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Chávez turns to the right

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Hugo Chávez has caused much excitement in the international left and consternation in Washington with his call for “21st century socialism”. But despite some nationalisations and social reforms, Chávez insists on defending the capitalist market. No wonder then, that he is moving right under the pressure of global events, writes Natalie Sedley

The referendum in 2007 was an unprecedented defeat for the Hugo Chávez project – after years of support from the Venezuelan masses. The narrow “No” Vote blocked a series of constitutional reforms that would have given Chávez much greater power to restrict democratic rights, including, allowing him to rule by decree, impose indefinite states of emergency, suspend freedom of expression and other legal rights, such as due process, without review by the courts. It would also have allowed him to stand for president again in five years time and every seven years after that, negating the current constitutional provision for a democratic mechanism allowing the recall of all elected officials, including the president, halfway through their term.1

The net effect of these reforms would have been the extension of powers that could potentially be used by the state to crush any rebellion by workers’ and progressive movements. The proposals also included other more progressive measures such as shortening the working day, but these were already included in the old constitution. The reason for the narrow defeat (50.7 per cent voted No) was not primarily the No campaign and votes of the bourgeois anti-Chávez groups, who have always opposed his reforms. Instead, many previous Chávez supporters now abstained, with a low turnout overall (56 per cent) and reportedly in many poor areas. The reasons for abstaining included concerns about corruption at all levels – what Marea Clasista y Socialista (Socialist & Class Tide) describes as the “bureaucratic and corrupt structure in governorships, mayors, ministries” – and the lack of democratic control over Chávez and the government.2

2007 saw Chávez turn left after his massive re-election in December 2006, with calls for socialist revolution.3 Since his referendum defeat in late 2007 he has changed course, shoring up and buffering his regime from pressure by the US by turning right on a series of key questions – the economy, the state, the “socialist” PSUV party, foreign policy – in the process further alienating many workers and sparking struggles against his policies. Chávez has moved away from his reliance on popular organisations and working class support towards developing further ties with Venezuelan capitalists, Latin American bourgeois regimes, including the US-backed Uribe regime in Colombia, and now has increasingly close links to Russian imperialism.

Economy: inflation, discontent and Chávez’s response
The referendum not only expressed anger at the draconian elements of the proposed constitution, it also testified to the growing discontent with the government over the economy, as dramatic increases in inflation make it difficult for the masses to afford basic goods. Clearly, inflation is a global problem affecting workers and poor all over the world, but there are some specific problems in Venezuela. The run away world oil price has benefited the rich Venezuelans and the state. The economy has been flooded with “petro-dollars” from oil sales and this has made the inflation particularly serious in Venezuela. The government has imposed price controls but many farmers and food processors – including the government-initiated co-operatives – have refused to accept them fearing the impact on their livelihoods.

Essentially, the problem is that the economy is still run as a capitalist market system. It is unable to really plan production and control inflation. However, Chávez’s view is quite different. He sees the inflation problem as caused by a lack of investment by business – even though today in Venezuela, the private sector has a larger share of economy than when Chávez first took office, and its commercial banks last year saw a 110 per cent increase in assets. Chávez accepts the bourgeois lie that inflation is due to lack of production which destabilises the supply/demand relationship, with the logical conclusion that the cure is more incentives for business and lowering workers’ already pinched consumption. Chávez has also been silent on the booming consumption of luxury goods by the state officials and bourgeois classes benefiting from his economic policies.

Chávez proposed to answer inflation with the launch of “Reimpulso Productivo, la inversión es Venezuela,” or “re-launch production, investment is Venezuela,” which calls for a National Strategic Production Alliance. To launch this Chávez and top ministers met in a Caracas hotel on 11 June with the 500 most important employers in Venezuela, including: Lorenzo Mendoza, of the Polar company; Oswaldo Cisneros, from the Cisneros Group; Michel Goguikian from the Bank of Venezuela; Luis Van Dam, president of Van Dam Metal Industries and contractor of the multinational, Odebrecht. Despite reaffirming just a few months before that his government was a “workers’ government,” Chávez is now looking for alliances not only with the small and medium sized capitalists but also with the big bourgeoisie at the core of the Venezuelan ruling class.

