Venezuela
Magical Development or Magical Illusions? Oil, Dependency and Venezuela
With oil prices nearing historic lows, a new round of introspection about the pitfalls of oil-based development has kicked off in the media and development policy circles. The arguments, as to be expected, rehash some version of the ‘resource curse’ thesis, which holds that resource richness, in particular in oil, represents not a blessing but a curse, with a host of negative effects, from corruption engendered by unproductive rent revenues, to the Dutch Disease. Venezuela features prominently in this discourse, given its reliance on oil revenues to power the ‘Bolivarian Revolution’ under Hugo Chávez and Nicolás Maduro over the past 17 years. With the country facing shortages of basic goods, widespread corruption and political polarisation, resource curse advocates seem to have no shortage of evidence to illustrate their thesis.
However, as I argue in a recent book chapter entitled “A Different Kind of Magic? Oil, Development and the Bolivarian Revolution in Venezuela”, the situation is much more complex. The resource curse thesis offers a one-sided account of the failures of oil-based development, which essentially boils down to the absence of capitalist modernity in oil-producing nations. Yet these failures cannot be understood as resulting from endogenous factors alone. Any analysis must also examine the larger question of the dependent insertion of oil-producing nations into the global economy, and the role played by foreign oil capital in perpetuating this dependence. Likewise, any attempt to use oil to achieve sustainable development must address this dependence if it hopes to succeed.
In this context, Venezuela’s past and present offer a perfect case study of oil-based development and its pitfalls. Its post-war development model was closely aligned with the West, seeking to ‘sow the oil’ by capturing a ‘fair’ share of revenues from foreign oil companies, to invest them in creating a modern, capitalist, industrial economy. This model represented oil as a means to Western modernity, without the need for revolutionary change in a country riven with racial and class cleavages. As the late Fernando Coronil argued, this was ‘magical’ thinking, with Venezuelan leaders acting like ‘magicians,’ claiming that oil wealth enabled them to pull a modern Venezuela out of the proverbial hat, without radical change and social upheaval.
However, despite periodic achievements, by the 1980s this model was failing, precisely because it failed to confront Venezuela’s dependent insertion into the global economy, and its social structure build on centuries of exclusion and exploitation. Internally, the oil economy skewed class relations, promoting the middle and skilled working classes, while marginalising the vast masses confined to the informal sector. On the other side, easy money doled out to local capital fuelled corruption, and meant that national industry never became competitive. Externally, Venezuela remained reliant on foreign corporations, which defined the terms of production to suit their own needs, refusing to increase refining capacity or diversify export markets. Even nationalisation in 1976 failed to change much, with the management of the new national company Petróleos de Venezuela, SA (PDVSA) retaining an international focus, and the oil price collapse of the 1980s crippling hopes of a revenue boost.
As a result, Venezuela entered a long and painful period of economic crisis and stagnation, with 81% of the population living below the poverty line by 1998. Far from delivering modernity, oil had produced a flawed development model which reproduced internal domination and intensified external dependence.
It was in this context that Hugo Chávez came to power in 1998, attacking the post-war model precisely for its failure to confront Venezuela’s internal class cleavages and external dependence. In its place, Chávez offered a different kind of a magical project, one which also celebrated the oil wealth of the nation, but which sought to use that wealth to explicitly challenge dependence.
Externally, Chávez sought to gain control over PDVSA and change its orientation from international to national goals. The first five years of his presidency revolved around the former objective, with the short-lived coup in 2002, the oil industry strike of 2002-2003 and the recall referendum in 2004 all having at their core the question of control over the company. Supported from below, Chávez won these struggles, and set out to transform PDVSA by increasing refining capacity, diversifying export markets, decreasing reliance on the American market, and using oil to promote regional integration through programs such as Petrocaribe. In sum, Chávez sought greater autonomy for Venezuela from the whims of the global economy.
