A currency devaluation, military expropriations, demonstrations, resignations, TV channel closures, more demonstrations – it’s been an eventful start to 2010 in Venezuela.
There are whispers as to the extent of the military's loyalty to Chávez
The country hadn’t even returned to work from the Christmas break when they were hit by the first coñazo, that being the devaluation of the bolívar from 2.15/US$1 to 2.6/US$1. More punishing for Venezuelans, as El Libertario note, was the creation of a new exchange rate – the so called ”dólar petrolera” – at 4.3/US$1, which will affect the import of anything the government deems to be ‘non-essential’. In one fell swoop, the new exchange rate has doubled the price of all electronic domestic goods, cars, cigarettes, alcohol, amongst other goods. Rather curiously, the announcement was made on 8th January, a Friday night, to be executed the following Monday 11th, leading to a 48-hour mad consumer rush in Caracas. The morning saw bizarre scenes of shopkeepers battling would-be buyers to close their shutters early in an attempt to keep their shelves full for Monday, in order to sell their goods at the new rate. On my street, the Guardia Nacional arrived to protect one Arabic electronic store.
The government explained the sudden presence of soldiers in shop fronts as an enforcement of ‘fair’ prices. At this point, the regime was still largely denying that their announcement would cause inflation, and tried to shift the blame for rising prices onto “speculation” by big chains. Chains which refused to comply with Chávez’ order to keep their prices down saw their military occupation turn permanent, as was most prominently the case with the French-owned supermarket chain of Exito, which is now a state asset. Other expropriations have taken place unofficially, with bands of franelas rojas (redshirts aka chavistas) occupying shop floors at the (unconfirmed) behest of the local authority.
While the chavista regime did verbal gymnastics in an attempt to justify the devaluation (dismissed as “neoliberal” by Chávez himself just last year, when the IMF made it a condition to giving the country a loan), claiming that the increased incomes would be reinvested in the misiones (the wide-ranging, but now floundering, governmental social programmes), the devaluation spelt out in starkest terms - even for the most isolated, uninformed Venezuelan - the torrid state of the national economy. After 11 years of so called ‘socialism’, the average Venezuelan has seen his/her purchasing power fall dramatically: figures show a flat in Caracas is now worth 500 months’ wages of a minimum salary, as opposed to 220 in 1998. Desperately trying to shore up his support amongst the unions and working class, Chávez announced a staggered 25% increase in the minimum wage, a measure which - patronisingly – depends on the working class not doing any maths, since in real terms it’s a drop in the ocean of the wage cut enforced by the devaluation. In a nation in which approximately 85% of all goods are imported (including 60% of all foodstuffs), El Libertario calculate that the doubling in price of most imported goods will lead to a 62% real term decrease for the 60% odd of Venezuelan workers who are paid minimum wage.
Moreover, with reducing the national debt now an economic priority for the incumbents, the efficiency of the state industries will now, once again, be under review. Books-fiddling at PDVSA (the state-owned oil company) largely kept it afloat during the oil price’s plummet in 2009, but the sweetheart deals with Cuba and other anti-imperialist allies with goods in exchange for cheap oil have restricted the profitability of the nation’s main export. Meanwhile, the misiones, although good PR and excellent news for unemployment figures, have ultimately failed in their developmentalist aim of creating a skilled, efficient reserve labour force, and as they continue to malfunction and stutter, Chávez must be looking for a way out from the one policy that has retained his populist appeal for all of these years.
However, as the episode over electricity rationing demonstrated, populism itself is still very much the staple of chavismo. The day after the devaluation came into force, January 12th, saw the implementation of electricity rationing in Greater Caracas, with each of the city’s six parroquias due to endure four of every 48 hours without power. On the first night, the region around the Estadio Olímpico, the sports stadium where Caracas’ baseball matches are held, was scheduled for a blackout from 12-4am, leading to a crucial match being abandoned at 11pm, with the two teams tied. In a nation full of baseball fanatics, this was a gross miscalculation on the government’s part, and the whole city – loyal chavistas included – were furious. With confusion abounding over the timetable, Chávez suddenly postponed the programme and fired the Electricity Minister just before midnight on the second night, some two minutes before my zone was due to go dark for the first time. A new schedule has supposedly been announced though, with the programme due to start after the end of the baseball season. Blackouts have also been restricted to the daytime (when temperatures can reach 35 degrees), as the homicide and robbery toll in the barrios affected by night-time power cuts made ugly reading.