In his speech introducing Reimpulso Productivo, he stated that the aim of the measures was to bring down inflation, reduce unemployment, increase production, and improve the distribution of income. But in fact companies like Mendoza’s have had a key role in exacerbating food shortages and inflation through speculation. Chávez added it was “absurd” to think the invisible hand of market could solve all economic problems, but then qualified this by saying – “we don’t deny the market, but the free market.” Chávez justifies his attempt to reconcile the irreconcilable class contradictions between worker and capitalist by ceaselessly stressing the need for stability to ward off the threats from the right. But, as Stalin Perez Borges, left leader of the National Workers’ Union of Venezuala (UNT), points out, “the president is bathing in illusions if he thinks that by granting the privileges claimed by the employers, they will no longer constitute a factor of destabilization.”4

The quite ambitious aim of Chávez’s speech appeared to be to convince capitalists that capitalism is actually bad for them and that they should take part in building a new type of socialism, in which they too could have role! They were told not to fear “21st century socialism”. And certainly Venezuelan capitalists have little to fear from this kind of “socialism”. It is in fact not socialism at all but a project for a capitalist Venezuela centred on a strategic alliance – in the “national interest” – between the populist government, the mass Chavista movement, and the capitalists. The aim is national development on an economic model that was the dominant paradigm until the 1980s. Economic areas are earmarked for investment by the state with the help and participation of the private sector. Such strategic areas are the production and distribution of food, agro-industry, petrochemicals, gas, construction of homes and infrastructure, finance, and regional development. The aim of this limited state intervention is to develop and concentrate the country’s industrial capital and put it in a better position to compete on the world stage. There is nothing anticapitalist about it because consolidating the strength and position of the industrial bourgeoisie is a key aim of such a policy. Thus, the measures of the Reimpulso Productivo are firmly in the interests of the industrial and financial bourgeoisie, with a range of subsidies and deregulation, such as:
• Eliminating the tax on financial transfers
• Loosening restrictions on foreign exchange for businesses importing materials and machinery valued up to $50 million
• A $1 billion fund to promote private development of strategic industries, funded by a combination of tax on windfall profits and money from a Chinese-Venezuelan investment fund
• Lifting the government suspension of “business wheels”, allowing business a free rein to network and coordinate between themselves and develop new markets
• Increasing state purchases from businesses
• Shaping a network of social production companies co-owned by the state and the private sector
• Subsidies and minimum prices to address the “food crisis” , along with some debt relief for some farmers and agribusinesses5

In sum, the Reimpulso Productivo is a charter for greater business freedom and subsidy, with measures to expand production by means of the private sector. In contrast to Chávez’s previous efforts to portray his politics as satisfying everyone and hurting no one, he is now making a more decisive turn to alliances with big business to boost development and international trade. This turn to the right comes at the expense of advancing the interests of the workers and poor. While some pro-Chávez “socialists” are trying to portray the measures as analogous with the New Economic Programme (NEP) introduced in 1921 after the civil war by the Bolsheviks, the comparison is absurd because in Venezuela today there is still an intact bourgeois state and ruling capitalist class. In contrast, the Soviet Union in 1921 was an isolated workers’ state, devastated by civil war and desperately needing to boost agricultural production to avoid mass starvation.

Chávez is not just promoting the “national” bourgeoisie but allowing imperialist capital to increase its penetration into the economy too. He claims that Venezuela is much less dependent than most countries on the international economic situation, and that this gives it the potential to build an autonomous, independent politics. Chávez has counter-posed his “Bolivarianism”, i.e. pan-Latin Americanism, to dependency on the centres of world capitalism and the Reimpulso Productivo invites Venezuelan companies to team up with Brazilian and Argentinean multinationals and created a billion dollar investment fund open to corporations from these states. But the “anti-imperialism” of such initiatives is open to question. As Stalin Peres Borges points out “it would be more exact to speak about [the fund opening Venezuela up to] North-American, European and Asian multinationals because the majority of [Argentina and Brazil’s] financial capital comes from companies and banks in these regions.”6 Venezuelan capital remains, as before, not a vehicle for “national unity” and the interests of the people, instead the country’s ruling class is tied by a thousand links of dependence and subordination to imperialist capital, either directly or by means of the more subtle mechanisms of the world capital market.

