27 January 2019 00:23

What is going on in Venezuela?

Blatant presence of the USA in events should also be expected to exert a moderating influence even on circles that oppose or are critical of Maduro.

What is going on in Venezuela?

Photograph: AA


Ertan EROL

Many people and groups on a national and international scale were known to have urged Maduro not to swear in for a fresh six-year term on 10 January in Venezuela, where inflation has proved uncontrollable and the national currency is undergoing constant devaluation, petroleum production is constantly declining in a country with the world’s most abundant petroleum reserves and key foodstuffs, medicines and health equipment, intermediate goods and spare parts are unavailable, and from which hundreds of thousands have migrated as straits become ever direr. Maduro was re-elected president in the elections last May, which were uncontested and boycotted by a large part of the opposition, but the turnout in the election was a mere 46%. The holding of the elections before they were due and the low turnout form the premise for the opposition and international public opinion’s argument that Maduro is not the legitimate government.

The Lima Group, set up with the inclusion of fourteen countries in the region to allegedly find a democratic solution to the problem in Venezuela, called in January on Maduro not to assume office on 10 January and announced that otherwise economic sanctions would be implemented against Venezuela, and Mexico alone disassociated itself from this decision. The Organization of American States (OEA) followed the Lima Group. The declaring himself president on 23 January, the day on which Venezuela was liberated from the Pérez Jiménez dictatorship, by Juan Guaidó, unknown until the past two or three weeks and president of the National Assembly that Maduro has eliminated by convening a constituent assembly, set off this chain of events in the international arena. The USA’s, the OEA’s and Lima Group member countries’ recognition within minutes of Guaidó as the legitimate interim government serves to indicate that this process has been long in the planning.

Venezuela underwent an important socio-economic transition with Chavez’s coming to power in 1999. With nearly 50% of the natural resource-rich country living under conditions of poverty, the Chavez administration managed to reduce this to 27% by 2012 through increasing subsidies on petrol and foodstuffs, implementing social and economic programmes and increasing contributions towards education and health services. This situation clearly cannot be attributed purely to rising petroleum prices. With Chavez upsetting the economic structure based on distributing the country’s petroleum income, the ruling oligarchy and capitalist class becoming deprived of this income and it becoming clearer whom the administration would transfer the proceeds of petroleum income to, this created opposition to the government. For his part, Chavez tried to surmount this opposition by securing the backing of the sections of society that had been condemned to poverty and the army and setting about the task of constructing the participatory democracy that he called 21st Century Socialism.

However, it is hard to say that the socio-economic transformation in the country in this period was accompanied by a radical transformation of the economy. The Chavez administration basically overvalued the country’s currency, the bolivar, while subsidizing basic consumer goods and petrol. However, the economy was never equipped with a central and planned structure. Factories that were acquired through haphazard and small-scale nationalizations were not run successfully and were closed. The private sector and the capitalist class that dominated it stayed in existence and even profited from petroleum income by engaging in arbitrage thanks to the strong bolivar. Price controls and inflation helped to further enrich the existing oligarchy. Bolivarian socialism, rather than breaking away with its petroleum income from formal integration into global capitalism, preserved the existing structure.

In the Maduro period, conversely, the economic situation spun out of control as petroleum prices fell. The Bolivar fell faster on the domestic market as cheap dollars were bought at state-supported official prices and sold at high prices on the black market. Subsidized goods and petrol gave rise to a huge smuggling sector and as low-priced products began to be sold particularly in Columbia, this led to a shortage of these goods on the domestic market and the creation of a black market. The black market and arbitrage mechanisms undoubtedly also created groups within the Maduro administration and army who benefitted from such trade and poverty also spread rapidly. In short, Bolivarian socialism’s transformation in the socio-economic field was not complemented by a transformation into a planned economy, the existing gains vanished as the crisis deepened and the traditional right and national capital in the country spearheaded an organized plan along with the USA to deepen this crisis and bring about a change of administration.

The events of the past month point to the making of a plan hatched to bring about a change of administration by essentially leaving Venezuela isolated in the international arena, bringing all sections of society weary of economic crisis with the addition of the impoverished masses onto the street and mobilizing groups in the army that are dissatisfied with Maduro. Ongoing events in Venezuela appear to have been instrumental in the right and far-right administrations in Brazil, Columbia and Argentina rapidly rallying round in support, while in Mexico, in the recently ousted right also joining this group and harshly criticizing the new government.

It has become apparent that this plan has no take-up for the time being in the army. However, this should not be taken to mean that the situation can be kept under control. The opposition will aim to wear the government down with a series of drawn-out actions as in 2017. Furthermore, the USA has announced that it does not recognize Maduro’s decision yesterday for US diplomats to leave the country within 72 hours and has stated that Juan Guaidó constitutes the country’s legitimate administration. Viewed in these terms, the US mission in the country and the fate of Guaidó himself will stoke up the tension. However, the blatant presence of the USA in events should also be expected to exert a moderating influence even on circles that oppose or are critical of Maduro.