In itself, this was hardly radical. Indeed the government of Carlos Andrés Pérez employed similar policies during the 1970s. However Pérez never sought a radical rupture with the old order. Chávez, on the other hand, sought to use the oil wealth to explicitly challenge Venezuela’s class cleavages by empowering those marginalised under the post-war model. This included, for example, the doubling of social spending from 11.3% of GDP in 1998 to 22.8% in 2011, paid for largely with increased oil revenues, and channelled through a parallel system of ‘missions’ established directly in the barrios where previously the state did not reach, and administered by the communities themselves via newly established Communal Councils. The aim of the government was not simply alleviating socio-economic disadvantage, but also empowering the masses, by using the oil wealth to facilitate self-determination. On a macro scale, the Bolivarian Revolution also sought to utilise the oil wealth to transform the economy, creating a ‘social economy’ enclave, where experiments with cooperatives, co-managed factories and Social Production Enterprises sought to satisfy collective needs rather than considerations of profit. This enclave was surrounded by a larger state-led economy dedicated to increasing Venezuela’s autonomy and diversifying from oil through measures such promoting agricultural production, implementing currency controls and tariffs, and seeking new sources of investment from the Global South.
For a while, this alternative model seemed to make real strides. Poverty more than halved between 1999 and 2012, and Venezuela moved up nine places on the UN Human Development ranking, as the country became the second least unequal country in Latin America. Moreover, the country experienced the largest increase in support for democracy in Latin America, with 87% of the population sporting democracy in the country in 2013. Importantly, this enthusiasm had a class dimension, with 85% of barrio residents believing that there was democracy in Venezuela, compared with only 55% of residents in middle and upper class neighbourhoods. Likewise, efforts to diversify the economy saw the size of the oil sector as a share of GDP decrease from 19.18% in 1999 to 11.55% in 2009, with services and finance making the biggest gains.
However, over the past couple of years, most of these gains have either stalled or reversed, and the country once again tethers on the brink. For the proponents of the resource curse thesis, this is proof that the Revolution was nothing more than oil populism, spawning corruption and failing to implement the ‘good governance’ measures necessary to make the most of oil wealth.
Yet, whilst corruption undeniably remains a problem, and governance standards often leave a lot to be desired, there are deeper issues at play here, which are ignored by the resource curse advocates. What the current crisis in Venezuela illustrates is the difficulty of transforming a social order shaped by centuries of marginalisation and exploitation, both internally and externally. Internally, the Bolivarian model has found itself under constant attack from domestic capital, which mobilises its economic, political and social power to effectively go on strike whenever its fundamental interests are threatened. This is especially true since Chávez’s death in 2013, with an investment strike coupled with the political opposition’s regime change strategy paralysing the country and the economy. Likewise, despite efforts at diversification, Venezuela continues to rely on oil for 96% of its export revenues. With international prices plunging, this puts the entire model under threat, especially as PDVSA struggles to find a balance between being a capitalist and a social enterprise, undermining production and refining capabilities. In the face of these problems, the government of Nicolás Maduro seems paralysed and short of ideas on how to confront the economic, political and social crisis now unfolding in Venezuela, especially with a resurgent opposition using its recent capture of the Congress to try to remove him from power. Thus, while in the 2000s Venezuela represented a powerful example of the possibilities of different paths to oil-based development, it seems that in the end it did not manage to free itself from its internal and external dependencies sufficiently to construct a genuine alternative to the status quo. Despite its undeniable achievements, the Bolivarian Revolution may turn out to be yet another magical illusion.
The post Magical Development or Magical Illusions? Oil, Dependency and Venezuela appeared first on Progress in Political Economy (PPE).
Rodrigo Acuña, Venezuela Foreign Policy and Latin American Unification
Rodrigo Acuña (Macquarie University), 'Venezuelan Foreign Policy and Latin American Unification'
This is the third seminar in the Semester 1 series of 2016 organised by the Department of Political Economy at the University of Sydney.
Date and Location:
7 April 2016, Darlington Centre Boardroom, 4:00pm – 5.30pm
All welcome!
