Venezuela: privatisation is a betrayal

Recently, a debate has opened up regarding the denunciation by the former Minister Elías Jaua of the arrest of 10 communards, who had occupied and reclaimed the social ownership of the state company, Arroz del Alba, in the Portuguesa state in west Venezuela. Arroz del Alba's assets had been turned over to be managed by the private company Agroinlaca.

The La Tabla blog noted on twitter that, in addition to the turning over of the plant in Portuguesa, in 2015, the ABA feed mill belonging to Corporación Venezolana de Alimentos SA (CVAL) had already been handed over to this same private company, whose owners would have obtained sufficient profits to “build or acquire real estate such as a luxury headquarters in the Industrial Zone II of Barquisimeto and an apartment of more than one million dollars in Miami." Returning to the arrest of the communards, Elías Jaua explained the reasons for the occupation of the company by the Agua de Dios Commune:

"What does the Agua de Dios Commune demand, in the exercise of its legal powers in the communal sphere?: That the social property be respected, that the legal conditions under which national assets are delivered to a private entity be explained, that the stability and working conditions of the workers are guaranteed, that the rice production of the area is received, and that a percentage of the distribution be sold in the community. The operating capitalist fulfills none of these demands at the moment.”

As we can see, those occupying the property were only responding to the plundering of the capitalists, who divert production for export, amass fortunes, and acquire property, all on the backs of the workers and peasants, who are the ones that are actually producing the wealth.

It was only after the case provoked a scandal among the Chavista Left and when the communards had been in detention for 70 days, that they were released.

Isolated case or state policy?

Unfortunately, the aforementioned case is not isolated, but is part of an increasingly evident policy that, under the argument of "private sector participation", advances towards the partial or total privatisation of companies that were nationalised or inaugurated during the Bolivarian Revolution. In addition, this process of reverting acquired gains to private hands not only occurs in the industrial sector, but also covers everything from land to tourism, from rubbish collection to the change in the shareholding composition of strategic hydrocarbon companies.

One of the greatest conflicts over property since the beginning of the Bolivarian Revolution has been that of land ownership. The coup d'état of April 2002 had among its motivations the reversal of the Land Law, promulgated in 2001 by President Chávez using enabling powers. This law allowed a process of socialisation and turning over of non-productive land to peasants.[1] Today, an inverse process is taking place, dispossessing the peasants and communards of their land to hand it over to the big landowners.

These terrófago (land-thieving) actions take place under the protective shadow of the new minister, who coined the term "revolutionary bourgeoisie". The dispossession of the peasants is done in favour of former “landowners” who can pay for it, but also in favour of bureaucrats – civilian and military – close to the "tsar" of the land. For this reason, all kinds of means are used to expel the peasants, from pressure and institutional besieging, to intimidation by the military, paramilitary and hired assassins.

All this motivated a group of peasants from Portuguesa state to undertake what would be called the "Peasant March": a journey on foot from Portuguesa to Caracas in order to meet with the president and present their problems. This march mobilised a great deal of solidarity from the left all over the country but, nevertheless, the peasants were received by the armed forces. Days after their arrival in Caracas, the peasants managed to meet with the president, who listened to them on national television and made all kinds of promises. But since then, there have been few advances made and the deaths have continued, reaching a toll of 19 peasant leaders killed to date.

Along with the killings, there have also been arbitrary arrests and eviction attempts, during which houses and schools in the peasant communities have been burned. For example, in Mérida, 32 peasants (including 11 women, one of them nursing an infant) were arrested for the alleged invasion of La Magdalena farm, where, according to La Tabla, they came with permission from the National Land Institute (INTI). Another example of arbitrary arrests is the case of Wiston Olivero, the spokesman for land recovery in Gavilán-La Chaqueta, Portuguesa. Olivero was arrested with nine other peasants, who had upon whom shotguns and military uniforms were “planted” to make them look like paramilitaries. Meanwhile, in the same state, in the peasant council Guasimal Los Caribes in the Papelón municipality, armed gangs burned several houses, a tractor, and destroyed the community's crops.

