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ECONOMICS -
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Venezuela at the Crossroads of the New Humanity Century

Posted in the database on Tuesday, April 12th, 2005 @ 00:55:57 MST (1504 views)
by Vladimir Bravo-Salazar    Z Net  

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The world as we know it, and have known it since the 15th century, is reaching a dichotomous moment. This has been brought on by Capitalism, the dominant economic and development model to this point. Humanity is at a junction, where it can either choose a more sane and sustainable future for all, or it can choose the path of annihilating other nations in order to steal their resources until there are no resources left. The nature of the capitalist system demands constant growth. This system is engineered to allow selected segments of the population to obtain great wealth, while permitting just enough scraps to trickle down to the masses. This has led to ever increasing polarization in the societies of the world, even in those countries of the so-called First World.

Population pressures are adding to the strain on the Capitalist system. The world population is continually increasing, particularly in those countries that are rich with the resources needed to fuel Capitalism’s model of constant growth. The core capitalist countries, and in particular the USA, do not have these resources. In spite of this, the core capitalist countries lay claim to the substantial resources needed for frivolous consumption and an unsustainable high standard of living. Those countries of the periphery that have the resources, most of them former colonies, are staking their legitimate claim to them for the nourishment, health, education, dignity and survival of their own populations. [1]

Of these resources, none, with the possible exception of water, is more important than oil. Oil is the cheapest and most efficient energy source in terms of energy obtained per extraction effort. None of the currently available alternative sources of energy come even close to providing the energy needs of the current industrial and technological world. Many experts believe that world oil production is approaching its peak. Other experts believe that production is already at its peak or has passed it. What this means is that in the very near future, oil will become scarcer and there will not be enough of it to meet even the First World's demand for it. Oil is not only needed for the energy it can yield, but for creating a myriad of artificial materials, including plastics. Oil is used extensively by many industries. Modern medicine uses a multitude of oil based products. Agriculture production cannot be maintained at current yields without oil-based fertilizers. [2]

The world economy as it is currently structured, cannot run without oil. Oil is currently traded in world markets controlled by the US and denominated in petrodollars, based on the US dollar. The US dollar is artificially propped up by the collateral of a resource that the US does not directly own. The petrodollar is what is keeping the US economy from collapsing in spite of the huge deficit which it maintains. [3]

Venezuela is the country with the largest proven reserves of oil in the western hemisphere and the largest reserves of heavy oil in the world. Regretfully, this makes it a strategic Fort Knox to the US.

2) Old colonialists, new colonialists and the PNAC

The goal of the neo-colonial economies is the domination of countries in the periphery of the world capitalist system and the appropriation of their resources. The neo-colonial system for domination consists of these steps: First, convince a country that it can achieve full development; defined by the neo-colonialists to mean reaching a standard of living like those of the core countries. The country desiring full development is required to accept loans for its development from the IMF and World Bank. Second, make the country believe that market forces are immutable laws of nature, and not constructs created by economists. Third, make the country open their fragile economies to the market with the promise that by doing this, the country will be able to achieve full development. [4]

A country is forced to put Structural Adjustments Programs (SAPs) in place by the IMF and World Bank. These programs are purportedly to make the economy of the country credit worthy for the new loans, but in reality, the programs only lead to the destruction of the social structures of the country. The true purpose of the IMF and World Bank is not to help countries reach full development, but rather to transform them into producers of cheap commodities to feed the growth of the core. The countries of the periphery send actual resources to those of the core in exchange for petrodollars in order to pay their "development loans". This very clever scheme has been in operation since the end of WWII. The US has control of the IMF and World Bank. This has enabled the US to tighten its hold as a neocolonial power and then become the world's imperial seat; thus, eclipsing the old colonialists of Europe. The Washington Consensus (used here, based on its pragmatic effects, as a synonym to Neo-liberalism) has reigned supreme and the petrodollar was one of the major advantages that allowed the US to prevail over the Soviet Union.

Key members of the current US administration were involved in the drafting of the document called: Project for a New American Century (PNAC). This document details recommendations regarding what the US government should do to insure its hegemony over the rest of the World. The European Union has been steadily becoming a more cohesive economic and political group and their currency has started to pose a challenge to the petrodollar monopoly. Iraq had switched its international reserves to Euros and was selling oil in this currency. Many people believe that one of the true reasons why Iraq was invaded was due to their switch away from the petrodollar. Iran is proposing the creation of a new oil exchange, to compete with the Brent and Nymex, denominated in petroeuros. Not surprisingly, the current US government has accused Iran of having WMDs. [5]

The potential strengthening of the economic power of the old colonialists and the challenge of the petrodollar is of concern to the new colonialists. The Center for Contemporary Conflict at the Naval Postgraduate School in Monterey, California, has made attempts to dismiss the challenge by either a petroeuro or any other currency, or form of trade that bypasses the petrodollar as a “conspiracy theory” [6].

