CONCLAT: an undeniable setback

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Published on Sunday, 11 July 2010 17:39

Ernesto Herrera *

It was a stirring call. The Working Class Congress (CONCLAT) in Brazil proposed to unify, in a new classist centre the trade-union, student and popular currents; all that are resisting the Lula government’s and the bosses’ offensive. And, at the same time, confront the trade-union centres (CUT, Força Sindical, etc.) that have yielded to the government and the capitalist order.

The CONCLAT was held on 5 and 6 June in the city of Santos in Brazil.   The massive turnout reflected the expectations created: 4,000 participants and 3,200 delegates, about 350 unions, associations, movements and associations representing, according to organisers, more than 3 million workers. In the previous months, 926 grass-root assemblies had gathered around 20,000 workers to discuss the various documents, to make proposals and to choose delegates.

Numerous foreign delegations turned up from 26 countries in Latin America and the Caribbean, United States, Europe and Japan. They brought in to CONCLAT the essential international dimensions. Particularly moving, was the presence of Sotiris Martalis from the teachers’ union in Greece, belonging to the ADEY (Confederation of Public Sector Trade Unions), who recounted the struggle of the Greek workers challenging the brutal capitalist attack on wages, employment, and retirements.

Power relations
For the thousands of participants involved with the unification, the CONCLAT was a kind of synthesis of their diverse experiences. It was an act of translating these experiences to an organisational and programmatic level and the beginning of a trade union and popular restructuring. Albeit in a defensive situation, it is built from an opposition to the neoliberal agenda of the employers’ government headed by Lula. It expressed, on the other hand, efforts to unify the struggles, wage demands and seek consensus on issues that divided the class-conscious and anti-capitalist camp.

Although still a vanguard phenomenon, a minority of the whole working class and without the presence of a crucial sector of the exploited, such as landless peasants (mostly organized in the Movimento dos Trabalhadores Sim Farm Terra-MST), this process of unification reflected the social energy accumulated in the significant layers of the popular movement.

In fact, the CONCLAT expressed at a certain level, the emergence of a new unionism. A trade union which, in turn, binds more concrete demands of the working masses in all the mobilisations of the exploited and oppressed by an anti-capitalist perspective. Hence, the emergence of CONCLAT initiated the possibility (and only that) for an alternative to contest the global power relations.
Since it attempted to build an instrument to modify (or to endeavour to modify) the power relations between class-conscious trade-union camp and the trade-union councils subordinated (politically and materially) to the capitalist state apparatus.   On Thursday June 3, a note in the daily Folha de Sao Paulo revealed the scandalous price of this subordination: the trade unions allied with the government, had received since 2008, the sum of 228 million reais ($ 126.3 million) as “reimbursement” of the “union tax.”  
The CONCLAT faced the challenge to overcome – in the benefit of the working classes and oppressed - the “bankruptcy of militant and independent left-wing union project,” that started with the major workers’ strikes in the years 1978-1980 and the establishment of the CUT (Central Unica dos Trabalhadores). Therefore, the challenge demanded a development of the construction of a class-conscious alternative with decisive impact on key sectors of the working class. One delegate, from the education sector, summed up the feelings of the common activists: “refound class unionism.”

However, this opportunity was diluted by the events of the Congress. What weighed much more, for the Intersindical and Conlutas union apparatus was the “rightness” of their arguments and the “victory” of their proposals. They incited their troops. They heard nothing. They imposed - from the gallery and discussion groups – the logic of competition. They gave priority to the dispute over the balance of power within the CONCLAT....

Unfortunately, the CONCLAT failed to secure the path of unity. In contrast, it ended up producing a serious rupture. And this “interruption of the process of unification” - that was growing from the World Social Forum of Belem (January 2009) - is, from every point of view, a heavy setback. Unable to conceal or disguise, it was enough to see the bitter, desolate and angry expressions of workers and popular social activists - who came with thousand sacrifices from throughout the country - to perceive the consequences of failure. Suddenly, the contagious hope of the previous days had gone.

Majority leaderless
The call to CONCLAT sparkled in the flags and T-shirts: “Let’s unite to strengthen the fight.”  This simple slogan raised the tasks: the Congress to overcome the fragmentation of the trade union left, the new centre as a tool to organize the struggle against capital.

The different documents submitted  at the Congress contained significant convergence and divergence, for example, on the future functioning of the centre, proportionality, integration and powers of leadership. The same could be said about the analysis of the national situation: there was an “underlying tension” marked by the election campaign. In the Congress, the rivalry became apparent between those who supported the candidacy of Ze Maria of PSTU (Partido Socialista dos Trabalhadores Unificado) and those who supported Plinio de Arruda Sampaio-PSOL (Partido Socialismo e Liberdade) as two distinctly different ways  to express the struggle and the interests of workers against the two bourgeois parties (PSDB and PT). The claim of “responsibilities” around the non-realisation of the Left Front was a constant during the Congress.

Obviously, a candidature presented under the slogan of the Left Front, would have created better conditions for altering the false “centre-left/centre- right” polarisation. The sociologist Ricardo Antunes described this as a danger of “Americanisation” of the Brazilian political system.

Anyway, there was a basic consensus on the situation of trade union and popular struggles, especially regarding the program that further encouraged the possibility of unification.

There was no agreement on two central questions: 1) the nature of the centre, 2) the name of the new centre. In eleven meetings of the Commission for the Reorganisation / Coordination of the Centre these differences were not resolved. They agreed to go by the criterion of “workers’ democracy”, i.e. voting in Congress. All of us now know the outcome of that decision. Apparently very democratic indeed.

A clear majority of delegates voted in favour of the Conlutas proposal: a trade union, peoples’ and student centre. Undoubtedly, a winning formula in tune with the plurality of social groups involved in the trade-union and popular reorganisation. Intersindical proposed a trade union that articulated in a National Forum with the student movement. Following the proposal from Conlutas, the same majority voted for the integration of students in the leadership of the new centre.