The industrial sector has also been advancing towards this policy of privatisation, accompanied by the persecution of workers. An emblematic case of this was the arrest by the CICPC of three trade union leaders from the Lácteos los Andes company in February last year. The workers of this company, nationalised by Chavez in 2008, reported that more than 80 percent of the plant in Cabudare was paralysed due to corruption and lack of investment in raw materials. According to the workers, this corresponds with the rerouting of resources destined for the company in order to provide a justification for placing it in private hands.

In Café Fama de América, the story is not much different. Nationalised in 2009 as part of a fight against monopolies (Fama de America and Café Madrid controlled 80 percent of the market), it remained under the workers' control for a short time. Now, controlled by the bureaucracy, the company often goes without raw materials. The workers in this case also denounce the company's bankruptcy process, because while products labeled "gourmet" are in the warehouse, there is no supply of "green coffee" (unroasted coffee beans). The man in charge of the transportation invoices is Colonel José Alfredo Mora, president of the Venezuelan Coffee Corporation.

The communes have also been targeted by attacks of the bureaucracy, and in this matter, the latter have outdone themselves in their cynicism. The El Maizal Commune is a clear example of how the greater the success of the popular organisation, the greater the viciousness of the bureaucracy.

For example, President Nicolás Maduro recently announced on twitter the "reactivation" of the pig farm "José Leonardo Chirinos", located in the Iribarren municipality of Lara State, which was one of the four plants from the Porcinos del Alba mixed company.

It's no secret to anyone that this mixed company was never productive in the hands of the bureaucracy. Regardless of the size of the investments made to lift production, their facilities were converted into pig cemeteries until one of their plants (also in the Lara state) was occupied by the Maizal communards in conjunction with the workers, to increase production under a system of social ownership. In January 2018, the success of the commune was demonstrated when various regions of the country were protesting, demanding the Christmas hams promised by Maduro (which never arrived), and the neighbouring communities could acquire them at solidarity prices from the Maizal commune.

As we pointed out before, the successes of the commune are unacceptable for the bureaucracy, because they not only demonstrate the bureaucracy's uselessness, but also expose the lies that are used as excuses for privatisation. For this reason, the bureaucracy laid siege to this experience, denying the food needed to keep the pigs alive, as was reported by one of the leaders of the Ángel Prado Commune, when it was announced that the pigs would be sold to the peasants to prevent them from starving to death.

"We are not going to hand over our farm that was bankrupted by the poor management of Porcinos del Alba, leaving a cemetery of animals as it is known, and it's even worse in times of crisis. With the workers and the organised communities, we will take over the company. With them we will rise up and with them we will move forward, but never give in."

This is just one of the many attacks the communes have suffered, but it clearly shows the cynicism with which one speaks of "recovering" a company when, in reality, they have been ruined by the bureaucracy, suffocating every successful experience of workers' control with the end goal of handing the companies over to the capitalists.

The "strategic" alliances with the bourgeoisie are not limited to the turning over of nationalised companies to the new capitalist friends of the government, but also include multinationals from all over the world, from Canadian Gold Reserve, whom Chávez expelled from the country, to Turkish and Chinese companies known for corruption in their respective countries.

In most cases, the government has tried to keep up appearances. Knowing that Chávez was against privatisations in Venezuela, the bureaucrats are trying to lift all of those decrees that, during Chávez's government, put a maximum margin of 40 percent participation of foreign capital in the shareholding composition of mixed companies. In this sense, the Foreign Investment Law, sanctioned by the National Constituent Assembly, has been a severe blow to national sovereignty, since it not only puts the Venezuelan people at the mercy of vultures and multinationals, but also allows looting via royalties. This is without mentioning the agreements against double taxation (already signed by the government) that exempt foreign companies from paying taxes to the country.

In the case of the Gold Reserve, the Maduro government has agreed to pay compensation of $1.032 billion dollars in recompense for the expropriation carried out under Chávez. With this, Maduro would get the company to invest in the construction of two plants to extract gold and copper, one of them worth $295 million dollars (much less than what we are paying), through the creation of a mixed company in which 45 percent would belong to the Canadian company.

"In the Turkish case, for example, the commercial exchange has grown rapidly, going from $803.6 million dollars in the period 2013-17, to $892.4 million dollars in the first five months of 2018, an amount that was divided into 52.2 million for Venezuelan imports in flour, wheat, rice, pasta, soap, marble and construction materials, and 834.2 million of exports in diamonds, precious metals, iron, steel and pearls...


