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Proletarian issue 18 (June 2007)
Venezuela: oil nationalisation project completed
As the Bolivarian revolution deepens, progressive forces face new challenges
In April and May 2007, Venezuelan president Hugo Chávez led the people in jubilant celebrations of the achievements of the Bolivarian revolution (an anti-imperialist struggle against the superexploitation of Venezuela by foreign capital). The celebrations coincided with the anniversary of the Venezuelan people’s victory over the US-inspired coup that removed Chávez from power for two days on 11 and 12 April 2002, and with May Day.

Following his re-election after a landslide victory in December 2006, Chávez promised to deepen and strengthen the Bolivarian revolution. The people’s enthusiasm for this struggle, and their faith in Chávez’s leadership, led to the grant of power for Chávez to rule by degree, ie, without the need to get legislative sanction for every action, for a period of 18 months. Since then, Chávez has wasted no time in implementing fundamental changes to Venezuela’s economic and social conditions.

Debt free

On 13 April 2007, Chávez announced that Venezuela had paid off all monies owed to the IMF and World Bank and was now free of the heavy shackles of debt. “We have transformed Venezuela, from an indebted and bound country that we were … to a modest but important country and financial centre that supports other countries and peoples.” (‘President Chávez announces World Bank debt has been paid off’ TeleSur/Prensa Web RNV, translated by Yoshie Furuhashi, 13 April 2007)

The benefits of a debt-free Venezuela will continue to be felt by the people as revenues are invested into social and economic projects aimed at eliminating poverty. Chávez chose May Day to announce a 20 percent rise in the minimum wage and a corresponding increase in the state pension, both provided from funds that previously would have gone on servicing debt. Venezuela now has one of the highest minimum wages in Latin America at $286 per month.

In place of heavy-strings-attached funding from imperialist banks, Venezuela now has the security of substantial reserves built up from oil revenues and is developing a ‘Bank of the South’, to help fund development projects of member states, including Brazil, Argentina, Bolivia and Ecuador. Each country is being encouraged to invest significant assets into the venture. (‘Venezuela: 20 percent minimum salary raise, withdrawal from World Bank and IMF’,, 1 May 2007)

Increased regional cooperation and strength

Key to Venezuelan aims of freedom from imperialist domination is increased cooperation amongst Latin American states. Substantial Venezuelan resources and oil revenues are being diverted into aiding development of neighbouring countries in order to strengthen the region as a whole.

The fifth ALBA summit (Bolivarian Alternative for the Americas), held in Venezuela in April, was attended by leaders from Bolivia, Cuba, Venezuela, Nicaragua and Haiti, as well as by delegations from Ecuador, Uruguay, Dominica, St Vincent and the Grenadines. The organisation was set up in opposition to the Free Trade Area of the Americas (FTAA), a neo-liberal economic project promoted by the US government in order to ‘remove trade barriers’ and thereby facilitate North American imperialist exploitation of the continent. The objective of ALBA, by contrast, is to promote cooperation and collective development of the region with an emphasis on fighting poverty and social exclusion. The ALBA includes not just governments but representatives of social movements from Honduras, Peru, El Salvador, Chile and Cuba.

Daniel Ortega, Nicaraguan president, explained: “the objective is not necessarily to maintain high economic statistics or attract investment, but rather to benefit our populations, so that they have healthcare, education, jobs and so they can get out of poverty” . (‘Fifth ALBA summit in Venezuela strengthens regional integration’, by Chris Carlson,, 29 April 2007)

Key to the venture are agreements for the supply of oil from Venezuela and joint financing of social and industrial projects. The establishment of joint companies for the exploitation of natural resources – Cuban-Venezuelan stainless steel plant and nickel plants, a Nicaraguan–Venezuelan aluminium plant and in Bolivia joint plans for the extraction of iron alongside steel and cement plants – will strengthen regional industry and decrease dependence on the US and other imperialist states.

