Socialist View, No. 15, Spring 2006
Venezuela on the road to socialism?
THE BACKDROP to the recent World Social Forum in Caracas, Venezuela, is a society whose government is headed by someone who Donald Rumsfeld recently compared to Hitler. MICHAEl O'BRIEN writes
Given that Hugo Chavez and his policies can excite such a reaction from the Bush administration it is no small wonder that socialists and activists the world over have been following with great interest of a process that has been characterised by radical reforms, mass mobilisations and revolutionary potential.
While the election of Chavez in 1998 is seen as the start of the process, its real roots can be traced to the mass mobilisation in 1989 against neo-liberal counter reforms, referred to locally as the "Caracazo".
Venezuela, unlike most of its Latin American neighbours had enjoyed up to that point over 30 years of parliamentary democracy. When people turned out from the working class districts of Caracas in 1989 to protest against a doubling of bus fares, their demonstration was met with merciless brutality as the full force of the army and police was deployed and thousands were slaughtered. Locals claim that the death toll exceeded that of the Tiananmen Square protest in Beijing which occurred at the same time.
Like the events around the 1905 revolution in Russia, the "Caracazo" served to shatter any illusions workers and poor may have had about the nature of the regime. The then Colonel Chavez and his followers within the army positioned themselves on the side of the people and in February 1992 he led an unsuccessful left wing coup.
Chavez was jailed but the coup served to raise his profile and public pressure built up forcing his release in 1994. Chavez embarked on a course for political power culminating in his election to the presidency in early 1998. This victory ended a period of 40 years of alternating governments of the traditional establishment parties COPEI and AD.
At the outset of his first term in government, Chavez spoke in terms of democratising Venezuelan society, endorsing the rights of indigenous people and prioritising economic reforms over debt repayments. Socialism did not feature in his speeches and he clearly felt that his reforms could co-exist with the capitalist system remaining intact. His reforms were codified in a new Bolivarian constitution that was endorsed by referendum.
Instead, hard experience over the last eight years has demonstrated that a cohort of domestic and foreign capitalists, the old white political elite, the Catholic Church and right wing elements of the army officer corps and state apparatus have tried to overthrow Chavez.
This was graphically demonstrated by the failed coup attempt in April 2002, a bosses' lock out from winter 2002 to spring 2003 and an unsuccessful recall referendum in late 2004. Besides these headline events, there have been scores of opposition demonstrations. The last such demonstration in Caracas in late January turned out 40,000, a figure dwarfed by the 1.5 million that turned out two weeks later to commemorate the twelfth anniversary of the failed left wing coup of 1992. More recently, the main right wing parties abandoned the parliamentary elections in December knowing full well that they were going to be soundly beaten. This effectively handed Chavez's Movement for the Fifth Republic (MVR) a near monopoly of seats in the parliament.
The implacable opposition of the capitalists caused a shift in Chavez's politics. In January 2005 at the World Social Forum in Porto Alegre, Brazil, Chavez described his attempts to find a "third way" to peacefully co-exist with capitalism as a "farce" and that a socialist society was the objective he set for Venezuela.
The reforms introduced by Chavez do not threaten the rule of capitalism, but the old ruling elite has been enraged by the proceeds of the state oil industry being spent on the poor and how the theft of this wealth by the rich has been curbed.
Oil accounts for 75% of Venezuelan export revenues and 50% of taxed income. Venezuela is the fifth largest producer of oil in the world and the second biggest exporter to the US. The state owned oil company owns some 14,000 pump stations in the US, trading under the name Citgo.
The benefits felt by the poorest from the spending of the oil wealth are real. Spending by central government as a percentage of GDP has increased from 19% in 1998 to 31% in 2004. An estimated $100 billion will be spent on infrastructure over the next five years. It is important to bear in mind that this money goes a lot further in Venezuela than it would in Europe. Those of us who participated in the World Social Forum were given the opportunity to see first hand how these resources have impacted on people's lives.