“Regarding China, the most recent agreements include converting the Ferrominera del Orinoco into a mixed company, granting 9.9 percent of the shares of Petrosinovensa (a mixed company in the oil sector) to China, which would increase the shareholding in Asia to 49.9 percent (violating laws introduced by President Chávez); agreements on gas extraction with the National Corporation of China's Gas Exploitation (CNODC), gold mining with the Yankuang Group and iron with the Railway Engineering Corporation, as well as agreements for the extraction and processing of coltan".

The problem for the government is that this new "opening up" of the economy has not managed to attract large investments for the development of the productive forces, but has concentrated on the extractivist industry, which is why they represent a turning over of natural resources to save the dying rentier model.

The words of the right in the mouths of the bureaucracy

To try to justify this policy, it is not uncommon to hear from the right that workers' control does not work, that industry in the hands of the state fails and that it must be in private hands so that the market can work in a balanced way.

During Chávez's life, many bureaucrats (who still hold positions today), thought this way, but, faced with the growth of the masses’ and workers' struggles, they kept quiet (which did not prevent them from torpedoing all attempts at workers' organisation and management). Already in 2012, taking advantage of the medical treatment of President Chávez in Cuba, the bureaucracy destroyed workers' control in the companies of the CVG, dismissing the workers' presidents of SIDOR and Alcasa. Now, these cowards, who spent years acting as a fifth column in the revolutionary process, are taking advantage of a crisis situation that strengthens them to be able to voice their arguments. They talk about "recovering" unproductive or paralysed companies hand-in-hand with the private sector, while openly pointing out that workers' control was a failure.

However, for any person whose conscience is not numbed by the propaganda of these charlatans, a fairly logical question would come to mind: why are these companies, that were producing when they were nationalised, now paralysed? Surely we will be told that the workers were to blame, or even worse, they will allude to a supposed Venezuelan culture that makes us lazy by nature; however, none of these "cultural" myths correspond to an analysis of the facts.

These prejudicial arguments do not withstand the slightest scrutiny. The workforce is now and has always been the source of all value in society, whether their companies are state-owned or private. As we saw in the case of Lacteos los Andes or Fama de América, one cannot blame the debacle of these companies on the workers when, not only do they have no say over administration, but they are also the ones who are denouncing the dubious manoeuvres of the bureaucrats in charge.

Moreover, it can be demonstrated with facts and figures that all the companies that were nationalised and under workers' control produced more than under private control, yet quickly encountered difficulties when the bureaucracy crushed the organs of workers' control, and replacing them with management by bureaucrats (mostly from the military).

During two days, various social organisations promoted the twitter hashtags #PrivatizarEsTraicionar (Privatisation is Betrayal) and #LibertadParaLosComuneros (Freedom for the Communards), which trended for a few hours. Here, we could see the mentality of the bureaucrats, who, in many cases, shielded by the anonymity of social networks, took the opportunity to show which side they are on in the class struggle. Government bots launched another hashtag: #EmpresasMixtasConChinaYRusia (Mixed Companies with China and Russia), which shows how sensitive the bureaucracy is to criticism and how weak they are in the debate over ideas. It is necessary to expose their true ideas, and the damage they are doing to the socialist cause.

The fundamental reason for the privatisations is quite obvious: it has nothing to do with the needs of the people, because, as mentioned, food (which the bureaucrats and capitalists regard as merchandise) does not go toward domestic consumption; it also has nothing to do with state needs, because the wealth generated does not go to the government. The real motive behind the privatisations is personal interest: profit derived from the sale or concession of state property.

We welcome Elías Jaua's clear and courageous intervention in the case of Arroz del Alba. What is incredible is that if it were not for him publicising the case two months after it happened, no one would have known about it. The bureaucracy acts in a shady and treacherous manner because it knows that its actions would be rejected widely if they were known. However, Elías Jaua does not draw all the necessary conclusions. His proposal of a "mixed economy" between capitalism and socialism does not and cannot work. As we responded to Elías directly:

"A mixed economy model, within the framework of the development of capitalism in Venezuela, is nothing more than another form of state transfer of oil revenues through different means (corruption, subsidies, imports, monetary overvaluation, etc.) in favor of the ruling classes, clearly tied to the backwardness and underdevelopment of our country."

