Chávez strengthens his grip

After last month's referendum working class power is as far away as ever, writes Nick Rogers

At the second time of asking, Hugo Chávez has persuaded the Venezuelan electorate to allow him to stand again for the presidency when his current term expires. The February 15 referendum on a constitutional amendment removing term limits for all elected office was passed by a margin of 54.4% to 45.6%.

The constitution that inaugurated Chávez’s fifth republic in December 1999 (approved by 71% of the electorate 10 months after Chávez took office) had extended the number of consecutive presidential terms from one to two. Previous presidents had been elected for more than one term, but only after taking a break from office.

The 1999 constitution extended the presidential term from five to six years and allowed for one re-election. Chávez stood again in July 2000 under the new rules and after winning a majority of 59% initiated the first of a possible two terms. Re-elected in 2006 with 63% of the vote, Chávez immediately began to plan how to remove the restrictions that would have forced him out of office in 2013.

The result was the December 2007 referendum. The proposals supposedly set Venezuela on a socialist path but also removed presidential term limits and would have strengthened the powers of the presidency that the 1999 constitution had already enlarged.1 The irony of Chávez’s suggestion that to allow the indefinite re-election of mayors and state governors risked the creation of ‘regional caudillos’ may have rebounded on him. Certainly, general confusion about what the many new clauses meant, combined with rising dissatisfaction over price increases and shortages of goods, led to a proportion of the Chávista constituency abstaining and narrow defeat by 49% to 51%.

Difficulties were predicted for Chávez and his new united socialist party (PSUV) in local and state elections on November 23 last year. And indeed he did lose political control of some key urban centres, especially in Caracas - the mayor of greater Caracas and control of Sucre, the capital’s second largest council, went to the opposition, although Libertador, the largest, stayed with the PSUV. Overall, the opposition won five state governors. However, the PSUV and its allies won the majority of votes cast. One analysis concludes that Chávez’s supporters won 5.5 million votes (or 58%) and opposition candidates 4 million (41%). Possibly this affirmation encouraged Chávez in January 2009 to try again with a referendum overturning term limits.

This time the proposal was focused on this single issue and all elected posts were to be allowed the same dispensation. The election campaign saw relatively high levels of violence, with clashes between the middle class student vanguard of the rightwing opposition and Chávez’s supporters from the shanty towns. The opposition protested that state resources and civil servants were blatantly being used to try and secure a ‘yes’ vote and that the 11 state-owned TV channels were pumping out propaganda in favour of the proposals. The private media was equally vociferous in its call for a ‘no’.

A turnout of 70% was crucial in securing victory for the ‘yes’ campaign. Chávez’s victory speech declared that “those who voted ‘yes’ today voted for socialism, for revolution”. He promised to tackle rising levels of crime and combat “corruption and its vile ways” that acted as a drag on his levels of support. And he declared himself a candidate for the next presidential election in December 2012.

Still only 54 years old, Chávez’s hints that, in order to achieve “21st century socialism”, it might be necessary for him to carry on as president until 2030 (another three terms after this one ends) are not entirely far-fetched. But the remaining four years of this presidential term pose challenges as great as any Chávez has faced before - not least, a global economic crash and a United States president who has the potential to recast the terms of the debate about the projection of US power.

Global economy

For some months after the financial crash of September 2008 some economic commentators thought that Latin America might be spared the worst of its consequences. The region’s banks and financial institutions were not thought to be exposed to US ‘toxic assets’. Ecuador, Argentina and Venezuela, after all, had effectively been frozen out of international financial markets. During those weeks Venezuela’s stock exchange registered small gains at a time when mighty financial behemoths were felled.

A summit in early October of the presidents of Venezuela, Bolivia, Ecuador and Brazil was symptomatic of the early confidence of Latin America’s leaders. It declared: “From this crisis a new multipolar world has to emerge.”

But talk of Latin American ‘decoupling’ was to be no more accurate than the predictions made for the continuation of China’s stratospheric growth rates. In Mexico and Brazil non-financial companies had entered into derivatives contracts with investment banks and paid the price. The recent collapse of Stanford has directly impacted on Venezuela.

Above all, the global economic downturn that followed the financial crisis hit all who traded on the world market. Exporters of primary resources suffered particularly severely. The ‘commodity boom’ that had lasted some 10 years - and was particularly strong over the last five to six, peaking in the first half of 2008 - has been brought to a shuddering halt.