The resources, capital and infrastructure of these banks and companies could be much better harnessed and coordinated by nationalising them without compensation to their millionaire owners, and instead running them under the control and democratic planning of the Venezuelan workers and peasants. A state monopoly of foreign trade would give democratic control over the destabilising and exploitative trade and financial interchanges. Genuine revolutionary socialists must fight for such policies. Chávez will avoid such a policy at all costs unless he is forced by militant actions of the impoverished masses. At the same time, he faces a growing challenge from the Venezuelan bosses demanding an end to his limited social reform programme.

Chávez bonapartism leans to the right
Despite the measures of the Reimpulso Productivo, Chávez has not succeeded in consolidating a real pact with the big bourgeoisie, who still don’t see him as “their man”.7 Chávez’s isolation is further exacerbated by the fact that many workers who used to trust in him are now seeing through his rhetoric and recognising the dangers of his strategy. As one report put it, they are asking themselves “isn’t he making alliances with the enemies we were fighting yesterday” and “how can we have an alliance with those who exploit us day in, day out and are directly responsible for the poverty and precarité of our country?”8

The bourgeoisie’s lack of trust in Chávez is naturally encouraged by the more radical elements of his programme – in particular his continued nationalisation of industries. We have seen the dramatic nationalisation of the SIDOR steel plant after a militant struggle by the workers in April, of the Banco de Venezuela on 31 July, and taking into state ownership the operations owned by Mexican cement company Cemex, with the aim of lowering building costs in order to address the housing crisis. Chávez claimed that the Banco de Venezuela, previously owned by Spanish multinational Santander, “generates massive profits but these profits are going abroad”. The bankers’ squeals about the “greater efficiency” of leaving the private sector in control sound more ridiculous than ever in the face of the credit crunch and the huge injection of public funds into banks by both the US and Britain. Chávez has promised the bank will stop being a capitalist bank and become a socialist one because profits will be invested in “socialist social development”. Such a formulation testfies to Chávez’s variety of socialism, which does not exporpriate capital to develop a workers’ plan, but simply redistributed a segment of the profits generated on the market into limited social reform programmes.

Nonetheless, the nationalization programme might be seen to invalidate the claim Chávez is on a rightward trajectory. However, two points must be borne in mind. Firstly, these enterprises have not been expropriated but purchased from the capitalists: the Venezuelan Vice-President Ramon Carrizalez said Cemex had asked for $1.3bn for its Venezuelan operations, and Chávez’s calls to nationalise Banco de Venezuela started with the words “no, I will buy it, how much is it? We are going to pay for it”.9 Secondly, in many cases huge pressure has been applied from below to bring about nationalisation; this is particularly true of the nationalisation (again by repurchasing rather than expropriation) of SIDOR earlier this year. SIDOR was an Argentinean-owned iron and steel plant where a large number of workers had been sacked. Over half of the workers were sub-contracted, many were paid below the minimum wage and safety conditions were dire. The workers in struggle there demanded nationalisation – in keeping with Chávez’s left turn in December 2006, with his call for “All that was privatized, let it be nationalised”.10 Chávez at first agreed to nationalise the plant, but then on instructions of the Argentinean president Kirchner, he told the company bosses’ it would not be nationalised if they charged a fair price. However, workers continued to struggle, staging a total of nine strikes as well as a referendum on whether to continue striking along with a number of solidarity events. Consequently in April 2008 Chávez finally “nationalized” the company and in May, the workers won a collective retroactive contract for wage increases and benefits, overtime and sick leave, although still not incorporating all of the contract workers. Nevertheless the victory is inspiring to other sectors of workers and highlights the need to struggle against the Chávez government, which at one point was against the SIDOR workers and even sent the National Guard to attack one of their demonstrations on 14 April this year.11

These nationalizations, despite their limitations, show that Chávez can still be forced to take tactical steps leftwards under pressure from the working class and impoverished masses. Up till now this has been consistent with his limited wealth redistribution within the context of a capitalist economic framework but it is questionable whether this will remain viable if economic conditions worsen – as they are almost certain to. The continued mistrust of the bourgeois comes partly from anger at the social reforms but they also fear he will move further leftwards in the event of a workers uprising. In sum, the class contradictions in the Bolivarian project are sure to become more pronounced in the period ahead.

