Venezuela's Economic Woes? Excerpts from article by Federico Fuentes (countercurrents.org)
Venugopalan K M
Venezuela's Economic Woes?
by Federico Fuentes"..Attacks on capital
This is exactly what the Venezuelan government has done since announcing the bolivar’s devaluation. It is using its strong position to move against private capital, punish those sabotaging the economy and promote workers’ control experiments...
With the advantage of the lower bolivar rate for state imports, it has begun to move against those using speculation and sabotage aimed at causing discontent via rising inflation, increasing food shortages caused by hoarding and underproduction.
Since February, the government has taken over two private supermarket chains. Using the preferential exchange rate, the government will now import food and white goods via a newly created state import-export company.
The products will be sold cheaply in the state-owned supermarket chains, undercutting speculators. Six formerly private-owned Bicentenary hypermarkets now offer goods up to 50% cheaper than private supermarkets.
The aim, Chavez said, is to “displace the hegemony of the bourgeoisie in handling resources that belong to the people”.
On May 13, Chavez announced the takeover of Mexican-owned food processor Gruma, which had refused to sell flour in April despite a national shortage.
This was just the latest of a series of nationalisations carried out to stimulate food production, and stop hoarding and speculation.
These included the takeover of three sugar mills accused of hoarding and under-producing, a coffee processing company, and the expropriation of land belonging to Venezuela’s largest food and beverage company, Polar.
To combat speculation in the informal currency market, the government has intervened in 31 of the country’s 107 brokerage firms during May over accusations of illegal currency-trading and money laundering.
Chavez said: “If we have to eliminate the whole bunch of brokerages ... well eliminate them. This country doesn’t need them, we don’t need the savage capitalism of these rich money-bags.”
The government also halted trading of government bonds. Under a reformed law passed by the National Assembly, only the Central Bank of Venezuela will be able to authorise the purchase and sale of foreign currencies.
Workers’ control
Using its strong economic position, the government borrowed $20 billion from China in April as advanced payment for future oil deliveries. This is helping fund an increase in public investment.
To tackle decades of disinvestment, the government plans to spend $6 billion on the state electricity sector — strengthened by the nationalisation of six private companies in 2007.
It has initiated a process of workers’ control in the sector. Workers are organising committees to help reorganise the industry. Workers have also elected representatives to management boards.
The government has also increased the minimum wage by 25% this year and raised pensions for widows and widowers.
On April 30, Chavez announced a $1.168 billion investment package for the state-owned iron, steel and aluminium companies in Guayana. The package will fund projects discussed and approved by workers in the relevant companies.
On May 16, Chavez swore in new presidents in eight out of the 15 state-owned basic industry factories in Guayana that had been chosen by the workers.
Chavez also ordered the nationalisation of transport companies related to the industrial complex and Venezuelan chemical company Norpro.
‘Destroy the bourgeois state’
The new attacks on capital have also led to further splits in the pro-Chavez camp.
The Homeland For All (PPT) party, until recently allies of the Chavez-led United Socialist Party of Venezuela (PSUV), said it would not form an alliance for the September elections, but would stand against PSUV candidates.
The PPT has stepped up criticism of the government’s economic measures.
Lara state governor Henri Falcon defected from the PSUV to the PPT in opposition to the government’s moves against Polar in his state.
At a May 19 public meeting to welcome discontented PPT members into the PSUV, Chavez denounced the PPT as “reformists” unwilling to deepen the anti-capitalist revolution.
Chavez told a May 7 meeting of PSUV candidates for the National Assembly that the government’s actions meant a battle against “the capitalist state and the hegemony the capitalists still exercise in different sectors of national life”.
He said: “We cannot plan out measures thinking that we can or are going to execute measures in normal conditions ... we have to take into account that an adversary with a lot of forces is also involved: the bourgeoisie, with its economic and media power.”
With elections in September, the capitalists are playing hardball. They are trying to provoke economic chaos and shortages of essential goods — as they did before the defeat of Chavez’s proposed anti-capitalist constitution reforms in 2007.
“They are seeking out a way to retake the path of destabilisation”, Chavez said. “Either we finish off capitalism or capitalism will finish off the revolution.”
He said the revolutionary forces needed to win the elections and then push to “accelerate the destruction of the bourgeois state”
[Federico Fuentes is a member of Australia’s Socialist Alliance and is based in Venezuela as part of Green Left Weekly’s Caracas bureau.]
http://www.countercurrents.org/fuentes230510.htm--
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