When Chávez first took office in early 1999, oil prices were not much more than $10 a barrel. His immediate priority then had been to signal that the days when Venezuela had undermined Opec production targets were finished. Struggles over control of Venezuela’s state oil company, PDVSA, were the principal cause of the internal social conflict of the 2002-04 period. Chávez won the fight for PDVSA and over the last 10 years Venezuela has been one of the most intransigent members of the oil cartel. Last year oil peaked at $147 a barrel, rising sharply, along with other commodities, in the space of just a few months - possibly prompted by speculative pressures, as flows of short-term finance capital created one last bubble.

Now oil is selling for between $40 and $50 a barrel - a third or less below its peak and well below where oil prices have been for much of the period of Chávez’s presidency. This poses an acute problem for the ‘Bolivarian revolution’. Oil accounts for between 80 and 95% (depending on the price) of the value of Venezuela’s exports and pays for half of government spending. Foreign reserves at $40 billion provide something of a buffer, but they will rapidly deplete if used to plug the hole left by oil revenues. The reserves are not only used to pay for imports, but have been set aside to fund social expenditure and the assistance which Venezuela provides to its allies in the region.

This state of affairs has encouraged triumphalist headlines on the front cover of Newsweek, which looks forward to the fall - or at the very least the humiliation - of the ‘petrostates’ (Russia and Iran as well as Venezuela).2

Calmer spirits amongst Venezuela’s economists have contented themselves with predicting that victory in the referendum will allow more orthodox economic policies to be adopted: “Politically strengthened and with more room for manoeuvre, the government will … be more willing to slow the pace of spending, increase taxes and devalue the bolivar by 25 to 35% to bolster revenues and hold back a growing fiscal deficit.”3

Alí Rodríguez, finance minister (and Chávez’s first energy minister), denies any such plans: “They are used to applying those famous packages that have caused so much pain for the people, but they still haven’t understood that here we have a government that has a vision that is not only different, but completely contrary to the neoliberal optic.”

Rodríguez says that the government will wait to see at what level oil prices stabilise before drawing up long-term plans. The risk is that - the prospect of ‘peak oil’ notwithstanding - a long economic downturn will presage an even longer period of poorly performing oil prices. Over the last century booms in the prices of commodities have been much rarer events than long periods in which the terms of trade have swung against raw materials.4 Venezuela’s dependence on oil exports have served the Chávez regime well over its first decade, but could prove its Achilles heel, as he enters his second decade as president.

Facing Obama

For Latin America’s growing cast of left-of-centre presidents, Barack Obama represents something of an unknown quantity.

Bush may have acted on behalf of the most conservative wing of the US ruling class - at least during his first term of office. But his focus on the ‘war on terror’ and particularly the invasion of Iraq diverted attention from the nationalist (and anti-neoliberal) stirrings to the imperial power’s south. True, the US appears to have had foreknowledge of the April 2002 coup against Chávez - which quickly collapsed in the face of popular and military opposition - and financial aid of different sorts has been extended to opposition groupings, but the Bush administration did not pursue a consistent policy in Latin America.

It is striking that economic relations between Venezuela and the US have barely been affected over the last 10 years - 60% of the country’s oil exports go to the US (accounting for over 10% of US petroleum imports). PDVSA owns five refineries in the US outright and part-owns four. Its subsidiary, Citgo, runs a chain of US petrol stations.

Yet, for all the potential economic muscle that the US could flex, Bush failed utterly in staunching the rise of governments committed to a more independent approach to domestic policy - and a ‘multipolar’ vision when it comes to international alliances.

Chávez’s financial support has been crucial for a number of regimes that have thumbed their nose at US hegemony in Latin America over the last few years. Both Bolivia and Ecuador have benefited from Venezuelan largesse. As has Cuba, of course, with Venezuela providing regular supplies of oil in exchange for Cuban medical and educational assistance. Venezuelan purchases of Argentinean government bonds provided the Peronist government with virtually its only access to international finance after the 2001 default.

Many of the barter arrangements Venezuela has engaged in, its investments and practical assistance have taken place under the auspices of ALBA - the ‘Bolivarian’ bloc set up to counter Bush’s free trade proposals for South America. ALBA includes Venezuela, Cuba, Bolivia, Nicaragua, Dominica and Honduras, with Ecuador and Haiti as observers. Petrocaribe has provided cut-price oil supplies with hugely advantageous credit arrangements to many regimes, including some otherwise seen as US allies.

Chávez’s diplomatic ambitions have carried him around the world. Close ties have been formed with Russia, China and Iran. Purchases of Russian military equipment and visits by Russian long-distance bomber aircraft and aircraft carriers have particularly riled the US.

The election of Obama, who carries with him none of the baggage of the US neoconservatives and benefits from enormous international goodwill, provides the US ruling class with the opportunity of re-inventing itself and strengthening the longer-term interests of US imperialism. That may well mean a more confident assertion of imperial interests in America’s backyard.