In addition to forms of organisation like the consejos comunales (communal councils: geographically organised bodies fighting on local issues like transport, housing and food prices, which are inevitably also political), most of the left have also joined the United Socialist Party of Venezuela (Partido Socialista Unido de Venezuela, or PSUV). Chávez launched the PSUV in December 2006 following his landslide re-election, and the early documents written by its National Promoters Team appeared to be very left wing. They set the goal of a socialist society, describing “a democratically planned and centralised economy, capable of ending the alienation of labour and satisfying all the necessities of the people”, which would “plan production and the satisfaction of collective necessities in harmony with the requirements of the ecosystem.”12 However, the party’s publications always lacked any notion of how to reach such a society – namely, the overthrow of the capitalist state – and indeed Chávez explicitly stated that the PSUV “is not a Marxist-Leninist project” and that “the dictatorship of the proletariat... is not viable for Venezuela in these times.”13 It was therefore clear from the start that Chávez envisaged the PSUV as a means of reforming the state through decrees and referenda, not a means of building a movement to overthrow it. Hence it involves all social classes rather than representing the interests of the workers and poor peasants, and leading a struggle for their power.

Nonetheless, with around 5.7 million members apparently signing up in the party’s first few months, it appeared that the masses were overwhelmingly involved in the PSUV and it made sense for socialist organisations to join to try and influence these and argue for the party to become a revolutionary communist one, fighting for workers’ power. However, Chávez was not keen to encourage such debate on the programme and nature of the PSUV and he immediately called on all other socialist parties to dissolve. Indeed, Chávez has publicly denounced the UNT for trying to build an independent trade union movement, saying that this is not necessary and even disgracefully suggesting that by fighting for the independence of the working class movement, they are playing a counter-revolutionary role. More recently Stalin Perez Borges, despite his loyalty to the PSUV, has criticised the conduct of elections for regional leaderships of the PSUV in each of Venezuelan states.14 He notes that there was anger among the workers and popular movement when some candidates that did not get voted in due to lack of popular support had then been appointed by Chávez to key, influential positions!

The mass character of the PSUV has also been thrown into doubt following the referendum results – since only 4 million yes votes were cast, a good proportion of the claimed 5.7 million plus members must be, at best, too inactive to even vote in line with party policy. An editor of the website Aporrea and PSUV member, Gonzalo Gomez Freire, points out that the original figures were misleading – the days of enrolment “created the illusion that we had many millions, without differentiating between true militant vocation, solidarity, opportunism, and forced incorporation.”15 The latter refers to those “functionaries who forced their employees to sign up.” Freire believes that the referendum showed there was insufficient communication between the base and the president, and “the PSUV is more than a presidential commission and isn’t summarized in the sole figure of Chávez.” Unfortunately the opposite conclusion is correct the pro-Chávez bureaucracy does have the final say in the PSUV – the masses do not.

Now the tendency towards bureaucratism is deepening with a series of expulsions. In February 2008 the deputy Luis Tascón was suspended after denouncing alleged corruption in the Infrastructure Ministry headed by José David Cabello without providing evidence. He was also accused of supporting imperialism and was not given any chance to defend himself within the party before it was announced on TV that he had been expelled. As a result he criticised the PSUV for “the lack of internal democracy, the exclusion of leaders, authoritarianism, and the lack of political will to combat corruption.”16

