By Bill Van Auken
22 August 2018
Venezuela remained in a state
of chaos Tuesday, four days after President Nicolas Maduro announced a series
of economic measures, including a 95 percent currency devaluation and a
conversion of the country’s old currency “the strong bolivar” to a new one, the
“sovereign bolivar,” by lopping off five zeros from the new banknotes.
The country’s fractured
right-wing opposition claimed credit for reduced economic activity after an end
to a long holiday weekend, but the closure of businesses and reduced public
transportation appeared to have more to do with confusion over the new currency
regime than the “general strike” called by the collection of discredited
US-backed right-wing parties that make up the so-called Broad Front (Frente
Amplio) previously known as the MUD (United Democratic Roundtable).
While the Venezuelan right
cast its call for a general strike as an action in defense of the country’s
impoverished and exploited working class, one of the principal objections of
the Fedecamaras, the business association that is a pillar of the right-wing
opposition, was to Maduros’ inclusion of a 3,000 percent increase in the
country’s minimum wage, which it claimed would bankrupt Venezuelan businesses.
The increase, which raises the
Venezuelan minimum wage from $1 a month to $30 a month, is an accommodation by
the government to the wave of strikes involving nurses, electrical workers,
textile workers, public school teachers, university lecturers and various other
sectors of the workforce.
The new $30 is still a
starvation wage amounting to less than half the amount needed to meet essential
monthly necessities. It less than a third of the official monthly wage of
Haiti, the poorest country in the Americas, and less than a tenth of the prevailing
minimum wage in most of Latin America’s major economies.
In a statement issued on
Monday, Maduro claimed that his new plan would usher in an “economic miracle”
and represented a “revolutionary formula ... unique in the world.”
The derisory minimum wage hike
aside, the plan introduced by Maduro has all the earmarks of capitalist shock
therapy, in which the full weight of Venezuela’s profound economic crisis is to
be placed on the backs of the country’s working class.
In addition to the massive
devaluation, the plan includes an increase in the country’s value-added tax
(VAT) from 12 percent to 16 percent, which will be translated into
across-the-board consumer price hikes. Subsidies on gasoline prices are also
being lifted in a bid to raise them from what had been among the lowest in the
world to prevailing international rates. Previous attempts to impose such
increases had led to riots in Venezuela.
This has been accompanied by
tax exemptions for capitalist corporations, including energy transnationals
seeking to exploit the country’s oil wealth, as well as the lifting of currency
exchange controls introduced in 2003 in an attempt to control capital flight.
The Maduro government has
promoted its measures as the path to a “zero deficit,” the same goal enunciated
by right-wing capitalist governments throughout Latin America.
While the government and its
supporters claimed that the roll-out of the new currency regime was a success,
average Venezuelans saw it as just a further aggravation of the protracted
crisis. Withdrawals of the new “sovereign bolivar” were limited to 10
(1,000,000 of the old “strong bolivar”) at ATMs — the equivalent of 17 US
cents. Bank tellers were allowed to give out only 50 of the new bolivars.
The government has affirmed
that it will pay the increased costs of the new minimum wage for small and
medium-sized capitalist enterprises for the first 90 days, but no clear
provisions have been introduced for it to do so.
The immediate effect of the
new measures was a sharp rise in prices following Maduro’s announcement on
Friday, further intensifying the hyperinflation that the IMF has projected will
reach 1,000,000 percent for the whole of 2018. Rising prices have been
accompanied by severe shortages in basic food and medical supplies.
The increasingly intolerable
conditions for Venezuelan working people have led to a wave of economic
migrants fleeing the country in seek of work elsewhere in Latin America or
farther abroad. The flow of Venezuelan migrants has led to a violent reaction
in northern Brazil, where mobs attacked a migrant camp, as well as official
restriction being placed upon their entry by both Ecuador and Peru, which are
now demanding passports from Venezuelans passing south through Colombia.
US Vice President Mike Pence
issued a denunciation of the Maduro government’s new economic measures,
declaring that they “will only worsen the lives of the Venezuelans.”
Washington has imposed a
series of increasingly punishing sanctions aimed at creating the maximum
economic turmoil in the country, with the aim of preparing conditions for
regime change. These have included a ban on Venezuela’s borrowing or selling
assets in the US financial system, making it impossible to restructure its $60
billion debt. There are increasing threats that the Trump administration may
escalate these measures with a ban on the import of Venezuela oil.
US government strategists are
banking on the increasingly intolerable economic and social conditions
triggering a coup by the Venezuelan military bringing to power a more pliant
regime.
The military has been a
central pillar of the Venezuelan government since the coming to power of
Maduro’s predecessor, the late Hugo Chavez, a former career army officer and
coup leader, in 1999. His “Bolivarian socialism” rested heavily on the military
command, which filled many of the top posts in the government and profited
immensely off of its control of government contracts, key economic sectors and
illicit activities.
The arrests of two senior
military officers in the wake of the August 4 attempted drone assassination of
Maduro during a speech before troops in Caracas indicates the potential for
fissures within the military command under the combined pressure of US
imperialism and the growth of extreme class tensions within Venezuela itself.
Venezuela’s workers and
oppressed masses confront immense dangers under conditions of a growing threat
of violent conflict between two reactionary and repressive factions of the
country’s ruling class, as well as that of a military intervention by US
imperialism. These threats can be answered only by means of the mobilization of
the working class independently of both the government and the right-wing
opposition, as well as their respective trade union affiliates, in a political
struggle to put an end to capitalism as part of a socialist revolution
throughout the Americas and internationally.
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