Venezuela is using an alternative, to the use of petrodollars, by putting together trade deals with other countries of the periphery (i.e. Argentina, Cuba, Uruguay), that bypass the petrodollar via a direct exchange of commodities. This alternative could lead to the establishment of trade that encourages real and sustainable development of those countries.

3) Multipolar vs. imperialistic.

In order for the countries of the periphery of the world capitalist system to survive, they have to start claiming their resources for themselves. They must first meet the needs of their local populations. Only after these needs have been met, can they then consider trade. This trade cannot be based on petrodollars, or, even petroeuros. Both of these currencies were created by colonialists to assure a trade imbalance that provides the core countries with real goods in exchange for debt. Since countries at the core of the system cannot be trusted to help bring a stop to a model that has been so fruitful to them, the countries of the periphery have to start organizing and integrating in such a way as to form new economic and development blocks or "poles". These poles would allow the countries at the periphery to develop in a sustainable and humanistic way within their pole and then to later negotiate with the imperialists on a more equal footing. This integration of the periphery could be done in a regional sense in South America, Asia and Africa, in order to create a pole in each of those regions. These poles would then integrate at a strategic level, creating a block of the South. This Southern block would be better able to demand equity from the US pole and the Europe pole.

The work of integration has been spearheaded by the Venezuelan government since the Bolivarian Revolution was democratically elected to power. The majority of Venezuelan society awakened to the evils of the Washington Consensus "development" model after witnessing the social turmoil in Venezuela triggered by the SAPs dictated by the IMF. Venezuela has proposed and is actually pursuing concrete projects for South American integration (PetroSur: a South American Oil Company, TeleSur: a 24-hour news and cultural channel with a South American perspective, and energy-goods trade that bypass the petrodollar). It is also bolstering already existing integration agreements such as Mercosur (created by Brazil, Argentina, Uruguay and Paraguay to establish a common market), CAN (Community of Andean Nations) and had a main role in the creation of the CSN (South American Community of Nations)[7]. All of these efforts are serving to make the South American pole a reality.

Venezuela is trying to put forth an example of how to bring about a different world, a more democratic and multipolar world.

4) Humanistic Economy vs. Neo-liberalism.

Population growth and dwindling resources do not bode well for the world capitalist system in its current form. The system requires constant growth in order to prosper and for constant growth, unlimited resources are needed. The system is operating on a neo-liberal philosophy of free corporate trade and "open markets". In order to create an illusion of growth, everything is considered a commodity, (including skilled and highly skilled human labor) and forcibly made cheaper through outsourcing it to the cheapest bidder. This "growth" only benefits the corporations that profit from the outsourcing and the handful of wealthy individuals that own the majority of their shares. Increasingly less income is available to the rest of the members of society. The neo-liberal philosophy of capital is creating an unsustainable polarization of the world into the mega-rich and the ultra-poor, and is doing so at such a level that even societies in the core countries have started awakening to this reality.

Proof that the neo-liberal model is not sustainable can be found in the countries of the periphery of the world capitalist system. They are the "canaries in coal mine" that show the destruction caused by neo-liberal SAPs on societies and economies. There are numerous examples, from The Asian Tiger (South Korea), to African (Somalia, Mozambique), to South American (Argentina, Peru, Brazil, Bolivia) and many countries of Eastern Europe [8]. After having suffered the consequences of SAPs (applied from the late 1980s to 1998) that increased the polarization of society and produced violent repression of popular unrest that left many dead, the People of Venezuela awakened from their slumber and embarked on a road of democratic and revolutionary change.

The People of Venezuela have democratically re-founded their republic as the Bolivarian Republic of Venezuela and given themselves what is arguably the most advanced Constitution in the world [9]. It is a Constitution that establishes (in its Preamble and in its Articles 2 and 3), among its values, not only freedom but independence, peace, solidarity, common good and coexistence. And among its rights, not only to life but to work, to healthcare (Article 83 and 84), to culture, to education, to social justice and equality without discrimination and subordination. One example of its avant-garde social and humanistic perspective is that it recognizes work at home as an economic activity that entitles housewives to social security (Article 88). Article 90 mandates the eight hour work day and stipulates that no employer has the right to demand a worker to work overtime. The Constitution also insures that the ultimate power remains with the People through multiple Popular Referenda, including those that can revoke the mandate of any elected official.