As for the name, a thin majority (impossible to quantify the extent as the votes were not counted), forced the name “Conlutas-Intersindical/Trade –Union and Popular Centre.” The delegates from Intersindical (who already denied the use of their name in the name of the new centre), MAS  and Unidos pra Lutar  rebelled against the “outrage” and left the Congress. The unification process was “interrupted.”

The “restoration” of Congress - after the withdrawal of the delegates from Intersindical / Unidos/ MAS deepened the split. The majority that finally formed the “new trade union confederation is mainly Conlutas. Other currents to accompany were Movimento dos Trabalhadores Sim Teto (MTST) Terra Livre (Popular Movement of the cities and the villages); Movimento Popular pela Reforma Agrária (MPRA) and, surprisingly, the Movimento Terra, Trabalho e Liberdade (MTL), an organisation that integrates an opportunistic fraction of PSOL.  

The formalities say that the Congress decided. There was a majority (which is not disputed) and a minority. There was a “democratic legitimacy.” Already without the atmosphere of enthusiasm and with little more than half the delegates in the hall, the formation of the new centre was announced and the integration of a “Provisional National Executive Secretariat” of 21 members agreed by consensus with ample pre-eminence of Conlutas.  It shall be responsible for “routing decisions” and to re-establish relations with the section who walked out of the Congress.

The main forces have commented on the result. According to Conlutas: “What could have been a great victory for the reorganisation process, unfortunately, turned into a defeat by the decision of the Intersindical/Unidos/MAS walking-out from the Congress after losing the vote on the name of the new entity.” For Intersindical: “Unfortunately, we did not want what happened! We had to interrupt the process of setting up the centre. The debate over the construction of the new centre (nature, politics and name) revealed the utter lack of willingness on the part of most Conlutas, to build a synthesis of divergent views. It preferred to carry out the opinion of the majority (small and casual) of delegates in Congress to impose a single vision.”

Almost everyone agrees to continue exploring ways of unity. Although the prevailing idea is that the break is “irreversible” if the majority maintained their positions and the methods, which led to ultimate failure. It is attributed, of course, to the “responsibility” of Conlutas and the political force that hegemonises it: the PSTU.
One does not discover anything new to say that the PSTU have a decisive bearing on Conlutas and in many social struggles. It is impossible to understand the genesis and development of Conlutas without considering the boldness and the active engagement of activists and union leaders PSTU in this process. Therefore, the majority in Conlutas adheres to PSTU and it has unquestionable political legitimacy.

It is also true that there is a responsibility of Conlutas/PSTU in the CONCLAT failure. Because of the “abuse” of its majority? Because of the “knocking down” of the minority? It would be too unilateral and sectarian explanation. The drama lies in not being able to exercise leadership over anyone else apart from the majority obtained in CONCLAT. A leadership that transcended the borders of Conlutas / PSTU, i.e. beyond its defined field of membership and influence already achieved. A Leadership that, ultimately, promote and ensure both the agreements and consensus. Essential in any process of unification - as it opened the CONCLAT- involving very different forces, traditions, and practices; a process which should secure the maturity and credibility of a leadership, a capability that, in addition, came under consideration of broad sections of the society which came to meet in the CONCLAT.

The big mistake was not mended and the attempt was not to be a true leader. since from the beginning of Congress there were sniffs of a climate of rupture in the various tendencies of Intersindical (which in turn responded to the fractions of PSOL) that feared being “annexed” by Conlutas and landing into the orbit of PSTU (after votes on the nature and the name of the new centre, there was a stampede of delegates from Intersindical, forcing its leadership to withdraw). Also, because it was well-known that major sections of Intersindical (not involved in the CONCLAT) were negative to unification with Conlutas: why “close the doors” to left-wing currents in the CUT, which are critical of the subordination to the Lula government.
“Political autism“, as one grassroots delegate said? Difficult to judge for a foreign “observer”. However, there is the perception that the “Staff” of Conlutas / PSTU should not force the vote on the name of the new centre. Not only because it did not reflect the trade-union and popular reorganisation process, but because they did not respect the sensitivities and pluralities represented in the CONCLAT.

Before the CONCLAT (3 and 4 June) there was the Conlutas Congress. It was supposed to be a Congress of their “dissolution”. But it was not. The 1,800 delegates, who participated intensely, both in discussions and vote, ended up self-affirming the continuity of Conlutas. Was there a final mandate in defence of “identity?” Two days later, at the time of breaking the impasse in the CONCLAT, there was neither a consensus, nor were there “concessions.” The leadership of Conlutas / PSTU took refuge in a closed centralism for a reorganization process that went beyond their militant forces and their field of influences.
The efforts and last-minute negotiations were unsuccessful. After the vote, hundreds of delegates left the Congress. Mostly Intersindical and many of Conlutas with the feeling that they had lost an invaluable opportunity.

* Member of the Colectivo Militante  (Uruguay), editor of Correspondencia de Prensa.