Karl Marx and the Dictatorship of the Proletariat
The notion of the ‘dictatorship of the proletariat’ is widely vilified. Often linked to Stalin’s authoritarian rule in the Soviet Union, there is little positive said about it. Moreover, the negative evaluation is also regularly linked back to Lenin and his idea of a vanguard party taking over state power in order to change society for the better. As John Holloway argues in Change the World Without Taking Power, ‘you cannot build a society of non-power relations by conquering power. Once the logic of power is adopted, the struggle against power is already lost’. And yet, these reflections overlook Marx’s own discussion of what the dictatorship of the proletariat may entail in practice. Most importantly they neglect his analysis of the Paris Commune in The Civil War in France (1871). For as Engels pointed out in 1891, ‘well and good, gentlemen, do you want to know what this dictatorship looks like? Look at the Paris Commune. That was the Dictatorship of the Proletariat’.
In this post, I will look more closely at Marx’s discussion of the Paris Commune and his ideas about how to organise popular government.
It is especially the third part of the Third Address, given by Marx to the General Council of the International Workingmen’s Association in May 1871, which is relevant for our purpose here. First, Marx makes clear that the proletariat cannot simply take over the bourgeois state and its institutions, if it wants to change society. ‘The working class cannot simply lay hold of the ready-made state machinery, and wield it for its own purposes’. Parallel to the ‘pace at which the progress of modern industry developed, widened, intensified the class antagonism between capital and labour, the state power assumed more and more the character of the national power of capital over labour, of a public force organised for social enslavement, of an engine of class despotism’. In order to bring about a new society, therefore, the very institutions of the bourgeois state form have to be changed first. For example, ‘the police was at once stripped of its political attributes’ in the Paris Commune. Furthermore, Marx recognised the importance of education for a truly free society and praised the Commune’s steps in this area. ‘The whole of the educational institutions were opened to the people gratuitously, and at the same time cleared of all interference of church and state’.
Second, Marx highlights the governance structure, introduced by the Paris Commune. ‘The Commune was formed of the municipal councillors, chosen by universal suffrage in the various wards of the town, responsible and revocable at short terms’. In other words, rather than representing authoritarian government, ‘the dictatorship of the proletariat’ is a fundamentally democratic set-up, within which the individual has a direct impact on decision-making in that delegates have the task to transfer local decisions and can be re-called and replaced at any time. Equally, in relation to the judiciary, ‘like the rest of public servants, magistrates and judges were to be elective, responsible, and revocable’. The overall goal is the ‘self-government of the producers’. This system, once established in Paris, should then also be implemented in the rural communities, with delegates being elected to represent these districts to the National Delegation in Paris. Again, each delegate was ‘to be at any time revocable and bound by the mandate imperative (formal instructions) of his constituents’. In short, for Marx the dictatorship of the proletariat always implied direct participation by the people in all aspects of the decision-making process. It did not mean authoritarian rule.
Importantly, restructuring of the bourgeois state form did not simply focus on bourgeois institutions. For Marx, it was always clear that capitalist exploitation was rooted in the way production was organised around wage labour and the private ownership of the means of production. To overcome exploitation, therefore, it was necessary to abolish private property and this is precisely what the Paris Commune did. ‘Yes, gentlemen, the Commune intended to abolish that class property which makes the labour of the many the wealth of the few. It aimed at the expropriation of the expropriators. It wanted to make individual property a truth by transforming the means of production, land, and capital, now chiefly the means of enslaving and exploiting labour, into mere instruments of free and associated labor’. In other words, the economy cannot be regarded as separate from politics, if true change is to be accomplished.
Finally, Marx was aware of the importance of the Commune’s international dimension. ‘If the Commune was thus the true representative of all the healthy elements of French society, and therefore the truly national government, it was, at the same time, as a working men’s government, as the bold champion of the emancipation of labour, emphatically international’. Thus, for Marx it was always clear that the defeat of capitalism could not only be achieved in one country or even one city – after all the Paris Commune fell after a couple of months – but must always have an international aspiration.
To establish ‘the dictatorship of the proletariat’ as experimented by the Paris Commune is not really on today’s agenda. And yet, perhaps developments in Venezuela are potentially one step into this direction? The so-called Housing Mission, for example, did not only succeed in building thousands of homes for the poor, but also managed to include barrio residents in their planning and construction, as argued by Steve Ellner in 2012. To conclude, the dictatorship of the proletariat, as envisaged by the Paris Commune, is an aspiration at best at this point in time, but an aspiration worthwhile to pursue and push further.
