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Chávez in The Americas: Increasing Autonomy in Latin America and the Caribbean

By Stephanie Pearce, NACLA

This article originally appeared in the Summer 2013 edition “Chavismo After Chávez: What Was Created? What Remains?”

Countries in the “developing world” have, since the end of formal colonialism, seen their ability to act autonomously systematically constrained by a variety of factors. These include, but are not limited to, macroeconomic policy conditions attached to World Bank and IMF loans, poor terms of trade with the Global North, lack of effective agency in international organizations, and the actions of multinational corporations operating in their territory.

Venezuela’s regionally oriented foreign policy during the Chávez era counteracted each of these dynamics, and in doing so opened up autonomous policy space for other states in Latin America and the Caribbean. The concrete achievements of a number of mechanisms, including counter-trading and credit provision within the PetroCaribe framework, and the recent establishment of a virtual regional currency, the SUCRE, all played a part in this process.

The first crucial action undertaken by Hugo Chávez as Venezuelan President in protecting regional economies was to vociferously oppose the proposed Free Trade Area of the Americas (FTAA) at the third summit of the Americas, held in Quebec in 2000. The proposal represented the perfect consolidation of U.S. economic power, and was designed, in the words of General Colin Powell, to “guarantee control for North American businesses…over the entire hemisphere.”1 After Chávez voiced concerns, the Mercosur countries followed suit, stopping the FTAA conclusively at the subsequent Mar del Plata summit in 2005. If the FTAA had gone ahead, it would have resulted in the substantial economic subordination of Latin America to U.S. corporate interests. Agricultural sectors in particular would have suffered from an influx of low-cost subsidized U.S. products. In addition, areas of the public sphere that had previously avoided commoditization or privatization would have been fair game for trans-national corporations. Under the FTAA, Amanothep Zambrano, ALBA Executive Secretary, told me last August that states would not have been able to “lead any aspect of economic policy, and therefore their political capacity to solve social problems” would have been heavily constrained.

Their shared opposition to these proposals encouraged Cuba and Venezuela to form an alternative regional integration framework, the Bolivarian Alliance for the Peoples of Our America (ALBA) in 2004. This quickly matured from a bilateral socio-centric cooperation agreement to a nascent regional bloc, or alliance, with the addition of Bolivia in 2006. Bolivia’s newly elected president, Evo Morales, brought with him the idea of a “Peoples Trade Treaty” (TCP), which extended the ALBA’s self-identified principles of solidarity, complementarity between economies, and respect for sovereignty, into a 23-point agreement that systematically opposed the tenets of orthodox free trade agreements. The TCP opened the possibility of pursuing economic policies outside of the market fundamentalist approach of the neoliberal era, for example by stating that people’s right to access healthcare should be prioritized above protecting pharmaceuticals’ corporate profitability. In the following three years, membership of the ALBA-TCP grew to nine countries encompassing much of Central and South America as well as the Caribbean.

During this time, the Venezuelan government also constructed PetroCaribe, a framework designed to facilitate the supply of its oil products to neighboring Caribbean states under preferential conditions, which at the time of writing had 18 members. Through these two channels the Venezuelan government has opened up autonomous policy space in the region, to some extent overcoming the constraints identified above. Venezuela has, largely through ALBA and PetroCaribe, become an important source of funding in the region. Oil supply agreements, signed between Venezuela and several members of both frameworks, permit countries to defer payment on set portions of their oil bill and use the capital obtained for government spending. Crucially this capital is obtained without the macroeconomic conditionality and policy prescriptions associated with World Bank or IMF loans. PetroCaribe agreements, for example, state that “member nations of the group are allowed to defer payment of 60% of their oil bills to Venezuela for 25 years, at 1% interest, in addition to a 90-day grace period on all payments, and a two year initial grace period on the credit facility.”2

This credit facility offers an alternative to IFI loans, while maintaining small Caribbean nations’ ability for autonomous decision making, which is considered critical in the post-colonial context. Specifically, credit provision has enabled Jamaica and Antigua to delay recourse to IMF loans, and put them in a better negotiating position so, I was told in August 2011 by Norman Girvan, former Secretary General of the Association of Caribbean States, “they were able to make an easier deal.” Venezuela, under the current administration, has also purchased billions of dollars’ worth of bonds issued by the Argentine government, enabling the country’s early exit from all of its IMF debts and associated policy prescriptions.

