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Sunday, April 25, 2010
Jamaica: Drug lords turn to cigarettes
Multimillion-dollar trade said more lucrative than cocaine, holds lower risk
BY ALICIA ROACHE Sunday Observer staff reporter roachea@jamaicaobserver.com:
ORGANISED criminal gangs and drug dealers are behind the growing multimillion-dollar trade in illicit cigarettes locally, the Sunday Observer has learnt.
According to the authorities, the drug lords' transition is driven by their desire to avoid the harsh penalties associated with narcotics trafficking, even though breaches of the Trade Marks Act can attract huge fines and prison time.
In addition, the trade in illicit cigarettes is said to have lower safety risks.
"What we are really seeing in the illicit trade is tantamount to organised crime," said Michael Bernard, managing director of Carreras, the sole legal distributor of Craven A cigarettes in Jamaica.
"We believe it is structured and it has the potential for bringing in very, very significant income to the players," he told the Sunday Observer. "We don't believe, for example, that the major players are the little traders operating a small shop or wholesale. We believe it is basically planned, controlled and organised by people who have the capacity to, in some instances, engage with external suppliers."
Bernard spoke to the Sunday Observer following a record $300-million worth of illicit Craven A cigarettes was discovered last week in the country. Carreras immediately advised the public of the find and the potential legal actions which may be taken against those involved in the illegal trade.
Last month, the Jamaica Customs Contraband Enforcement Team seized a 40-foot container with over 400 cases of illegal cigarettes valued at $120 million. At that time, it was disclosed that the container belonged to a well-known area leader.
The estimated world market for the illicit trade is 390 billion sticks per year, representing six per cent of total world cigarette consumption, according to director of corporate and regulatory affairs at British American Tobacco (BAT) Michael Prideaux. An estimated 44-50 million sticks are illegally imported and distributed in Jamaica.
The cigarette market in Jamaica is also one of the most lucrative in the region, according to Carreras. This makes Jamaica a prime target for not only local 'dons' but international crime syndicates which can benefit from the high margins on the product.
Last year, BAT, owners of Carreras, recorded over £14 billion in revenue from the sale of the products. The Americas, of which Jamaica is a part, contributed 27 per cent of that amount, the largest share of the total for the company.
Carreras, which holds 99 per cent of the legal market through brands Dunhill, Matterhorn, Craven A and Rothmans, reported sales of 757 million sticks last year, even with the high incidence of counterfeit brands on the market. The contraband market accounts for 44-50 billion sticks, a loss to the formal system of approximately $1 billion in taxes and other duties each year.
A former law enforcement official who now targets the illicit cigarette trade said the value of the industry to the crime lords cannot be underestimated. He said that given the success of local and international law enforcement officials in disabling aspects of the cocaine trade locally, the cigarette market provides an efficient and low-risk means of diversifying the revenue base of the crime lords.
"Cocaine and gold don't carry the value that cigarettes do," he said. "This market is always going to be an attractive market for those who operate in the illicit trade."
He told the Sunday Observer that the illicit trade seen in Jamaica is part of a wider global network of which China accounts for 80 per cent of counterfeit brands. Countries such as Guatemala and Paraguay are also major hubs of trade in illegal products, but of all the territories, Jamaica presents the biggest challenge in arresting the problem because the margins for illegal traders are the highest here. Two million sticks of illicit cigarettes have an estimated street value of over $50 million in Jamaica.
"Why sell for $10 million in Guatemala when you can sell it for $100 million in Jamaica?" the official said. "If you have, say US$40,000, you can go to Nicaragua, El Salvador, Guatemala where they have tobacco factories, get a 40-foot container, load it up, bring it in and sell it in Jamaica and make at least $US1.2 million. What is your exposure there?"
Christopher Brown, head of corporate and regulatory affairs at Carreras, said that the high value-to-volume ratio of cigarettes, ease of production and movement, low detection rates and penalties, make cigarettes an attractive addition to organised crime's portfolio of activities.
"Cigarette business is profitable. In fact, because of that it would be attractive to profiteering and the evasion of duties, which would make it more profitable for those doing it," argued Brown. "...It is tantamount to becoming a segue for those organised criminal gangs that were previously involved in the hard cocaine trade, ganja trade, the guns and ammunition trade."
He said that the illicit trade is a transnational phenomenon, similar to how organised crime, and the guns for drugs trade operate. "Sometimes a container that starts in China goes to Panama and then eventually it comes here," said Brown.
A copy of a video shown to the Sunday Observer last Friday suggests that the counterfeit facilities, like narcotics labs, are hidden. In China, for instance, workers are given quotas and are left in caves, along with the machinery and parts to manufacture counterfeit goods.
Brown said the discoveries that have been made locally so far will prove small compared to what will happen if the trade goes unrestricted. "We are just seeing the tip of this. Because in other central and south American countries they have this problem full blown," he said. "They have support from the organised gangs, and even unscrupulous members of the authorities. They control the distribution network. In other countries in the Americas this is well-organised and they are looking to grow their market." Paraguay, for example produces 60 million sticks of cigarettes a year, but the market there consumes only three million sticks. The remaining cigarettes, therefore, find their way into countries such as Jamaica.
Superintendent Fitz Bailey, head of the Organised Crime Investigation Division, told the Sunday Observer that the police are still devising a strategy to deal with the illicit trade in cigarettes. "We have been pursuing it. We have been working on some new strategy," said Bailey. "I hope that at the end of the day we will be getting a better understanding of what the trade is all about and how it is perpetrated."
Glenmore Hinds, acting assistant commissioner of police in charge of operations, said that drug lords' transition to illicit cigarettes should not come as a surprise as the leaders of organised crime will seek to benefit from all criminal activity if the opportunity exists.
"It is just another commodity, so... they move from one to the other as the trade becomes more profitable," said Hinds.
He said the illicit cigarette trade, like any other criminal activity, can be arrested with time, diligent work and the collaboration of all stakeholders, including law-abiding citizens.
"I don't think there is any police force in the world that has all the resources that they need," said Hinds. "But to the extent that they exist, they will be applied to addressing the problems."
According to Brown, Carreras will offer its support to the authorities. "We as a company do not have operational activity that we directly participate in as it relates to the anti-illicit trade, because it is a very dangerous trade," he said. "However, what we really want to do is to sensitise the country to the presence of this new shift and this new emergence of what is generally considered to be part of the organised crime activity. It has been developing a lot in Central America and because of the transnational nature of it we have to now flag this and show that it is becoming a serious issue in the country."
April 25, 2010
jamaicaobserver
Saturday, April 24, 2010
Hugo Chávez’s First Decade in Office: Breakthroughs and Shortcomings
By Steve Ellner - Latin American Perspectives:
Now that the presidency of Hugo Chávez is beginning its second decade, the insistence of some critics on holding the government accountable by evaluating its concrete results becomes increasingly compelling. The assessment of gains and shortcomings is particularly important in light of the assertion of Chávez’s adversaries, as well as the concerns of some analysts who are more sympathetic to his government, that rent-seeking continues to underpin the Venezuelan economy and society, which remain completely dependent on petroleum (López Maya, 2008: 7; Coronil, 2008; Kelly and Palma, 2004: 229–230; Lombardi, 2003: 5–6). According to this line of reasoning, all the improvements over the past 10 years will be wiped out if international oil prices decline significantly. This article proposes to evaluate the gains in order to put this thesis to the test. Specifically, it seeks to determine whether paternalism and doles to the needy guide policy or, to the contrary, the government has set in motion fundamental changes that have the potential to contribute to structural transformation. The main premise of the article is that, in contrast to the situation in Bolivia and Ecuador, where leftist governments have been in power for a shorter time, it is possible to draw plausible conclusions on the basis of the Chávez government’s record in order to pinpoint its strong and weak points.
The proposed balance sheet of 10 years of Chavismo in power is designed to overcome the shortcomings of the debate on it at all levels. An empirically based analysis that contextualizes the positive and negative aspects of government policy inevitably highlights the complexity of Chávez’s rule. The resultant mixed picture of performance refutes both the opposition’s demonization of his government and the uncritically rosy depiction of it presented in the official media. It also promises to reframe the debate not only between pro- and anti-Chavista political analysts and writers but also among the main political currents within the Chávez movement.