Consistent with its values and Constitution, the Bolivarian Republic of Venezuela has proposed an alternative to the neo-liberal doctrines that are driving the current world system. The Venezuelan model proposes as its central premise, in Article 299, that it is the economy that must be at the service of humanity for the benefit of all, as opposed to the neo-liberal premise that humanity should be at the service of the economy to benefit the rich. This is embodied, in the Americas, by the ALBA (Bolivarian Alternative of the Americas), which is "a proposed alternative to the U.S.-sponsored Free Trade Area of the Americas (FTAA, ALCA in its Spanish initials), differing from the latter in that it advocates a socially-oriented trade block rather than one strictly based on the logic of deregulated profit maximization. ALBA appeals to the egalitarian principles of justice and equality that are innate in human beings, the well-being of the most dispossessed sectors of society, and a reinvigorated sense of solidarity toward the underdeveloped countries of the western hemisphere, so that with the required assistance, they can enter into trade negotiations on more favorable terms than has been the case under the dictates of developed countries." [10] The countries of the periphery must switch to a humanist and sustainable economy and a solidarity-based way of life. It is not only a matter of survival but also the best chance for a better way of life. Venezuela has become the vanguard of this transformation process.

5) Sovereignty vs. Intervention

This democratic and revolutionary process of change has enacted an autonomous foreign policy in matters of trade, energy and diplomacy and has asserted Venezuela as a sovereign nation. It has used its resources and the wealth of the country in order to provide free education and healthcare to even its poorest citizens.

Venezuela’s democracy has been met with a high degree of hostility from the US administration. This hostility ranges from frequent negative statements about Venezuela’s democratic government to funding through the National Endowment for Democracy of groups that participated in the coup d’etat that briefly overthrew the government in April 2002. The de facto government, put in place by the leaders of the coup, abolished the Constitution, the Supreme Court and the National Assembly. The US government was the first to recognize the dictatorship as the legitimate government of Venezuela. The US continues to provide support of $5 million a year to organizations that supported the coup [11] [12]. Further proof of US intervention is the fact that, in an obtuse logic, the main US papers hailed the coup as a pro-democracy movement [13]. The true democratic nature of the actual Venezuelan government was made evident by the reversal of the coup. The coup was unique as compared to many others instigated by the US in Latin America, in that there were masses of people protesting in the streets for the return of their constitutional President (Mr. Chavez). Loyal officers and the rank-and-file of the military, at the behest of the people, re-instated the President. Since then, Mr Chavez's government has successfully withstood multiple tests of economic sabotage unleashed by the same sectors that attempted the coup, and he handily won a referendum on his mandate which was closely monitored by the OAS, the Carter Center, and many other international monitors. Recently, Venezuela has been diversifying its oil markets by signing agreements with China, France and India and with the rest of South America. This could only be considered as the most prudent strategy, since relying only on the US as its main market is not in its best interest, particularly in light of the US hostility. This hostility has been ratcheted up, in a manner that reflects not only the hegemonic PNAC intent but also echoes to the Roosevelt Corollary of the Monroe Doctrine (when the US claims for itself the right to intervene in the Americas), letting the intentions of the US come to the surface.

A recent diplomatic row occurred between Venezuela and Colombia over a violation of Venezuelan sovereignty committed by Colombia, when it kidnapped Rodrigo Granda, a FARC guerrilla, from Caracas, instead of requesting his detention through Interpol as stipulated in International Law. Immediately, the US government, through its ambassador to Colombia, said that it was a 100% behind Colombia on the issue, clearly trying to stir trouble between the two countries [14].

This interventionist strategy also includes Plan Colombia. Under this plan, the US has sent approximately 800 military "advisors" to Colombia in the guise of fighting a "war on drugs" and the "war on terror". The US is also giving Colombia more than $ 1 billion a year in military aid [15]. This fits very well with the neocolonialist history of the US, where military aid and assistance easily turn into military intervention, particularly in the Americas. US action is consistent with the drive for total hegemony proposed by the PNAC authors now driving the foreign policy of the US administration.

The US administration has not stopped with the military involvement in Colombia but has also proposed modifications of the OAS Democratic Charter aimed at intervening in Venezuela. According to Robert Zoellick, a candidate to be second in command at the US State Department: "Chávez won the elections, it mined the opposition and soon it restricted the press and the Judicial Power". "It is a new form of authoritarianism that is germinating and that there is to face" [16]. This fallacious argumentation that turns a widely supported democratic government, with a Constitution that embodies Participative Democracy, into a dictatorship, is typical of the rhetoric used against Venezuela by the US administration’s officials and its local proxies.

