‘Economic coup’ against Chávez crumbles

FRFI 171 February / March 2003

For ten weeks an acute struggle has taken place over Venezuela’s future. Managers of the national oil corporation – Petroleos de Venezuela (PDVSA) – with leaders of skilled trades unions, prompted by big businesses, carrying out economic sabotage to get rid of President Chávez. With their military allies, they suffered defeat in a coup attempt in April 2002 (FRFI 167). A second planned coup was aborted on 25 June. Several assassination attempts have been made on the President’s life. Then, in August, the new ‘Patria para Todos’ party called for an ‘economic coup’. ‘It’s all part of our strategy,’ said Carlos Ortega, fraudulently elected head of Venezuela’s CTV union federation. So on 2 December the business sponsored opposition launched its most serious attempt at a business shutdown. ALVARO MICHAELS reports.

The centre of this struggle focuses on legislation that came into force on 1 January 2003. The new Hydrocarbons Act gives the state a 50%+ stake in new joint ventures in the oil sector and gives it 30% royalties on all extracted crude. In 1974, PDVSA delivered 80% of its income to the state and kept 20% (as ‘operating costs’ entering the coffers of foreign companies and its directors and managers). In 1990, the ratio was 50:50 and in 1998 it became 20:80! The government is stopping this theft. The New York Times denounced the Hydrocarbons Act as a ‘grave risk’ to foreign investment.

Furthermore, the new Law on Land and Agricultural Development legalises the government’s takeover of idle estates and other land, and its distribution to landless and homeless families. The Law on Fishing and Aquaculture favours small fishermen over large monopolies. These and other legal changes (see FRFI 167) are being fought against tooth and nail by the wealthy in the courts, with administrative obstruction and now by business stoppages.

Since 1998 there have been increasingly serious clashes between the supporters of President Chávez and those of business, whose self-appointed ‘democratic co-ordinators’ rejected a joint ‘declaration against the use of violence and intolerance’ with the government on 12 November. On the same day Alfredo Peña, the mayor of Caracas, allowed his metropolitan police to fire on pro-Chávez demonstrators, killing one and wounding 20. He also attempted to force pro-Chávez police officers into early retirement. After armed confrontation between police officers on opposing sides, the President deployed the National Guard on 16 November to take control of ten city police stations and replaced the police chief. Yet the Supreme Court ordered Chávez to restore the force’s autonomy on 19 December.

Labour aristocracy walks out

Business’s current anti-government ‘lockout’ was organised after 28 November when the government rejected an illegal decision by the National Electoral Council (CEN) to call a referendum on 2 February over President Chávez’s tenure. From 2 December the business élite decided to stop all fuels for electricity generating stations, for the aluminium and steel industry, water distribution, transport and domestic use, preventing the filling of oil tankers. This blocked food supplies to the workers. In the first week about 30,000 technicians and administrative personnel stayed away. The National Guard arrested several PDVSA managers trying to lock and weld shut the gates of refineries to prevent production workers from entering. Most production workers in oil extraction and refining did not leave their posts.

By 5 December, 23 oil tankers were unable to load, bringing most exports to a standstill. In some cases, technicians shut off computerised refinery controls and the US company, Intensa, running the computers, passively obstructed attempts to restart systems. ‘What is going on in my country is not a strike,’ Chávez charged. ‘It is a coup attempt disguised as a strike’ organised by ‘terrorists who are blocking oil and food distribution and sabotaging refineries.’ Fires were started at some oil wells. The National Guard and many production workers manually restarted operations, whilst support from volunteer technicians from OPEC countries was sought.

About 20% of the working population were locked out on the first day, reduced to 10% after three days, despite a vitriolic mass media campaign supporting the strike. The media continuously spreads anti-Chávez lies. He is supposedly giving free oil to Cuba, wants to impose communism, is dealing with North Korea over atomic weapons, has funded Al Qaida, is a dictator, ruining the economy (sic!) and so on.

In Caracas on 6 December, the day before a major pro-government rally, a gunman opened fire on supporters of the military officers on trial for the April coup attempt (see FRFI 170). In exchanges of fire – guns are to be seen everywhere – three people were killed and 28 wounded. Security forces arrested seven people; one, a Portuguese ‘drifter’, admitted opening fire. Such provocation provided grist for the anti-Chávez mill. Later, Vice President Rangel, attending a wake for one of the victims, said the government had videotape showing city police were responsible for the deaths.

The mass of workers is furious with the old élite and is demanding strong measures from the President. On 7 December, despite the night’s shootings, more than 400,000 peasants, workers, students and others marched in Caracas supporting the President. José Prieto, Minister of Defence, said the armed forces would defend the oil industry so that Venezuela could meet its international obligations. Constant pressure, including bribes, has been used to get army officers to support the opposition. The President again called for an end to the lockout, leaving open the possibility of declaring a state of emergency. The National Guard deployed at petrol stations prevented panic buying. Venezuelan navy commandos took control of the tanker Pilín León, allowing 280,000 barrels of petroleum to be unloaded. Brazil’s President Cardoso sent 520,000 barrels of petroleum to Venezuela as an act of support.

Olga Fonseca, Venezuela’s chargé d’affairs in Havana, warned of ‘the possibility of a low intensity war. The internal affairs of Venezuela have never been beyond the reach of foreign influences. The US is an important power factor in the region, it’s an important factor in the historical future of our countries’. Fonseca suggested that another coup d’état, Chávez’s murder, guerrilla war or low intensity war, were on the opposition’s agenda.

