FRFI 214 April / May 2010

Over a decade has passed since the Bolivarian Revolution swept to power in Venezuela under the leadership of Hugo Chavez. Five years later, Chavez announced that they were building socialism for the 21st century. However, while millions were pulled out of poverty by the government’s social ‘missions’ and employment creation, and marginalisation was reversed by the integration of the poor into national politics, the majority of the means of production remained in private hands and Venezuela’s dependency on oil exports, particularly to the US, continued. This contradictory situation raised questions – about the extent to which it was possible to build a parallel economy; state ownership, or socialised production, alongside capitalist industry and financial institutions – and about the limits to the revolutionary or socialist character of the Bolivarian process in Venezuela, without serious inroads being made to capitalist social relations and bourgeois political institutions. Under the leadership of Chavez and the United Socialist Party of Venezuela (PSUV), set up in 2008, the Bolivarian Revolution has begun to tackle those contradictions by extending state ownership and socialised production. SAM MCGILL reports from Venezuela.

This process is vital if they are to establish a rational economy, controlled by a national plan, less vulnerable to internal opposition and the dictates of international capital and protected from fluctuations in the international markets.

This is a dynamic and complex process which faces many challenges, not just from the official opposition, but also from opportunists and class opponents within the state sector and government institutions – pro-imperialist and petit-bourgeois managers and politicians. The recent period has seen battles over the nationalisation of industries and for the democratisation of their operation through increased workers’ control.

A new model for a better quality of life

‘We can’t sing victory yet, but we should ensure the people know about these major advances and the creation of a new model that will generate a better quality of life and more opportunities for all.’ Hugo Chavez (2010)

With these words President Chavez inaugurated the second ‘Bicentennial Supermarket’ in Zulia State in March 2010. The first was opened in Lara State in February. These new supermarkets are part of the publicly-owned Corporation of Socialist Markets (COMERSO) network, expanded with the recent purchase of 80% of the French owned CADA chain of 35 centres with over 5,000 workers. The latter supermarket was stocking food beyond its sell-by date, abusing its workers and, by marking up prices, contributing to speculation following the realignment of Venezuela’s national currency, the Bolivar, in January.

COMERSO recently opened six new stores offering subsidised food, sound equipment, computers, furniture, clothing, domestic goods and more, all produced in countries that are member states of the Bolivarian Alliance for the Americas (ALBA) and sold below both unregulated market prices and prices fixed by the state. COMERSO promotes consumption of domestically produced foodstuffs in a drive to reduce imports. For example, the state-owned Venezuela Agrarian Corporation will supply dairy products to the COMERSO stores.

Venezuela has been making progress in reducing its heavy dependence on food imports. In 2009, its National Seed Plan produced six million kilos of seeds and the newly-established Marisela Corporation has begun planting rice and raising livestock on land expropriated from large private estates in Apure State. With the assistance of Vietnamese agronomists, within four years the government expects to have cultivated 50,000 hectares of expropriated land to produce rice which will be sold for 50% cheaper than other grains, and will be free from agro-chemicals. In addition to production goals, Chavez has emphasised the importance of raising the consciousness of workers in expropriated and nationalised plants and enterprises: ‘Each store should be a school. Workshops, debates and discussions should be incorporated into our new work model.’ This is essential to prepare workers for the decentralisation of control and participation in management and is part of an ongoing effort in various heavy industry plants and factories expropriated over the last five years.

The battle for workers’ control

On 7 May 2009, Venezuela’s National Assembly passed a law giving the state control over a range of activities connected to the oil industry and previously run by multinationals. The next day the government expropriated 300 boats, 30 barges, 39 terminals and docks, five dams and 13 workshops on Lake Maracaibo where there are large crude oil reserves. Later that month, the government withdrew a contract for running a gas compression plant in Mongas State from the US company Wilpro Energy services. Using the same law, it then nationalised the Consigua steelmaking complex (jointly owned by Japan’s Kobe Steel and Argentina’s Techint), the Tavsa steel tube plant and the joint BHP-Billiton/Sivensa company’s subsidiaries, Orinoco Iron and the Venprecar iron briquette manufacturers, and Matesi iron briquette producer in Monagas State. Workers had been pressing for the nationalisations.

These efforts to place control over production into the hands of the state and the workers are part of the Socialist Guyana Plan, which aims to reorient industries towards manufacturing products for domestic consumption, rather than for raw material exports, thus converting energy-intensive processes such as liquid steel production into less energy-intensive manufacturing (James Suggett, Venezuela Analysis, 9 January 2010). The Socialist Guyana Plan was drafted in May 2009, by working groups of over 2,000 trade union representatives, and will result in increased worker control of management and retraining. During a ‘Socialist Transformation Workshop’ attended by 400 workers, Chavez, quoting Che Guevara, insisted that: ‘Every factory must be a school to educate, to produce not only briquettes, steel and aluminum, but also, above all, the new man and woman, the new society, the socialist society.’

The recent appropriations add to other industries previously nationalised – SIDOR, Bauxilum, Carbonorca, Venalum and ALCASA – and run under the Venezuelan Corporation of Guyana (CVG). The results of these nationalisations have been mixed. CVG Venalum has maintained high levels of aluminium production with increasing levels of workers’ control. However, SIDOR and ALCASA have been fraught with internal problems caused by inadequate and obstructive management leading to crises of production. Although Chavez and workers and revolutionaries in the left wing of the PSUV repeatedly call for active workers’ control, the conservative wing within both the Party and management of many of these state companies block this. In ALCASA, an aluminium manufacturer, which has always been a state company, the worker co-management that was developed in 2004 through workers’ struggle and radical leadership, crumbled in 2007 as the workers became disillusioned. The old management remained intact or ensured that their business contacts and friends replaced them, actively obstructing the development of workers’ control.

