Venezuela: The eye of the storm

In the midst of Venezuela’s worst economic crisis for decades, severe flooding killed thousands of people and brought air and sea ports to a standstill. Tony Saunois evaluates the effects of the disaster against the political backdrop of the election 14 months ago of the radical president, Hugo Chávez.


This article appeared in the February, 2000 issue of Socialism Today, journal of the Socialist Party, the CWI in England and Wales.

The eye of the storm

Venezuela was hit by one of the worst disasters in its history during the Christmas and New Year holidays. Torrential rain devastated the infrastructure and swept away entire communities. The final death toll may never be known as thousands of people were washed out to sea or buried beneath mudslides. Some estimates are that as many as 50,000 people have lost their lives.

Hugo Chávez, the Venezuelan president, has rightly blamed ’corrupt politicians and planners’ for the scale of the disaster because they allowed the precarious shanty town structures to be built in steep valleys along the Caribbean coast and on the hillsides surrounding the capital, Caracas. One of the worst hit areas was in the narrow strip of land between Caracas and the sea, where 350,000 people previously lived. Most were street sellers who made the daily trek to the capital to sell their products in a desperate attempt to earn something to live on. The big companies which have carried through a large-scale deforestation of the area, must also be held responsible.

Such catastrophes, in reality ’geo-political’ disasters, can be the midwife to revolution – just as the 1972 Managua earthquake exposed all that was rotten in the regime of the Nicaraguan dictator, Anastasio Somoza, preparing the way for the victory of the Sandinistas in 1979. In Venezuela the effects of the floods have pushed the radical, populist Chávez government even further to the left.

The government responded to the crisis by re-housing up to 100,000 homeless people within a few days. The armed forces were mobilised and army barracks and the presidential palace were opened to the homeless. Chávez donned his paratrooper’s uniform and joined helicopter rescue missions. Now his government has announced an ambitious programme to rebuild the damaged infrastructure and relocate large parts of the population to the great plains on the edge of the Amazon rainforest.

Pointing to the powers granted him under the new constitution, Chávez has threatened to take the land needed for reconstruction from the big landowners. He warned that if a landowner, "owns 50,000 hectares, does not want to pay taxes, or sell, and he has no project for that land, we will now simply apply the letter of ’the law in the public interest’, expropriation". (Venezuela News, 6 January) Chávez has also accepted the call raised in a number of factory occupations that broke out following the disaster, that the employers’ insurance funds should be seized to finance the relief effort.

These threats by Chávez, his promise of a ’peaceful revolution’, and the popular steps that he has taken during the floods, are the latest twist in the social and political upheavals and mass mobilisations rocking Venezuelan society. The election of Chávez in December 1998 and subsequent events mark a turning point that has a significance beyond the country’s frontiers. They represent the beginnings of a new wave of radicalisation and a rejection of the neo-liberal policies that have been applied internationally throughout the 1990s, and are an indication of the explosive developments that will rock the former colonial world in the next few years.

Resisting the march of neo-liberalism

Chávez and his government have received massive support for their radical proposals, which reflect the democratic demands of Venezuelan workers and peasants and their support for increased state intervention in the economy. The government’s policies run against the dominant trend of the 1990s: open, ’free’ markets and the neo-liberal policies of privatisation with no or minimal state intervention. Such neo-liberal measures have been forced on all economies, reflecting the power and domination of the international economy which no isolated country could stand against.

However, the consequences of these policies for the working class, peasantry and other exploited social groups, have been devastating. They have strengthened the grip of imperialism over the former colonial world where the ruling classes have become more and more subservient to the major imperialist powers.

And they are fuelling a revolt from the peoples of the former colonial world. Even the representatives of the ruling classes from these countries were compelled to mildly reflect this at the recent WTO summit in Seattle. That too was another step in a change in the world situation. The onset of a global economic recession and the revolt of the masses will begin to reverse the dominant trends of globalisation and neo-liberalism.