The failure of anti-Chavista leaders and writers and many pro-Chavista ones to consider the broader picture stems in large part from two shortcomings that this article attempts to correct. In the first place, they overlook the trade-offs of government actions and the dissimilar effects on distinct sectors of the population outside of elite spheres. For example, the typical pro-Chavista analysis focuses on the underprivileged and stops short of weighing the effects of government discourse and policy on the middle sectors, implicitly if not explicitly conflating middle-class concerns with those of powerful economic groups. In the second place, writers reach different conclusions regarding concrete results according to the frameworks and lenses they use. Thus, for instance, according to the model of liberal democracy the Venezuelan political system fares poorly, while the model of radical democracy inspired by Rousseau leads to completely opposite conclusions.
The failure of most Chávez government critics as well as members of internal Chavista currents to root their analyses in the specifics of government performance and the failure of those who do so to overcome paradigmatic blinders are amply evident. Three examples —one of an anti-Chavista leader, another of anti-Chavista academics, and a third of internal currents within the Chavista movement—will suffice. Teodoro Petkoff, one of the less dogmatic opposition leaders and the author of several books on recent political developments, credits Chávez with converting the issue of poverty into a major topic of public debate, a feat that allegedly constitutes his main and perhaps only accomplishment as president. Petkoff’s focus on discourse, however, detracts from discussion of the government’s concrete breakthroughs on the social front (see, e.g., Frontline, 2008; Ellner, 2008: 135–36). This bias in favor of style and discourse over concrete results characterizes much of the formal and informal discussion of the Chávez phenomenon.
An example of an empirical study whose inflexible adherence to a given model undermines the objective interpretation of government performance is Castañeda and Morales’s (2008) Leftovers. Most of the book’s contributors use the unfavorable interpretation of the model of radical populism1 to argue that regimes like the Chávez government are inherently authoritarian, opportunistic, wasteful, and given to rhetorical excesses. As a result of being locked into this line of thinking, they pass over the gains that are outside the purview of the negative concept of radical populism, such as social inclusion and participation (Ellner, n.d.).
A third example of obstacles to the objective evaluation of government performance concerns divergent perceptions stemming from different models within the Chavista movement. A social-prioritization strategy, which highlights socialist values and emphasizes social over economic goals, is at odds with a pragmatic-decision-making approach designed to maximize efficiency and guarantee the viability of the economic system. While the more radical social-prioritization strategy favors harnessing popular energy through mobilizations and social programs with limited restrictions and controls, pragmatic decision-making emphasizes the importance of state institutionalization (Ellner, 2008: Chaps. 6 and 7).
Chavista leaders, including Chávez himself, and analysts who are sympathetic to the government sometimes prioritize social and cultural goals over economic ones (see discussion in Bowman and Stone, 2006: 22; Piñeiro Harnecker, 2009: 333–337). Thus, for example, Chávez’s constitutional amendment proposal (defeated at the polls in 2007), which would have reduced the work week from 44 to 36 hours, placed cultural and social goals ahead of economic ones. Others who defend the social-prioritization approach tend to pass over concrete problems that undermine the productive capacity of state-owned companies while arguing for worker-participation schemes. The clash of priorities calls for a more nuanced evaluation, even among pro-leftist writers, that recognizes the plurality of goals.2
In view of these conflicting priorities and claims, a balanced examination of the performance of the Chavistas in power that addresses distinct goals should shed considerable light on Venezuelan developments. This article will examine the concrete results of the Chávez presidency on political, economic, and social fronts. In doing so, it will place the government’s record in a broader context by looking at both the winners and losers of its policies among nonelite sectors, as well as the different and often conflicting goals that guide its actions.
The Political Front
The two distinct criteria used to evaluate the political system that has emerged under Chávez result in distinct evaluations of his rule. On the one hand, liberal democracy emphasizes checks and balances and the rights of minorities and warns against excessive executive power and centralism. On the other hand, radical democracy stresses majority rule and the direct participation of the people in decision making (though not necessarily to the detriment of representative institutions). While the Chavistas embrace radical democracy, or what they call “participatory democracy,” the Venezuelan opposition’s condemnation of the government rests on assumptions associated with liberal democracy.
Judging by liberal standards, Venezuelan democracy is highly deficient on a number of counts. First, those occupying key positions that are intended to be politically nonpartisan, such as the attorney general, national controller, and a majority of the members of the National Electoral Council, have been clearly identified with Chavismo. As a result, institutional checks on power are largely absent. Second, the 1999 constitution strengthened the power of the national executive by giving it, for instance, exclusive control over the promotion of military officers. Third, the nonpolitical character of the public administration, which was largely a myth in the decades prior to 1998, continues to be openly disregarded. Thus, for instance, those belonging to individual social programs participate in political mobilizations in favor of the government in separate blocs. In addition, liberal democracy warns against electoral initiatives originating from the executive branch (pejoratively labeled “plebiscitary democracy”), since the nation’s president ends up framing the issues without input from the opposition. Some political analysts apply this critique to Chávez, who called for two referenda at the outset of his presidency, another in 2007, and yet another in 2009. Finally, the Chávez government has refused to call tripartite commissions—which previous governments had created to provide organized sectors of the population such as labor and management with policy input—on the ground that they provide a voice for national elites rather than the rank and file (Márquez, 2007: 85–86).
Judging by standards associated with radical democracy, the Venezuelan political system under Chávez fares much better. Radical democracy (underpinned by the formulations of Jean-Jacques Rousseau) places emphasis on majority rule as opposed to the rights of minorities. It also attaches primary importance to the participation of popular sectors of the population. A key component of radical democracy is mass mobilizations, which in turn lead to empowerment, incorporation, and “political learning” on the part of the formerly excluded—largely subjective factors that are difficult to measure. During Chávez’s rule, significant progress has been made on these fronts. In contrast, three other components that are essential for the achievement and consolidation of any new democratic system lag behind: mechanisms for internal critical discussion, organizational solidity, and institutionalization of new rules of the game that are conducive to participation on a regular basis. The following discussion examines advances and obstacles in the achievement of these goals.
A system that emphasizes majority rule lends itself to frequent electoral contests. During Chávez’s presidency, the government held a record number of elections, which were validated by international observers and surveys by the international media and which the Chavistas largely won by percentages unmatched since 1958, with an abstention rate generally lower than throughout the 1990s. These electoral contests include the presidential recall election of 2004 and the referenda on the constitution in 1999, the 69-article constitutional reform in 2007, and a constitutional amendment in 2009. The system of referenda contains elements of direct or participatory democracy in that elections are preceded by a signature campaign (in the case of the 2004 recall) and the electoral contest places specific proposals rather than candidates to the test. Thus, for instance, in 1999, 2007, and 2009 the national debates over constitutional proposals involved all voters and not just national political elites and were largely without precedent in Venezuelan history, although the opposition criticized their relatively short duration (García Guadilla, 2003: 186–187). Finally, despite the violence at critical moments, in some cases traced to the radical opposition, and the refusal of the opposition to endorse any of President Chávez’s initiatives thus indirectly questioning his legitimacy, overt government repression was avoided.3
Another important component of radical democracy is mobilization, particularly when it leads to empowerment and political learning that in turn contributes to organizational growth. Never in the history of Venezuela have massive numbers of people participated in marches and rallies over such an extended period of time as during the Chávez presidency. Indeed, the key to Chávez’s political survival in the face of the opposition’s aggressive street tactics beginning in late 2001 has been his mobilization capacity, which at first equaled and then exceeded that of his adversaries.
Most important, the hundreds of thousands of poor people who surrounded the presidential palace and military bases following the April 11, 2002, coup made possible Chávez’s return to power. In contrast to the street mobilizations on that day, which were largely spontaneous, the participation of large numbers of Chávez’s followers in the numerous electoral campaigns since 1998 has required a degree of organization. Electoral organizations that were perceived as representing a bottom-up effort included the Unidades de Batalla Electoral, created to campaign against the presidential recall vote in August 2004, the “battalions,” “platoons,” and “squadrons” formed for the presidential campaign of December 2006, the “socialist battalions” of the newly created Partido Socialista Unitario de Venezuela (Unitary Socialist Party of Venezuela—PSUV), which canvassed in favor of the constitutional reform in the referendum held in December 2007 and for the Chavista candidates in the state-municipal elections of November 2008, and the 20–30-member “patrols” that the PSUV created in 2009 to replace the much larger “battalions.”