This post originally appeared on Trade Unions and Global Restructuring (14 September 2012) and appears here as one of the texts originally read in the Marxism Reading Group.
Venezuela, indigenous capitalisms and the socialisms of the twenty-first century
Venezuelans balloted last month – again. Nothing exceptional in a country where citizens have cast their votes in twenty different nationwide elections over the past 17 years – more than once annually, if one draws an average. Yet elections in the Bolivarian republic generate an extraordinary level of international attention and a flurry of commentary ever since the late Hugo Chávez was elected in 1998. That is what happens when people in an oil-rich country suddenly reveal themselves as rich in political resources too, and furthermore decide that neither their oil nor their politics should be managed in the interest of national and international elites: the latter rapidly deploy the best of their political repertoire (and their media) to make sure that everyone around the world realises how wrong those people in the oil-rich country are.
On this occasion, the spotlight on Venezuelan elections was even more intense than usual. A variety of international analysts and the hostile majority of commercial media had been anticipating a defeat of chavismo. After repeated embarrassments in past pre-electoral prognoses, this time their oracles got it right: the opposition bloc, a permanent occupier of the losing side in previous electoral contests, obtained a strong qualified majority in the new National Assembly.
The economic crisis in Venezuela had already reached enormous dimensions, the government had been under a renewed wave of international pressure and the political vigour of the chavista electorate was at a historical low. The limitations in the government programs seeking to strengthen national production over the past decade could not be ignored anymore, and took their toll. And many chavistas directly criticised the lack of skill of Maduro’s government in successfully addressing the crisis – but they did not mean that the opposition was the solution.
Even in those critical circumstances, more than 5.6 million Venezuelans voted for Bolivarian candidates. This is a strong indication of how deep runs the distrust towards an opposition bloc which cannot fully disguise its neoliberal core and whose leadership has for over a decade oscillated between electorally competing with chavismo and pursuing extra-institutional adventures to oust the government. Let us recall that, unlike Maduro in December, most prominent opposition leaders did not recognise electoral results when they were not favouring them, systematically casting doubts on the electoral system and on the very same National Electoral Council that now certified their victory.
In the current conjuncture, the future of the Bolivarian project is clearly at risk. As I argue more at length in my book Venezuela Reframed, the transformative potential of this project, still undefined between its post-neoliberal and post-capitalist possibilities, is only plausible if chavismo were to maintain electoral majorities. Despite the radical character of the Bolivarian revolution in some respects, it is once again necessary to underscore that what effectively made the pursuit of a transformative political process possible in the country were elections. Continuing successes in electoral competition guaranteed access to shares of state power that enabled the condensation of fragmented anti-neoliberal forces in the country, and that in turn enhanced the possibilities of further transformation. From a governing position, those shares of power were simultaneously used to facilitate socioeconomic inclusion and to foster popular mobilization.
After the December elections, the composition of the new National Assembly fundamentally recasts the institutional power balance in the country – and the options for the Bolivarian bloc to prevent the gradual dispersion and fragmentation of anti-neoliberal forces in the country. The qualified majority that the opposition has obtained in the Assembly provides it with a variety of institutional means to harness and debilitate the Executive Power in the hands of Maduro, and consequently the Bolivarian forces will lose spaces and mechanisms for their regrouping and reactivation. What is ahead in the next few months is a frontal contest between the Legislative and the Executive that will encapsulate the national-level struggle between chavismo and its historically constituted opposite – and will also decide the medium term prospects of the socialism of the twenty-first century project in the country.
