the impoverishment of millions across the continent.
The corporate media have largely ignored the fact that in the expropriations of idle land and firms that have occurred as part of the revolution so far, the former owners have all been fully compensated, as is required under Venezuelan law. Also, the plan to re-nationalise CANTV comes after Chavez threatened the firm with nationalisation last year unless it agreed to the demand of CANTV workers to obey Venezuelan law and raise pension payments to meet the minimum wage. CANTV cannot claim it wasn't warned.
Also, any moves to ensure that Venezuela's state-owned oil company PDVSA gains control over the four Orinoco river belt projects would merely be an extension of the changes last year, when 32 projects were shifted to joint ventures with PDVSA that guaranteed the latter a majority share, as well as moves to increase royalty payments and force oil corporations in Venezuela to pay their taxes. The extra money earned by the Venezuelan state has funded a massive increase in social spending that decreased poverty in one year alone by 10% according to the World Bank.
This has not stopped the corporate media from alleging that the plans amount to a personal grab at power by Chavez. What these claims ignore is the fundamentally democratic nature of the process of change in Venezuela. The presidential elections represented the 11th straight national electoral victory for pro-Chavez forces, and Chavez campaigned in the elections on an explicitly socialist platform. Chavez is doing something that pro-capitalist politicians almost never do — exactly what he promised.
Even more significant are the new communal councils formed last year, which Chavez has called for the expansion of — in number and power — to form the base of a new revolutionary state. These are bodies elected and recallable by groups of between 200-400 families. The communal councils, of which the highest decision-making body is an assembly of the community in which all members over the age of 15 can participate, control the implementation of social programs and other decisions affecting their area. Venezuelanalysis.com reported on January 10 that the government announced it would provide US$5 billion in funding directly to these councils this year, up from $1.5 billion last year. Already 13,000 councils exist and this number is expected to grow to 21,000 by the end of the year.
It is clear that the Chavez government is extending, rather than restricting, democracy. In combining this with deepening moves to reverse free-market policies, the revolution in Venezuela is providing a powerful alternative to the "savage capitalism" being forced down the throats of working people the world over.