The formation of the PSUV, which was designed to overcome the bureaucracy and lack of communication with the Chavista base that characterized its predecessor the Movimiento Quinta República (Fifth Republic Movement—MVR), also promoted mass participation. In the first half of 2007, 5.7 million Chavistas, representing about 75 percent of those who had voted for Chávez in the presidential elections of the previous year, enrolled in the PSUV. In a sign of rank-and-file empowerment and discontent, PSUV elections for local party “spokespeople” (leaders) excluded in large part those Chavistas who held positions in the government and movement, in accordance with Chávez’s call for new leadership. In June 2008, about 2.5 million PSUV members participated in primaries to choose the party’s gubernatorial and mayoral candidates for the upcoming elections, in contrast to the opposition’s largely top-down method of selection.
The key role of popular mobilization in the Chavista political strategy and Chávez’s discourse emphasizing the “protagonist” role of the people as spelled out in the 1999 constitution have contributed to a sense of empowerment among those who for decades had been largely excluded from decision making. Political victories have also empowered the rank and file of the Chavista movement. Thus, for instance, the Chavistas who took to the streets at the time of the April 2002 coup assumed credit for Chávez’s return to power by pointing out that the MVR “political class” had gone into hiding while they had acted on their own and risked their lives in the process. Furthermore, after each successful electoral contest beginning with the August 2004 recall election, rank-and-file Chavistas have asserted that their activism entitled them to decision-making power, particularly with regard to the selection of party candidates.
Diverse social programs that provide education and employment opportunities to large numbers of the underprivileged, in accordance with the government policy of prioritizing quantity over quality (to be discussed below), have also had an empowering effect. While a sense of paternalism (the antithesis of empowerment) prevailed among many of the original cooperatives and some community councils consisting mainly of low-income Venezuelans and although a large number failed to get off the ground, those that did became well versed in legal and administrative matters for the purpose of strengthening their hand in negotiations with state institutions. Thus, for instance, their application for loans, grants, and contracts from state institutions have proved to be a learning experience for cooperative and community council members while enhancing their sense of efficacy (López Maya, 2007; Piñero Harnecker, 2007: 30–31; Ellner, 2007; 2009).
Mobilization and empowerment have influenced general attitudes toward Venezuelan democracy. The annual Latinbarometer public opinion surveys in recent years have placed Venezuela significantly above the continent’s average in terms of respondents’ positive feelings about the nation’s democratic system. In 2006, for instance, the continent’s average was 58 percent, 12 points below that of Venezuela. High levels of democratic commitment became particularly evident at the time of the April 2002 coup, when both opposition and pro-Chávez forces participated in massive demonstrations zealously calling for the restoration of democracy (Santiso, 2006: 105–106).
Mobilization and empowerment have not, however, stimulated organizational development and formal internal debate, which are also essential elements of radical democracy. Social organizations such as the Círculos Bolivarianos have proved short-lived as their members dropped out to join state-sponsored social programs and then Chavista electoral organizations. Although state money did not necessarily co-opt the rank-and-file Chavistas, who maintained a critical attitude toward the party and elected officials, the lack of organizational continuity limited avenues of popular input in decision making.
The Chavista movement’s lack of organizational stability and consolidation are reflected in a major way in the labor movement. The pro-Chavista Unión Nacional de Trabajadores (National Workers’ Union—UNT) had an auspicious beginning in the aftermath of the general strike of 2002–2003, when it immediately displaced the discredited Confederación de Trabajadores de Venezuela (Workers Confederation of Venezuela—CTV). Nevertheless, an intense struggle among internal currents (between those like the Trotskyist Orlando Chirino, who insisted on complete autonomy, and those who stressed the need to defend the government) has delayed elections for confederation authorities and the structural consolidation of the organization (Ellner, 2008: 157–158). So heavily charged is the internal debate that the head of the UNT’s Anzoátegui chapter stated, “We tell our members to leave their factional sympathies at the door, since otherwise our meetings become raucous” (Luis Serrano, interview, Barcelona, Venezuela, December 18, 2007). Buoyed by the recent nationalization of the steel company Siderúrgica de Orinoco (Orinoco Steel Company—SIDOR) as a result of an intense labor conflict, UNT-sponsored May Day marches in 2008 expressed rank-and-file support for the unity of the Chavista labor movement.
Until the government’s defeat in the referendum held in December 2007, the Chavista movement consistently postponed internal debate and self-criticism. Two positions emerged in meetings (such as those of the PSUV’s socialist battalions) held throughout the country and in discussion aired by the Chavista media to analyze the unfavorable electoral results of 2007 (Guillermo García Ponce, interview, Caracas, January 24, 2008). Some Chavistas, and initially Chávez himself, focused on tactics as well as the Chavistas’ overconfidence and communicational errors. They also blamed a campaign of misinformation engineered by government adversaries. A second position stressed the larger implications of the defeat and was defended by Chavistas at all levels, including the outspoken national deputy from the state of Táchira, Luis Tascón, as well as intellectuals on the periphery of the movement, such as Heinz Dieterich. These Chavistas attributed the defeat to errors of policy and strategy committed over a period of time and particularly to the failure of Chavista-elected officials at the local and state levels to promote efficient government. Some of them also claimed that corrupt and moderate members of the Chavista movement, fearing the radicalization process, had secretly worked against the referendum’s approval. At the outset of the new year, Chávez modified his position by calling for an open debate within his movement and for the first time recognized the existence of internal currents of opinion that needed to be harnessed rather than suppressed.
In short, since 1999 the Chávez government has made certain advances toward radical democracy, but major obstacles block the goal’s full achievement. Ongoing mobilization of record numbers of Venezuelans and the incorporation of excluded sectors and their resultant sense of empowerment represent important steps toward a new, more inclusive political system. The critical internal debate among Chavistas set off by the referendum’s defeat in 2007 initiated a discussion within the movement that could serve to counter bureaucratization and corruption. At the same time, however, the all-encompassing role of Chávez and the tendency of Chavistas to look to him to formulate official positions discourage internal debate and the creation of well-defined mechanisms for decision making. Furthermore, the tendency of Chavistas with critical positions to defect to the opposition (such as the dissident group led by Francisco Arias Cárdenas in 2000, the Movimiento al Socialismo party and Luis Miquilena in 2001–2002, and the Podemos Party along with General Raúl Baduel in 2007) militates against the tolerance of diversity that is a sine qua non for internal democracy.
The greatest challenge the Chavistas face in their effort to transform the nation’s political system is organizational solidification and institutionalization. Steps toward institutionalization have been taken in the recent past. In some areas, the state has become more demanding of experimental forms of economic activity (in accordance with the pragmatic-decision-making approach). Thus, for instance, following the failure of the initial practice of granting start-up capital to massive numbers of cooperatives without effective guarantees, the government has tightened requirements for new loans and allocations to the nation’s 20,000 community councils. Nevertheless, much-needed institutional oversight consisting of links between the controllerships at the national, state and municipal levels and the makeshift “social controllerships” at the community level (and the latter’s access to technical information regarding public works projects) is lacking.
In another auspicious organizational development, the PSUV was designed to establish mechanisms linking the rank and file to the Chavista leadership. The PSUV’s socialist battalions played a central role in the campaign for the local elections in November 2008, for which the party (in contrast to the opposition bloc) held primaries to choose its candidates. The battalions, however, were less active in the campaign for the referendum on a proposed constitutional amendment that was held four months later, when the Chavistas relied to a greater degree on those participating in the social missions and other state programs.
Various explanations for the slow pace of institutionalization can be offered. One obstacle is the differences in strategies within the Chavista movement. Those who defend the social-prioritization model highlight mobilization of massive numbers and their participation in different programs but are suspicious of state interference in social programs that could dampen popular enthusiasm. In contrast, the pragmatic-decision-making approach underlines the importance of formal mechanisms to ensure efficiency and is thus more supportive of institutionalization.
In addition, the Chavista movement’s distrust of political party leaders and state-sector professional employees (pejoratively called “technocrats”) holds back organizational and institutional growth. This attitude especially manifests itself in the social-prioritization line of thinking. Furthermore, the frequent replacement of personnel in top ministerial positions and their inexperience, in the context of profound structural changes, contribute to uncertainty regarding the rules of the game and lack of regularity in public administration, which are characteristics of low levels of institutionalization.