As a result of this mechanism, PetroCaribe funding to the Caribbean now exceeds both EU and U.S. aid by a wide margin, with only remittances from the Caribbean diaspora exceeding it in funding to the signatory states.3 For Dominica, Venezuela is now the “single largest creditor…surpassing traditional sources of credit such as regional development banks and the IMF.” Venezuela is owed 27.7% of the country’s total debt, which grew 12.6% in 2011 alone, to $8.8 billion.4 Such figures inevitably raise concerns that the agreement is increasing debt levels in the region and developing dependence on Venezuelan largesse. Barbados’s Prime Minister, Owen Arthur, has stated that his country would not join because he “would not permit the present generation of Barbadians to consume oil now to be paid for by succeeding generations of Barbadians.”5 However, the deferred portion of the bill does not constitute debt in the orthodox sense, as it is kept by the Caribbean partners and can be spent as capital towards any project deemed socio-productive, or saved to accrue interest to offset the bill, as has been the case in Guyana. The domestic opposition sees the PetroCaribe scheme as Chávez “giving away” oil irresponsibly. However, the amount is relatively small and sustainable. Supply to PetroCaribe members, including Cuba, peaked in 2009 at an average of 196.4 thousand barrels daily, which constituted only 7% of total Venezuelan oil exports that year, and operates under market prices in accordance with Venezuela’s OPEC membership.6

Due to a high level of dependence on imports, Venezuela has also been uniquely able to position itself as a regional alternative to North American and European markets. This dynamic has, again, been apparent within both ALBA-TCP and PetroCaribe. In 2008, the PetroCaribe framework was augmented with a “compensatory exchange mechanism” via which oil bills from Venezuela could be offset by the export of domestically produced goods and services. The Venezuelan market is particularly important for Caribbean countries who suffer from poor terms of trade with the North due to dependence on primary commodity exports, the continued use of tariff and non-tariff barriers by developed nations, and the erosion of colonial trade preferences. For example, up to 90% of Guyanese rice exports per annum were going to EU countries when, in 2000, the Overseas Territories (OCT) loophole was closed, resulting, I was told by the Guyanese Ambassador to Venezuela, in a “50-60%” drop in prices. When the compensation mechanism was announced, the then-president of Guyana, Jagdeo Bharrat, actively sought a better deal with Venezuela through the PetroCaribe framework. The resultant export of both rice and unprocessed paddy has seen Venezuela become the single largest importer of Guyanese rice, replacing Portugal.7

In the case of ALBA countries, a strategic reorientation towards intra-regional trade, and particularly export to Venezuela, has reduced dependence on the United States and subsequently its ability to constrain autonomous action. For example, when Bolivia expelled the U.S. ambassador in 2008 following his alleged involvement in separatist actions in the Santa Cruz Department, Washington retaliated by excluding Bolivia from the Andean Trade Promotion and Drug Eradication Agreement (ATPDEA). Bolivia lost its U.S. tariff advantages, which was a particularly painful blow to its textile industry. Chávez immediately offered them a market under “the same or better conditions” that Bolivia had enjoyed with the United States. As a result, says the Bolivian Ambassador to Venezuela, in 2010 Venezuela “imported almost 50 million dollars in textiles alone, or nearly double that which [Bolivia] used to export to the USA” annually.

The purchase agreement was supported by initiatives by both governments to facilitate small and medium sized businesses’ entry into the regional market. A fund was established in the Bank of ALBA to provide short-term interest-free credit to Venezuelan importers in order to purchase Bolivian textiles, paired with a fund in the Bolivian national development bank to provide small textile producers credit to purchase raw materials. This agreement therefore not only minimized the impact that U.S. market sanctions could have over autonomous decision making by the Bolivian government, but also created direct relations between regional producers and consumers.

These patterns are part of a wider renewed focus on South-South trade, both within the region and with extra-hemispheric partners. However, the United States remains the region’s single most important trading partner. The objective is not to be “anti-American,” rather to reduce the U.S. ability to exert controlling influence over its Latin American and Caribbean neighbors by creating alternatives to the dollar in international trade. One way in which this was achieved was through the PetroCaribe mechanism and similar counter-purchase agreements with other regional allies. As direct non-market transactions, they circumvented the use of the dollar, thereby avoiding its automatic privileging in international trade, and avoiding the transaction costs associated with its use.