Similarly, Venezuelan health and education ‘missions’ are to be extended to ALBA territories to the mutual benefit of all. (Ibid)

Venezuela’s leading role in fomenting this increased cooperation, backed up by its willingness to invest its natural wealth in the project, has been instrumental in assisting neighbouring states to escape the debt trap. Nicaragua has announced that it too is negotiating to leave the IMF, while Venezuela has assisted Argentina in paying back millions of dollars to the fund so that country now walks free of crippling debt. Meanwhile, Ecuadorian president Rafael Correa has expelled the World Bank’s representative from his country, accusing the organisation of attempting to blackmail him when he served as economic minister in 2005. (Xinhua News Agency, 30 April 2007)

Oil industry nationalised and other industries to follow

Renationalisation of the oil reserves, a priority of the Bolivarian revolution following the latest election, was completed on 2 May 2007 when the government took hold of the Orinoco oil installations and handed them over for management by the Venezuelan state oil company, PDVSA. Energy minister Rafael Ramirez said: “the existing oil reserves in all national territory … belong to the public and are goods of the public domain. Venezuela is exercising its right to administer its natural resources for the benefit of the people”.

The overwhelming majority of the multinational companies who have stakes in Venezuelan oil – Total, Sincor, Chevron Texaco, ExxonMobil, BP and Veba oil, have signed agreements with the state to allow them to continue to exploit a minority interest in the oil. Such is the value of Venezuelan oil in today’s world that these companies would rather sign a deal that places the Venezuelan state firmly in the driving seat than be forced out of the country, as was their alternative according to the ultimatum given by the Chávez administration.

Chávez used the May Day celebrations to announce the historic step: “Imperialism dominated our basic industry, our energy resources and our natural resources for a long time. That is over today. Today is the end of that time when our natural resources always ended up in the hands of anyone but the Venezuelan people.”

With the majority renationalisation of the Venezuelan oil industry complete, other natural resources and basic industries are next in line. These will include the steel industry, private banks, electricity and telecommunications. The plan is to develop domestic industrial productive capacity to replace foreign-controlled private monopolies. The planned ‘social production enterprises’ will give workers partial ownership of the company. (‘Venezuela takes control of the Orinoco oil reserves’ by Chris Carlson, ibid, 2 May 2007)

Decreased dependence on the US

Moves are well underway to decrease Venezuela’s dependence on the US (currently Venezuela’s largest oil market) through strengthening trade relations with China and neighbouring Latin American states.

Cooperation agreements have been signed between Venezuela and China that cover production of crude oil in the Orinoco oil fields and construction of oil tankers, as well as service and maintenance of oil wells. Other planned projects include the manufacture of mobile phones, cars and railways. (‘Venezuela and China strengthen strategic and economic alliance’ by Chris Carlson, ibid, 31 March 2007)

Oil refineries currently situated in the US are to be moved to Latin America. (‘ALBA summit creates new model for Latin American integration’ by Chris Carlson, ibid, 30 April 2007)

People’s political power on the rise

Corresponding with the transformation of economic conditions in Venezuela is the evolution of new forms of people’s political power, burgeoning alongside the existing bourgeois state machinery.

According to Marcela Maspero, National Coordinator of the National Union of Workers, the ‘Bolivarian Councils of Workers’ (workers’ councils) have been set up as “political organisations of the working class, based on direct democracy and control over production”. Alongside these representative bodies, another source of community power is being encouraged through the formation of 19,000 Communal Councils, each made up of 200–400 families (smaller groups in rural areas). Discussions within these forums are progressing towards the setting up of federations of Communal Councils to tackle larger projects. (‘Venezuela’s revolution accelerates’ by Federico Fuentes, Green Left Weekly, 25 April 2007)

Clashes between these new sources of workers’ power and the old bourgeois state machinery have been reported and will undoubtedly increase as the balance of power changes. For example, RCTV, the television station that participated in the 2002 coup attempt, is to lose its licence on 28 May, and the licence will be given instead to community media. Meanwhile, the opposition has begun destabilisation activities that are planned to culminate on the expiry of the licence and which have so far involved isolated incidents of detonation of explosives and attempts to create food shortages. (Ibid)