The failure of Chavismo to make important advances along institutional lines can also be understood in historical and theoretical contexts. In the first place, the Chávez phenomenon resembles stages of other revolutionary processes, such as that of Cuba in the 1960s and the Cultural Revolution in China, which were characterized by “ultraleftism,” voluntarism, and campaigns against established bureaucracies and promoted makeshift structures holding back institutionalization. The direct appeal to the mass of the population above legalistic and bureaucratic restraints is frequently a reaction to the perceived (and very often real) threats posed by a ruthless internal and external enemy. In the second place, Max Weber’s observation that charismatic leadership generates legitimacy at the same time that it forestalls the emergence of legal structures is applicable to the Chávez presidency. Indeed, Chávez’s charismatic qualities have militated against institutionalization by impeding the development of the system of checks and balances associated with the liberal-democracy model. Furthermore, Chávez’s undisputed role as maximum leader of the government and the Chavista movement impedes the emergence of collective leadership and competition for leadership roles and hinders the organizational development of the party. These shortcomings discourage healthy rivalry within the PSUV that would stimulate internal debate. They also hold back the party from serving as a two-way link between the Chavista base and social movements on the one hand and state institutions on the other.
The Economic Front
The Chávez government has targeted three fundamental economic goals that have been defended by most political leaders in Venezuela, at least in principle, since the beginning of the modern democratic period in 1958. The first explicit goal is the diversification of commercial relations in order to overcome dependence on the U.S. oil market (Últimas Noticias, September 11, 2007, p. 21). A second, related goal is the assertion of national “sovereignty” by increasing the nation’s independent productive capacity, specifically severing dependence on capital and technology from the advanced capitalist nations. Third, the government seeks to challenge oligopolistic control of the economy by opening opportunities for new sources of competition. In attempting to achieve these goals, the Chávez government has taken bold initiatives on national and international fronts and has displayed a sense of economic nationalism. Any evaluation of the government’s economic performance must center on advances along these three lines, as well as deficiencies and hardships resulting from misguided policies and resistance from powerful economic groups.
The so-called nationalization of the Orinoco Oil Belt in 2007 was designed to further the first two goals. Under the arrangement, the state oil company Petróleos de Venezuela (Petroleum of Venezuela—PDVSA), which had until then been a junior partner among the companies that produced and refined heavyweight unconventional petroleum from the Orinoco Belt, was given a minimum of 60 percent ownership. In addition, the employees of the Orinoco companies were transferred to PDVSA’s payroll. The move was a gambit that produced mixed results. On the one hand, Exxon and ConocoPhillips, both with important interests in the Orinoco Belt, refused to accept reduced ownership and pulled out. The resultant shortage of skilled personnel was aggravated by PDVSA’s pay scale, which was lower than that of the multinationals and even than its own salaries in the past.4 However, another major Orinoco producer, Chevron Texaco, along with several other multinationals, accepted the new arrangement at the same time that it negotiated an expanded role.
The government’s diversification of foreign participation in the Orinoco contributed to this relative success. Shortly before implementation of the nationalization scheme, PDVSA had opened the Orinoco’s 27 blocks to mostly state companies outside of the advanced capitalist world in nations such as China, Iran, Russia, Belarus, Vietnam, Argentina, Uruguay, and Brazil. The prospect of being eventually displaced by countries like energy-hungry China in the Orinoco reserves, which may be the largest in the world, discouraged the multinationals from rejecting the Venezuelan government’s initiative.
Chávez’s activist foreign policy, including his frequent travel abroad, has facilitated arrangements allowing Venezuela to diversify sources of capital, technology, and commerce. During his presidency, Venezuela’s exports of crude to China have risen rapidly, surpassing 350,000 barrels per day in 2008. In addition, the Chávez government established PetroCaribe, consisting of 16 nations (including Jamaica, Cuba, the Dominican Republic, and, as of 2007, Nicaragua and Haiti), which received lenient terms of payment for 40 percent of the price of the Venezuelan oil that was purchased. Diplomatic moves also paved the way for the construction of a gas pipeline connecting Venezuela’s western region and Colombia, which was completed in 2007, as well as a refinery in Cienfuegos, Cuba, concluded in 2007 and another in Pernambuco, Brazil, due for completion in 2011. Venezuela has a 49 percent stake in the Cienfuegos refinery and 40 percent in the case of Pernambuco. These endeavors contributed to a modest lessening of dependency on U.S. markets, as shown by the decline of Venezuelan oil exports to the United States by 8.2 percent in 2005 and 2006 (Luhnow and Millard, 2007).
Other sectors of the economy also benefit from the policy of attracting investments from nonadvanced nations, particularly state companies, which unlike multinational corporations do not generally block the transfer of technology. Technology transfer, for instance, is a major objective in the joint automobile production venture consisting of a semipublic Iranian company with 51 percent of the ownership and Venezuelan state capital with 49 percent. In 2007 the factory, located in Maracay and using Iranian technology, produced the first lot of 227 cars called Venirautos. Their retail price was less than half of market value, and buyers were given lenient credit options by the state bank BANFOANDES. In 2009 the mixed company announced plans to produce 5,000 vehicles that year and open 10 concessionaires throughout the nation. By 2010, the cars are to use 35 percent Venezuelan parts, and this figure is supposed to reach 92 percent in subsequent years.
The diversification of investment and technological transfer beyond the advanced capitalist bloc is also evident in the case of the nation’s ambitious expansion of the public transportation system. In 2006, three rail lines were completed in Caracas, one cutting across the inner city and the other two connecting the metro system with the surrounding towns of Los Teques and Cua. In the same year, the first lines of metro systems were inaugurated in Maracaibo (with two stations extending 1.1 kilometers) and Valencia (with seven stations extending 4.7 kilometers). Shortly thereafter, the trolley bus of Mérida began functioning, while another in Barquisimeto was nearing completion. The Brazilian company Odebrecht directed several major transportation projects, including Caracas’s parallel inner-city metro line and its planned extension (beyond Parque del Este), in addition to the Orinoco River’s second bridge, completed in 2006, and a cable car system in the capital’s hillside barrio of San Agustin.
Work is under way to expand most of these projects. There have been modest advances in the recent past, such as the establishment of daylong service along the Los Teques and Cua lines, which previously had been suspended between 9:00 a.m. and 5:00 p.m. while work was being undertaken on parallel tracks. Nevertheless, the plan to expand the national railroad system did not receive the priority attention that was merited given the traffic problems generated by the boom in automobile sales, itself made possible by increased purchasing power. Electoral considerations may explain the impressive number of inaugurations of projects prior to the presidential elections in 2006 in contrast with the slower pace of construction since then.
The Chávez presidency’s demands on foreign capital were unmatched by the Venezuelan governments that pursued state interventionist policies over the previous half century. Chávez’s boldness was apparent in his 2007 showdown with SIDOR, whose controlling shares were owned by the Argentine-dominated consortium Ternium. In May of that year, Chávez accused SIDOR of prioritizing foreign markets, thus forcing Venezuela to import seamless pipes for its oil industry from China. At the same time, he threatened nationalization, which the militant steel workers’ union had been demanding for some time. In an effort to avert nationalization, top executives of SIDOR and its parent companies met with the minister of basic industries and mining and the minister of light industry. The resultant agreement committed SIDOR to selling steel to Venezuelan clients at a discount and providing worker cooperatives with an additional 2 percent reduction. SIDOR also agreed to invest US$500 million (including US$70 million for environmental protection) to increase the company’s productive capacity. In addition, the Argentine company Techint, which controls Ternium, agreed to supply Venezuela with seamless pipes. In an unprecedented arrangement, a commission that included the Ministry of Basic Industries was established to function within SIDOR to monitor the fulfillment of the agreement. By the end of the year, SIDOR claimed to be placing 80 percent of its production in the national market.
The new arrangement, however, did not deter the Venezuelan government from nationalizing SIDOR the following year as a result of a labor conflict over the failure to sign a collective bargaining agreement. The move followed the state takeover of the Compañía Anónima Nacional de Teléfonos (Anonymous National Telephone Company—CANTV) and several electricity companies and preceded the acquisition of three cement companies (the largest being the Mexican-owned Cementos Mexicanos) and one of the nation’s largest and oldest banks, the Bank of Venezuela. All of these companies were foreign-owned, as were other, smaller nationalized ones, including several that served SIDOR, as well as various food-processing firms. State control of strategic sectors of the economy had been a political rallying point dating back to the first leftist and nationalist parties in the 1930s and became part of the economic program of the two main pro-establishment parties, Acción Democrática (Democratic Action—AD) and the Comité de Organización Política Electoral Independiente (Independent Committee for Electoral Political Organization—COPEI) prior to the neoliberal period of the 1990s. Chávez had advocated state management of basic industry prior to running for the presidency in 1998 but then laid the issue aside until his third presidential triumph in December 2006.