Then in May 2008, four more members of the PSUV, including Henry Falcón, (mayor of Iribarren municipality in Barquisimeto and a possible candidate for governor of Lara), were expelled for launching candidacies for November elections, contrary to Chávez’s ruling that candidates must be nominated and chosen by the party leadership. These events prompted Muller Rojas, a veteran who participated in 1998 campaigns and who is now one of the PSUV’s vice presidents, to refer to Trotsky’s writings on the degeneration of USSR when he stated that the biggest danger the party faced was bureaucratism, which “tends to create a new class, make party life much more rigid, where the party loses flexibility and where what happens is what happened to the party in the USSR.”17

It therefore seems that the PSUV has gone a lot further down the road of bureaucratisation and is further than ever away from becoming an instrument of the workers’ revolution against the bourgeois state. But nonetheless clearly the PSUV remains a key arena in which the struggle for the future of Venezuela is taking place. Revolutionaries need to ceaselessly fight bureaucracy and class collaborationism, for a break with the bourgeoisie and a programme for the conquest of power by the working class. Their role should be to sharply criticise and expose every bureaucratic manoeuvre and expulsion and, of course, every pro-capitalist reform. The aim should not be to maintain a party centred on and loyal to Chávez, but to split the party on class lines and build an independent party of the Venezualan working class, with workers’ democracy and united on the basis of a revolutionary programme. Unfortunately, this is not the approach taken by Stalin Perez Borges’s Marea Socialista – an oppositional faction within the PSUV that is formally Trotskyist. His criticisms of the conduct of elections are tempered by reference to all PSUV members as “compatriots” and a statement that “Chávez’s leadership is beyond questioning.” This is a very odd position for a Trotskyist to adopt! It is not Chávez, but the workers and poor of Venezuela that will lead a revolution against capitalism.

Revolutionaries should not only work within the PSUV but also build up the independent organisations of the workers and poor, like the UNT. The UNT itself has been divided into different currents over the question of membership of the PSUV since the 2006 national congress, and tensions are made worse by the lack of democratic elections for leadership positions. In fact according to Orlando Chirino – leader of the faction outside the PSUV – the government’s opposition to workers’ independent organisation is one of the main reasons it has not been possible to hold elections, as pro-Chávez currents in the UNT have given priority to the presidential elections.18 Stalin Perez Borges, who is also an important leaders of the UNT, has promised that by February 2009 at the latest “we will go towards a transparent, democratic process of national elections,” but the fiercely pro-Chávez Bolivarian Socialist Force of Workers (BSFT), whose member José Ramon Rivero was previously labour minister, have refused to take part in the process.

The workers’ movement is still far from being co-ordinated and built into an independent force, all the while the rightwing within the Chávez government (including those from the old order who have decided to work within the new one) are consolidating their power quickly, using the levers at their control within the government and the PSUV bureaucracy. The government’s accommodation of the opposition may have the unintended consequence of not just incorporating elements but also encouraging others to organise in a way they have not had the courage to do since their failed coup attempt in 2002. An advanced coup plot involving high-level military officers, both retired and active from the vice-admiral level down and involving some of the 2002 plotters, was exposed on 10 September. It had nation-wide links and “control points” at a key Venezualan Air Force base, showing that the rightwing is in no way appeased by Chávez right turn, but see it as the signal to develop their plans further.19

Foreign policy: Chávez turns right
Chávez’s turn to the right on the economy is reflected in far-reaching changes in foreign policy, most dramatically reversing relations with Colombia’s right-wing president Álvaro Uribe and the left-wing guerrilla group Revolutionary Armed Forces of Colombia (FARC). Colombia is the key ally of US imperialism in Latin America, and it was natural that the two governments would clash given US attempts to overthrow Chávez in the past. As recently as March 2008, Chávez showed his outrage when Colombian forces pursued FARC forces into Ecuadorian territory by angrily denouncing Uribe, expelling the Colombian ambassador and mobilising troops on the Venezuela-Colombia border. At that point he demanded international recognition of the FARC as “a belligerent force.” So it came as a shock to many when just three months later, in June 2008, Chávez publicly called on the FARC to cease their armed struggle and release all their hostages.