In the case of SIDOR, a steel and iron producer nationalised in 2008, the management has been opposing the mandatory electricity regulations introduced to deal with the acute drought in Venezuela since September 2009. Electricity consumption has increased more than 40% in a decade, reflecting a growth in economic activity particularly in the last five years, but 72% of Venezuela’s electricity is generated from the Guri dam, which saw alarming water level falls as a result of the drought. In addition to distributing millions of energy saving light-bulbs and investing in 30 new thermoelectric and hydroelectric facilities nationwide, the Ministry for Electricity instructed heavy industries to reduce energy consumption by up to 500 megawatts and to focus on domestic goods production, instead of materials for export, which involve energy-intensive processes. SIDOR’s management, however, is doing the opposite. The Workers’ Control Collective and workers organised in the Revolutionary Front of Steelworkers inside SIDOR protested and held strikes throughout 2009, as have workers in the other CVG industries listed above, who have opposed the closure of plants, the reduction in production and corrupt management, and are demanding assurances that they will be paid.

Other nationalisations have been more successful. For example, at La Gaviota sardine plant in Cumana, which was nationalised on 1 May 2009, production has been high and continuous (previously three days a week), orientated to the domestic market (previously for export only), workers receive fixed salaries and benefits in kind and are actively taking control of the management of the plant.

Workers’ struggles win collective contracts

Another promising achievement is the ‘collective workers’ contract’ with the new electricity corporation CORPOELEC, signed in December 2009 after 18 months of workers’ struggle, including marches, protests and demands for the management to resign. CORPOELEC was formed in 2007 after the electricity sector was nationalised and 14 private companies were merged into a single enterprise. However, much of the previous management remained with disparities in pay and working conditions left over from the private firms. The collective workers’ contract provides for equal pay, benefits and working conditions, enables direct workers’ participation in the management of the company, outlines how a socialist enterprise should function and promotes better relations in production. This struggle has raised the workers’ consciousness and encouraged them to transform the trade unions from defensive organisations into class consciousness organisations for the transition to socialism.

Also in early December 2009, Venezuela’s main trade union federation, the National Union of Workers (UNT), held its First Extraordinary Congress to re-establish itself after it collapsed in 2006 due to infighting. The Congress adopted key principles including organisational and political autonomy, internal democracy, worker solidarity and internationalism, and the rejection of ‘class conciliation’. Nationwide grassroots elections within the UNT are scheduled for June 2010.

The CORPOELEC collective contract follows the oil workers’ collective contract agreed in the national Petroleum Corporation of Venezuela (PDVSA) in January 2009. There are divisions between various trade unions in the oil industry but in October 2009 the PSUV won a majority in the United Federation of Venezuelan Oil Workers (FUTPV) elections, giving it more leverage within PDVSA. A recent US Geological Survey report estimated Venezuela’s reserves at over 500 billion barrels of petroleum, which could guarantee extraction for another 200 years, so the PDVSA will remain a driving force in the transition to socialism.

Bicentenary Bank paves the way

Venezuela’s financial sector is looking positive following the incorporation of four expropriated banks into the state bank BANFOANDES to form the new Bicentenary Bank, holding 20% of bank deposits in the country. Together with the Bank of Venezuela (nationalised in 2007), the state now controls 20-25% of the banking system. The Bicentenary Bank is administering a new fund which has 3bn Bolivars to invest in food production, coffee, metals, textiles, chemicals, domestic and industrial goods and for building homes. The priorities are import substitution projects and those to diversify exports. The Venezuelan government reports $35bn in international currency reserves, finishing 2009 with a 30bn Bolivar budget surplus, approximately 15% of total state spending – thus exposing the lie of Chavez’s opponents who claim that he is bleeding the country dry with investments in social missions.

Worker occupations and state interventions in private companies pave the way for future expropriations and nationalisations. For example, in early March a sugar mill found to be hoarding 4,000 tonnes of sugar, contributing to a nationwide sugar shortage, was taken under state control for 90 days, after which a decision will be made about its future. As a result of mill workers’ and community council inspections, another sugar mill has since been implicated and temporarily occupied by the government. Two coffee processing plants were occupied in August 2009 after the Agriculture Ministry obtained evidence of hoarding, speculation and smuggling to Colombia. One of them was nationalised in November 2009.

Elections for the National Assembly take place on 26 September 2010. In the run up to those, these expropriations and nationalisations are vital to secure public support, advancing the revolutionary process and reducing vulnerability to its enemies’ machinations. The outcome of this battle is uncertain. For Chavez, the revolutionaries in the PSUV and the workers fighting for participatory control, it is clear that state-owned companies ‘that remain within the framework of state capitalism’ have to be managed by their workers in order to become ‘socialist’. However, each step taken to weaken the political and economic power of international and domestic capital brings confrontations with the enemy within the Bolivarian process: pro-imperialist and petty bourgeois managers working to obstruct production in order to ‘prove’ that nationalisation is a mistake and the corrupt mayors, governors and right-wing social democratic tendencies within the Chavista alliance. If the revolution is to progress, the Bolivarian workers, activists and radical youth need to uncover and undermine these attempts to destabilise the Bolivarian process.