The nationalization of important sectors beginning in 2007, as in the past, was designed to promote national development and social objectives more than profit-making considerations. During its initial year or two of operation, each nationalized company boasted of achieving goals unrelated to profits: SIDOR began placing a number of the 10,000 workers of contractor companies on its payroll; the state cement company began to address the problem of the national demand that had gone unfulfilled while 50 percent of the industry’s production was destined for export, a situation that SIDOR also pledged itself to correct; and CANTV offered a “tariff solidarity plan” with discounts of 10–15 percent to 820,000 low-income subscribers.
Different criteria existed within the Chavista movement on the management and goals of nationalized industries. Members of the social-prioritization current defended a strategy of disregarding market and globalization pressures and concentrating on the priorities established by national planning. In contrast, members of the pragmatic-decision-making current, while supporting noneconomic objectives, prioritized efficiency and production goals. They also questioned the application of worker-management schemes in strategic state-owned sectors such as the aluminum industry, the state electricity company CADAFE, and PDVSA. In contrast, the social-prioritization champions, including UNT trade unionists, called for a complete overhaul of the company bureaucracy and warned that some of its managers were government adversaries who were engaging in sabotage.
A major shortcoming of government economic policy has been the failure to stimulate production in certain key sectors to the degree necessary to meet the levels of demand brought about by record high oil prices. The land distribution facilitated by the Lands Law of 2001, the government’s promotion of thousands of agricultural cooperatives with generous amounts of start-up capital, and the state-run food distribution chain Mercado de Alimentos (MERCAL), with its 15,000 retail outlets (many of them ”Bodegas Mercales” located in people’s homes), were designed to break the oligopoly control of the food industry that had induced shortages during the 2002–2003 general strike. These efforts, however, failed to alleviate significantly the ongoing shortage of staples in 2007, including milk, sugar, meat, and orange juice, which undoubtedly contributed to the government’s defeat in the referendum held that December.
The country’s heightened dependence on foreign imports thwarts the achievement of the Chavistas’ fundamental goal of national sovereignty. With the steady increase in oil revenue, the problem of commercial dependence had by 2007 reached an extreme. In the first half of 2007, overall national demand rose 30 percent with respect to the equivalent months of the previous year, while industrial production increased only 7 percent (El Caribeño, July 28, 2007, p. C-14). In his annual address to the National Assembly in January 2008, Chávez recognized that insufficient national production and resultant scarcities reflected poorly on the state’s national planning efforts. Chronic shortages, a poor investment climate, and the failure of the nation’s productive capacity to keep pace with increased demand were translated into inflation, which reached 22.5 percent in 2007 and 30.9 percent in 2008.
The astronomical increase in car imports and related problems put in evidence the government’s failure to set and follow through on economic priorities. While car sales rose 176 percent between January and June 2007 compared with the first half of 2006, production increased only 5 percent (El Universal, July 6, 2007, p. 1-14). In addition to allowing imports to overtake national production, this trend undermined the fabrication of automobile parts, which are geared toward models assembled in the country. Furthermore, investment in public transportation, in spite of the positive results discussed above, has been insufficient to lessen the steep increase in demand for automobiles. Along with the boom in automobile purchases, various government policies aggravated the problem of urban traffic: low gasoline prices, set at about 15 cents a gallon; the government-sponsored popular cars known as the Venemovil (whose sales represented 18 percent of the national market in 2007), which are exempt from the 9–14 percent value-added tax; and the government’s failure to place a tax on luxury cars (in spite of Chávez’s support for the proposition). In mid-2009 Chávez backed down on his announced plan to increase gasoline prices.
While imports in general have surged, the upturn in national production fell far behind increases in purchasing power. The modest increase in output was mainly due to the utilization of excess capacity and not to private-sector investments. Thus, by 2008 the economy was operating at 90 percent of capacity, up from 60 percent in four years (Panorama, January 14, 2008).
Analysts and actors have put forward several related explanations for scarcities and insufficient investment by national and foreign capital. One attributes the problem to the government’s regulatory policies, which are incompatible with the realities of the globalized economy. The World Liberty Index, which ranks nations largely on the basis of economic freedoms, lowered Venezuela’s ranking from 135th to 141st place in 2006 and made special reference to state regulation of labor, credit, and prices (Economía, September 4, 2007 p. 1-12). In early 2007, some of the price controls established by the government to combat the inflation set off by the 2002–2003 general strike were lifted. The adjustments, however, allegedly did not accord with increases in the cost of production, and to make matters worse the consumer protection agency temporarily closed hundreds of commercial establishments for having ignored regulated prices (Ordoñez, 2007). Other critics of the Chavistas explain the disparity between national supply and demand by pointing out that investors always react negatively to governments perceived to be hostile, particularly those like Chávez’s that threaten expropriation and advocate socialism (Rosenberg, 2007). The head of the business organization VenAmCham, Carlos Tejera París, summarized this dynamic with the words “Capital is cowardly” (El Universal, September 7, 2007, p. 1-12).
In 2008, the government began to limit imports in nonpriority areas. A greater percentage of preferential dollars (sold at a lower exchange rate) was assigned to the importation of food and medicine at the expense of automobiles and other nonessential products. In addition, by mid-2008 the government had taken steps to eliminate the Venemovil program.
The diversification of commercial relations and investment has proved to be more achievable, at least in the short run, than increasing production. PDVSA’s strategy for meeting its industrial requirements reflects this productive lag. In 2007, PDVSA created PDVSA Industrial and PDVSA Servicios to supply parts and equipment for the oil industry, partly to overcome the shortage of oil drills. PDVSA Industrial undertook a project to build a factory in the Orinoco region to assemble drills from components imported from China. Meanwhile, as part of the diversification process, PDVSA has begun to import drills from China and elsewhere that will be serviced by PDVSA Servicios. The strategy reflects the slow pace of implementation of plans to increase productive capacity in order to meet the rising demand generated by windfall oil revenue.
The Social Front
Zero-sum-game policies under Chávez’s rule include the strict enforcement of the income tax by the state collection agency Servicio Integrado de Administración Aduanera y Tributaria (SENIAT), reduction of the value-added tax, and the prioritization of social spending (Parker, 2007: 68–69). In addition, for the first time since the outset of the democratic period in 1958 the government has refrained from appointing business representatives to key positions in the formulation of economic policy. Although these measures favor the nonprivileged at the expense of the privileged, abundant oil income under Chávez’s presidency has ruled out the necessity of a substantial transfer of wealth from one sector of the population to another. According to the Economic Commission for Latin America and the Caribbean (ECLAC, 2007), poverty and extreme poverty rates in Venezuela decreased by 18.4 and 12.3 percent respectively between 2002 and 2006, the second sharpest decline in the continent.5 At the same time, the more than twofold increase in automobile sales in 2007 and the large number of new SUVs visible in middle-class neighborhoods put in evidence the improved purchasing power of the well-to-do.
Some of the main advances achieved under Chávez’s rule imply trade-offs in which quantity is prioritized over quality. This strategy is designed to facilitate the incorporation of previously excluded sectors of the population, a fundamental Chavista goal. In some cases, however, the losers in the trade-offs do not belong to the nation’s elite.
An example of this dynamic is the educational “missions,” consisting of literacy classes as well as programs at the high school (Misión Ribas) and university (Misión Sucre) levels. By 2008, Misión Ribas had graduated 450,000 students. Its use of videocassettes and “facilitators” as substitutes for teachers is a practical innovation but one that not surprisingly fails to match the quality of regular schools. Thus, for instance, Misión Ribas employs university graduates mainly as supervisors but not as facilitators, as was the original intention (although facilitators are obliged to be enrolled in university studies). Some universities under the jurisdiction of the Ministry of Higher Education play a supervisory role in the Misión Sucre and confer on the graduates diplomas in the name of their respective institutions. The “losers” are the graduates of traditional schools, who end up competing with the mission graduates in the labor market, and the private universities, which lose students to the Misión Sucre and the related Universidad Bolivariana.6 Some members of the opposition question the validity of the mission degrees, arguing that they should not be given the same weight as those issued by traditional schools because of the missions’ lower standards. They particularly criticize medical programs at the undergraduate and graduate levels, which are under the direction of Cuban doctors. Nevertheless, the success of the missions in attracting large numbers of students is due in large part to the issuance of regular high school (bachillerato) and university (licenciatura) degrees, since junior college ones (técnico superior universitario) command notoriously low salaries on the job market.7
Just as the opportunity of obtaining a high school or college degree (as well as a stipend) motivates Misión Ribas and Misión Sucre enrollees, the prospect of receiving grants for neighborhood projects has catalyzed the formation of community councils beginning in 2006. The councils select priority public works projects for their respective communities and then design them, apply for funding, and implement them. In contrast to the cooperatives, all those in charge of the councils are on an equal footing and are simply called “spokespeople” (voceros). Diverse agencies provide funding, including the Ministry of Participation and Social Protection, the Fondo Intergubernamental para la Descentralización (Intergovernmental Fund for Decentralization—FIDES), local governments, and state banks, in accordance with Article 25 of the Law of Community Councils. (The mandatory allocation of 5 percent of the ordinary federal budget for the community councils was one of the 69 proposed constitutional articles voted down in the national referendum in 2007.) To date, much of the money has been used to construct community centers, roads, sidewalks, and family housing, although the councils also provide loans for small local businessmen, following approval in community assemblies.