The US has been trying, albeit unsuccessfully, to isolate Venezuela in the region [17] and has been conducting suspiciously provocative naval activities just 30 miles off the Venezuelan coast [18]. Also, some unspecified “containment” is being talked about by senior administration officials [19], and during an interview with a former CIA agent by a Miami TV station, the moderator asked about the “physical elimination” of President Chavez and told Venezuelans to “wake up”[20].

The people of a country of the periphery must assert their sovereignty as the way to control their resources for their own welfare and development, to conduct their trade in a way that favors their goals, and to pursue an independent foreign policy with positive results and peaceful goals.

6) Community, Education and the Promise of a Just Society.

The goal of the Bolivarian Revolution is to have a society formed of individuals who are capable not only of enjoying their liberties but also constructively carrying out effectively their duties in a participative democracy for the betterment of the whole of their society, country and humanity. Part of this process is the provision of free education (from elementary to graduate level). According to the rector of the Bolivarian University: “education is not just to create professionals. Education is much more than that. Knowledge is power, and more people with knowledge empowers the whole population. Educating women empowers not only the women educated, but the whole population. Creating critical thinkers, a population of intellectuals, is a much more profound project than just preparing people for jobs” [21].

In order to make this goal a concrete reality, the Venezuelan government has implemented a series of programs, known as missions; Mission Robinson, providing elementary level education; Mission Ribas, providing high-school level education; Mission Sucre, providing college level education and Mission Vuelvan Caras, providing education in the trades. Additionally, free healthcare is provided through Mission Barrio Adentro, which has established an expanding network of neigborhood clinics, that, for the first time, have brought medical care into the poorest neighborhoods and areas of the country. The government has also, through Mission Mercal, created a network of basic grocery stores, located in the same neighborhooods, that sell subsidized food staples at very affordable prices.

The quest is to achieve a solidarity-based, non-violent society, a real and participative democracy, health care for all, free access to education and quality of life for all its members. This stands in contrast to the neo-liberal alternative, which reduces the individual to an island with no sense of the common good and only concern for the self. Thus, an individual in a neo-liberal paradigm is forced to cope with the increasing polarization of her/his society by dehumanizing others.

The Venezuelan proposal holds the promise of a just society and its Bolivarian Revolution is the democratic process that is bringing it about. If others follow this example, this century could have the potential to become the New Humanity Century.

7) References

[1] Pacheco Simanca, Jose Luis, “Sistema Capitalista Mundial y Polo de Poder Latino Americano”, Fondo Editorial Question/Centro de Estudios Territorio Emergente, Caracas 2004.

[2] Heinberg, Richard, “The Party’s is Over: Oil, War and the Fate of Industrial Societies”, 3rd Edition Revised, New Society Publishers, Canada 2003.

[3] http://www.ratical.org/ratville/CAH/RRiraqWar.html  

[4] Chossudovsky, Michel, “The Globalization of Poverty and the New World Order”, 2nd edition, Global Outlook, Canada 2003.

[5] http://www.globalresearch.ca/articles/CLA410A.html  

[6] http://www.ccc.nps.navy.mil/si/nov03/middleEast.asp#references

 [7] http://www.comunidadandina.org/ingles/press/Allanwagner8-2-04.htm

[8] Chossudovsky, Michel, (see [4]).

[9] http://www.vheadline.com/readnews.asp?id=6831 

[10] http://www.venezuelanalysis.com/docs.php?dno=1010

[11] http://www.venezuelafoia.info/

[12] http://www.venezuelafoia.info/Press-Articles/CIA-coup-proof.htm#_edn4

[13] http://www.fair.org/press-releases/venezuela-editorials.html

[14] http://www.axisoflogic.com/cgi-bin/exec/view.pl?archive=85&num=15280

[15] http://www.thenation.com/doc.mhtml?i=20041101&s=weinberg

[16]http://translate.google.com/translate

[17] http://www.greenleft.org.au/back/2005/614/614p19.htm

[18] http://www.venezuelanalysis.com/news.php?newsno=1528

[19] http://news.ft.com/cms/s/77d0a418-93ff-11d9-9d6e-00000e2511c8.html

[20] http://www.venezuelanalysis.com/news.php?newsno=1549

[21] http://www.venezuelanalysis.com/articles.php?artno=1282