On 14 December, the ‘opposition’ organised a large demonstration, but within two days almost every store in the wealthy neighbourhoods of Eastern Caracas had opened for business. Their losses were mounting. The opposition kept agitating for a ‘mega-march’ or the ‘taking of Caracas’. Carlos Ortega announced there would ‘not be any Christmas for Venezuelan families’ and declared the stoppage indefinite. However all holiday season flights from Caracas to Miami for the middle class were booked solid!

Before Christmas the Supreme Court declared the strike illegal; contempt of court can be punished by up to 15 months’ imprisonment. By now 90% of all contracted oil industry employees had returned to work. The remainder, the managers, were to be fired if they did not also return.
On 22 December Chávez informed the country of PDVSA’s reactivation and the dispatch to the USA of 2.18 million barrels of oil in order to maintain Venezuela’s commercial commitments. The army now guarded installations, ports and pipelines; PDVSA has been reorganised and split into two regional entities; its Caracas HQ will be largely dismantled.

On 23 December opposition leaders desperately tried to block highways into Caracas – typically four or five cars or trucks per route. They were met by angry workers and quickly disbanded after violent clashes at ten locations. Vice President Rangel announced that banks would return to their usual schedule, apparently ending their partial work stoppage. The anger of people denied access to their own money had brought huge pressure on the National Banking Council to reopen branches.

In an increasingly desperate situation for the propertied classes, Caracas police attacked pro-Chávez demonstrators on 3 January 2003, killing two. 20,000 marchers demanded justice for the two murdered youths on 5 January. At night, police fired shots and tear gas at a vigil for one of the victims. ‘How long will metropolitan police officers continue being used to repress the people?’ Chávez demanded. ‘We will find the assassins of Oscar Gomez and Jairo Gregorio Moran wherever they are hiding.’

Banks again closed on 9 and 10 January. Thousands of workers could not access their wages, but the banks have admitted defeat for the moment, accusing the government of threatening them! As we said in FRFI 152, ‘Chávez...has the massive pressure of a young and energetic coalition representing the mass of workers urging him into action’. It is the constant action of the mass of workers that threatens the banks, not fear of government fines.

By 10 January, to guarantee food distribution, Chávez ordered the military to prepare to seize food stocks and plants made idle by the now 40-day-old strike. The National Guard reopened two Coca-Cola and other plants to ensure supplies of bottled water. The US ambassador protested!
On 12 January opposition marchers in Caracas urged the army to oust Chávez. But after tens of millions of dollars in losses, the country’s middle class was now seriously affected by currency devaluation, diminishing the value of their salaries and reducing business access to credit. Continuing their strike could now be devastating. Matters are not going well for the leaders of the ‘economic coup’. By the last week of January the Spanish government unofficially agreed to safe conduct and asylum for Carlos Ortega and Chambers of Commerce & Industry president Carlos Fernandez. On 22 January these two flew to New York, officially to a ‘dog and pony show’ at Rockefeller’s ‘Council of The Americas’. That day the country’s Supreme Court declared the CEN referendum decision invalid.

The next day over 300,000 marchers again demonstrated for Chávez. Shipping pilots returned to work. By the end of January, 5,111 strikers in the oil industry had been sacked (mostly managers). Nevertheless, oil supplies had been more than halved, from 3.1 million barrels per day (bpd), returning to 1.5 million bpd by the end of January, losing the country an average of $50 million every day.

US interference
Since the defeated April coup, the opposition has been supported by the USA within the Organisation of American States. Yet on 17 December the OAS, for the first time in the organisation’s history, rejected a major US initiative calling for elections. It resolved (32-0 with two abstentions) ‘to fully back the democratic and constitutional legitimacy of the Bolivarian Republic of Venezuela, whose government is led by Hugo Chávez Frías, and to reject, categorically, any coup attempt or alteration of constitutional order that seriously affects democratic rule’.

Now the USA wants to subvert the Friends of Venezuela group proposed by Brazil’s President Lula da Silva. Because the PDVSA usually provides the USA with 15% of its oil imports the continued struggle has inconvenienced the USA, but imperialism is not reconciled to the Chávez government. So now, along with ex-President Carter’s travelling peace circus, meeting in Washington at the OAS, the opposition’s call for early elections is being repeated.

Attacking the restructured PDVSA in December, Moody’s Investors Service downgraded its credit rating, as well as four heavy oil projects the state firm is developing with foreign oil companies such as Conoco-Phillips, Exxon Mobil, and Total-Fina-Elf. On 21 January foreign exchange markets were closed for five days and restrictions put on foreign currency withdrawals. Unemployment now stands at 17% and inflation is 30%. Oil exports account for half of government revenues. Venezuela has lost over $2.7 billion in lost oil revenues, money for the government’s social plans.

Yet the abolition of school fees means 600,000 more children go to school and the cost of staples to the poor had fallen by mid-2002. Working class opposition to the coup attempts has stiffened. Alexander Carrizo, a shoe repairman says ‘They can carry a coup against Chávez, but then we come: those of us who are with Chávez’. Nellie Yaerte, local community leader, says: ‘There is going to be a civil war here if they topple Chávez. With all the problems, going back to what we had before 1998 will take away any hope for a better future, any hope to get rid of the slavery to the rich.’


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