The right-wing Economist magazine, in this respect, points out that "Mr Chávez… speaks the idiom of state-led industrial development beloved of Latin American nationalist caudillos (military or political leaders) of a generation ago. But some outsiders worry that Mr Chávez represents the future, not the past: much of Latin America is fatigued by the seeming failure of market economics and liberal democracy to deliver prosperity and social fairness". (20 November 1999)

Despite the devastation in the wake of the floods, nearly half the population managed to vote in December’s referendum on a new constitution, drafted by the newly-elected national constituent assembly (ANC) of the renamed Bolívarian Republic of Venezuela. This constitution, although it retains the kind of draconian reserve powers, concentrated in the hands of the president, much loved by the caudillos of old, is undoubtedly the most democratic in Latin America – on paper at any rate.

It allows for the election of a single-chamber parliament. All deputies elected to it must provide an annual report to their constituents and they can be removed from office by referendum, if so demanded by 25% of their electorate. Deputies are prohibited from having outside business interests. Judges are to be elected by popular mandate.

The constitution also enshrines free healthcare, social services and education for all. Pensioners should receive no less than the average wage. Men and women are to receive equal pay. Although Spanish is the official language, the linguistic and cultural rights of indigenous peoples are also defended. This is in marked contrast, for example, to the programme of the Chilean dictator, Augusto Pinochet, who, in one of his Junta’s decrees, declared that the Mapuche people ’do not exist’.

The petrol and gas industry are to remain in state hands and there is provision for the state to take control of other sectors of the economy if it is ’in the public interest’. It also opposes monopoly control of any sector of the economy and urges greater state intervention, albeit vaguely. In relation to labour rights, the constitution reduces the working week from 48 to 44 hours and prohibits nightshift workers from working more than seven-hour shifts. The corrupt leadership of the trade unions, who were almost entirely enmeshed with the old regime and received enormous perks and privileges, are being removed. Four hundred trade union officials with positions on the boards of directors of banks and other institutions have gone. Despite a wave of protest from the US and other imperialist powers, the government last year banned union leaders from leaving the country and taking their money with them. The new labour decrees provide for the election of all union officials by the membership and states that they must receive no more than the ’normal’ salary of an employee. Previously, the leaders of the oil workers’ union received 16 million bolívars a month – $24,400! Trade unions will no longer receive financial support from the state but must be financed by the members’ contributions.

Not surprisingly, 70% of those who voted backed the proposed constitution. Only the bishops and representatives of the rich elite opposed it. During the campaign, Chávez adopted even more radical language than he did during the presidential election, denouncing the Roman Catholic bishops as ’devils in vestments’ and their wealthy backers as ’rancid oligarchs who are squealing like pigs’.

The demand for change and the revolt against the old establishment was seen in the summer 1999 elections to the constituent assembly when the supporters of Chávez took 91% of the seats. The parties that had ruled Venezuela since 1958 – Acción Democrática (social democrats) and the Partido Social-Cristiano (known as Copei) – won just a handful of deputies. The election represented a revolt against the corrupt establishment and a demand for change.

From August onwards there was a rush of democratic demands by the masses, with thousands of submissions made to the constituent assembly on every aspect of life. These have been reflected in the new constitution. However, to enact the democratic and social reforms contained in its 350 statutes, would require the overthrow of capitalism and the establishment of a workers’ and peasants’ government.

The collapse of the old order

Historically, Venezuela was one of the richest countries in Latin America, with vast reserves of oil, gas, iron ore, gold, bauxite, cheap hydro-electric power and arable land. The development of the oil industry in the 1960s and 1970s, when it was nationalised, transformed the country. Rapid urbanisation took place resulting in 87% of the population living in cities, compared with an average of 75% across the continent. Life expectancy rose to 73 years. Infant mortality was 21 per 1,000 and a relatively high literacy rate was achieved – 92%.

However, the massive increase in exploitation by the major imperialist powers through the application of neo-liberal polices and the process of globalisation, together with a fall in the price of commodities (agricultural produce, minerals, etc), has had a devastating effect. The numbers living in poverty more than doubled. In 1975 the percentage of the population living on less than two US dollars per day was 33%; by 1997 it was 67%. The number living on less than a dollar a day rose from 13% to 36% over the same period. The middle classes saw their savings destroyed as inflation soared above 100% in 1996, driving whole sections of them below the poverty line. Today an estimated 80% of the population are struggling to survive on an income below the official poverty line.