Soon afterwards, on 2 July, the Colombian government “tricked” the FARC into releasing 15 hostages; Chávez’s response was to congratulate Uribe and assure him that he would receive him “like a brother” in Caracas! Referring to the earlier problems between them, he said, “these things happen between brothers”, but that it had passed, he hoped, forever. He also stated his aim of contributing to future liberations – promising to “continue until we liberate the last hostage from the Colombian guerrillas.” Referring to Ingrid Betancourt, the bourgeois French-Colombian presidential candidate that had been kidnapped in 2002 as a result of campaigning against the FARC, he said he was sending her a kiss and that “if we needed to go to the deepest jungle to look for Ingrid and her companions, I would go.” He repeated his calls for the FARC to free all hostages and abandon the armed struggle, arguing that “it’s no longer the time for guerrilla fronts... The time for rifles has already passed... Don’t make us return to that time.”

Chávez kept his promise when Uribe came to visit him on 12 July, hugging him and shaking his hand, and talking about the beginning of a new era in bilateral relations between Colombia and Venezuela. Uribe also expressed desire to rebuild relations with Ecuador and proposed to Chávez an agreement of reciprocal promotion and protection of investment, to avoid double taxation and facilitate free movement of goods. The two countries had maintained commercial exchanges totalling up to $6,000 million last year but will now introduce further mechanisms such as electrical interconnections, bi-national gas ducts, and opportunities for business between state enterprises of both countries. Venezuela also assisted with the capture and deportation of Gabriel Culma, alias “Guillermo,” suspected of being the FARC’s chief of Border and Finance Commissions. He was detained 26 July and deported on 31 July to Colombia by the Venezuelan National Guard (military police), where he will be sentenced for drugs trafficking. Uribe gave his thanks for Venezuela’s help from an anti-drugs summit (where Chávez was present), and the chancellors of both countries used it to hold a bilateral meeting and set a date for Colombian officials to visit Venezuela in second week of August to further discuss reactivating the bilateral agenda. In particular the two countries will discuss combating “criminal activity” in the border regions, underlining the fact that Chávez is no longer prepared to offer any kind of protection to FARC members on Venezuelan territory.

This treachery was followed by another U-turn in foreign policy later in July, during Chávez’s meeting with the Spanish King Juan Carlos. The pair had last met in November 2007 at a summit in Chile, when the king asked Chávez why he wouldn’t shut up when he continually interrupted Prime Minister Zapatero, who was defending the previous right wing Spanish PM from Venezuelan questioning. All this was forgotten as Chávez underlined his friendship with the monarchy and with Spain. This followed shortly from a conference and meeting with Zapatero at the governmental palace, where Chávez promised “Spain will have petroleum for life” and guaranteed that Venezuela would sell Spain 10,000 daily barrels of oil for $100 dollars each, in exchange for investments (e.g. medical equipment & infrastructure) and technology. Chávez stressed the importance of the Spanish oil and gas multinational Repsol participating in projects in the Orinoco Belt, which is one of the biggest petroleum reserves in the world, together with Venezuelan state oil company PDVSA, which has already started working there. This reflects Chávez’s view that Venezuela needs investment to avoid a situation where the price of crude oil continues to rise, and his wish that the price of a barrel will stabilise at about $100.

Chávez also proposed creating a “work table” between Europe, Spain, Portugal & the Latin American countries to “look for solutions” to the Directive for the Return of Illegal Immigrants. This legislation, passed by the EU in June 2008, encourages the “voluntary” return of illegal immigrants, and allows for the issue of removal orders and holding immigrants in custody for up to 18 months if they do not choose to leave. Despite the draconian, racist nature of this Directive and the harm it will do to Venezuelan and other Latin American citizens living in Europe, Chávez said he didn’t want any kind of confrontation about it – in other words, he is willing to appeal for kindness but not to really fight. This is a much weaker response even than that of Bolivia’s president Evo Morales, who at least made some threats in response to the Directive, saying that if it became law, “we will not be morally able to deepen negotiations with the EU, and we reserve the right to legislate so European citizens have the same obligations for visas that Europe imposes on the Bolivians, according to the diplomatic principle of reciprocity.”