Notes

i. The CONCLAT was convened and organized by Conlutas (National Coordinaçào Lutas), Intersindical, MAS (Movimento Avançando Sindical)); MTST (Movimento dos Trabalhadores Sim Teto) MTL (Movimento Terra, Trabalho e Liberdade) and the Pastoral worker ( PO - Metropolitana de Sao Paulo).
ii.  The notable foreign trade union delegations were: SUD-Solidaires, unitaire et démocratique (France), National Union of Railway Companies (Japan) Labor Notes (USA) and the, Classist, Unitary, Revolutionary and Autonomous Current (Venezuela). Among the international political organisations were: Batay Ouvriye (Haiti); New Anti-Capitalist Party (France) Red Stream (Spanish State) and the Movement for Socialism (Switzerland). In addition, there were numerous groups in Latin America and the Caribbean. On Monday June 7, foreign delegations held a meeting to coordinate Intersindicalnational solidarity campaigns.
iii.  The six trade unions legally receive state funds. All of them are campaigning for Dilma Rousseff, the PT presidential candidate. CUT (trade union wing of the PT) and Força Sindical (divided PCB bureaucracy and recycled during his time by Collor de Mello to curb the “wild unionism” of the CUT) are those that have most members.
iv. The “union tax” was created by the government of Getulio Vargas in 1940. Today is mandatory and is paid by all workers, whether unionized or not. It is the equivalent of a day’s wage and is deducted every March. It is also charged to employers. The two central majorities CUT and Força Sindical received a sum of 50 million reais (approximately $ 29 million) in 2010 only. The “union tax” that the government collects, is distributed among the central trade union federations and business associations since 2008. It is currently the main source of income for the unions. CUT denounces it as a “spurious resource”, but it collects the same nevertheless.
v.  All these are available at sites and Intersindical Conlutas: http://www.conlutas.org.br/site1/default.aspwww.Intersindicalsindical.inf.br
vi.  The student representation in the CONCLAT was in charge of ANEL (Asambleia Nacional dos Estudantes – Livre), composed mostly of young militants of PSTU who broke with UNE (União Nacional dos Estudantes) dominated by political forces supporting the Lula government, mainly PCdoB and PT.
vii.  The MAS (Movimento Avançando Sindical), of Stalinist origins, is motivated by the Luís Carlos Prestes Communist Current.
viii.  Unidos pra Lutar is the trade union front of the Corrente Socialista dos Trabalhadores (TSA), a Trotskyist organization integrated in PSOL. Until CONCLAT was part of Conlutas. Its own document in some issues was opposed to the majority Conlutas proposals, particularly with regard to the character and the name of the new centre.
ix. This fraction of PSOL is composed of the Movimento Terra, Trabalho e Liberdade (MTL), Movimento Socialista Esquerda (MES) and former senator Heloisa Helena. This fraction is proposing that the PSOL support the presidential candidacy of Marina Silva (Green Party). They did not support the choice of Plinio de Arruda Sampaio, PSOL presidential candidate. It accepts the “donations” from private companies in election campaigns.
x. The Provisional National Executive Secretariat consists of three militants of Terra Livre, three from MTL, 3 from MTST and 12 from Conlutas.
xi.  The full version of the two statements (in Portuguese) is in Conlutas and Intersindical websites.

Suggested paths to 21st century socialism in Venezuela

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Published on Thursday, 08 July 2010 04:48

Eric Toussaint[2]

 

Reduce dependency on hydrocarbons and on the United States

One of the challenges that several previous governements have had to face, just as Chávez’ government must, is to diversify the productive apparatus in order to shake off the country’s extreme dependency on hydrocarbons (this is also true for the majority of the big oil-exporting countries). It was precisely to this end that, in the 1960s, a company such as SIDOR, the iron steel corporation, was created. Later, during the 1980s and 1990s, the neo-liberal governments privatized several public companies like SIDOR and decided to rely on foreign investments to diversify the economy. This was a failure.

 

In recent years, the Hugo Chávez government has in its own way been endeavouring to diversify the production infrastructure:

1. development and reinforcement of a steel and iron pole by carrying out a policy of import substitution (for instance, Venezuela is going to produce the pipes it needs for its pipelines whereas, up to now, they have been imported; with the help of the Chinese, Venezuela is going to produce railway equipment and re-develop its rail network);

2. support for local food production so as to come as close as possible to a situation of food sovereignty, while currently almost 90% of food products consumed in the country are imported (legacy of a decade-long use of oil revenues to import whatever Venezuela needed) ;

3. development of a  petrochemical industry;

4. improvement of the production and supply of electricity, produced in the great majority from hydraulic energy (and fortunately not from oil). In this regard, contrary to the official position, Venezuela must avoid getting into electricity production from nuclear power;

5. nationalization of the cement industry so as to develop the government’s housing construction policy.

 

Venezuela is also seeking to reduce the share of exports to the United States,[3] its main buyer of hydrocarbons, by trying to increase its supplies to China (according to some goverment sources, there is hope that China will be buying as much as the United States by 2014, which seems  a difficult objective to achieve).

 

Land policy

A land reform has been carried out,[4] cooperatives and small farms have been granted substantial subsidies, but the initial situation was very delicate. The share of agriculture in the country’s GDP is very low[5] and, with some important exceptions (for instance the regions of big market-garden production in the Andes[6]), Venezuela is one of the countries where the system of farmers’ smallholdings has been notably weakened due to the importing model that has prevailed for decades.

 

How can a local farming population be reconstituted so as to ensure food sovereignty for a population that will reach 30 million inhabitants in the coming years? The problem is admittedly a difficult one to solve. To this end, the State needs to implement a vast package of incentive measures such as: a substantial improvement in the quality of public services in rural areas so as to reduce rural exodus; support for family farming and other traditional forms of agricultural production without favouring cooperatives exclusively;[7] the development of a public retail network for farmers’ production, guaranteeing stable outlets and prices high enough to encourage producers and save them from the clutches of the private networks that impose their prices on producers and secure excessive profit margins for themselves.

Michael Lebowitz made a number of proposals regarding farming policy in Venezuela that should be implemented to improve the situation: “taking into account the existing contraband due to an overvalued bolivar and the diversion of goods through the black market, the solution does not lie in subsidizing by supplying free inputs such as means of production, nor in direct monetary subsidies to agricultural production (except in cases where new production facilities are built). Why? Because, given the circumstances, there is no kind of control ensuring that products go where they are needed – especially when control or monitoring mechanisms, which involve high transaction costs, are lacking.