What we see is precisely the consequence of not taking the revolution to its ultimate end, not expropriating the bourgeoisie, and not having destroyed the bourgeois state. Returning to a "progressive" past is not only impossible under the current condition of capitalist crisis, but means stepping into the ring of history to receive a knockout.

From bureaucrats to the bourgeoisie: a transition based on plunder

We are facing a total bureaucratic degeneration in the political leadership of the Bolivarian Republic, something that cannot be described in any other way than as a betrayal of the Bolivarian Revolution. This is not the product of some leader's malignant plan but a product of the objective conditions and class interests of those in power during the stagnation of the revolution. A widespread paraphrase of Spinoza used by Trotsky reads: "Neither weep nor laugh but understand." Let us then understand how we have arrived at this point.

Chávez himself reported on several occasions that, even during the Constituent National Assembly of 1999, there were representatives that altered the wording of laws and the constitution, that had been discussed in the chamber, to favour the interests of the capitalists. The current labour law, which certainly contemplates progress for the working class (as does the constitution), also shows how the bureaucracy was creating a legal framework to use it with an employer mentality by restricting the right to strike, interposing the request for a permit – as if one must have authorisation to exercise a democratic right.

The greatest demonstration of this link between the bureaucracy and the bourgeoisie is the scourge of corruption that eats away at Venezuelan society and is aggravated by the disgusting rentier model that the government insists on safeguarding. The bribes that are paid for a good contract fall into the pockets of the bureaucracy, and come out of the wallets of companies like Odebrecht: a win-win relationship, in which the Venezuelan workers lose out.

So far, we have seen the essence of the bureaucracy, and the material conditions under which it is strengthened, but what happens when bribes no longer fit in their pockets?

Due to the opacity of the privatisation process, and the impossibility in many cases of tracking the characters that are behind a large number of front businesses (for now), measuring the amount of shares, companies, and land directly in the hands of the bureaucracy is a difficult task. However, history shows us that, given the conditions of revolutionary stagnation and bureaucratic strengthening, the tendency is for the bureaucracy and those close to it to try and take ownership of the means of production that they manage.

In Venezuela, although the bourgeoisie was not expropriated in its entirety, as was done in Russia and Cuba, there was a process of nationalisation (in which the bourgeoisie were compensated) pushed by the rise of the masses. This gives the bureaucracy quite distinctive characteristics, since the state maintained its bourgeois character, but in turn, the bureaucracy had a fairly large economic power – state enterprises were at the head of various sectors of the economy, monopolising some (hydrocarbon), or being a competitor in others (banking, insurance, agro-industry, services, etc.).

Thus, the bureaucracy has developed, from simple parasitism, in which it favoured the interests of the bourgeoisie and appropriated the rent through bribery and kickbacks, to strengthening and expropriating political power as a result of the crisis and the ebb of the mass movement. The bureaucracy is now moving towards an open privatisation policy, which is clearly counterrevolutionary, and from which it is possibly profiting directly (although for now this is in marginal areas of the economy).

The weakness of the Venezuelan bureaucracy, and the particular characteristics of rentier capitalism, have shaped the privatisation process. In this way, we observe that, in the strategic sectors of the extractivist industry, the bureaucracy has not been able to confront foreign capital, so privatisations are made in favour of its "strategic allies", while in sectors of medium-scale industry, the small national capitalists grouped in Fedeindustria are favoured. However, it is in the distribution of the land where the bureaucracy (civil and military) has led this process of appropriation.

We must remember that government policy, even since Chávez, has been to try to create a "patriotic bourgeoisie" through the financial support of sectors of medium-scale industry, in order to develop the productive forces. Unfortunately this has not served the people but has only served to enlarge bourgeois sectors related to the bureaucracy, as well as bureaucrats who decided to "set forth" on their own and take advantage of their political power. We witness how the process of expropriations is paralysed, replaced by an occupation procedure in which property still belongs to the capitalist, but is administered by the bureaucracy when the capitalists decide to close their business. This, the capitalists advance on the land of peasants and communards, on companies that operate under social production or state enterprises, and on the country’s natural resources.