At the same time, the rich elite concentrated more and more wealth into its hands and increasingly became the lackeys of imperialism. As in Nigeria and other ex-colonial countries, corruption was endemic amongst the political leaders and the judiciary. The ever-increasing gap between rich and poor is one of the driving forces for revolution. During his election campaign, Chávez stated: ’Neo-liberalism is the dogma of individualism that has led the world to fight like savages against each other. Venezuela is now rising out of the ashes’.

The seething anger of the masses exploded in 1989/1990 during the so-called, ’Caracazo’. This was an uprising against the IMF-imposed austerity package implemented by former president, Carlos Perez. The savage reprisals resulted in hundreds of deaths. The economic devastation of the country affected important sections of the middle classes and even sections of the military, who were repulsed by the decadence of the rulers and the increasing squalor of the masses. A series of military coups by junior officers followed, including a failed attempt by Chávez in 1992, which led to his imprisonment.

Rafael Caldera, the candidate of the Partido Social-Cristiano (Copei), became president in December 1993, prophetically offering himself up as ’the last hope for the political system established in 1958’. Caldera proceeded to implement yet another IMF-imposed austerity package, carried through by his finance minister who, as a former ’Marxist’ guerrilla, personified the ideological abandonment of socialism by the official left and its embrace of the market during the 1990s. This package provoked more protests and strikes. The revolt against the established political parties and a demand for change opened up a political vacuum.

Initially, opinion polls in 1996 gave massive backing to a former Miss Universe, Irene Saez, who was endorsed and then dropped as the official candidate of Copei. The same polls gave Chávez only 7% approval ratings. But Chávez, who had been increasingly radicalised at each turn of events, was able to fill the vacuum.

His own political movement, Movimiento V Republica (Movement for a Fifth Republic), formed a coalition with left-wing trade unionists, community groups, the Communist Party and socialist groupings such as the Movimiento al Socialismo (MAS) and PPT. Also included were some forces from the radical left-wing movement of the Catholic church, still adhering to the ideas of ’liberation theology’ developed in the 1970s and 1980s, who retained an important influence amongst layers of the urban poor. At the same time, the coalition involved a section of the ruling class who supported political and economic reform.

This coalition, the Polo Patriotica (Patriotic Pole), has many features of the popular front governments that were established in other countries during periods of revolutionary upheaval, such as in Spain (1936) and Chile (1970-73). Those governments implemented widespread radical reforms, including the redistribution of land and the nationalisation of industry, and even spoke of socialism (which Chávez does not). In Spain, four-fifths of the social revolution was completed under the pressure of the workers and peasants. The participation of even a few representatives of capitalism in these governments, however, ensured that their policies remained within the framework of capitalism and was used as an excuse to put a brake on the workers’ and peasants’ movement. Without exception, the popular fronts ended in defeat for the working class and victory for reactionary regimes.

Radical nationalism

Chávez and his government have given popular expression to the anger felt by the masses against the rich elite and neo-liberalism, and the desire for a change. But it also reflects a section of the petty bourgeoisie (middle classes) and bourgeoisie (ruling class) who want to ’clean up’ the corruption and decay of the former establishment in order to construct a ’modern’, more acceptable form of capitalism. Although the majority of the workers are against the policies of neo-liberalism and the elite, they have not as yet embraced the idea of the need for an alternative revolutionary socialist programme.

The radical, popular nationalism and concern for the poor of Chávez – partly rooted in his own peasant background of which he boasts – also reflects an important tradition amongst the armed forces in Venezuela. Although it acts in defence of capitalism, the armed forces have also contained radical nationalist elements who have wanted to develop Venezuelan society and ease the misery of the poor. This has, on occasion, brought them into conflict with the immediate interests of the national capitalist class and US imperialism. Sections of the military have partly embraced this ’radicalism’ in disgust at the role of the ruling class and in a desire to develop society. They have also partly embraced such ideas to defend and develop their own interests.

At the same time, they express the powerful tradition left by the 19th century revolutionary capitalist democrat, Simon Bolívar, who was based in Caracas. Bolívar led the struggle for Latin American independence and strove to unify the continent.