In spite of greater state controls than was initially the case with the cooperatives, the Chávez government’s low levels of institutionalization has contributed to the misuse of public funds. At the same time, however, the councils that have achieved consolidation have produced favorable results. Given the time and effort invested by their leading members, the community councils that have withstood the test of time have a vested interest in complying with fiscal obligations in order to qualify for additional support.
Diverse activities promoted by the community councils demonstrate their potential to assume diverse responsibilities. First, their “social controllership” commissions monitor public works in accordance with Article 11 of the Law of Community Councils, which defines their role as one of “inspection, control, and supervision.” The social controllerships complement the activity of inspectors sent by the agency that finances community projects and are able to take grievances to the National Registry of Contractors. Second, the community councils establish employment commissions that demand preferential hiring for neighborhood residents in the carrying out of public works projects within their jurisdiction (Leandro Rodríguez, interview, Caracas, January 24, 2008).
A host of government initiatives tie the community councils to state entities and programs. Thus college students enrolled in the social sciences in the Misión Sucre take courses called “Projects” in which they work with community councils to design proposals for consideration by state financial agencies. Similarly, community council leaders accompany the consumer protection agency in its inspections of commercial establishments in order to monitor prices on regulated commodities and to close stores that overcharge for 24–48 hours. In addition, CANTV provides discounted monthly rates to community council spokespeople.
Rank-and-file Chavistas frequently argue that there is visible evidence of clientelism, corruption, and exaggerated lifestyles among some Chavista leaders. Other vices in the public sector are also discernible. In 2004, the names of those who had signed the petition in favor of the presidential recall were published as the “Tascón List.” Although several leading government officials (such as Labor Minister María Cristina Iglesias and PDVSA president Alí Rodríguez), as well as Chávez himself, publicly opposed discrimination in the public sector against the petition’s signers, the controversial Minister of Health Roger Capella took the opposite stand: “In NASA if someone signs a petition against the Bush government and declares that he is conspiring against it, you can just imagine whether or not he continues in NASA” (El Universal, November 17, 2004).
At the same time, however, major government social programs are collective in scope, representing the antithesis of clientelism and paternalism. The system of social security pensions, for instance, compensates working people for their lifelong service and thus represents the opposite of a “handout.”8 The Chávez government for the first time pegged social security pensions to the minimum wage (which itself steadily increased), an arrangement that had been signed into law but not enforced under the previous government of Rafael Caldera. Various obstacles to entrance into the system were removed and payments were made on time, also in sharp contrast with past practice. In addition, the government accepted the pension movement’s proposal for a Christmas bonus amounting to two months’ payment. By 2007 the number of pension recipients had reached 2.2 million, a figure that surpassed the expectations of social movement activists and represented a threefold increase over those in the program in 1998 (Arturo Tremont, interview, Caracas, December 4, 2007). The government included a proposal for a special social security fund for members of the informal economy in the constitutional reform that was defeated at the polls in December 2007.
Differences in the criteria used by different currents within the Chavista movement as well as the opposition lead to distinct evaluations of the government’s social programs. From the standpoint of the Chavista goal of the incorporation of the marginalized and semimarginalized sectors of the population (emphasized by the social-prioritization strategy), the cooperatives, community councils, and educational mission programs have been undeniably successful. They have provided opportunities to hundreds of thousands of the underprivileged for learning and participation in decision making, which in turn enhance their sense of empowerment. Furthermore, their participation is not merely symbolic. A significant number of public works projects undertaken by community councils throughout the country have been satisfactorily completed. In addition, hundreds of thousands of students are now beginning to graduate from the mission programs. Nevertheless, from a cost-benefit perspective that prioritizes quality over quantity, the results are not equally impressive. Large contractors with greater capital, experience, and technological know-how could undoubtedly perform better than the community councils and cooperatives, at least in the short run (Ellner, 2009). The real test for the programs will come with the consolidation of the community councils at a later date when statistics will demonstrate how many of them continue to function actively and when it will be possible to determine how the graduates of the mission programs fare in the job market and the workplace.
Conclusion
Empirical studies of socialist governments over the past century that center on their strengths and weaknesses in specific areas are well suited to the framing of issues for theoretical analysis. Thus, for instance, an objective examination of “really existing socialism” that draws up a balance sheet for socialist experiences since 1917 is conducive to a conclusion that those who demonize or glorify the system may not readily accept: that while socialist nations have scored high on the social front, the stimulation of production of consumer goods has proved to be a major weak point. The Venezuelan experience coincides with this historical tendency in social and economic performance.9
This article has pointed to concrete advances achieved by the Chávez government on political, economic, and social fronts, including the mobilization and incorporation of massive numbers of the formerly marginalized in the decision-making process, the diversification of technological and commercial ties, and the assertion of greater national control in the economic sphere. The shortcomings of the government include the failure to substantially boost production in spite of a windfall in oil revenue and the slow pace of institutionalization. This mixed picture counters analyses that simplify the process of change under way in Venezuela such as those that demonize Chávez and the Chavista movement. It also demonstrates the limitations of the rent-seeking thesis, which posits continuity over a lengthy period of time and denies any alteration in Venezuela’s status as an oil-dependent nation.
In addition, the article makes evident the complexity of the task of devising a uniform standard for evaluating the positive and negative features of Chávez’s rule and the importance of going beyond paradigmatic boundaries. In the first place, different models highlight distinct objectives. Liberal democracy, which underpins the thinking of Chávez’s critics to his right, places a premium on a system of checks and balances that the Chavistas, who embrace a model of radical democracy, tend to ignore. Nevertheless, checks are an indispensable mechanism for overcoming corruption in Venezuela, which is generally recognized as a critical problem by both sides. Another example of differences in models that tend to cloud the objective evaluation of the government’s performance is the social-prioritization and pragmatic-decision-making approaches within the Chavista movement. While the former posits that nationalized companies in strategic industries should be primarily committed to developmental and social objectives, the latter prioritizes production targets and efficiency. Furthermore, while the social-prioritization thesis, which largely rejects Venezuela’s incorporation into in the global market, hails PetroCaribe as an example of international solidarity, the pragmatic-decision-making defenders view the arrangement as a viable commercial strategy to promote diversification by penetrating new markets.
In the second place, the evaluation of the impact of government policies needs to take into account widely dissimilar effects on different nonprivileged sectors of the population, a reality that both Chavista and anti-Chavista political actors seldom recognize. Indeed, those who are sympathetic to the Chávez government tend to lose sight of the fact that government policies have had “winners” and “losers” and that not all of the latter belong to elite groups. The Chavistas, by highlighting the success of the government’s social programs in incorporating the nonprivileged into the nation’s life, often pass over the “losers.” Students in established universities, for instance, end up competing with their counterparts in the Misión Sucre in the job market in spite of the marked differences in the educational standards of the two programs. The Chavistas overlook this incongruity when they commonly attribute the mobilizations of large numbers of anti-Chavista students to the influence of the opposition-controlled media while failing to recognize that the mission programs undermine the interests of the traditional educational system.
The recognition of the need for a broader analysis of government policies that looks at the effects on “losers” among nonelite groups and the applicability of diverse models suggests the importance for the Chavistas of going beyond rhetoric and dogma by promoting formal debate in an effort to examine complex and knotty problems and devise viable solutions. Since the defeat of the proposed constitutional reform in the national referendum in 2007, self-criticism, which Chávez himself has declared necessary, has begun to transcend informal discussion among Chavistas. The daily, online pro-Chavista Aporrea.org, for example, has opened its pages to a diversity of viewpoints, including critical ones, within the movement (Hellinger, 2009). Nevertheless, when a gathering of pro-Chávez intellectuals in June 2009 sponsored by the leftist think tank Centro Internacional Miranda, which is organically linked to the Chavista movement, issued a document that raised such polemical issues as the need for collective leadership and an internally democratic revolutionary party, Foreign Minister Nicolás Maduro called the statement “nonsense.” Chávez reacted to the document by reiterating his commitment to self-criticism but warned that internal differences of this type could be utilized by the anti-Chavista media.
