Michael Roberts
As the Maduro regime tries to
impose its new Constituent Assembly as a rival or replacement of the existing
Venezuelan Congress and arrests the leaders of the pro-capitalist opposition,
the dire economic and social situation in the country continues to worsen.
According to the IMF, Venezuela’s
GDP in 2017 is 35% below 2013 levels, or 40% in per capita terms.
That is a significantly sharper contraction than during the 1929-1933 Great
Depression in the US, when US GDP is estimated to have fallen 28%. It is
slightly bigger than the decline in Russia (1990-1994), Cuba (1989-1993), and
Albania (1989-1993), but smaller than that experienced by other former Soviet
States at the time of transition, such as Georgia, Tajikistan, Azerbaijan,
Armenia, and Ukraine, or war-torn countries such as Liberia (1993), Libya
(2011), Rwanda (1994), Iran (1981), and, most recently, South Sudan.
So, on this measure, according
to Ricardo
Haussman, former chief economist of Inter-American Development Bank,
Venezuela’s economic catastrophe dwarfs any in the history of the US, Western
Europe or the rest of Latin America.
Back
in 2013, I warned that the achievements of the ‘Bolivarian revolution’
under Chavez were seriously under threat. Chavez had improved the
conditions of the poorest with increased wages, social services and reduced
inequality. But these improvements were only possible within the confines
of capitalist economy by using the revenues of oil exports at a time of very
high global oil prices. But oil prices started to mark time and have
virtually halved in the last two years.
Oil exports fell by
$2,200 per capita from 2012 to 2016, of which $1,500 was due to the
decline in oil prices. The Maduro government started to rack up huge
foreign debts to try and sustain living standards. Venezuela is now the
world’s most indebted country. No country has a larger public external debt as
a share of GDP or of exports, or faces higher debt service as a share of
exports.
The government resorted to the
devaluation of the currency to boost dollar revenues, but this only stimulated
outrageous inflation and cuts in real wages. At the same time, the
government decided to ‘honour’ all its foreign debt payments and cut imports
instead. As a consequence, imports of goods and services per capita fell
by 75% in real (inflation-adjusted) terms between 2012 and 2016, with a further
decline in 2017. Such a collapse is comparable only to that of Mongolia
(1988-1992) and Nigeria (1982-1986) and bigger than all other four-year import
collapses worldwide since 1960. This led to a collapse in agriculture and
manufacturing even larger than that of overall GDP, slashing almost another
$1,000 per capita in locally produced consumer goods.
The minimum wage – which in
Venezuela is also the income of the median worker, owing to the large share of
minimum-wage earners – declined by 75% (in constant prices) from May 2012 to
May 2017. Measured in the cheapest available calorie, the minimum wage
declined from 52,854 calories per day to just 7,005 during the same period, a
decline of 86.7% and insufficient to feed a family of five, assuming that all
the income is spent to buy the cheapest calorie. With their minimum wage,
Venezuelans could buy less than a fifth of the food that traditionally poorer
Colombians could buy with theirs.
Income
poverty increased from 48% in 2014 to 82% in 2016, according to a survey
conducted by Venezuela’s three most prestigious universities. The same study
found that 74% of Venezuelans involuntarily lost an average of 8.6 kilos (19
pounds) in weight. The Venezuelan Health Observatory reports a
ten-fold increase in in-patient mortality and a 100-fold increase in the death
of newborns in hospitals in 2016.
According to a study carried
out between October and December 2016 by Caritas Venezuela, in collaboration
with Caritas France, the European Commission and the Swiss Confederation, there
are clear indications of chronic malnutrition among children in Venezuela. In
some areas, it reaches levels close to what, according to international
standards, is a crisis. The report says: “Insecure and irreversible survival
strategies are being recorded from an economic, social and biological point of
view, and the consumption of street foods is especially worrying.”
“According to a survey conducted in June 2016 in the state of Miranda, 86% of
children feared to run out of food. Fifty percent said they went to bed hungry
for lack of food in their homes. “
Erika Guevara, director of
Amnesty International’s Regional Office for the Americas in June 2016, wrote:
“J.M. Children’s Hospital. Of the Rivers in Caracas, once a source of
pride as a model of pediatric care in Venezuela, today is a tragic symbol of
the crisis that is sweeping this South American country. Half the
gigantic building is collapsing, the walls stagger, the floors are flooded and
the rooms are so deteriorated that they are no longer used. Halfway through,
hundreds of children are being treated. But both medicines and basic medical
supplies are in short supply, and the children’s mothers have already given up
ordering them. (…)”. The Voices of Hunger, a report made by Telemundo and
led by the Venezuelan journalist Fernando Girón, shows how Venezuelan children
fight with birds of prey for bones discarded by butchers (El Nacional,
02/28/17).