The wars of independence begun by Bolívar in 1811 took place in a different historical epoch when there was an extremely weak working class. Even then, his struggle to unify Latin America was largely defeated because of the treacherous role played by the various ruling dynasties who had their own vested interests and collaborated with different imperial powers. The working class was far too weak at that stage to play the leading role and take over the running of society and unify the continent on a socialist basis.

Today, the ruling classes of Latin America are enmeshed with imperialism and each has its own interests. Under capitalism it will not be possible to unify the continent and liberate it from the shackles of imperialism. This is a task for the working class. The workers now have the strength to defeat the ruling classes of Latin America and unify the continent on a voluntary socialist basis and, thereby, break it free from imperialism’s stranglehold, but workers’ parties need to be built to accomplish this task.

However, Bolívar’s legacy has been seen on numerous occasions. In 1945, for example, a group of young nationalist officers organised a putsch together with Acción Democrática. The short-lived ’Revolutionary Junta’ that they formed following the coup forced the oil companies to accept that 50% of all profits should go to the state. This limited reform was one factor that provoked the ruling class to strike back and organise a counter-coup, securing the dictatorial rule of Pérez Jimenez.

In 1958 a mutiny broke out at Maracay air base against the Jimenez dictatorship. This followed a series of protests organised by university students which resulted in the formation of an underground organisation, Patriotic Junta. This included the Communist Party and Copei amongst others. The mutiny appeared to be rapidly crushed. However, the Patriotic Junta issued a call for a general strike which was taken up by the working class. Barricades were built throughout Caracas as the navy raised anchor and sailed in support of the uprising. The dictatorship ordered the bombing of the fleet but the airforce refused to follow this order, the army split and the regime collapsed. Encouraged by Admiral Wolfgang Larrazabál, students took to the streets of Caracas, chanting against US vice-president Richard Nixon as he arrived in the capital, ’Fuera Nixon – Muere el imperialismo Yanki’ (’Out with Nixon – Death to Yankee imperialism’).

Chávez has evoked the powerful tradition of Bolívar during his assent to power. After his election victory he took the sword of Bolívar from the national vault and paraded it through the streets to jubilant cries from the mass demonstrations that greeted him. For the masses such an action is interpreted as a struggle against imperialism and capitalism. It is this that has terrified the ruling class in Venezuela and aroused the concern of US imperialism, its representatives denouncing Chávez’s ’dictatorial’ methods and powers.

In an effort to contain Chávez, and anticipating their own defeat for the presidency, the former ruling parties had called elections to the congress prior to the 1998 presidential elections. It was a scenario that had been played out in Chile between 1970-73. There, the socialist Salvador Allende won the presidency but the capitalist parties controlled the congress and senate, and used them to hold him back. Rather than form a workers’ and peasants’ government based on the workers’ committees (the Cordones – formed in 1971/72), arm the workers, dissolve the rigged congress and call elections to a new democratic assembly, Allende accepted the situation. This gave the reactionary forces the time needed to plan and execute a military coup in 1973.

The establishment parties hoped that the undemocratic nature of the Venezuelan parliament would ensure that the right wing maintained control. In the event, Chávez’s Movimiento V Republica emerged as the largest force but without a majority. In response Chávez effectively disempowered the old parliament and called elections to a new constituent assembly, to draft a new constitution for elections to a single-chamber assembly. There was no immediate prospect of a coup, because the threat to capitalism in Venezuela is not as advanced as it was during the revolutionary events in Chile between 1970-73, but also because Chávez has an important basis of support within the armed forces at this stage.

Chávez has struck a blow against some of the old ruling elite and their political institutions. The military command has been restructured and 150 corrupt judges sacked. The former directors of the state oil company have been replaced with Chávez supporters. These, and the other previously mentioned reforms, have been enthusiastically supported by the mass of the Venezuelan population.

However, such steps have not overthrown capitalism and the government is not proposing a programme to do so. The questions remain: How are these reforms to be consolidated? And how are the rights enshrined in the constitution to be enacted? Capitalism in Venezuela does not have the resources to implement or sustain them. Chávez himself admitted that the government lacks the resources to pay for the promised social welfare measures, as he explained, when he argued that ’with 6% of the payments made to the foreign debt the government could progressively pay for the social expectations established in the new constitution over 20 years’. (El Pais) But will the masses wait for 20 years?