This article has attempted to demonstrate that a balance sheet of the relative successes and shortcomings of the Chávez government reveals the complex nature of the changes currently under way in Venezuela. Dogmatic, simplistic accounts coming from all sides of the political spectrum that ignore this complexity are especially misleading given the model of “twenty-first-century socialism” embraced by the Chavistas. The concept’s trial-and-error approach calls for originality and open-mindedness in facing the novel challenges and mistakes that are inevitable in any untested process of change. In this sense “twenty-first-century socialism” represents the antithesis of the preconceived notions and simplifications that have characterized much of the debate on socialism in the past and much of the analysis of the Chávez phenomenon.
Notes
1. This interpretation of populism dates back to the works of the Italian-Argentine sociologist Gino Germani, who compared Perón to Mussolini, whose government had jailed him prior to his emigrating in 1934.
2. Although all revolutionary movements are divided over conflicting aims, the Chavista movement is particularly characterized by the lack of clear priorities. Indeed, the Chavista official discourse of “twenty-first-century socialism” is admittedly ill-defined. One reason for the prioritization of social goals among many Chavistas is the existence of far greater inequality in Venezuela than was the case with the Soviet Union and other revolutionary governments following the initial years of socialist rule.
3. Because space is limited, this article does not pretend to deal with the charges of government violation of civil liberties and freedom of the press. In my opinion there is sufficient evidence to demonstrate that these claims are exaggerated and fail to prove that the Chávez government is headed in the direction of authoritarian rule.
4. PDVSA’s lower salaries are designed as a corrective to the previous perception of oil-industry employees as a technocratic elite.
5. These figures and others that demonstrate the net social gains under the Chávez presidency for the most part do not take into account the free and discounted services provided the poor in such areas as health and food distribution (Weisbrot, 2008: 39).
6. The interests of the established universities were also threatened by the demand of the pro-Chavista student movement that all schools of higher education be required to grant admission preference to Misión Ribas graduates.
7. The Chávez government has applied the same policy of privileging quantity over quality to the Programa de Promoción del Investigador (PPI), which grants stipends pegged to the productivity of university professors engaged in research. During its first decade in the 1990s, the PPI was often criticized for being elitist and overly selective. Under Chávez, requirements were loosened and publication in Venezuelan journals received greater weight. As a result the number of professors in the program has increased threefold. The “losers” in this case are the most renowned researchers, who complain that the incorporation of less-productive professors in the program has undermined its prestige and reduced the compensation allotted to those at the top.
8. An example of handouts was the main campaign proposal of Manuel Rosales (the opposition’s presidential candidate in 2006) to distribute 20 percent of oil-derived state revenue equally to all citizens in cash.
9. The focus on socialism’s performance needs to take into account that the aggressive behavior of powerful actors intent on restoring the old order saps the energy and resources of the socialist government. Nevertheless, contrary to what many revolutionaries state or assume, shortcomings and failures cannot be attributed solely to the campaign of attrition and destruction, particularly when the socialist government has remained in power for a considerable period of time. After replacing his brother in the nation’s presidency, Raúl Castro acknowledged the validity of this point with regard to Cuba.
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This article was originally published in Latin American Perspectives, January 2010 Vol. 37, No.1.
Steve Ellner has taught economic history at the Universidad de Oriente in Puerto La Cruz, Venezuela, since 1977. He is a participating editor of Latin American Perspectives, the author of Rethinking Venezuelan Politics: Class, Conflict and the Chávez Phenomenon (2008) and Neoliberalismo y Anti-Neoliberalismo en América Latina (2006), and coeditor (with Miguel Tinker Salas) of Venezuela: Hugo Chávez and the Decline of an “Exceptional” Democracy (2007) and (with Daniel Hellinger) Venezuelan Politics in the Chávez Era: Class, Polarization, and Conflict (2003).
April 23rd 2010
Friday, April 23, 2010
Up to 300,000 people killed in Haiti quake, says UN
Until now, the Haitian government death toll was more than 220,000.
April 21 "marked the 100th day since the devastating earthquake that struck Haiti, leaving between 250,000 and 300,000 people dead," said Edmond Mulet, the head of the UN mission in Haiti.
Mulet also said that 300,000 people were wounded in the disaster, and more than one million people were left homeless.
The 7.0-magnitude quake left much of Haiti's capital Port-au-Prince in ruins, destroying infrastructure and the seat of government and causing a humanitarian catastrophe in a country already considered the poorest in the Americas.
Mulet, speaking at a press conference, said that he wants the UN Security Council to send an extra 800 police officers to provide safety in the refugee camps.
"In the history of humanity one has never seen a natural disaster of this dimension," said Mulet, adding that the Haiti quake death toll was twice the toll of the atomic bomb dropped on Hiroshima at the end of World War II.
Mulet said that the next 12 to 18 months will be "critical," noting that peacekeepers in the UN Stabilization Mission in Haiti (MINUSTAH) will focus on five areas: helping support the government organize quick elections, coordinate "post-disaster" humanitarian aid, provide general security, support the Haitian government in carrying out its reconstruction plan, and "help Haiti rebuild its human capital."
Concerning security, Mulet said MINUSTAH forces will help the Haitian National Police have "a more visible presence" to help the tens of thousands of people living in 1,200 refugee camps.
Mulet, a native of Guatemala, took over the UN mission on March 31, replacing Tunisian Hedi Annabi, who was killed in the quake.
If the Security Council accepts Mulet's recommendations, the overall number of UN police in Haiti will rise to 4,391.
When the MINUSTAH peacekeeping soldiers are also counted -- though Mulet has not asked for an increase in this force -- the total UN force would reach 13,300 supported by more than 2,000 civilians.
Separately, Mulet said the Haitian government on Thursday ordered a three-week moratorium on the forced evacuation of refugees camping out on private land, schools or markets.
For nearly two weeks, the authorities and private property owners have urged people squatting on their property to leave.
More than 7,000 people who took refuge at the Port-au-Prince stadium were moved out 10 days ago, and last week some 10,000 Haitians living in a school were ordered out.
"There are students that want to return to their schools to continue their studies, and there are refugees living in the schools. So in order to avoid clashes, a moratorium was established," Mulet said.
UN officials have opened two refugee camps on the outskirts of Port-au-Prince in order to accept some 10,000 refugees currently in danger of being affected by flooding as the Caribbean rainy season is set to begin.
Mulet also said that Haiti "is going on the right path" towards reconstruction, and that he was showing "prudent optimism." He also urged people to "not underestimate the size of the task and the challenges that Haiti faces."
April 23, 2010
caribbeannetnews
Thursday, April 22, 2010
Caribbean IP - Protecting traditional knowledge
While there is much preoccupation with the issues of copyright law in the Caribbean, which is centered on trade and commerce, the lesser known issues of traditional knowledge in Intellectual Property are hardly considered to be of especial significance to the majority of policymakers and, except for a few pockets of interest groups such as a group of Rastafarians in Jamaica, the average citizen is uninformed on the subject.
The importance of traditional knowledge and the preservation of entitlement to retain the rights to commercial and other exploitation are of some importance to Caribbean countries, as our histories are quite recent, dating settlement by Europeans and others to the fifteenth century and later, and contain a rich legacy of traditions in many areas, which resulted from an amalgamation of various cultures; or which may have remained within the grasp of particular cultural enclaves.

Assuredly many of the aforementioned activities are carried on daily across the region alongside the westernized lifestyles as either a parallel culture or a fusion of the two. The following excerpt from a WIPO publication is instructive on this idea.
“Contrary to a common perception, traditional knowledge is not necessarily ancient. It is evolving all the time, a process of periodic, even daily creation as individuals and communities take up the challenges presented by their social and physical environment. In many ways therefore, traditional knowledge is actually contemporary knowledge. Traditional knowledge is embedded in traditional knowledge systems, which each community has developed and maintained in its local context. The commercial and other advantages deriving from that use could give rise to intellectual property questions that could in turn be multiplied by international trade, communications and cultural exchange.”
Differences in worldview on the subject have distinguished local knowledge from traditional knowledge; social scientists have placed knowledge into a naturalistic framework, which is illustrated by a gradation that extrapolates backwards from recent to ancient knowledge. Local and traditional knowledge are determined by the length of time for which they have existed, for example decades and centuries as against millennia, with local knowledge being thought to exist in the more recent stages and traditional knowledge in the latter ones.