For the most part, however, it appears that much of the domestic bourgeoisie (ie, the nationalist, as opposed to comprador, sections) do not currently feel particularly threatened by the radical reforms taking place under the Chávez administration. There is still a role for capitalist exploitation in Venezuela. Chávez made it clear in a speech at a rally on 12 April 2007 that Venezuela has “no plan to eradicate private property in Venezuela, so long as it subordinates itself to the national interest and the socialist project [otherwise it was] condemned to progressively disappear”. (Quoted in ibid)

It is important not to lose sight of the fact that the Bolivarian revolution is currently an anti-imperialist revolution, a nationalist bourgeois revolution aimed at ousting the foreign exploiters and their domestic representatives and placing the country’s vast natural resources at the disposal of the Venezuelan people. It is about building a Venezuela in charge of its own destiny and, indeed, a Latin America that is independent and free from the imperialist exploitation that has for so long kept the people of that continent in destitution.

To the extent that Chávez talks about instituting socialism, history teaches that this cannot be accomplished without a proletarian revolution that will undertake the task of smashing capitalist productive relations and the bourgeois state machinery, which is set up to maintain the minority rule of that class.

As the Bolivarian revolution deepens, as key sectors of industry move from private hands to state ownership and the prospects of making a profit out of exploitation of the working class diminish, even the nationalist section of the capitalist class will start to feel the squeeze and may well decide that the time has come to fight back. The existing bourgeois state will reinforce itself as a tool of the capitalist class – the proletariat and peasantry cannot hope to use it as a mechanism through which they can advance their cause towards socialism.

United Socialist Party of Venezuela (USPV)

The inevitability of the old exploiting classes intensifying their struggle to maintain control over Venezuelan resources and workers appears to be the reasoning behind Chávez’s call that all progressive forces should unite in one United Socialist Party of Venezuela. Chávez has said that “What I want is true unity, organic unity. I say before the country that the Revolution needs a revolutionary party, it needs unity … those other parties and political groups who don’t want to join it, well, like I told them before, the doors will be open. The doors will remain open, but unity is fundamental, unity, revolutionary unity.” (‘Chávez presents plan for Socialist Unity Party of Venezuela’ by Chris Carlson,, 7 March 2007)

The process of forming this party will take many months and is scheduled to involve long periods of consultation between representatives of the population across the country. The first stage involves the initiation of party promoters whose task is to build support for, and encourage mass involvement in, the new party. People will then be encouraged to become members and to form party cells of around 200 people each on the basis of territorial divisions, universities and factories, each cell electing a spokesperson to participate in the party’s founding conference, which will run for approximately three months and involve frequent movement of the spokespersons between their cell and the congress as ideas are debated and decided upon. The process will conclude on 2 December 2007, when a referendum of all party members will decide whether or not to approve the party’s founding programme.

The various parties that currently make up the Bolivarian movement led by Chávez, including the Communist Party (PVC), are coming under intense pressure to dissolve their existing organisations and join the new party. At the time of writing this article, the PCV position was not to dissolve, while remaining in firm support of Chávez. The PVC General Secretary has stated that “The comrades of the PCV I know will never follow the opposition … You will never see the Communist Party in the opposition. You will always see them accompanying the leader of the process: President Hugh Chávez Frias.” However, large sections of the membership and a significant proportion of the executive of the PCV have already left in anticipation of the formation of the new united party. (‘Chávez: parties that don’t join Unified Socialist Party of Venezuela are free to leave’ by Gregory Wilpert,, 19 March 2007).

In the light of the fact that sooner or later the Venezuelan national bourgeoisie is bound to turn against the Bolivarian revolution, it is the duty of communists to preserve a distinct proletarian revolutionary party to continue to fight for the interests of the working class and peasantry when the current anti-imperialist unity is split asunder by capitalist greed. For this reason we believe that the PCV has taken the only possible correct line on this question and would urge Comrade Chávez, if he earnestly wishes to see Venezuela advancing uninterruptedly towards socialism, to accept this situation, for to fail to do so would unnecessarily weaken the anti-imperialist movement.

The PCV has been instrumental throughout the length of the Bolivarian revolution in galvanising proletarian forces behind Chávez and, while he is quite correct to say that the revolutionary forces must be united in their struggle, this unity should be achieved through a united front between the anti-imperialist parties.

> Chavez victory paves the way for fresh progress - February 2007
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