The city of Caracas is surrounded by mountains upon the sides of which are perched the "barrios". The barrios sprung up when a mass migration of poor people from the countryside to the city took place in the 1960s. Homes were improvised by bits of corrugated iron, wood pallets and wire. The barrios had no legal status and therefore local authorities did not feel any obligation to provide services and infrastructure. What spending did take place was at the discretion of the church and NGOs.
We were brought to Barrio Kennedy. The first thing you notice is the upgrading of the shacks. Proper building materials have been made available to replace the old flimsy structures. Title deeds have been dispensed to the occupants for the pieces of mountain they have occupied giving them security of tenure.
Street lighting and a water supply have been put in place and concrete steps have replaced the old dirt tracks. Retention walls and concrete lined channels form protection against the worst effects of the torrential showers that occur. From the high vantage point of Barrio Kennedy you have a view of the other barrios surrounding Caracas and similar upgrading work could be viewed all around.
One of the obstacles that had to be overcome when initial efforts were being made to extend accessibility of health care to all was the lack of co-operation by the majority of the medical profession in Venezuela. This was overcome by a deal struck between Chavez and the Castro regime in Cuba, whereby, in return for cheap oil, Cuba supplied the services of 20,000 doctors and thousands of other specialists.
Health centres have been set up in the Barrios staffed by the Cubans. There is an ambitious plan for the Cubans to be entirely replaced within five years by Venezuelans who are currently studying medicine in the Bolivarian University that was established by the current administration.
While in Barrio Kennedy we were brought to a "casa de alimentación" which plays the role of a primary school as well as a centre for feeding children and assisting people in developing their parenting skills. On a wider scale, a campaign against illiteracy is being waged. The Chavistas will tell you that by raising the overall educational level of population the way will then be paved for the development of more high tech or "knowledge based" industry in Venezuela, thus reducing their dependence on oil. There is a tendency by some of them to underestimate the problems and inequalities that exist in economies that fit this description in the so-called first world.
Despite this impressive record of social spending, there is some frustration over economic problems among sections of the working class and middle class who initially supported Chavez and now do so with reservations, abstain or in a minority of cases have gone over to the right wing opposition. Inflation and unemployment in particular have not been resolved.
Inflation, despite price controls of certain commodities that are in short supply such as coffee and sugar, was the highest in Latin America at 15.3% in 2005. However this is still down on the average figure of 35.1% between 1995 and 2004. Venezuela imports about 70% of its food, mostly from Colombia and the US. 
During the bosses' lockout of 2002-03, a chain of state sponsored supermarkets was established to sell food cheaply. These have remained after the lockout. Unemployment is currently 11%. Foreign investment is one third of five years ago. Since 1999, some 5,000 manufacturing companies have ceased production costing 100,000 jobs.
Chavez recently announced an increase in the minimum wage to 465,750 Bolivares per month ($1 = 2,150Bs approx). However about 50% of the workforce are in the "informal sector" and are not likely to directly benefit from this. An allowance for homemakers of about $220 per month has also been announced.
Normal capitalist relations apply in the Venezuelan ecomony, hence high unemployment and inflation and consequent hardship for 60% of households defined as poor (up from 54% in 1999) whilst big business makes huge profits. For many workers, the rhetoric of socialism, while in part embodied in the social spending is at odds with their experience on the factory floor and dole queue.
While Chavez, unlike other "left" heads of state in Latin America is not an agent of neo-liberal counter reforms, this does not mean that he and his party constitute political and economic representation for the working class.
The trade union movement has undergone a dramatic change since the time of the bosses' lockout. The old confederation, CTV, was a creature of the old oligarchy. It signed its own death warrant with its support for the lockout. A new confederation, UNT, and its affiliates have offered better representation for workers in the many individual struggles that have taken place. 
The UNT contains various political trends. The principle two are the one that is uncritically pro-Chavez and one that has adopted a more principled class struggle position led by Orlando Chirino and Stalin Peréz Borges.
New socialist party
These two leaders have assisted in the launch of a new party that embraces much of the old Trotskyist left in Venezuela, the Party of Revolutionary Socialism (PRS). This initiative is at the early stages of its development and it is an open question as to whether it can prosper despite the crying objective need for such a party. It models itself politically on the recently formed Party of Socialism and Liberty (P-SOL) in Brazil which has been forged in the wake of the sell-outs by President Lula.