Therefore to ensure that subsidies lead to a real increase in food supply on the national market, and at decent prices, the best form of subsidizing is through a State agency that buys products at a set price. This State agency can offer the producers a price that encourages production and can later make sure that the items are sold to the population via the Mercal network at prices lower than those paid to the producers.”[8]

The Venezuelan government’s debt policy

The public debt burden in percentage of GDP has been reduced over the last few years but one has to emphasize that the Chávez government is not initiating a comprehensive audit of the public debt, whereas it promised to do so on several occasions.[9]

Besides, one can only wonder about the appropriateness of taking on new loans when the price of the barrel of oil was high and when liquid assets were abundant. And yet, in 2006 PDVSA went into debt for 12 billion dollars by issuing bonds on the international financial markets. How can this decision, which was not discussed in the National Assembly, be justified? With the decline in the price of the oil barrel since July 2008 (even if the current price – between 70 to 80 dollars a barrel during spring 2010 – keeps Venezuela on the safe side for the time being), don’t the repayments by the PDVSA put a strain on its budget and excessively reduce its liquid assets? Why go into debt and transfer interests to the international (or national) private financial players if one has enough cash assets not to be forced to borrow money? These questions are unfortunately not being answered.

 

One should note that Chávez emphasizes the country’s endogenous development, which he defines as “self-centred, based on domestic resources and an integral part of the strong comeback of the national dimension.” Reducing PDVSA's external debt should be an interesting way of developing this definition.

Other steps to be programmed

 

One of the solutions that need to be implemented so that the State (instead of the present private banking sector) can retrieve a substantial share of the money it distributes (or spends) consists of transferring to the public sector (nationalizing) the greater part or the whole of the capitalist banking sector of Venezuela.[10] The State will then be able to re-invest part of the money it distributes (derived from its oil income) into the economy in the form of social spending or productive investments, in order to generate a virtuous circle of accumulation and the development of a public sector of the economy, as well as other kinds of ownership to be supported and strengthened (small private ownership, cooperative ownership, traditional forms of property among indigenous communities, etc.).

 

A second measure could consist of State control on foreign trade, so as to prevent a great part of the revenues it generates from being diverted towards capitalist accumulation and/or towards other countries through outflow of capital. A series of incentives of different kinds (taxes, subsidies, priorities in State orders…) is also needed to support the non-capitalist sector of the economy (obviously including small private ownership).[11]

 

Citizens’ and workers’ control to avoid 20^th-like socialism

But what is absolutely essential is to set up mechanisms aimed at avoiding two major pitfalls: 1) the monopolization of decision-making processes by the State bureaucracy and

2) the emergence of a new bourgeoisie from within Chavism, which is already dubbed  “bolibourgeoisie” (= the Bolivarian bourgeoisie, the section of the Chavist leaders who take advantage of their position to begin accumulating capital). [12]

 

Among other mechanisms, let us mention: establishing limits to the range of wages (for instance a scale from one to six) by reducing the highest wages and significantly raising minimum wages as well as other wages up to the average wages;  forcing agents and civil servants to make an annual declaration of global incomes (salaries and other earnings and incomes) and personal wealth (since the accumulation of capital by bureaucrats is more often done through backhanders which do not appear in income statements whereas they do in statements of personal wealth); forcing citizens to declare their various bank accounts in the country and abroad (lifting bank secrecy); substantially increasing proportionality in income tax.

 

Improving the training of managers in public companies is also vital, because nationalizations require the creation of a recruitment pool of managers with high technical competence and a high level of political, social and ethical training. To step up the pace of nationalizations, a pool of managers has to be created, while simultaneously developing, as mentioned above, a policy of worker and citizen control. Unless this is done, there is the risk of creating public companies that are inefficient, and even corrupt.

 

The essential and certainly the most efficient remedy is to implement a policy of workers’ and citizens’ control over the accounts and running of companies and public institutions. It would enforce transparent management (so as to prevent embezzlement, squandering, use of the resources of companies or institutions for projects which are not socially or environmentally justified) through a comprehensive audit policy in which workers and users of services must actively take part.

There is also a need for appropriate transition from workers’ control to company self-management (while maintaining an external control). The whole battle for workers’ control, for citizen control (which I also call control by users), for self-management, is part of the building up of grassroots popular bodies, such as the communal councils. The right forms still remain to be found so that this construction of grassroots entities is not restricted to a fragmented view. This raises the question of setting up a national federation of control organizations through which popular power can become a reality.

 

 

Translated by Stéphanie Jacquemont and Judith Harris, in collaboration with Francesca Denley and Christine Pagnoulle

 

Bolivarian Venezuela at the crossroads The Venezuelan economy: in transition towards socialism?

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Published on Thursday, 08 July 2010 04:47

(Part 3)[1]

 

Eric Toussaint[2]

The capitalist sector is growing faster than the public sector and is still predominant in Venezuela’s economy despite the nationalizations.

The share of the private sector (greatly dominated by the capitalist sector[3]) in Venezuela’s gross domestic product has grown from 64.7% in 1998 (before Hugo Chávez was elected president) to 70.9% in the third quarter of 2008.[4] Although the government has nationalized a significant number of large companies in the electricity, telecommunications, steel, food, cement and banking sectors, the capitalist sector has recorded more rapid growth than the public sector, which explains that its relative share in GDP has increased whereas the share of the public sector has decreased (from 34.8% in 1998 to 29.1% in 2008).[5]

 

This can be explained by the way the country’s oil income is used. The overwhelming majority of the Venezuelan State’s revenue comes from oil exports. The government massively uses the resources coming from oil to improve the living conditions of the poor majority of the population (as well as of the medium income brackets) in the fields of health (where results are impressive), education (also impressive), supply of low-priced basic products through the distribution and marketing channels Mercal[6] and Pdval[7] (staple food and other basic products for households), housing construction, the building of infrastructure and public transport (subway, train), wage increases in the civil service, increases in a large number of grants and social allowances, not to mention expenses in the field of culture and sports. It grants substantial subsidies for cooperatives, communal councils, etc. The result is clearly positive: the percentage of Venezuelans below the poverty line was reduced by half between 2003 and 2008, from 62.1% to 31.5% of the population. As for the percentage of people in extreme poverty, it was reduced by two-thirds, from 29% in 2003 down to 9.1% in 2008;[8] illiteracy dropped sharply, the level in training improved, access to free healthcare increased greatly, mass consumption rose.