Chávez, on the other hand, seems to be deepening his ties with the EU despite their increasing discrimination against migrants. While visiting Portugal in July he said that the Immigrant Directive was an “outrage”, but again did not outline any action he would take against it. He also met with the President Anibal Cavaco Silva and signed three commercial contracts worth $750 million regarding telecoms, housing, port and industry infrastructure, and two memorandums of understanding. Perhaps even more significant than Chávez’s attempts to reach a rapprochement with EU and Spanish imperialism, is his growing economic and military cooperation with Russia, with two diplomatic visits this year. The love-in between Russian leader Dmitry Medvedev and his “esteemed president, dear Hugo” was cemented on 26 September as the two oversaw the signing of an agreement between Russian energy giant Gazprom and Venezuelan firm PDVSA to cooperate in oil and gas production. This comes alongside increasing military ties, from $4 billion worth of Russian arms already agreed to more active military cooperation.

After Russia’s defeat of Georgia in the August war, and with it the USA’s foreign policy in the region, Chávez upped the ante and declared increased military cooperation with Russia. Long-range Russian strategic bombers visited earlier in September and later in the autumn Russian warships en route to the Caribbean stopped for joint exercises with the Venezuelan navy. As the bombers landed Chávez claimed “The Yankee hegemony is finished”, while Russian Deputy Prime Minister Igor Sechin, visiting Caracas, stated that Latin America needed a strong friendship with Russia to help reduce US influence. “It would be wrong to talk about one nation having exclusive rights to this zone” he said, in an open riposte to US imperialism. This new alliance with Venezuala reverses the withdrawal of Russian activity from Latin America after the collapse of the Soviet Union, it will no doubt increase US hostility to Chávez even further and its determination to overthrow him.

Closer to home Venezuela has influence through the trade and cooperation initiative Petrocaribe, which incorporates governments of many Caribbean and Central American countries. Together with Argentina and Ecuador, Venezuela set up the Bank of the South. This also involves Bolivia, Brazil, Paraguay and Uruguay and has had other applications. It will start operations later this year with capital of $7bn to $10bn. Venezuela also has a strategic agreement with Bolivia and Ecuador to address the problem of their inadequate oil refineries, possibly with the technical help of Russia’s Gazprom. During Chávez’s visit to Ecuador to initiate a refinery, their president Rafael Correa described the process of Latin American integration as “irreversible”. For all Chávez rhetoric, this process is about the strengthening of South American capitalism, creating a strong bloc that is in a better position to reach agreements with EU, Russia and United States. Not only does it have nothing to do with socialism, but its anti-imperialism is also very limited because the large imperialist powers are likely to continue to manipulate divisions between the Latin American states to their advantage. Moreover, constructing a web of relations with other powerful semi-colonial and even imperialist regimes to help this along: China with its market and investment funds, the technical know-how of Russia for oil production and Iran for nuclear power. All this can only buffer Venezuela dependence on the imperialist-dominated world economy.

Where is Chávez taking Venezuela?
During the prolonged period of relative equilibrium in the world economy that has endured throughout most of Chávez’s presidency, he has been able to preside over a system purporting to serve everyone’s interests. While not expropriating the capitalists, the government brought improvement to the lives of the poor through projects like “social missions” – these are state-sponsored development programmes that according to Michael Albert have contributed to a 9.9 per cent decrease in the poverty rate since 2003.20 Such projects did not signal a move towards socialism – even companies given names like “Socialist Production Units” were actually just giving an (undefined) proportion of their profits to community projects, with a view of handing them over to the community “in the long term.”21 But they made a difference to people’s lives because of the money the government was able to pour into them, based on rising oil prices, without having to actually challenge capitalist private ownership.

History however is quickening its pace. The spiralling inflation of recent months is making it increasingly difficult to maintain this type of system: the rising cost of living makes it much more difficult for the same social programmes to stem discontent. The coming economic downturn could hit Venezuela hard, throw the economy into a tailspin, and create huge tensions that would drive forward the class struggle. If the developing recession drives down the price of oil, as it is likely to, if world output contracts significantly lowering demand, then social reforms would have to be completely slashed unless Chávez began to take on the capitalists. Chávez’s record in office suggests that he is highly unlikely to make this kind of turn – huge pressure from below may force him to make tactical concessions here and there, but he is resolutely opposed to the expropriation of capital and disbanding of the bourgeois state, i.e. a socialist revolution.