A scarce few days later, the annual commemoration of the popular toppling of military dictator Pérez Jiménez fell on Saturday, leading to the opposition calling a ”gran marcha” against chavismo. The government – obviously - responded by calling its own demonstration. The rendezvous for the chavista demonstration was right outside my current address, and, as well as the comparatively small numbers (previous marches would have shut the city down), I noted the subdued atmosphere, with no chants and few banners. The chavistas appeared to be running out of ideas for slogans! Chávez though, had no shortage, as he demonstrated when he addressed his supporters in Plaza O’Leary, demanding "absolute loyalty because I am the people, dammit!" His messianism was matched by some of his supporters, who were quoted in the newspapers claiming that recent events correlate with the Bible, or are the fault of "the atmosphere".
Meanwhile, the opposition bleated feebly about democracy on Globovisión (conveniently forgetting about the failed 2002 coup, of course), while RCTV allegedly refused to broadcast a government message late on Saturday night. This was just the excuse the regime needed to finally shut down the channel, which had supported the 2002 coup attempt (with their owners funding it) and were booted off of terrestrial in 2007 in revenge. In response, just like three years earlier, right wing students from the private universities are once again marching. Last Monday saw the death of two students (one chavista and one antichavista) in the Andean city of Mérida, both at the hands of “armed civilians”. This was followed by a flurry of wild rumours in Caracas, largely sent by text message. When, at midnight, Caracas finally did erupt into shouts and explosions, it was – somewhat inevitably – the celebrations of Leones de Caracas levelling their series with Magallanes de Valencia at 2-2. Baseball, once again, took priority.
Not, of course, that the series finale was without its power cuts: three were in fact registered over the seven nights of play – the last one happening immediately before the final innings of season, with Leones about to defeat Magallanes for the Championship in Magallanes’ stadium in Valencia. Due to Chávez’ stated affiliation to the Valencia team, shouts of ”ES EL GOBIERNO!” could be heard in the bar I was drinking in. Eventually, the lights came back on and Leones were able to complete their triumph.
The demonstrations though, continued into their fifth day on Friday. The arterial roads of Valencia – Venezuela’s industrial powerhouse, some two hours outside of Caracas – were blockaded for much of the week, while human rights groups and international governments have started to raise their eyebrows at photographs of injured kids, pockmarked by rubber bullets and choking on tear gas. In Caracas, the private universities have been joined by members of the big state uni – Universidad Central de Venezuela - leading to clashes between opposing cliques wanting to dictate the marchers’ ‘message’.
Reports of clashes in rural areas – away from large, urban universities – leave me wondering whether these marches will generalise beyond the petty gripes of rich students, whose complaints about a misinformational TV channel pale in comparison with the economic woes the nation as a whole is facing. Some of the shrewder ‘student representatives’ have attempted to link their actions to electricity rationing and the devaluation. There are cautious signs of their demonstrations and motorway blockades slipping out of their control and beyond the manipulations of the opposition parties, who will only milk them for their own gain in this year’s parliamentary elections. While Caracas has been the focus of lazy news reporters for TV channels and the printed press, all of which have a stake with either Chávez or the opposition, the capital has been somewhat subdued in comparison with conflicts in El Interior. Outside of Caracas, the chavista-antichavista split is not quite as strong, and some of the franelas rojas mobilising must be feeling the pinch too, as well as flinching at the actions of quasi-paramilitaries on the streets against unarmed – if irritating – young men and women. We can but wait and see whether events develop or peter out.
As for the Chávez regime itself, it has spent the last few days making thinly-veiled threats against the opposition. On Tuesday, it was ‘leaked’ that the milicias bolivarianas (Chávez’ secretive volunteer reserve army of workers) consist of nearly 150,000 individuals “ready to defend the people”. On Thursday, he warned the opposition against attempting to organise another coup, telling national TV that “some people are already inciting serving soldiers and senior military figures…[this time] I won’t be that Chávez of 2002 who reached the verge of being overthrown”. Accusing those who criticise the regime of being ”guarimberos” (troublemakers/coup-plotters) is nothing new for Chávez, but the spectre of a coup – most likely coming from dissidents high up in the supposedly “socialist” and “educated” military - seems to be ever more present in Venezuela.