 

But to a large extent the capitalist sector is also benefiting from government spending because it is still dominant, by a long way, in the banking sector, in trade and in the food industry. The extra money that goes to the people and comes from public spending ends up in the capitalists’ pockets because it is in the capitalist banks that individuals (and also cooperatives, municipal councils, municipalities and many other public entities) deposit their money. It is the capitalist banks that issue consumer credit facilities in the form of credit cards, and support a growing share of the consumption (and charge high interest rates for this). It is the capitalist companies of the food industry that produce or market most of the food products consumed by the masses.  It is the capitalist import companies that bring from abroad the many imported products consumed by Venezuelans. The private retail chains still dominate trade even if Mercal and Pdval are significant players in supplying basic products. When the State nationalizes private companies that belong to the national capital, it is the local capitalists that receive buyout compensations from the State.

In brief, the capitalist sector continues siphoning off most of the money spent by the State to help the poor or middle-income sectors of the population.

According to a study[9] by Mark Weisbrot and Luis Sandoval that is in fact very favourable to the Chávez government, the private financial sector grew by 37.9% in 2004, by 34.6% in 2005 and by 39.2% in 2006, while the growth of the public sector (all sectors taken together)  was only 12.5% in 2004, 4.1% in 2005 and 2.9% in 2006.

As stated by Victor Álvarez : “During the previous mandate of President Chávez (2000-2006), most financial, fiscal, exchange rate incentives, most public spending, most technical assistance, etc., went to the existing production apparatus, fundamentally consisting of commercial companies, which reproduce a capitalist mode of production that is, paradoxically, the very one we want to overtake and transcend.”

We are thus far from the assertions made by the mainstream media, which see in the Chávez administration a rampant imposition of state control over the Venezuelan economy.

 

Gifts made to the banks

An additional issue, stems from the policy of overvaluation of the Venezuelan currency against the dollar. This question requires some explanation. Since 2003, companies that want to import goods and services have had to buy dollars from a state administration called CADIVI. This is a useful measure taken to fight capital outflow. The problem is that the exchange rate between the bolivar and the dollar overvalued the value of the former. It therefore exacerbated a perverse pattern: for a capitalist who has a large amount of bolivars, it is more profitable to change them for dollars which are sold cheaply by the State and import products from the United States or elsewhere than to produce them in the country. Thus the policy of an overvalued bolivar deterred productive investment and encouraged trade based on the frenetic import of goods[10] and sale of the same through the big private retail networks. These massive imports are in fact subsidized by the State since the State sells the private sector the cheap dollars it has accumulated through its oil exports.  Another point also needs to be examined: how this policy of an overvalued bolivar and a high level of imports influenced the inflation rate, which has been particularly high in Venezuela in recent years. This high inflation rate reduces the impact of the pay rises granted by the government.

 

One vicious example of this policy of an overvalued bolivar and of gifts made by the government to the private banks: the Venezuelan State bought debt bonds issued by Argentina in 2004-2005. The problem is that it sold part of these Argentine debt bonds, drawn up in dollars, to the private banks. These banks bought them with bolivars at the official overvalued exchange rate. What did some (in fact many) of them do with these bonds? They sold these Argentine debt bonds in the United States or elsewhere to obtain dollars. This allowed them to bypass the control imposed by the Venezuelan State over capital movements. Officially, they did not export capital; they only got Argentine debt bonds out of the country.

Since then, the State has kept on making gifts to private banks thanks to similar manoeuvres.  PDVSA and other public entities issue public debt bonds drawn up in dollars that are bought in bolivars by Venezuelan banks at the official exchange rate. Then these banks sell part of the bonds on the international market for dollars[11]. In brief, the State policy has two negative consequences: first, it permits capital flight in a circuitous but perfectly legal way; second, it encourages parasitic banking behaviour (buying of debt bonds) to the detriment of productive investment.

 

The conclusion that can be drawn is that although the State is trying to carry out a policy of endogenous development (i.e. designed  to meet the internal demand through greater domestic production), the way the oil money is redistributed, combined with the overvaluation of the bolivar, tends to strengthen the capitalist sector and its importing pattern.

 

In a speech given during the meeting of intellectuals organized by the CIM, the writer and lawyer Luis Britto aptly summed up the situation: “We live in a dual society, and in a fable I wrote I explained that if one tries to set up a mixed system with hens and foxes in one single henhouse, then the following week, there will only be foxes left, and then they will eat the farmer.”[12]

 

 

Dealing with the thorny question of exchange rates: the January 2010 devaluation

In January 2010, the government carried out a devaluation. What does this devaluation consist of? Two official rates were set: the first one represents a 21 percent devaluation of the bolivar against the dollar (instead of 2.15 bolivars, 2.6 bolivars are needed to obtain one dollar); the second rate represents a 100 percent devaluation (one has to pay 4.3 bolivars for one dollar instead of 2.15 bolivars). The first rate (2.6 bolivars per dollar) is in force for expenses considered to be vital or at least to be a priority: imports of food, medicines, technologies, equipment for industrial or agricultural production, imports made by the public sector, the payment of scholarships to Venezuelan students studying abroad, of pensions to retired people living abroad. The second rate (4.3 bolivars per dollar) is applied to imports of automobiles, beverages, tobacco, cell phones, computers, home appliances, textiles, chemical and metallurgical products, rubber, etc.

 

In the short term, this devaluation will increase the State’s tax revenues. The dollars that the State gets from oil exports will be sold for a larger amount of bolivars. This is certainly one of the main goals pursued by the government which has seen its tax revenues dwindle due to the impact of the international crisis on the country’s economy. But this does not mean that the Venezuelan State is going to win on all fronts. The repayment of the public debt, 67.8 percent of which is drawn up in dollars, will cost the government more. The Venezuelan bankers and other capitalists who bought debt securities drawn up in dollars will get richer once again.

 

Obviously there are other consequences: for the workers and all low income earners who receive this income in national currency, the devaluation means lower purchasing power: the cost of the products they consume will be higher because many products are imported or produced in the country with a large imported component. Importers, retailers, producers will pass on the additional costs to the retail price. This loss of purchasing power can only be limited or compensated if wages increase in proportion to the cost of living, which is not the case. On 1 May 2010 Hugo Chávez decreed a 15 percent increase in minimum wages and pensions but inflation reached 25 percent in 2009 and will probably be even higher in 2010.