At the moment his strategy for coping with the economic crisis is quite the opposite: turning to pro-business reforms which will make life even harder for workers and the poor, and seeking international alliances beyond his existing ties to other leftist Latin American governments and including hard right-winger Uribe and the EU governments of Spain and Portugal. Even pro-Chávez journalists like Michael Albert are expressing the fear that he could go in the same direction as leaders like Lula in Brazil who, though head of the “Workers’ Party”, push through the same IMF neoliberal reforms, keep up with debt repayments to imperialist countries, and just soften blow to workers using a few social programmes.

Even if Chávez does not “do a Lula” a dangerous precedent is set by his history of oscillations to left and right as he rests first on the radicalised masses, next panders to the rapacious Venezuelan capitalist class. Such zigzags will demoralise his supporters and embolden the opposition. If under mass presure Chávez is forced to persevere with nationalisation and his programmes to raise the standard of living of the poor, in the face of crisis and capitalist sabotage, his regime will certainly face a major coup attempt like that of Allende’s Chile in 1973. Chávez’s response to the plot exposed on 10 September is not encouraging, as he counselled faith in the state and military: “The empire is desperate...We are alert, I say to the country to trust your government, our intelligence organizations, our Armed Forces, in which our officials and soldiers have learnt many lessons.” So did Allende, down to his last days. If Chávez’s turn to the right continues, this will make it ever more difficult for the millions in the barrios, factories and farms who have thrust him to power to continue believing that his government is “building socialism.” As revolutionaries, we must use this growing gap to expose his pro-capitalist politics, and redouble our efforts at building independent organisations of the working class, willing to fight for full expropriation of the capitalists and workers’ control of enterprises, and to take on and smash the bourgeois state that Chávez has left intact – and indeed strengthening.

1 Referendum defeat shakes the Hugo Chávez’ project, 07 December 2007, online at,1312,0,0,1,0
2 Socialist Workers Party (SWP), 18 December 2007, ‘Lessons from the Venezuelan Referendum’, International Socialism Journal, no. 117, SWP: London
3 Articles charting the development of Chávez’ regime can be found at the Fifth International website under “Venezuelan revolution: articles from the League for a Fifth International” at,1184,0,0,1,0
4 ‘The alliance with the employers is putting brakes on the march towards socialism’
Interview with Stalin Peres Borges, IV Online magazine : IV403 – August 2008
6 Stalin Perez Borges, ibid
7 Against the government-business pact that Chávez is driving! Deepen and unify the workers’ struggles! – 15 July 2008
8 Ibid
9 Alan Woods, 1 August 2008, ‘Venezuela: the nationalisation of Banko de Venezuela’, Marxist.Com
10 Chávez wins for the third time and promises “socialist revolution”, December 2007, online at,813,0,0,1,0
11 Venezuela: SIDOR strikers force nationalisation, 21 April 2008, available online at,1360,0,0,1,0
12 23 January 2008, ‘Draft Programme and Principles of the PSUV’, on VenezuelaAnalysis.Com
13 Federico Fuentes, 31 August 2007, ‘Uniting revolutionaries to end capitalism’,,
14 Stalin Pérez Borges: “Pero no se puede seguir dejando fuera el sentimiento de las bases del PSUV” (interview) – Marea Socialista, 5 May 2008
15 El PSUV Post-Referéndum, Aporrea, 13th December 2007
16 United Socialist Party of Venezuela to Determine Nomination Process Democratically, May 6th 2008, by Kiraz Janicke –
17 Green Left Weekly, 19th March 2008, online at
18 Orlando Chirino on Chávez, trade unions and socialism in Venezuela (interview) – International Socialism, 9 May 2007
19 Coup Plot against Chávez Disclosed on Venezualan TV, Tamara Pearson, 11 Sept 2008,
20 Which Way Venezuela?, Michael Albert, 24th July 2008
21 Ibid