Chavismo’s oily roots

In a recent essay in London Review of Books, Greg Grandin analyzes the ideological roots of Hugo Chavez and “chavismo”, and how important oil has always been for Venezeulan political economy.  The most interesting plank of his analysis is the way chavismo’s material dependence on oil, and its ideology, is traced back to efforts by Third World nationalists in the ’60s and ’70s to create the conditions for state-lead socio-economic development.  Chavez came of age in this era, when in Venezuela, profits from the oil industry were used to both consolidate a rigid two-party political system, a social-democratic system of welfare and patronage, and an unexpected commitment to anti-imperialist politics.

In 1974, the Venezuelan Congress extended ‘special powers’ to President Pérez, giving him complete discretion to legislate and spend. He nationalised industries, limited foreign influence in banking and commerce, and launched a massive programme of state-controlled industrialisation. Money flowed lavishly and unaccountably to projects that were often wishful, wasteful and venal. ‘Anyone who had the tiniest bit of power began stealing shamelessly,’ Chávez tells Ramonet. Pérez, he says, ‘presided over the greatest wave of corruption in living memory… The rich got even richer and amassed colossal fortunes, while the poor received mere crumbs from the oil money table.’ At the same time, however, Pérez was pledging to put Venezuela’s oil at the ‘service of Latin America, at the service of humanity’, in order to wipe out the ‘last traces of colonialism’ and turn socialism into a ‘planetary reality’. Venezuela’s foreign policy during these boom years called for debt relief, nuclear disarmament, an end to the arms race, access to the sea for landlocked Bolivia, lifting the US embargo on Cuba, and the creation of a Latin American Economic System that would function free of Washington’s interference. Pérez proposed using Opec as an ‘instrument of negotiation for the construction of the New International Economic Order’.

These political efforts were made by possible by the high oil prices of the ’70s and early ’80s.  But the subsequent crash unraveled Perez’s project, leading to intense social unrest and destabilizing events like the Caracazo and Chavez’s coup attempts.  After Chavez was brought into power, the major thrust of his program was apparently to reinvigorate OPEC, get oil prices back up, and fuel the Bolivarian Revolution.

Chávez knew that the best way to gain control over oil revenue was to restore the effectiveness of Opec. In early 2001, his first oil minister, Alí Rodríguez Araque, became Opec’s general secretary, and he managed to achieve a level of unity among oil-exporting nations not seen since the early 1970s. Opec nations not only agreed to a production cut, but agreed to give Rodríguez unprecedented authority to decide targets for future output as he deemed necessary, without having to consult the organisation as a whole. Mexico, not a member of Opec, committed to adhering to Opec quotas too. Oil prices began to rise, helping Chávez take control of PDVSA and beat back efforts to oust him.

Prices rose over the next decade and a half, as did the various social and economic indicators in Venezuela that the chavistas were pouring oil profits into.  And the various international projects that Chavez developed looked quite like those advocated by Perez, even beyond the central role of OPEC: a regional economic bloc autonomous from the US, oil subsidies for poorer nations, etc.  But like the Perez era, the vast wealth of oil also created and consolidated mechanisms for corruption.  It also allowed for the chavista state to avoid dealing with the harsh realities of class conflict: as Grandin notes, the accumulation of wealth by the Venezuelan bourgeoisie continued relatively unhindered throughout the Chavez years, despite the simultaneous explosion in grassroots organizing by the masses.

Now, several years into a new era of low oil prices, the Bolivarian Revolution is falling apart — again, not unlike what happened in the final years of the Perez era.  The rollback of the victories of chavismo, by the inexorable logic of basic material constraints, is apparently the price paid for not freeing the Bolivarian Revolution from its material dependence on oil.


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