Before Chavez, most
Venezuelans were desperately poor after a series of right-wing capitalist
governments. But now once again, under Maduro, this is the situation for
the poor and the majority of the Venezuelan working class. No wonder
support for the Maduro government has subsided while the forces of reaction
grow stronger. While the majority struggle, many at the top of the Maduro
government are as comfortable as the Venezuelan capitalists and their
supporters who are trying to bring the government down.
The Maduro government is now
relying increasingly not on the support of the working class but on the armed
forces. And the government looks after them well. The military can
buy in exclusive markets (for example, on military bases), have privileged
access to loans and purchases of cars and departments, and have received
substantial salary increases. They have also won lucrative contracts,
exploiting exchange controls and subsidies, for example, selling cheap gasoline
purchased in neighboring countries with huge profits.
As Rolando Asturita has
pointed out in a series of
posts. the army has strong direct economic power, since the FANB
directs and controls a whole series of companies: the bank BANFANB; AGROFANB,
for agriculture; EMILTRA, transport; EMCOFANB, company communications systems
of the FANB; TVFANB, an open digital TV channel; TECNOMAR, a mixed military
technology projects company; FIMNP, an investment fund; CONSTRUFANB,
constructor; CANCORFANB, Bolivarian Mixed Company; Water Tiuna, water bottling
plant; And then there is CAMINPEG, the anonymous military, mining and oil and
gas company.
Many of the Maduro government
elite have used the economic crisis to their own personal benefit. They
have bought up government debt for rich returns, while at the same time
ensuring that there is no default, all at the expense of falling living
standards for the people who must pay this debt through taxes and foregone oil
revenues. Foreign exchange earmarked for the payment of foreign debt has
been offset by the reduction of imports of food, medicines or essential
industrial inputs.
So, as anti-government protestors
fight the police and army on the streets and the Maduro government moves ever
closer to outright authoritarian rule, the working class is left in the
cold. The economic and social program of the opposition is the
traditional one of the national capitalists backed by imperialism: namely,
reform of the labor laws (ie more exploitation and sackings), privatization or
re-privatization of state enterprises, deregulation of controls over investment
(ie ensuring a high rate of labor exploitation) and, of course, the lifting of
price controls and exchange reunification. The implementation of this program
would impose even more losses on the majority. As would the planned
sanctions by US imperialism and its acolytes in the region.
What went wrong with the laudable
aims of Chavismo? Could this tragedy been avoided? Well, yes, if the Chavista
revolution had not stopped at less than halfway, leaving the economy still
predominantly in the control of capital. Instead, the Chavista and Maduro
governments relied on high oil prices and huge oil reserves to reduce poverty,
while failing to transform the economy through productive investment, state
ownership and planning. Between 1999 and 2012 the state had an income of
$383bn from oil, due not only to the improvement in prices, but also to the
increase in the royalties paid by the transnationals. However, this income was
not used transform the productive sectors of the economy. Yes, some was
used to improve the living standards of the most impoverished masses. But there
was no plan for investment and growth. Venezuelan capital was allowed to
get on with it – or not as the case may be. Indeed, the share of industry
in GDP fell from 18% of GDP in 1998 to 14% in 2012.
Now the right-wing ‘free
marketeers’ tell us that this shows ‘socialism’ does not work and there is no
escape from the rigors of the market. But the history of the last ten
years is not the failure of ‘socialism’ or planning, it is the failure to end
the control of capital in a weak (an increasingly isolated) capitalist country
with apparently only one asset, oil. There was no investment in the
people, their skills, no development of new industries and the raising of
technology – that was left to the capitalist sector. Contrast that with ‘socialism
with Chinese characteristics’, albeit in the largest country and now economy in
the world.
Just
over a year ago, I argued in a post that, to save the aims of
Chavismo, “it is probably too late, as the forces of reaction gain ground
every day in the country. It seems that we await only the decision of the
army to change sides and oust the Chavistas.”
The only way to defeat Trump—
and to redeem what is worth saving in liberal democracy—is to detach ourselves
from liberal democracy’s corpse and establish a new Left.
Elements of the program for
this new Left are easy to imagine.
Trump promises the
cancellation of the big free trade agreements supported by Clinton, and the
left alternative to both should be a project of new and different international
agreements.
Such agreements would
establish public control of the banks, ecological standards, workers rights,
universal healthcare, protections of sexual and ethnic minorities, etc.
The big lesson of global
capitalism is that nation states alone cannot do the job—only a new political
international has a chance of bridling global capital.
Excerpt from:
“We Must Rise from the Ashes
of Liberal Democracy”
BY Slavoj Žižek
http://inthesetimes.com/article/19918/slavoj-zizek-from-the-ashes-of-liberal-democracy
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