Venezuela is in the grip of its deepest economic crisis for 40 years, despite the recent rise in oil prices. The situation will be worsened by the effects of the flooding. It is quite possible that the depth of the crisis and mass pressure will push Chávez to strike further blows against the interests of capitalism and imperialism. The threat to expropriate land is an indication of this. Banks have been obliged to put 50% of all profits into a credit account to protect the banking system, following a fall in capital after dividends were paid out to shareholders. The government may be pushed to nationalise some sectors of the economy. However, if capitalism is not overthrown and replaced with a workers’ and peasants’ government, that could begin the tasks of building socialism based upon a democratic plan of production, it will not be possible to end the misery of the masses and implement the reforms aspired to in the new constitution.

Breaking the US vice

The squalor of capitalist society undoubtedly repulses Chávez and many junior officers. However, like their counterparts in history, they lack a programme that will destroy the system that breeds it. The revolution of 1958 gave rise to a new political structure in capitalism and brought to power parties such as Acción Democrática and Copei on a radical programme. They subsequently copied the same corrupt rule they originally opposed, and which they maintained for a further 40 years.

The radicalism of Chávez has already resulted in him becoming a thorn in the side of US imperialism. His links with Fidel Castro, with the possibility of reaching a deal to refine oil in Cuba, his banning of US flights over Venezuela, and other steps, all illustrate this.

At the same time, if capitalism is not overthrown and replaced with a workers’ democracy, his government will be subject to counter-pressures from imperialism that could drive him into conflict with the Venezuelan masses. Therefore, his regime could vacillate between striking some blows at capitalist interests while resting on the support of the masses, and then moving into conflict with the working class by trying to appease the capitalists. During his visit to Paris last year he pledged to enact privatisation as a means of attracting foreign investment. Then, following December’s referendum on the constitution, he appealed to the right-wing forces that had opposed him to accept "honour to the defeated and glory to the victor", arguing that "if we unite we will be invincible". (Guardian, 17 December)

Although the constitution represents a step forward in the democratic rights of the masses it also allows for the entry of the armed forces into all aspects of society, which means they could be used against the working class. It is also possible that sections of the military could attempt to overthrow Chávez in the future, should his regime become too unstable for the interests of capitalism and imperialism.

To defend the democratic gains already conquered and to take the struggle forward, a revolutionary socialist programme and mass workers’ party is urgently needed. The national constituent assembly cannot be relied on to enact and defend the democratic gains. It is necessary for the workers, peasants and other exploited people, to establish their own organisations. Independent workers’ committees, together with those of peasants, indigenous peoples, rank-and-file soldiers and the urban poor, need to be formed, made up of elected delegates. The directors of state-owned companies must be removed and replaced by elected boards of workers in the industries concerned. These need to constitute regional and national congresses, to form the basis of a government of workers and peasants. Delegates must be accountable and subject to immediate recall – no official should receive more than the average wage of a worker, including the deputies in the national constituent assembly!

Nor is it enough to rely on the restructuring of the military command to prevent the capitalists and landlords from preparing to defend their system and attacking the masses. The rank and file of the armed forces must elect their own officers and link up with the working class. An emergency plan of production must be drawn up based on the nationalisation of the banks, major companies and multi-national firms. The lands of the big landowners must be confiscated.

It would still be insufficient, however, to leave the situation there – on a national basis. Given the dominance of US imperialism throughout Latin and Central America, an appeal for international solidarity would have to be made to break the US stranglehold. US companies, as well as multinationals based in Europe and Japan, have ensured that the whole region is being bled dry in the pursuit of profit.

Countries like Colombia and Ecuador are themselves in the throes of deep economic recession. The workers, peasants and indigenous peoples are suffering as a result. But resistance is mounting. An appeal to overthrow capitalism and landlordism must be made to the workers of Latin America – coupled with a call for solidarity from the workers and youth of North America – with a view to establishing a socialist federation of the continent in order to defeat imperialism, once and for all.

This article appeared in the February issue of Socialism Today, journal of the Socialist Party, the CWI’s affiliated party in England and Wales.

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February 2003