Additionally, traditional knowledge is thought by social scientists of the naturalistic school of thought as not falling into a natural category and being reflective of social struggles, land issues and relationships , power struggles and social control and an adherence to ancestry or heritage.(see Valuing local knowledge: Indigenous people and intellectual property rights, Brush, Stephen B, Stabinsky Doreen, Island Press 1996)
Local communities often have very different perceptions of the ownership of traditional knowledge, often believing that such ownership does not exist since it may have derived from divine inspiration or/and culturally it is passed down the generations. It is perhaps because of this ambivalence that the issue of traditional knowledge is not a hot point in indigenous communities in the Caribbean.
Protection of traditional knowledge by intellectual property laws is a major issue as far as concerns traditional medicines, since huge international pharmaceutical companies have been known to draw on these resources, which may then be combined with other additives to produce drugs that are then patented and sold at significant profit, whilst the source of a part of that invention remains unacknowledged financially or otherwise.
Copyright law deals with the form of expression, such as whether it is song or dance, electronic or paper for example, and so is more suited to the protection of traditional cultural expression than to traditional knowledge. While intellectual property law in the region remains a hodge-podge on the whole, it is useful to turn for guidance to the recent developments in the protection of traditional knowledge in IP law internationally.
In public international law there exists a range of legal conventions, treaties, and instruments designed to address the treatment to traditional knowledge, these include:
*The Convention Concerning the Protection of the World Cultural and Natural Heritage 1972 (the UNESCO Heritage Convention);
*The Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property 1970 (the UNESCO Cultural Property Convention);
*The Convention Concerning Indigenous Peoples in Independent Countries 1986 (ILO Convention 169);
*Negotiations concerning the FAO’s International Undertaking on Plant Genetic Resources (the IUPGR-FAO);
*The Convention on Biological Diversity 1992 (the CBD)39; and
*United Nations Convention to Combat Desertification in Countries Experiencing Serious Drought and/or Desertification, Particularly in Africa 1994 (the UNCCD).
These, however, have been widely criticized as being concerned with the protection of traditional knowledge only in so far as it is connected with the cause of global ecological stability (see Djims Milius Justifying Intellectual property in traditional knowledge, 2009).
The current developments see proposals for the use of mechanisms such as the creation of an ombudsman or public defender to investigate abuses against indigenous communities, voluntary contractual regimes to ensure access and benefit-sharing such as material transfer agreements (MTAs) or information transfer agreements (ITAs), voluntary guidelines and codes of conduct such as the FAO International Code of Conduct for Plant Germplasm Collection and Transfer, the Bonn Guidelines and the WIPO IGC draft IP Guidelines for Access and Benefit-Sharing, databases and community registers to publish TK in the public domain and hence, failing novelty, block the grant of patents based on indigenous knowledge; and a Global Bio-Collecting Society (GBS) providing a TK register mechanism at the global scale, plant breeders’ rights used to cover new plant varieties under the UPOV Convention(s) (WIPO/GRTKS/IC).
The Caribbean, in spite of the oddities in Intellectual Property regulation, is in the ideal position to take advantage of the knowledge available and to craft for itself a protective regimen complete with an enforcement scheme based on some or all of the aforementioned proposals for protection of traditional knowledge. With the focus on climate change and the protection of rainforests, such a scheme is vital within the Caribbean context and needs to be given priority treatment concurrent with the other issues in the area of copyright.
The protection of the cultural heritage of the region through a normative system of law is exceeding necessary for the survival of our unique brand of cultural expression. It will aid in its preservation even as dilution and westernization change the dynamics of presentation and expression. The Shantos (a form of calypso with a unique rhythm) of Guyana’s Bill Rogers and the Parang of Trinidad will need continuous protection even after the rights have expired for the sake of their preservation.
A regime for the protection of traditional knowledge will ensure the survival of the core Caribbean culture and fairness in the access to the knowledge which results in economic or other benefits.
April 22, 2010
caribbeannetnews
Wednesday, April 21, 2010
CARICOM offical defends integration movement
Speaking on the topic Regional Integration and Development: the relevance of Functional Cooperation, Dr Greene dispelled speculations that the regional integration movement would erode the ‘sovereignty’ of member states. Noting that there was more to the integration movement than the CSME which was the popular yardstick seemingly used to measure progress, Dr Greene highlighted major achievements spawned by the integration movement since its inception.
The Assistant Secretary-General gave examples of the more recent establishment of the Regional Development Fund in Barbados, the replacement of the Caribbean Regional Negotiating Machinery (CRNM) with the Office of Trade Negotiations now under the aegis of the CARICOM Secretariat and the establishment of the CARICOM Competition Commission headquartered in Suriname as successful building blocks in sustaining the integration process. He noted further, their importance in “sustaining a level playing field, coordinating trade negotiations and guaranteeing the application of common standards in trade production within the Community.”
Moreover, Dr Greene said, much economic, political and social development had been achieved which should definitely be attributed to the regional integration movement.
However, Dr Greene was not un-mindful of the challenges plaguing regional integration and the CSME asserted that the major roadblocks were due to national resistance, changes in governments and delays in the facilitation of the necessary national regulations or legislation to bring policies and programmes into effect.
He lamented that attempts to deepen the integration process were usually hindered by what he described as “the sustained pre-occupation with the notion that CARICOM comprises sovereign states which would be eroded by the application of shared sovereignty.”
This he said couldn’t be further from the truth and pointed to functional cooperation as the critical lever of the regional integration movement that he argued advanced rather than stymied the sovereignty of member states.
According to the Assistant Secretary-General, ‘sovereign states’ had benefited from functional cooperation in the areas of foreign policy and diplomacy, and therefore could “identify the value of acting collectively in negotiating theatres, internationally.” These benefits he said “were all indicative of forms of integration that had helped in no small way to sustain the cohesiveness and viability of the community in the hemispheric and global systems.”
“The principles of Functional Cooperation,” Dr Greene concluded “if properly applied allows sovereign states to advance specific programmes in a series of South-South arrangements that contribute significantly to economic development.”
April 21, 2010
caribbeannetnews
Tuesday, April 20, 2010
Church urges Cuba to make 'necessary' economic changes
Church leader Cardinal Jaime Ortega pressed the government of President Raul Castro to "promptly make the necessary changes in Cuba" to alleviate hardship, stressing that the Cuban people were growing restless over deteriorating conditions in the only Communist-ruled nation in the Americas.
"This opinion has reached a kind of national consensus, and postponement produces impatience and discomfort in the people," Ortega said in "Palabra Nueva," the magazine of the Archdiocese of Havana, in reference to recent criticism by economists, academics, dissidents and artists.
Castro, who announced a need for reforms shortly after taking over from his ailing brother Fidel Castro four years ago, warned recently that while many "desperate" Cubans were seeking immediate change, it was vital to avoid "haste and improvisation."
Ortega's statements were the latest criticism aimed at the regime by the church, which warned in late March that "a worsening crisis is on the horizon that could break the fragile social cohesion."
The church has encouraged promotion of self-employment, legalized but restricted since 1993, and called for a law protecting small and medium private enterprises in a country where the state controls 95 percent of the economy.
It has also said performance-based pay, currently used by only 18 percent of state enterprises, should be expanded, urged "greater security" for foreign investment, and called for a boost in exports.
Ortega on Monday also urged Havana to get serious about improving ties with Washington.
"I think a Cuba-US dialogue is the first step needed to break the cycle of criticism," the cardinal said, recalling the various offers of top-level dialogue by Castro as well as US President Barack Obama, when he was campaigning for the White House in 2008.
But the cardinal also criticized Obama for repeating "the same old scheme of previous US governments," by insisting that Washington would lift its five-decade embargo on the island nation and enter high-level talks only if Havana made major changes on human rights.
"Only in advancing the dialogue can steps be made to improve or overcome the most critical situations," he said.
Havana has faced mounting international criticism that increased in February when dissident Orlando Zapata died 85 days into a hunger strike.
Cuban bishops lamented Zapata's death and called on the authorities "to take appropriate measures so that such situations do not recur."
The church also repeated its call for dissident journalist Guillermo Farinas to end his own hunger strike, begun the day after Zapata died.
Farinas told AFP Monday that he "respects" Ortega but was firm in his decision to carry on with his fast.
Ortega also criticized the harassment of the wives of political prisoners known as the "Ladies in White," who have been prevented from marching in recent weeks.
"This is no time to stir up passions," Ortega said.
April 20, 2010
caribbeannetnews