Venezuela shows the limits of state led socialism


by Drew Povey

ChavezSince Hugo Chávez first came to power, in February 1999, Venezuela has provided an alternative which the Nigerian state could have chosen to follow – a progressive change that not even Buhari is attempting to provide.  However, in early December last year, elections gave the opposition a majority in parliament – for the first time in 16 years.

Like in Nigeria, oil is essential for the economy, providing half the state income and 93% of export earnings.   The GDP per head is about the same in both countries, but much more equally spread in Venezuela. The population is less than a fifth of that of Nigeria with a similar level of oil production.

The Chávez Government faced economic and political problems since coming to power.  The bosses were still very powerful running about a third of the economy. In addition, Venezuela had to operate in a hostile world where the support of Cuba did not really compensate for the opposition of the much larger economy of the US. Barack Obama placed sanctions against Venezuela and claimed the country’s progressive reforms were dictatorial, even though Chávez and his supporters won a total of 18 elections out of 20 conducted over the last 17 years.

In recent years, the economy has suffered three-digit inflation and wages, especially the minimum wage, have not kept up.  Corruption has increased and the quality of the health and education services provided by the state have deteriorated badly.

However, the Bolivarian Revolution at least tried to provide an alternative strategy. This consisted of taking state control of the oil industry and using the income for social and economic development.  The key aspects were the missions providing social programs in health, education, land re-distribution and housing, aimed at the poor majority.

These did make a huge difference.  There are nearly eight times as many doctors in Venezuela as in Nigeria.  Infant mortality is less than 20 per thousand compared to around 70 in Nigeria – so more than three times as many Nigerian children die before they reach their fifth birthday.  But for most medical supplies, public hospitals depend on commercial pharmaceutical suppliers.  As a result, medicines have no longer been available in public hospitals.

In Nigeria about one in three children do not go to primary school. And nearly half the children that do cannot read when they leave primary school.  In Venezuela only 6% of children are not in school and 90% go on to secondary school.  As a result, for example, adult literacy in Venezuela is much higher than in Nigeria.

At the beginning of 2014 the minimum wage in Venezuela was around N70,000 a month. But despite several increases during 2015, its value had fallen to about N16,500 by October 2015.  In addition, in December 2015 petrol still sold at less than N5 a litre – the cheapest in the world.

The fall in the price of crude oil has had a catastrophic effect on an economy that was already struggling.  The problem is that the resources needed to re-launch the economy are simply not available to the state.  They could be found by turning to foreign investors like China or Russia.  But such investors are only interested in gaining ownership of the oil industry or benefiting from cheap labour.  They are not really interested in the socialist project or supporting the social gains of the Bolivarian Revolution.

The international fall in the oil price could have been reduced if the Nigerian government had formed an alliance with Venezuela to reduce production and so force up oil prices.  However, the corrupt elite of Nigeria would rather steal the money now rather than trying to ensure that the government obtains higher prices for oil over the longer term.

The Venezuelan government blames the electoral loss primarily on what it calls an economic war carried out by the Venezuelan bosses and its imperialist backers in U.S. –as well as a “betrayal” or a lack of “loyalty” among poor and working-class Chavistas, who either stayed home or voted for the opposition.

But the workers of Venezuela have been suffering declining living standards in recent years and have to pay more and more for public health and education services.  Ordinary people trying to get basic groceries have had to wait in line for seven hours a week on average.

After Hugo Chávez’s death in 2012, Maduro proved unable to win the loyalty of the party’s base. On December 6, millions of ordinary people voted against the government because they could no longer see any advantage in its economic and political policies.

As Venezuela socialist, Gonzalo Gómez, put it: “There are two enemies of the revolution: the bureaucracy and capital. They are two sides of the same capitalist coin at this point. Both compete against each other electorally, but share their briefcases under the table.”

What the Chavista bureaucracy is willing to concede to the right and what progressive reforms the right will seek to dismantle first will establish the terrain on which the working-class and poor will have to resist.

Unfortunately, the conditions under which this process will take place are turning negative in the region as a whole. The election of the opposition candidate Mauricio Marci in Argentina’s presidential vote energized the right in that country and also the movement in neighboring Brazil to impeach Workers Party President Dilma Roussef.

In both Argentina and Brazil, just as in Venezuela, collapsing oil and commodity prices and the spectacular corruption of left-leaning governments are allowing the right to claw its way back into power after more than a decade of Latin America’s so-called “Pink Tide” of left-wing governments.

These developments have all shown that ‘left’ governments have to dismantle the strength of their local bosses – or they will come back and attack them sooner or later.  Such governments rely on the power of the state to introduce reforms rather than using the power of the organized working class to smash the local elite.  This can bring reforms to benefit the working class and poor masses – but sooner or later the bosses locally and internationally are able to take back their power.



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