 

This devaluation aims at other objectives in the longer term, but it would be risky to say whether they can be reached or not. Among these objectives, the most important one is certainly the promotion of import substitution. Since importing now costs 21 or 100 percent more (depending on the products imported), imports should decline and local producers should be in a better position for selling their production on the national market. Even better: the devaluation should convince them that it is profitable to produce products that were formerly imported. This could create a virtuous circle thanks to which the country could strengthen its industrial and agricultural base by replacing imported products with local ones.

 

 

Translated by Stéphanie Jacquemont and Judith Harris, in collaboration with Francesca Denley and Christine Pagnoulle

Next part: Suggested paths to 21^st century socialism in Venezuela (Part 4)

Bolivarian Venezuela at the crossroads Debate and contradiction in the PSUV (United Socialist Party of Venezuela) (Part 2)

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Published on Thursday, 08 July 2010 04:46

Eric Toussaint[1]

During the 2007 constitutional referendum, one might have thought that the party created by Hugo Chávez in 2006 was stillborn since fewer people voted 'Yes' than the number of people officially enrolled in the party.[2] But this impression was partially belied in the following months: grassroot meetings multiplied, which resulted in the nomination of candidates for the municipal elections and for governors of the 23 states that make up Venezuela. However, the process is contradictory. While participation from the party’s rank and file was active and effective and while grassroot members did appoint candidates for the elections, the fact stills remains that when it came to the party’s executive board, ordinary members could not vote for all the leaders and Chávez himself put his government’s ministers in the party's key posts (for example, the 8 vice-presidents of the PSUV). This creates a regrettable confusion between the State, the government, and the party.

In this respect some voices have been raised within the PSUV to challenge the fact that the party’s management and coordination are left to the ministers who are already overloaded with their governmental mission. Moreover their position as ministers gives these leaders the power to disproportionately influence the decisions taken by the party. It is also easier for them to influence some party members when the latter are called to the polls. A critical view, shared by a substantial number of activists, was expressed by Martha Harnecker as follows: “One of the things that surprise us and, I imagine, must shock people abroad, particularly in Europe, is that the State is the instrument with which the party is built. It is in clear contradiction with our vision of the party.”[3]

Gonzalo Gómez, a PSUV activist and co-founder of Aporrea, also shows concern regarding the relationship to be built between the party and popular power (which he also calls “the constituent player”): “The party can seek to propose and give direction, accompanying social movements in the building up of popular power, but it cannot subjugate popular power: in other words subjugate this constituent player by the constituted power.”[4]

 

 

BOX

Communal councils: when “constituent power” challenges constituted power

 

The law entitled Ley de los consejos municipales (LCC)[5] was voted without any genuine debate on 7 April 2006. Its article 3 states: “The organization, functioning, and action of communal councils must meet the principles of co-responsibility, cooperation, solidarity,  transparency […], honesty, effectiveness, efficiency, social responsibility, social control, equity, justice, and gender and social equality.” (art. 3, LCC)

A citizens’ assembly (Asemblea de ciudadanos y ciudadanas), “the grand decision-making body of communal councils” (art. 6, LCC), must consist of at least 20% of inhabitants from the age of 15 and over (Consejos comunales, Expresión del poder popular). The communal council defines its jurisdiction, and its members are not paid (art. 12, LCC). Its various areas of intervention are defined as follows: “Health, education, land management in towns or rural areas, housing, social protection and social equality, popular economy, culture, security, communication and information, leisure and sports, food, technical guidance on water, technical guidance on energy and gas,  services, and any other matter the community may decide useful to proceed with.” (Art. 9, LCC)

 

President Hugo Chávez set up communal councils back in 2006, as a way of introducing participation in the drafting and implementing of local policies. The government sets great hope in these councils, which it sees as “territorial grassroots units of popular participation and self-government.” As the president said, this “revolutionary explosion of popular power” must be the realistic and sustainable basis for a new type of state, for “a socialism of the 21^st century.” (…)

Talking about the 15,000 councils already extant in June 2007, Juan Leonel M. (FONDEMI, Microfinance Development Fund) does not hide the fact that relationships with municipalities are sensitive: “Actually the mayors, or at least many of them, are opposed to this new mode of election and way of organizing communities. They see the communal councils as organizations in competition with their own administrations. But the idea today is that the established power must move hand in hand with the constituent power of communal councils. The State is initiating a revolution within the State system. The people’s constituent power must be the motor of change. Communal councils are the cornerstone of municipal self-government where the people have direct access to power.” [6]

 

The 2006 law on communal councils is currently being changed. It is likely to be replaced shortly by a new law that is being drafted[7]. To know more about this experiment, read Martha Harnecker’s books on the subject. She lives in Venezuela and has devoted much time in the last few years to the experiment with communal councils.[8]

END OF BOX

 

The PSUV Congress was held in several sessions from November 2009 to April 2010. The 772 delegates who took part in the Congress were elected in a secret ballot by rank-and-file party members (according to official figures, half of the 7,253,691 party members turned out for these internal elections). There were very few workers and company trade unionists among these delegates; on the other hand many delegates were employees who are answerable to the party or to local authorities and are therefore easily influenced. Even though Hugo Chávez, as president of the party, called on delegates to act in Congress as spokepersons for the popular base and social movements, with Congress composed as it was, it is hard to see how this could really lead to positive results.

 

In June 2009, the PSUV was the center of attention and debates, when thirty of the most eminent intellectuals invited by the Miranda International Center[9] discussed the progress of, and remaining obstacles to, the revolutionary process currently taking place.

The CIM published a summary[10] of these days for reflection entitled “Intellectuals, democracy and socialism: dead ends and paths to follow”.

Here are some extracts from the summary which give an idea of what is at stake in the party itself and beyond, if a genuine revolutionary project is to be implemented.