In amongst all this mess, Chávez’ Vicepresident and Defense Minister, alongside his wife (the Environment Minister), suddenly resigned from their ministerial posts. In yet another PR offensive, we were assured that both resignations were “purely personal” in nature and do not equate to any disagreement with the policies of El Jefe Comandante. It’s still unclear whether these resignations were forced, or whether the Carrizales pair represent rats leaving a sinking ship before it receives an attack from the armed forces. A leading sociologist – ever the ruling class’ barometer – recently compared Venezuela to a pressure cooker: “in a state of collective irritability” over “everyday” issues like water and electricity rationing and inflation. The mood, he wrote, is in fact similar to that of immediately before the caracazo riots of 1989. Time will tell as to what will happen in the coming days, weeks and months.
Comments
another great blog, thank
another great blog, thank you.
We should edit the content types on here to allow blog posts to be promoted to be front-page articles...
Appreciate this blog cheers.
Appreciate this blog cheers.
Very interesting and here was
Very interesting and here was me thinking Chavez was going to stand opposed to fucking capitalism, what a farce.
Though this could be used as pro-west american propaganda, in some place.
Quote: Though this could be
Yes indeed this caimen is nothing but the lap poodle of the imperialist, yankee running dogs!!!
You missed out
You missed out "pig"...
Incidentally (and hilariously), the horrific accusations by former poster Rise against El Libertario - which were completely debunked on here and resulted in him being banned - were recently used as a 'source' by someone in LAWAS and Hands Off Venezuela who is disingenuously attempting to paint the newspaper as "right wingers trying to trick the international left into believing they're anarchists". It was my first direct encounter with the pro-chavista international left, and I found it to be grossly ignorant, patronising and quasi-colonialist in its depiction of Venezuela. Here's the thread in question: http://libcom.org/forums/thought/the-cra-el-libertario-in-venezuela-as-black-propaganda-for-the-us-state-department
There, that's off my chest. :)
Thanks to everyone who read this...it took a while to prepare and I actually did some research this time. ;)
Cheers, i've added a
Cheers, i've added a prominent disclaimer to the smear thread and changed the title.
Hi Caiman - could you say
Hi Caiman - could you say some more about the water shortage?
The rightists (whose "colour revolution" funded by the National Endowment for Democracy etc. is well underway, and is planned to culminate at the time of the September election) are blaming it on Chavez. Chavez meanwhile blames it on drought, supposed to be caused by El Nino. It's quite interesting that the question is not being reported in the western media (leaving aside the anti-Chavez propaganda) as to how much blame should be apportioned to drought and how much to corruption.
Apparently a big part of the problem isn't just a shortage of water flowing along the pipes to the major towns, it's a shortage of water at the hydro generating stations, which means there's insufficient electrical power to run the pumps.
If such big water problems have been caused by environmental change in a country with a population of 27 million, then that's a big issue. Similarly, if corruption has caused the problems, then that's a big issue too. In either case (or whatever mix we decide on), we wonder what's going to happen next, given that people who don't have anything to drink for a few days will die.
The question arises as to why a country with so much oil bases its electricity supply on hydrolectric power. Probably the answer concerns the cheapness of hydroelectric power, given the country's substantial natural hydro resources, and also the history of oil multinationals preferring to pump the oil out and sell it abroad rather than burn it to light the homes of the natives. (Although at the same time, successive governments have nonetheless allowed the price of car petrol to be very low indeed). Engineers are coming in from various places to change the energy mix. Sounds like a good idea.
The conspiracy theorist in me wonders whether someone's been sabotaging the computer systems which run both water pumping and electricity generation an distribution. Is this possible? Obviously electrical power should go first to water pumping rather than domestic lighting. Interesting that Chavez has told casinos to cut down on their lighting! How about shutting them down altogether?
I know there are water vans going round to some of the Caracas barrios, selling water at exorbitant prices, so the shortage is hitting people's pockets (and the poor most of all) as well as taking up people's time.
Sometimes when I hear the rightists blame Chavez, I tend to think hang on a moment, Chavez is not a rainmaker. You cannot blame Chavez for the drought. Corruption is a different matter, although of course a government under the rightists would allow even more corruption.
As for rationing, well if there's a water shortage then rationing is exactly what I would want to see, even if it doesn't solve the underlying problem.
Got any more info about the water shortage?
-arold
Quote: The government
Hi Caiman - can you explain where you're coming from, when you report the above?
If the British currency is devalued and Tesco hike their prices in response, I'd love to see soldiers go into my local Tesco store, get hold of the manager, and tell the fucker he had to put prices back down again.
You seem to be saying that the devaluation caused inflation and it wasn't the big corporations' fault for putting their prices up??
Do you think the soldiers should have said "no way, Jose, we refuse to act against supermarket bosses (or even managers) just to stop them putting prices up, because putting prices up is all Chavez's fault anyway"?