Defend our conquests and fight for socialism

On many occasions, Chávez warned about the counterrevolutionary role of the bureaucracy and their behaviour as a fifth column within the Bolivarian Revolution. However, today this bureaucracy has lost its fear of the masses. Although in some cases it continues to use pseudo-socialist demagogy, it advances decisively against our conquests, implementing, albeit gradually, a bourgeois programme.

Some time ago, in our polemic with Elías Jaua, we posed three questions: what is the general direction of the government? Is there still the possibility that the governing leadership could take a turn to the the left? And, if not, why are we waiting to form a powerful left tendency that poses socialism as a strategic possibility, and a genuine defence of the interests of the workers and the oppressed in general?

On the general direction of the government, we already see a trend towards reversing the conquests of the revolution and making increasing concessions to the bourgeoisie, to maintain itself in power. Then again, is worth mentioning the words of Jaua himself, who pointed out that sections of the bureaucracy are now bourgeois, and that they have great political power and "pretend to behave like the old bourgeoisie", denying any progress (even gradual) towards socialism. Expecting a revolution headed by counterrevolutionaries would be like waiting for pears from an elm tree. All this leads us to answer the final question: it is time to move towards the construction of a revolutionary alternative?

Certainly, Venezuela is not in the best condition. The bureaucracy has been given great power over the lives of the masses, and has tied them up in a thousand and one clientelist knots. Meanwhile it has economically weakened the vanguard of the working class, be it through the reduction of purchasing power, or through the diversion of resources and the boycott of communal enterprises. However, even with all these blows, we see that the popular movement is far from suffering a definitive defeat. On the contrary, it is determined to carry on fighting.

At present, there is an urgent need to build a revolutionary alternative that denounces the counterrevolutionary shift of the government, and struggles against the current process of privatisation – for workers' control of all nationalised companies. This alternative also needs to be capable of articulating these struggles with the demands of the oppressed and exploited: decent wages, quality services and security, to move towards a socialist programme.

Given the current situation of imperialist aggression, we observe a certain tendency to close ranks even by sections that are critical of the government or some of its policies. Our position is clear: we reject and fight the attempted coup of Trump-Guaidó but without suspending our criticism of the government. This is necessary, since the government’s policies of concessions to the bourgeoisie and of dismantling the conquests of the revolution do not serve to confront imperialism. On the contrary: by undermining the revolution and emptying it of its content, the government prepares the ground for the victory of the imperialist counterrevolution.

Some even say that anyone who criticises the government is a "fifth columnist", trying to silence the growing clamour against defeatist policies such as privatisations and attacks on peasant communes. We respond, in a besieged fortress, who is the "fifth column"? Is it the one that criticises the generals who open gaps in the wall and hand over turrets to the enemy, or is it those who denounce these traitorous acts?

Today, it is more necessary than ever to begin the process of building a revolutionary alternative. This starts with understanding that imperialism can only be fought with revolutionary measures: jail for Guaidó, dissolution of the national assembly of coup plotters, arming of the militias, and expropriation of the properties and assets of the coup leaders under workers' control. Secondly, we must build a common front of all revolutionaries in defence of the conquests of the revolution, against privatisations, of the land and the communes, and that fights for decent wages. But ultimately, we must move from a defensive to an offensive struggle. We must recover the legacy of Chávez, who in his last speeches raised the need to advance to a socialist economy and pulverise the bourgeois state. The IMT and Lucha de Clases Venezuela are committed to this struggle, and in this common front we will defend our position that only with the expropriation of the bourgeoisie and with a democratic plan of production under the control of the working class can we begin to resolve the pressing problems we face.

Defend our conquests, fight for socialism!

Down with bureaucracy and reformism, to build a revolutionary alternative!

To privatise is to betray. Recover and defend the legacy of Chávez!


[1] This process was carried out through several methods: granting land directly to peasants, cooperatives, and more recently, social production companies linked to the communes.

This article was originally published on 25 April at Lucha de Clases: the Venezuelan website of the International Marxist Tendency.

Join us

If you want more information about joining the IMT, fill in this form. We will get back to you as soon as possible.