This concept was extended by the ALBA’s virtual common currency, the Unified Regional System for Economic Compensation (SUCRE). The SUCRE is essentially a series of clearing accounts between Cuba, Bolivia, Venezuela, and Ecuador that allow the countries to trade freely without transaction costs. Accounts are balanced every six months with one hard currency transfer. The value of trade conducted via the SUCRE in its first year of operations, 2010, was just over $8 million. It grew exponentially, to almost 100 times that the following year ($172,905,344).8 Though the SUCRE’s value was originally set against the dollar ($1 to XSU1.25), and it is typically used as the convertible currency to make balancing payments, in the long term the intention is to no longer use the dollar at all. The direct and deliberate countering of U.S. economic hegemony that the SUCRE represents has been of particular importance to Ecuador, whose macroeconomic policy options have been constrained by a prior administration’s decision to dollarize the economy in 2001. In fact, the mechanism was largely designed by Ecuadoran economists, and of the $170 million traded in 2011, $140 million was for Venezuelan purchases from Ecuador (mainly tuna).9

As we have seen, Chávez’s time in office saw an unequivocal reassertion of the state as economic actor throughout the region. This dynamic was particularly felt in the crucial energy sector. In Venezuela, governmental control of the state oil industry was consolidated, while both Bolivia and Argentina nationalized hydrocarbons with investment and technical assistance from Petroleos de Venezuela (PDVSA), via agreements with YPFB and Enarsa, state owned gas and oil companies in Bolivia and Argentina respectively. Even in centrist or center-right Caribbean nations, Venezuelan investment has enabled state-owned oil companies and agencies to supply oil products directly to their population, “to effectively intervene in their markets to minimize retail prices” in the energy sector which had previously been “dominated by foreign companies.”10

Where state energy companies or agencies did not exist prior to PetroCaribe, they have been formed to facilitate the direct import of oil products from PDVSA. These can take the form of joint ventures with the PDVSA subsidiary PDV Caribe. Venezuelan credit and grants have also been used to fund improvements in energy infrastructure; that is namely the capacity of the member countries to store and refine oil, and in turn to generate and distribute energy. Central to this scheme has been investment in the Cienfuegos refinery in Cuba and at the Kingston refinery which now almost exclusively refines Venezuelan crude. The refinery is run by Petrojam Ltd, a mixed state enterprise in which Jamaica Oil Company owns a 51% stake and PDV Caribe 49%. This reassertion of state control over energy resources is seen as a fundamental facet of PetroCaribe’s “new oil geopolitics…at the services of our peoples not at the service of imperialism and big capital.”11

The right and power of multinationals to dictate domestic policy has been systematically undermined, both through a reassertion of the state as economic actor and in the tenets of the TCP which we briefly touched on earlier. This offers a stark contrast to the World Trade Organization’s policies such as Trade Related Intellectual Property Rights (TRIPs), which consistently privilege corporate interests, and/or offer beneficial “loopholes” for developed nations. This has been possible through the creation of new regional forums in Latin America and the Caribbean, in which members’ interests are not subordinate to those of more powerful nations. For example, in the TCP, economic asymmetries between members are recognised and therefore tariff reductions do not have to be reciprocal, disregarding the “most favored nation” principle. In addition, ALBA has no supranationality; it is best described as a framework for cooperation rather than an integration body in the orthodox sense. All programs and agreements are optional, flexible, and voluntary, thereby protecting the national autonomy of members.

Though statist in its organization, ALBA facilitates continual dialogue through presidential and ministerial summits, which have also been attended by international observers. Non-member countries are also represented in the council for social movements, whose proponents include groups such as the Brazilian Landless Workers’ Movement. ALBA proved to be the first in a series of new regional spaces, catalysed by massive rejection of the FTAA proposal—a rejection led by Chávez—and culminating in the formation of the Community of Latin American and Caribbean States (CELAC), which was put together as an alternative to the Organization of American States (OAS), and includes all the countries of the Americas except the United States and Canada. In this way, lessened economic dependence has resulted in increased diplomatic autonomy from the United States.

There are those who argue that Venezuelan projects in the region created new constraints, replaced one set of dependencies with another. But this is not the case. Though he was a catalyst for and investor in regional development, Chávez avoided constructing a position of power or privilege for Venezuela. This is evident in the lack of conditionality attached to credit mechanisms and the fact that the controlling stake of each mixed state enterprise was maintained by the partner country. Though oil wealth put Chávez in a unique position to invest in regional projects, these were not unilaterally devised or constructed; the TCP came from Bolivia, SUCRE is an Ecuadoran concept, and of course ALBA social programs were exported from Cuba. However, these ideas were made a reality by the capacity for rapid implementation that oil largesse afforded. Such apparently altruistic actions led many to question Chávez’s motives. It is important to point out that these frameworks and counter-purchase agreements have also helped reduce Venezuela’s dependence on the United States as a market and refining destination for oil. The volume of Venezuelan oil exported to the United States decreased from 1,500,000 barrels per day in 2008, to 1,166,000 bpd in 2011, a drop of 334,000 barrels per day. This can, in part, be attributed to the diversification of markets in Latin America (190 bpd to PetroCaribe, plus supply agreements with Argentina among others). This is in addition to securing crucial imports without financial outlay, specifically agricultural commodities, which are often then provided to the Venezuelan population at low cost through state owned agencies such as the supermarket chain Mercal.