“What is the future of a party whose base rarely gets the opportunity to have their say? (…) Is this non-separation between State and party merely repeating a mistake of the 20^th century socialist model? Was the PSUV created as a top-down structure out of a political necessity felt by the government, rather than a necessity felt by the base?

Another important aspect that came up several times was the need for collective leadership of the party, which is effectively based on grassroots social movements (and which does not merely use them as the government’s communication channel during election periods), thereby putting an end to harmful, partisan vote-catching. This would create the base of a true revolutionary party which recognizes the right to express criticism and which fosters greater democracy within the party.”

Among other issues debated: the nature of the new revolutionary State (“If the State was the instrument used by neo-liberalism to implement its own agenda, should it also be used to free us from neo-liberalism? Can this State put us on the path to socialism or, on the contrary, it is an obstacle to socialism?); the role of the media, both pro- and anti-Chávez; the characteristics of the revolution – it was said that it contained “many types of revolutions within it: student, farmer, worker, socialist, feminist, military and popular”, thus the need for a constant dialogue between these groups; the definition of 21^st century socialism; popular participation, especially through communal councils (see box above), which were described as “a prime example of participation” but “not [playing] a sufficiently participatory role” in practice because “they run the risk of being co-opted by the party”.

 

The final issue considered during the meeting concerned the place and role of criticism in a revolutionary process, and the main question discussed was the following: “Is it possible for a revolution to succeed if it does not make criticism one of its main driving forces?” It was acknowledged that “criticism has lost some of its rightful place. In media that are sympathetic to the process, it is not difficult to find reactions reminiscent of 20^th century socialism where those who openly criticize are accused of being “counter-revolutionaries” or “CIA agents”. This considerably weakens the process as it prevents the government from implementing changes when things are not working.” At the same time, the intellectuals said they “were pleased that the Executive had given them a space for criticism - something which had not happened in ten years. They also stressed the fact that this event proved that fear of criticism was unfounded. The claim made by the anti-Chávez opposition that there is a lack of freedom of expression in Venezuela is equally false.”

The controversy raised by this meeting showed how relevant these questions are. These days were broadcast live in full on a public channel (TVES) and then re-broadcast over a period of some 10 days. Important sectors of the government strongly criticized the CIM initiative as well as the content of these meetings. Among the critics were the Minister for Oil, Rafael Ramirez, and the Minister of Foreign Affairs, Nicolas Maduro, both of them important political figures in the PSUV. One of the pro-Chávez daily newspapers, VEA, published several articles condemning the CIM initiative and stating that, “they convene meetings amongst intellectuals whose positions are confused, whilst allowing them to let off steam at Chávez’s leadership which they describe as a “hyper-leadership” or “progressive autocracy”. Without a doubt, these are pro-Chavist supporters without Chávez, ashamed to show their true colors and get on the other side of the fence.” (published 6 June 2009 under the collective signature Grano de maíz).

After ten days of controversy, both in the pro-Chávez and the opposition press, Hugo Chávez, in his televised programme Aló Presidente of June 14, seemed to agree with those who criticized the International Miranda Centre (CIM). That merely served to increase public interest in the event: different trade union worker leaders as well as the Communist Party of Venezuela and “Homeland for All” (two parties which support the government while refusing to join the PSUV) have defended the CIM and stated that the critical contribution of revolutionary intellectuals was a positive event. It was feared that at some point the CIM would be brought to heel or even shut down but nothing of the sort has happened. This shows once again the complexity of the changes taking place in Venezuela, whose government cannot be considered as totalitarian.

 

Translated by Francesca Denley, Judith Harris, Stéphanie Jacquemont and Christine Pagnoulle

Next part: The Venezuelan economy: in transition towards socialism? (Part 3)

PART 1 “Venezuela. Nationalization, workers’ control: achievements and limitations” is online: http://www.cadtm.org/Venezuela-Nationalization-workers

 

 

From Water Wars to the Fight for Climate Justice

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Published on Wednesday, 07 July 2010 16:59

 
Pablo Solón

 on the Lessons of Cochabamba

July 4, 2010

 

A Speech by Pablo Solón, Bolivia’s UN ambassador, to the Shout Out for Global Justice, attended by nearly 3,000 people on June 25 in Toronto.  Video of the event, which was sponsored by the Council of Canadians, can be viewed at rabbletv.

First of all, I think you [the MC who introduced Solón] have made a mistake. I am not the ambassador to the US, I am the ambassador to the UN, because we have kicked out the US ambassador in Bolivia and we don’t have an ambassador in the United States.

You know I met Maude Barlow and Vandana Shiva about 10 years ago. I remember it very well because it was at a meeting in Geneva after the water wars in Cochabamba in Bolivia, after we expelled the Bechtel corporation that was privatizing the water.

In those days I was a water warrior, now I am a water warrior ambassador. And now I only have a new possibility, that is to continue the fight we began more than 10 years ago. We have discussed very much with Maude, with Vandana and many of you, that there is something that we must do: We have to have water declared as a human right in the UN.

We have declared in the UN the right to food, the right to health, the right to education, the right to shelter, the right to development – but not the right to water. And we all know that without water we can’t live. So nobody can argue that it is not a basic and fundamental and universal human right, but despite this it has not been, until now, recognized as a human right.

So we have presented, two weeks ago, a draft resolution, so that this coming month, in July, we expect to have a vote in the General Assembly of the United Nations. And we want to see which countries are going to vote against that resolution, we want to vote to see which governments are going to say to humanity that water is not a human right. We want to expose, like sometimes you have to expose vampires, to public opinion.

Ten years ago we needed your help and you gave it to us. It was after the water war, when we expelled Bechtel, Bechtel sued Bolivia. They presented a demand to this arbitration panel of the World Bank. It was a demand for $30 to $100 million, even though they were only in Bolivia for six months. And, with a global campaign, we managed to have Bechtel at the end of five years saying ‘we are going to give up our demand, we are going to sell you everything.’ And they sold us everything for one dollar.

