For more than a year, opposition leaders in Venezuela, backed by the United States of America (USA) and other western government allies, have been trying to destabilize the democratically elected Nicolas Maduro government. A little historical perspective is pertinent at this juncture.
The leader of the opposition movement, Leopoldo Lopez, like Donald Trump and the Tea Party in the USA, represents the far right of the Venezuelan political spectrum. He was educated in the United States and is reported to be a descendant of the first president of Venezuela – in other words, the old oligarchy of Venezuela who “want their country back”.
Maduro, like former President Hugo Chavez, is from the working class who desires to represent the people and wants to make the resources of the country benefit the people of his country and their neighbors.
Of course, the capitalist class is totally opposed to the socialist government. They have taken advantage of students’ insecurity, food scarcity and other economic difficulties created by the drop in oil prices, to take to the streets.
In addition, capitalists have been withholding and hoarding goods, as well as engaging in currency speculation to undermine the economy and create the climate for the government to be overthrown. This scenario is like what happened in Chile when the military overthrew the democratically elected president, Salvador Allende.
The western powers, in what seems to be a coordinated attack, have been demanding the release of political prisoners; the IMF has given the government six months to provide timely statistics about the nation’s economy; and President Trump has levied financial sanctions that bar USA investors from lending to Venezuela.
They have also blacklisted Venezuelan Vice President Tareck El Aissami, as a major drug leader. These conditions have many foreign investors and hedge fund managers, betting that the country will default on its debts.
Interestingly enough, these attempts to undermine the government have not generated the desired results. Recently, the government won 17 of the 23 governorships, with a turnout of 61 percent.
George Ciccariello-Maher, American political theorist, commentator and activist, in an interview on Democracy Now, explains that the support is not about Chavez or Maduro.
“It’s about millions of Venezuelans who are building a better democracy, a deeper and more direct democracy, who are building social movements and organizations and workers councils and peasant councils and local communes,” Ciccariello-Maher said.
I believe that the people of Venezuela understand that under colonial capitalist governments, they were poor and had absolutely no hope of becoming rich. They understand that all their suffering came from capitalists.
Socialism did not colonize them or impoverish them. They look at Cuba and understand that despite the embargos on Cuba, the country has more doctors per capita than almost every other country, a strong military that was able to support revolutions as far away as Africa and is the most respected country in the Caribbean. They are willing to give socialism a chance.
Venezuela racked up massive debts when global prices of oil soared during the late President Hugo Chavez’s rule. But a dramatic drop in the price of crude has ravaged the country that sits atop the world’s largest oil reserves.
Last week, the government invited creditors to a November 13 meeting. To move away from the dollar and find other ways to conduct international transactions, the government has ordered oil traders to use other international currencies in crude oil deals.
Maduro also announced that he would pay a 1.2 billion-bond payment, despite the sanctions and announced that future payments would be refinanced. Because of the USA’s sanctions, the “market” is now waiting for Venezuela to be the first Latin American country to default since Argentina’s $82 billion default in 2001.
The same “market” also recognizes that Venezuela has always paid its debts.
It has foregone imports of food and medicine, leading to shortages and triple-digit inflation. The market, as usual, has some hedge funds seeing these conditions as a buying opportunity, while some creditors are salivating over the prospect of a default, since a default would expose Venezuela to lawsuits by creditors seeking to seize assets such as its refineries, in the USA.
On Wednesday, the Russian finance minister, Anton Siluanov, announced that the two countries had agreed to the restructuring of roughly $3 billion in Kremlin loans. This agreement gives Venezuela some temporary relief.
This writer believes that it’s time South American and Caribbean nations that benefited from the oil agreements under the Petrocaribe energy alliance, must come to Venezuela’s aid and oppose any move by the western alliance to remove Maduro from power.
The Petrocaribe alliance, distributed oil in the region to boost the development of the countries that had the most difficulty covering their energy bills and allowed them to meet their commitments.
Venezuela’s commitment to regional development was sincere and involved 18 countries to which Venezuela supplied up to 185,000 barrels per day (bpd) of crude and offered up to 50 percent of the value of the oil, payable over 25 years, at an interest rate of two percent.
This is the time to stand in solidarity with Venezuela and circumvent the US sanctions by ensuring that food, medicine and supplies get to Venezuela. Even if it means, extending credit so that Venezuela can conserve its foreign reserves.
Yes, extend credit, because the price of oil is going to go up soon and she will be able to repay the nations that helped. OPEC, especially Saudi Arabia, needs oil prices to get to $100 per barrel, to close the gap in its social budget and pave the way for the successful debut of its Aramco IPO.
They are in a position to manage traders and investors’ expectations about oil inventories, especially in winter months, when demand for heating oil peaks.
Equally important, is the scheduled Aramco IPO. The Saudi government has said the sale of five percent of Aramco shares, could value the company at as much as $2 trillion. If Saudi Arabia achieves its valuation, that stake would raise about $100 billion.
This would mean a partial privatization of Aramco, but more important, it prepares the country for the post-hydrocarbon age.
My unsolicited advice to Maduro, is to forget ideology and be pragmatic. Socialism and capitalism can coexist. In areas such as energy, health, water, etc., which is capital intensive and necessary for people to survive and thrive, government control and management are necessary.
However, the entrepreneurial energies of the local population must be nurtured, facilitated and encouraged. Being a worker for the state or a worker for foreign capitalists is still exploitation of labor.
Local entrepreneurs must be free to develop products and exploit their ideas and be rewarded for it. The government should begin to diversify the economy; alternative energy sources must be developed; people must be encouraged to go into agriculture; knowledge must become an industry; and the pursuit of excellence in all areas of endeavor must be emphasized.
Most important, the government needs to conduct a proper valuation of its oil companies and reserves. It should then determine a method for giving every Venezuelan family shares in the company.
The government could then raise additional funds by issuing shares for foreign investors to purchase. This arrangement would ensure that the people have a stake in the economy and still allows foreign private capitalists to participate.
Finally, examine the economic strategies of Singapore, Dubai and Oman. These countries are notable examples for development in the 21st century.