***

Under the last ten years of Hugo Chávez’s Presidency, Venezuela’s foreign policies resulted in an opening up of autonomous policy space in Latin America and the Caribbean. What was begun in 2004 with the rejection of the proposed FTAA continued into the post-crisis conjuncture, when Chávez was instrumental in creating a new regional financial architecture to limit the power exerted by Washington-based IFIs. PetroCaribe credit provided funds for capital expenditure, without imposing macroeconomic conditionality. In addition, guaranteed oil supplies allowed the small and energy dependent nations that made up its membership to move beyond reactive policies and look to longer term socio-productive investment.

Venezuela’s concurrent strategy of sourcing imports from the region offered primary-commodity-dependent economies some opportunity to diversify their markets and baskets, with better terms of trade than offered by the United States or ex-colonial metropoles in Europe. Chávez also took the bite out of attempted control via market sanctions, as was clearly demonstrated in the Bolivian example.

These regional imports often took the form of non-market exchanges and counter-purchase agreements within PetroCaribe, ALBA, and beyond. Combined, they arguably represented a strategic de-linking from international trade and finance systems, specifically from the U.S. dollar. As such, these frameworks have lessened both the dependence on, and influence of, the United States in the region, protecting countries’ ability to act autonomously and not follow the dictates of Washington. Chávez effectively undermined U.S. economic power by offering alternatives to the hegemony of the dollar, with the SUCRE in particular offering a concerted challenge. Lessened economic dependence in turn allowed for greater diplomatic autonomy from Washington, demonstrated in its strategic exclusion from the newly formed CELAC. The various new regional initiatives provide space to build development strategies and devise economic policies, beyond the constraints of “market-friendly” logic. This allows for a reassertion of the state as an economic actor and service provider, within a culture of regional cooperation. Though the Venezuelan state is not operating outside of capitalism per se, from the initial rejection of the proposed Free Trade Area of the Americas in 2001 the Chávez government demonstrated that there are alternatives beyond the policy prescriptions of the neoliberal era, and what’s more, facilitated their use throughout the region to mutually beneficial ends.

1. Colin Powell cited in Katharine Ainger, “Trading Away the Americas,” New Internationalist, Issue 351, November 1, 2002, available at newint.org

2. “Venezuela: Two Countries Hold Out Against Cheap Loans and Barters,” Countertrade & Offset, 26:15 (2008)7

3. Sir Ronald Sanders, “The Chavez Effect: A life belt for the Caribbean,” Kaieteur news online, July 27, 2008, available at kaieteurnewsonline.com

4. Andrés Rojas Jiménez “Deuda dominicana con PDVSA aumentó durante 201,” El Nacional, February 16, 2012, available at elnacional.com

5. Wendell Mottley, Trinidad and Tobago’s Industrial Policy 1959-2008 Kingston. (Randle, 2008) 157.

6. This data, and all data not otherwise cited, elaborated from PDVSA annual reports, 2009-2011.

7. Guyana Rice Development Board, “Guyana Rice Development Board Annual Report 2010,” 2011.

8. Consejo Monetario Regional del SUCRE, “SUCRE Informe de Gestión 2011,” 2012.

9. Ibid

10. Curtis Williams, “Venezuela Urged to Fast-track Petrocaribe Initiative,” Oil and Gas Journal, 102 (2004):26.

11. Hugo Chávez Frías, Petrocaribe, Towards A New Order in Our America, (Colecciones Discursos, Ministerio de Poder Popular para Comunicación.)

Stephanie Pearce is a doctoral candidate at the School of Politics & International Relations, Queen Mary College, University of London. Her research focuses on the role of countertrade in Venezuela’s “Bolivarian Revolution.”

Read the rest of NACLA’s Summer 2013 issue: “Chavismo After Chávez: What Was Created? What Remains?”