Why were we able to do that? Because in California, in Washington, in New York, here in Canada, in Europe – all around the world – activists, trade unions, social movements, NGOs, began to mobilize and say ‘it is unjust to put a suit against Bolivia for $30 to $100 million for the right of Bolivians to decide what they are going to do with their water service system in the city of Cochabamba.’

Now we need your support again. Because this resolution that declares the human right to water is not going to pass if we don’t build a global mobilization around the whole world, in Canada, in the United States, in Europe. We are discussing one of the key issues and it is necessary to have and to build this global political coalition now, and to act very strongly in the coming days. So, we are counting on you.

After the water war, for Bolivia, that was a very important moment. Because until the water war, we had lost all the battles in the social movements. We lost the battle against the privatization of social security, the battle against the privatization of the energy system, the privatization of gas, the privatization of railways, but when we won this battle against the privatization of water we said ‘we can do it.’

And we began to strengthen forces, the indigenous people, who are the majority in my country, came together with social movements, trade unions and we said ‘now we have to recover our natural resources’ that had been privatized, if we want to have another future.

And a big movement was built in order to nationalize the gas and oil company that was privatized. Before, when it was privatized, 82 percent of the revenues went to the companies and only 18 percent to the state.

So we built a movement and we realized that in order to accomplish the nationalization of the gas and oil company we also had to take control of the government. We had to nationalize our government.

And, after an election, an historic election, in the year 2005, President Evo Morales, with what we call the political instrument of the social movements, won for the first time with 54 percent of the votes.

Four months later, on May 1, we nationalized the gas and oil company. And when we nationalized it, then we said, ‘now 82 percent is going to be for the state and only 18 is going to be for the foreign investor.’

And they told us everybody’s going to run out, nobody is going to stay to administer that, but in the end we renegotiated 42 contracts under these new rules because even with 18 percent they have profits. And we have 82 [percent].

You know they have the G8/G20 model, but we have another model. If we take control, as a society, of our companies, of our resources, we can have enough money, first, to create more employment. In Bolivia, employment hasn’t decreased, it has increased. We have raised salaries, we have increased social benefits. Why was it possible? Because we control, now, the economic power of the country, not the corporations.

And we don’t have a fiscal deficit, we have a surplus. So there are two models, and this is the discussion that should have taken place. It’s not a discussion between stimulus package and austerity, between Europe and the United States, it’s a discussion between the society taking control of the economy, or the corporations. That is the main discussion. And the example of Bolivia shows that it’s possible. It is possible.

So for us, the main thing, our main lesson is that every time there is a problem we need to appeal to the people, to the social movements. For us, when we had this problem in Copenhagen, where they tried to impose this Copenhagen Accord – I remember it, at 3 o’clock in the morning, I was there. We said what are we going to do? Let’s call for a people’s world conference on climate change and Mother Earth rights. Because if we have to have a response, it has to be with the social movements of the world.

And between the 20th and 21st of April, we had this people’s conference and we discussed, what are we going to do? That’s the key: what is our agenda? We know what their agenda is. What’s our agenda?

And we said, ‘there is a problem here’. The problem is really very big with climate change. Because if emissions are not reduced in the short-term, not in the long-term, the temperature is going to rise – right now it’s more than 0.78 or 0.79 degrees more than it was in the pre-industrial era – if this keeps on we will see two, three degrees increase, four, five.

And what does that mean? Our glaciers are going to melt, Africa is going to burn, some island states are going to be beneath the ocean, food production is going to be reduced by about 40 percent, depending on how much the temperature increases.

And we only have these coming decades to act. Each year we lose is something like 35 or 40 gigatons of CO2 that is thrown into the atmosphere. So we need to act fast.

And we said in this people’s world conference, we want to have a reduction of 50 percent of greenhouse gas emissions, in a domestic way, without market mechanisms, without offset mechanisms, approved in the next negotiation on climate change that’s going to take place in Cancun, Mexico. And this is key. If we are not on board on this issue, we, our children, our grandchildren, are going to have a very bleak future. We must engage in this key issue if we want to change the future.

But another issue that is very important for us is the issue of Mother Earth rights. Why is this so important for us? Because in their agenda, what they say is that they have failed because privatization hasn’t gone further, to nature. So now is the time to privatize even nature – carbon markets, carbon rights, environmental services, water.

And we say No!, the alternative is not that, it’s precisely the opposite. We must recognize that there are things, beings, that cannot be commodified, that have rights as we have rights.

So we have presented, in the UN, a draft proposal of a resolution on the Declaration of the Universal Rights of Mother Earth – the right to live, the right to regenerate its biocapacity. That for us is key, it is the key thing of this century. That is why we have begun to build a movement to defend Mother Earth.

As [the MC] said, you are now all part of the Council of Canadians. I can say that you are now all part of the global movement for Mother Earth.

Just to finish with one very important message. What are we going to do with this plan of security, of authoritarianism, militarism. What is our alternative? We have also discussed this in Bolivia, and we said we must promote a global referendum, a worldwide referendum. We must call not G20, not only ‘G192′ – that is, the General Assembly of the UN, very important – but we have to call this 6 billion that Vandana [Shiva] was speaking about. A global referendum where we can ask the people: Do you agree, in the second commitment period of the Kyoto Protocol, to reduce greenhouse gas emissions by 50 percent? Do you agree with Mother Earth rights? Do you agree that military budgets should be redirected to solve climate change issues and not to promote war?

So the key thing, against authoritarianism, is democracy. Global democracy, all around the world. Thank you very much.

Ruling Class Offensive in Pakistan

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Published on Wednesday, 07 July 2010 16:50

Labour Leader killed for forming union in Faisalabad 

Mustansar Randhawa, a Labour Qaumi Movement leader in Faisalabad was killed today by unknown persons while he was sitting in the office of LQM Sarghoda Road Sector area. He has been receiving death threats from the power looms and textile mill owners for the last few days. His crime was to organise LQM in an area, no one dared to do that earlier. He was also president of National Trade Union Federation Faisalabad.

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