The immediate US response to Chávez’s referendum victory was a cautious one. A state department spokesperson said: “For the most part this was a process that was fully consistent with democratic process.” However, this may not be an indication of the approach to Latin America that the new administration will formulate.

Hillary Clinton, in confirmation hearings as the new secretary of state, bemoaned the fact that US neglect of Latin America had created a vacuum filled by Chávez, “who has tried to use this opportunity to advance outmoded and anti-American ideologies”. Clinton labelled Chávez “a democratically elected leader who does not govern democratically”.

Clinton’s deputy at the state department, James Steinberg, during his own confirmation argued the US should provide a “counterweight to governments like those currently in power in Venezuela and Bolivia which pursue policies which do not serve the interests of their people or the region”.

Obama himself during the election campaign characterised Chávez as “despotic” and, in an interview on a Spanish-language TV station on the eve of his inauguration, accused Chávez of having “impeded progress in the region” and of “exporting terrorist activities”. The latter was a reference to accusations made against Chávez of supporting Colombia’s Farc guerrillas.

And last week’s human rights report from the state department was highly critical of Venezuela, commenting that “the NGO community noted an erosion of democratic and human rights, with potentially severe consequences”.

The economic hurricanes (to quote a phrase of Chávez’s) devastating the global capitalist economy place all geopolitical considerations in the balance. Which powers will emerge strengthened, which weakened? What will become of US hegemony? Is a multipolar world a realistic possibility? The coming months and years will tell, but in Latin America the outcome of the contest between Obama and Chávez will be revealing.

A programme for the working class

Speculation about any reconfiguration of international capitalism and the relations between imperialist powers assumes that the working class will not act - the social force that really can throw all pre-existing expectations up in the air. But is the working class any closer to ruling in Venezuela?

Over the last year the nationalisations that Chávez carried out in 2007 (of the EdC electricity utility and the CANTV telephone company) - along with concessions to foreign companies in the Orinoco heavy crude oil belt - have been extended to gold mines, cement firms, some banks (mostly recently of the Venezuelan branch of Stanford Bank) and the Sidor steel firm.

But the role of workers in these companies has not been strengthened. The moves towards some degree of workers’ participation or control that seemed significant a couple of years ago have generally stalled. In some cases local bureaucrats have effectively rolled back previous advances. Even negotiations over wages and conditions have taken place behind the back of the workers and their representatives. Trotskyist trade union leader Orlando Chirino - sacked for most of last year from his job at PDVSA after calling for a spoilt ballot in the December 2007 referendum - says that pay rises have failed to take large numbers of workers above the minimum wage, while 71% of public sector workers and half of all waged workers are on or just above the minimum level.5

The ‘Bolivarian revolution’ has never prioritised the organisation of workers. When it comes to popular mobilisation, Chávez’s focus has been on of the inhabitants of the shanty towns and increasingly of rural areas - where his support in the November 23 elections was most solid.

In the 1990s the left attempted to revitalise Venezuela’s historic trade union confederation, the CTV, by taking control from the bureaucratic leadership. This effort failed and the CTV supported both the 2002 coup - its leader standing alongside those of the coup on the day - and the 2002-03 employers’ lock-out that closed down the oil industry.

It was the action of the workers who successfully broke the lock-out that led to the formation of a new independent trade union centre, the UNT. The UNT showed great promise and soon exceeded the membership and ability to mobilise of the CTV. But the role of those factions within the UNT closest to Chávez have brought this project close to collapse. The August 2006 congress broke up in disarray when the most Chávista elements refused to accept that they had only a minority of votes and sought to block the election of a leadership - using the pretext that the UNT’s main priority should be another Chávez victory in that December’s presidential election.

In the intervening two and a half years there has been no meeting of the UNT executive, and the Chávez-loyalist Bolivarian Socialist Workers Force (FSBT) has been organising separately.

It is clear that Chávez is extremely wary of a vibrant workers’ movement with the ability to act independently. In his March 2007 speech launching the PSUV, Chávez spoke passionately against the concept of working class autonomy from the ‘revolutionary’ party. Quoting Rosa Luxemburg, he condemned such thinking as “poison from the fourth republic”.

How to understand the ‘Bolivarian revolution’? The ‘official’ Venezuelan Communist Party (PCV), which is in close alliance with the PSUV, reckons Chávez has discovered a new progressive social formation that transcends attempts to apply the categories of classical Marxism.

Its president, Jeronimo Carrera, argues: “Chávez has mixed Bolivarian thought with Christianity, because he is a Christian, and, on top of all this, some Marxist ideas. So, this revolution is a mixture of those three ideological building blocks.