Chavez is getting the blame for water shortage (in which drought has played a large part, or if it hasn't, then I'd like to see an argument to that effect) and for supermarkets putting their prices up (even though his forces have acted against that happening, both at central level with nationalisation and at local level by sending in soldiers).
What is your take on the current 'colour revolution' US-funded campaign in the country?
Regards,
-arold-
I don't think he would be
I don't think he would be criticising these takeovers, just reporting them.
(deleted) (double post by
(deleted) (double post by accident)
I find sentences like the
I find sentences like the following quite peculiar:
It doesn't require much maths to know that the amount of money in this week's wage packet will only buy a half of the amount of food that it could buy last week. No government could fool people otherwise.
Some governments might be able to stop public recognition of what's going on. For example, in Britain food price inflation has been much higher than government statisticians admit who compile the Retail Price Index. However, in Venezuela it is clear that supermarket food prices are something that everyone's talking about, and there has been physical action in relation to food price movements at many supermarkets. I think it's great that people in Venezuela are realising that the supermarket owners and managers don't have to get things as they want them. We're miles away from that in Britain.
Whichever way you look at it, devaluation does not enforce a cut in real wages. What happens with real wages depends on 1) the amount of local currency in the wage-packet, 2) the prices in local currency of goods in the shops (and rents and bus fares etc.), and of course 3) the availability of goods that people want. Food, transport to and from work, and shelter are most important. I'd rather food prices be kept low even if mobile phone prices and the price of TV sets go through the roof. Since petrol costs the equivalent of a few pennies a gallon in Venezuela, transport prices aren't going to be a big problem. (I am willing to be corrected on this!). If rents are getting hiked, Caiman probably would have mentioned it, so I assume this isn't the case (again, corrections welcome). Food and water are the essential issues. Domestic electricity isn't such a big issue.
Caiman mentions the price of a flat in central Caracas. But how can this exemplify the movement of real wages? Most working class people don't own flats in central Caracas. It will generally be middle-class demand that has pushed such prices up. Most of these flats are privately owned and therefore when they're sold, they're sold on behalf of private owners, who don't get together to rig the market. These prices are set mainly by demand.
In particular, flat prices don't concern those on the minimum wage. I would quite agree that a much bigger rise in the minimum wage would be very welcome, but a 25% rise is substantial.
In a nation in which approximately 85% of all goods are imported (including 60% of all foodstuffs), El Libertario calculate that the doubling in price of most imported goods will lead to a 62% real term decrease for the 60% odd of Venezuelan workers who are paid minimum wage.
And did that newspaper's economics experts take into account nationalisation and that the army was going to be used to stop supermarkets putting prices up? It looks to me as though government action is preventing these alarmist predictions from becoming reality.
Caiman - are you here?? I'd be really interested to hear your take on the 'colour revolution' campaign and generally, what the right-wing opposition are up to - including e.g. recent quite big demos by right-wing students from the UCV etc.
-arold-
Hi Arold, apologies for the
Hi Arold, apologies for the tardiness. I've spent 3 weeks outside of Caracas enjoying the Carnaval holiday.
-arold-
I'm not sure what it is you want to know? Are you implying that to not 'support' (whatever that means) military manoevres by Chavez is right wing/counter-revolutionary? I'm trying to report events here, which help to illustrate both the moribund nature of Venezuela's economy and the conflicts within its fragmented bourgeoisie.
More or less, yes. Although I won't get sucked into who-did-what-first argument, this is my understanding of market economics. If the price of production doubles (as has done in this case with imported goods), then this will be reflected in shopfloor prices.
On the water crisis, I blogged back in October: http://libcom.org/blog/tropical-waterfight-struggle-basic-services-caracas-venezuela-28102009 Like I say in the first sentence, the drought instigated globally by climate change has been exarcebated by poor management of the resources. The blog details under-maintained pipes and a lack of power to pump water uphill and give pressure (hence why the ranchos in Caracas - hill top slums - are the worst affected).
It's probably worth noting at this point that certain parts of the chavista administration are now blaming barrio residents for not paying their bills (in common with most developing cities, in the poor areas, water is unofficially/illegally extracted) and launching campaigns calling for full payment.
I have no idea what you're referring to. This is possibly one of those things which international pro-chavistas make a great fuss about while noone in Venezuela (not even the chavista base) have heard of it.
Quickly, too much stuff to
Quickly, too much stuff to do....