However unlike the P-SOL, the PRS does not permit socialist groups from various traditions (including our newly established Committee for a Workers' International (CWI) group in Venezuela) to both participate and fight for our politics within it in an organised fashion.
In a number of cases, workers have taken action to stop factoty closures. At Venepal, the paper company, and Alcasa, the aluminium plant, workers have taken control of the factory, elected their supervisors and strived to maintain production and thus keep their jobs. In these and other cases it is the workers who have taken the initiative and followed up with the demand for nationalisation and co-management with the state.
Some nationalisations have taken place, but they have occurred as a result of struggle by workers against opposition from right-wing elements within the Chavez government. The state apparatus has been left largely unreformed by the government and remains full of supporters of the previous regimes and coup plotters. These people actively work against the nationalisations or where nationalisations take place, a tension develops as state appointees in the co-management set-up try to wrest as much control as possible off the workers. While workers have shown their ability to efficiently run these nationalised factories, they are often stymied because their nationalised plant operates in a sector dominated by private companies. Therefore they depend upon a private company for raw materials and another private company to distribute and sell their products. Not surprisingly, the private sector does everything it can to undermine co-managed nationalised enterprises.
As long as the capitalist class remain in control of the Venezuelan economy and their supporters and agents remain embedded in the state apparatus, the many difficulties that face the working class and poor will continue and worsen.
Need to end capitalism
The only way in the longterm to resolve these problems and to stop a right-wing, US backed coup is to end capitalism in Venezuela. The CWI believes that it is not enough just to nationalise "unprofitable" companies, as the Chavez government has done. We advocate the nationalisation of all major industry, banks, financial institutions and land under democratic workers' control and management as part of a planned economy. This is the only way to achieve socialism in Venezuela, and to end the depravation faced by the masses.
The Bolivarian Socialism spoken of by Chavez and some of his advisors is posed as a long-term transition, spanning decades where capitalism is "transcended". The implication is that there will be gradual accumulation of reforms and co-management initiatives coupled with a voluntary retreat by the capitalists. Therefore they do not see the purpose in expropriating the capitalists. Similarly, the old state apparatus is left largely intact if somewhat marginalised, with the missions in the barrios administered by a new pro Chavez apparatus.
The low turnout in December's elections (25%) was due in large measure to the forgone conclusion of the result because of the boycott by the right-wing parties. But it is also a verdict on the MVR and a sign of a decline in the role of the Bolivarian Circles (the community based voluntary organisations) who have been supplanted by a new paid strata of functionaries. This is a severe warning that Chavez has acknowledged in recent speeches. He refers to the need for a revolution within the revolution by which he is referring to the need to struggle with the bureaucracy. He has set a target of achieving 10 million votes in the presidential elections at the end of the year and has sought the reactivation of the voluntary community networks to deliver the vote.
The workers who are forced to struggle, the poor and unemployed cannot endure decades of half a revolution that is currently implied in the policies and speeches of Chavez. The experience of Chile 1970-73 and Nicaragua from 1979-88 are an historical warning to the Chavez government and the Venezuelan working class. In both cases, reforms and nationalisations went much further than has happened so far in Venezuela but the main control of the economy and state power were not taken into the hands of the working class, ultimately resulting in right-wing pro-US politicians regaining control.
A drop in oil prices, a military intervention or another bosses' lockout will again pose sharply the need for a decisive showdown with the ruling class and the abolition of capitalism in Venezuela.
The other permutation is succumbing to the market and cutting back spending. Such a course would undermine support for Chavez, demoralise the Venezuelan masses and allow the capitalists and their parties to seize the initiative in clawing back the reforms that have been achieved. To stop this the working class and poor need to build their own independent organisations armed with a socialist program. The prize is a socialist Venezuela that would have a monumental impact on the working class of Latin America and around the globe.
 Economic information can be obtained on www.venezuelanalysis.com
 For reports on recent struggles, strikes see January and February postings on www.socialistworld.net