“That’s why we came to the conclusion that we cannot say that this is a proletarian revolution, but it is not a bourgeois revolution. It’s not even a peasant revolution. It’s a Bolivarian revolution, a new kind of revolution … It is not a national liberation revolution ... It is wider. It means everything from Mexico down to Argentina and Chile. Even the West Indies.”6

In reality no political or social process can escape the imperatives of class society. A ‘revolution’ that is not led by the working class must result, after a very short time, in an outcome that is in the interests of another class. An individual or social formation may appear to stand above society and balance the conflicting interests of the major classes, but such a ‘Bonapartist’ figure - whatever their own inclinations may be - in fact rules on behalf of the class that dominates society.

Most of Venezuela’s capitalist class despises Chávez, but as long as they continue to rule Venezuelan society they will be the ultimate beneficiaries of Chávez’s actions - whether it is strengthening Venezuela’s position in the hierarchy of nations, establishing the foundations of a Latin American market or neutering the working class. None have been seen refusing to bank the high profits that have been readily available during the years of the oil boom.

If the current capitalist class will not cooperate, the ‘Bolivarian revolution’ will create a new capitalist class that will reap the benefits. A phenomenon that is already occurring with signs of a ‘Boli-bourgeoisie’ or ‘Boligarchy’ emerging. Daniel Hellinger, a US political scientist and commentator sympathetic to the Chávez regime, identifies two groups of ‘Boligarchs’: members of the old order who “changed their colours at the right time”; and a new group who “made smart decisions, built government connections, were very shrewd and just knew how to work the system”.7

The only strategy that can seize those opportunities that exist involves defending the independence of the working class. That means establishing independent working class organisations - not just trade unions, but, vitally, a Marxist party. And, especially given Chávez’s orientation, to seek to do so on a continental basis.

Unfortunately, the formation of the PSUV split the previously dominant C-CURA (Class, Unity, Revolutionary and Autonomous Current) faction of UNT that had also been involved in attempts to create an independent revolutionary party. Stalin Pérez Borges entered the PSUV, where he formed the Socialist Tide tendency, while Orlando Chirino stayed out and continues to look to form a new party independent of the PSUV.

Entryism is not necessarily an illegitimate tactic, but only if it allows communists openly to articulate their politics. The PSUV has inherited many of the top-down traits of Chávez’s previous party, the Movement for a Fifth Republic, and many of its dodgier personalities - characterised by some as the ‘endogenous right wing’. Attempts to expose corruption or take on the undemocratic bureaucracy within the party have proved difficult. National assembly member Luis Tascón, who did just that at the beginning of 2008, found himself summarily expelled. He has since formed the small New Revolutionary Path.

For working class militants a key aspect of the fight for working class independence is drafting a programme that points towards the working class taking the leadership of society. In Venezuela the working class has to address the extreme presidentialism of the political system and Chávez’s highly personalised rule. His insistence on bringing forward significant pieces of legislation as decrees - the most recent package of 26 laws was presented in July last year - when the national assembly is filled entirely with allies (after the opposition boycott of the last assembly elections) - verges on the bizarre.

It is not good enough to argue, as Orlando Chirino did before the referendum, that the economic crisis means that the proposed constitutional amendment was not a priority for the Venezuelan working class.8 If revolutionaries are serious about taking power, the way that the capitalist class rules is always a working class priority.

Arguing about whether there should be artificial limits on the number of times a politician can appeal to the electorate - a feature primarily of political life in the Americas - is beside the point. Communists should simply oppose presidential systems which, as Venezuela is demonstrating, are by their nature quasi-monarchies. Abolition of presidential regimes should be a universal feature of communist programmes. In Venezuela the demand that the post Chávez intends to occupy for the next 20 years be scrapped is the answer to his increasingly worrying cooption of the working class.


1. See ‘Chávez suffers major constitutional setback’ Weekly Worker December 13 2007.
2. R Foroohar, ‘The decline of the petro-czar’ Newsweek February 23.
3. ‘Chávez win revives vision of socialism’ Financial Times February 17.
4. ‘So long, super-cycle’ Financial Times December 10 2008.
5. Interview with Orlando Chirino: ‘Fixing the bathroom in a school isn’t socialism’ Permanent Revolution No9, summer 2008.
6. ‘Revolution at last’ Morning Star October 30 2007.
7. ‘Boligarchs rise to top in socialist Venezuela’ Financial Times December 2 2008.
8. Radio Juventud Libre, ‘El proceso revolucionario no necesita esta enmienda, sino medidas concretas contra la burguesía y el régimen capitalista’: www.rajuli.org.ve/view/noticiaShow.php?idN=466