-arold-
Actually, the minimum wage increased was lauded by the chavista press as a huge step forward and the solution to the economic crisis. In Venezuela, reasoned, analytical political debate has always taken a back seat to messianism and polarisation (right now, orientated around Chavez). Over here, there's no Guardian and independent civil society is still nascent, and there's practically no culture of generalised, issue-based, popular political debate.
Actually, the official figure for inflation in Venezuela in 2009 - 25% - is also fraudulent, taken as it is from Mercal, the state-owned supermarket. Which brings me neatly onto my next point: I agree that supermarket owners shouldn't be able to dominate food distribution (if I am to extrapolate the rhetoric here); however, I'd include the Venezuelan state and Mercal in that.
If 65% of foodstuffs and 80+% of all goods are now subject to a doubling in their price of distribution, how does that not affect wages? Do working class people now not buy fridges, TVs, cars, etc?
Brilliant, you're dictating priorities to the Venezuelan working class. They'll also be glad to see how seriously you take their ability to get to work (more than they do, I'd imagine ;)).
http://en.wikipedia.org/wiki/Caracazo
Moreover, I was just in Santa Elena, a town on the Brazilian border, where petrol stations are guarded by the military and privately owned cars are rationed to filling up on alternate days. The queues in the petrol stations throughout Bolivar state are often up to 1km long.
Well, in Caracas, rent prices have been in a constant state of mushroom. I can't really comment as to how much this has been affected by the devaluation. It's too early to say really.
:confused:
How about electricity used to power fridges which stop food from going off in 35 degree heat, or to filter/boil water and make it drinkable? Why should Venezuelans sacrifice their ability to make arepas and milk (in the licuadora, obviously) for some grand abstraction called el proceso (well, el paquetazo, actually)?
And once again, why are you dictating priorities to a Latin American working class? I thought you chavistas were anti-imperialist/anti-colonialist? ;)
Firstly, the figures I have relate more to eastern Caracas, although it is regarded as being the upmarket side of the city in terms of property. I think you're right to question the centrality of such a stat since it will be a minority who will move in that field (many of whom being in the boliburguesía of course ;)).
I think your division between the working and middle class is problematic though. There is a tendency amongst the international prochavista left to envision some grubby faced unwashed mass who have never seen a TV or owned a mobile phone who support Chavez whole heartedly. The chavistas I know are university educated middle managers or cultural workers, living in quintas (detached houses) or in upmarket suburbs outside the city (cos, y'know, Caracas is too dangerous nowadays). When I lived in a rancho, it was split between chavistas and antichavistas, with antichavistas in the majority.
Voices are emerging from people burnt out on the misiones moving against Chavez. In the words of one commentator, "él ha creado un monstruo" with all his talk of socialism and popular power and whatnot, with individuals introduced to socialism and solidarity by Chavez pointing out the hypocrises within. This is evident within the oficialista union movement (eg SIDOR, CECURA) and even the military. There is a fragmentation within chavismo, with some individuals claiming that nuestro comandante is being tricked by his inferiors (?) while others are criticising it from the left.
Of course, that won't get on a Hands Off Venezuela missive, they're more likely to link to El Libertario slander on Libcom!
I'm glad you have your finger on the pulse via the internet and an ocean and are able to draw your own conclusions over the experiences of a group living and working in the country. Presumably you didn't try to buy a TV or a fridge in Caracas the Monday after the announcement. State (mis)management of the economy is failing, it's only being kept artificially and temporarily afloat by the devaluation (ordered by the IMF of course).
Just to give one anecdotal example, in Sucre state, public sector workers haven't been paid since December and there's a chronic shortage of sugar, milk and flour on top of water and electricity rationing. Whole towns have no powdered milk! And this is before the reverberations of the devaluation really take hold.
Like I say, I've never heard of this term "the colour revolution". I'm not sure which demo was specifically UCV students either. The ones I've seen/heard about have been students from across Caracas joined by members of the public. In fact, as I noted in the blog post, Caracas has seen much weaker mobilisations than in the interior, which has seen deaths, paramilitarism and intense state violence.
As to their nature though, out of curiosity, I went to the gathering point of one of the student demos a few weeks back. Their slogan is "CHAVEZ: YOU'VE STRUCK OUT" with the three strikes (yeah, I know, baseball) being water rationing, electricity rationing and insecurity.
My impression was that the oppositional factions have been caught unawares by the students, while the demos have been a mixture of right wingers (including the student leaders) and people pissed off over how said issues affect their quality of life (if you live for 3 weeks without water, alternate nights without electricity and you're unable to leave your house past 6pm, maybe you'd question the success of el proceso too?).