In this conjuncture, a minimal modification in the distribution of allegiances in the National Assembly could make a world of a difference. Because the opposition has just narrowly reached the two thirds qualified majority that endows it with non-negotiable powers to obstruct the initiative of the Executive and to influence the orientation of other Public Powers (including, in the medium term, the appointment of directing figures in those Powers). Without that special majority, the opposition would still dominate the legislative Assembly, but negotiation would become indispensable for certain key decisions. In practical terms that would provide Maduro with a political breather that could prove crucial to regroup chavista forces: the Executive could maintain its creative, generative forces in addition to trying to address the most acute symptoms of the economic crisis. Given the expected recall referendum that the opposition will launch half way throughout the year, that breather could be the life-saving one for Bolivarianism in the short run.
In this scenario, do you know who the opposition depends on in order to maintain its super-qualified majority of two thirds in the Assembly? If you do not, here is a probably unexpected answer: the three indigenous MPs.
The 1999 constitution guarantees minimum representation to the indigenous population in legislative organs at local, regional and national level. In the National Assembly, they are granted three seats, whose occupants are elected in special constituencies (the amalgamation of several federal states). In the past December elections, the three elected indigenous representatives were politically allied with the so-called Mesa de la Unidad Democrática (MUD: Democratic Unity Roundtable) – the political platform of the opposition bloc. Without their support in the Assembly, the opposition would lose its two thirds qualified majority.
In my book Venezuela Reframed I explain the populist political logics that led the opposition bloc to build its own space of indigenous politics. In the 1990s, scholar and long term activist Esteban E. Mosonyi wrote in the preface to a seminal book on indigenous mobilisation written by the Wayúu Nemesio Montiel that in Venezuela the Right ‘does not want to have anything to do with the Indians’. Yet the Bolivarian process has altered so much the political dynamics of the country that at present the Right in Venezuela has occupied itself by having something to do with the Indians.
The opposition bloc harbours the diehard neoliberal forces that during the Constituent Assembly of 1999 sonorously opposed the recognition of indigenous rights. In fact, during that period one of the most adamant spokesmen against indigenous rights was Henrique Capriles, who subsequently became the opposition presidential candidate on two occasions – defeated in each of them by Chávez and Maduro, respectively. In a quasi-miraculous political conversion, 13 years later, during the campaign of the 2012 presidential elections of 2012, Capriles shouted ‘I will demarcate all indigenous lands’ before a congregation of supporters in the capital of Amazonas state – the only federal state in the country with a majority indigenous population. That day he was wearing an indigenous feather crown.
In my book I unveil that electoral pragmatism contributes to explain Capriles’ conversion, and more generally why Venezuelan right-wingers have been seeking to building organised alliances with an indigenous political front. But this question has another side to it, which is the fact that indigenous struggles in Venezuela, as for that matter in the rest of Latin America, cannot be assumed to have anti-capitalist directionalities or inclinations – which is what some people automatically assume.
Despite generalising assumptions and simplifications, the indigenous population in the continent is characterised by economic, cultural and other structural cleavages – rather than merely separated from other sectors of the population by one or all of those divisions. And this fragmentation is expressed in identifiable forms of indigenous collective action that reveal diverse political goals and priorities. Against hyperreal and teleological conceptions of indigeneity and indigenous struggles, this fact has been long ago revealed with clarity in Venezuela and other countries in the continent.
Some of those currents of collective action are anti-capitalist, needless to say, or at least anti-neoliberal. And among those currents some have been nourishing the ranks of the historical collective subject that in Latin America is behind the emergence of the so-called socialisms of the twenty-first century, whereas others have taken a belligerent position before the governments that represent them. But there are other identifiable streams of indigenous collective action that are best characterised as channelling new forms of ‘indigenous capitalisms’, a concept that encapsulates the political goals of activists who seek a successful incorporation into capitalism as an index of self-determination and as expression of cultural strength.
In Venezuela, representatives of those indigenous capitalisms have now a decisive role in the definition of the national struggle between chavismo and anti-chavismo – between post-neoliberal/post-capitalist potentials and a rapid return to neoliberalism. And this is only a visible, institutional example of the way in which the so-called socialisms of the twenty-first century have repoliticised all spheres of national life – including the indigenous ones. The (indigenous) advocates of indigenous capitalisms are an important part in the shaping of contemporary Latin American politics – just as the (indigenous) advocates of the Indoamerican socialisms have been.