February 23, 2014 Posted by | Economics, Solidarity and Activism, Timeless or most popular | , , , , , | Leave a comment

“Humanity Has Lost a Titan”: Interview with William I. Robinson on the Legacy of Hugo Chavez

Eleftherotypia | March 20, 2013

The progressive cause in Latin America but also worldwide has lost one of its most visible leaders.  How would you describe the political ideology professed by Hugo Chavez and his Venezuelan United Socialist Party?

Humanity has lost a titan with the passing of Hugo Chavez. Without doubt Chavez is the most important revolutionary leader to have emerged in Latin America – indeed, from the Global South – in at least a generation, if not in a century. When Chavez came to power in 1999 it was the heyday of neo-liberal hegemony in Latin America and around the world. Chavez’ election irked the Venezuelan bourgeoisie and raised eyebrows in the halls of power in Washington and elsewhere. But it was not until the April 2001 Summit of the Americas meeting in Quebec, Canada, that the direction Chavez and the Bolivarian revolution would take became clear. Chavez was the only head of state among the 24 hemispheric leaders present at that meeting who refused to sign on to the declaration approving the creation of a Free Trade Area of the Americas that, if approved, would have created by 2005 a giant free trade zone from the Arctic Circle to Tierra del Fuego. It was at that moment that neo-liberalism definitively lost its hegemony.

But Chavez not only rejected neo-liberalism. He put socialism back on the public agenda at a time when apologists for global capitalism were still claiming it was “the End of History” and when the defeatist left was insisting that we had to be “realistic” and “pragmatic,” to renounce anti-capitalism, and to limit ourselves to putting a “human face” on the capitalist system. Chavez called for a renewed democratic socialism – what he and the PUSV called “21st century socialism” – a socialism based on the protagonism and democratic control of the popular classes from below, as evinced in the 40,000 Communal Councils, the tens of thousands of worker cooperatives, and the thousands of public enterprises run by workers councils in Venezuela. It is apropos to recall these experiences in Venezuela take place at a time when the Greek and other European peoples are reeling under the austerity imposed by the brutal dictatorship of transnational finance capital.

In an era in which socialists in the west have embraced wholeheartedly the neoliberal project, on Chavez’s watch, the oil industry in Venezuela was nationalized, government spending increased substantially (up to 40% in 2012), and welfare projects were initiated on a massive scale. What challenges did Chavez have to overcome in order to accomplish these goals?

The anti-Chavista forces, Washington, and the international media are fond of saying that Chavez “polarized” Venezuela. But Venezuela was polarized long before Chavez came to power, with a tiny capitalist class and state elite and a sizable middle class on the one side – approximately some 30 percent of the Venezuelan population – and the impoverished majority on the other side. Above all Chavez reverted the country’s oil wealth to this majority. The re-nationalization of the oil industry allowed the Chavez government to redirect state resources towards this poor majority. The social achievements of the Bolivarian revolution are now well known: poverty was cut by more than half, from over 60 percent to some 25 percent of the population, and extreme poverty dropped from 25 percent to some seven percent; health and education became universally accessible; life expectancy rose from 74.5 to 79.5 years; unemployment dropped from 12 percent to 6 percent; hundreds of thousands of new homes have been constructed ; and so on.

But these achievements, and more generally, the effort to reorient the country’s resources to the poor majority, came at the cost of the enmity of the bourgeoisie and much of the middle classes, of Washington, and of the Latin American oligarchies and capitalist classes. The Chavista government faced ever more intense destabilization campaigns, including attempted coups, military and paramilitary plots, political conspiracies, disinformation and misinformation (of which much of the international press has been willing accomplices), employee strikes and economic sabotage, and so on. The country has faced a war of attrition that has taken a heavy toll.

Moreover, the drive to construct socialism has taken place within a capitalist global economy. Some 70 percent of the Venezuelan economy is still in private hands, including the financial system, and the country remains dependent on international oil companies and markets. The material power of national and transnational capital translates into continued political and ideological influence. The law of value and its logic is still very much operative in the economy.

The strategy has been to develop and state and cooperative sector to compete with private national and transnational capital; it has not been to replace the logic of accumulation with a social logic as much as it has been to develop a social logic in the state and cooperative sector alongside the logic of accumulation that remains operative for the economy as a whole. This has generated structural as well as political and ideological contradictions. With regard to the former, for instance, inflation has become a serious problem as has a black market in the currency. This is the challenge of 21st century socialism “in one country.”

Under Chavez, Venezuela had established very special relations with Cuba. Was the relationship mutually beneficial to both countries?

Chavez developed a close friendship with Fidel Castro and the two have worked closely together in confronting Washington’s political and economic domination in the region. Economic relations between the two countries on not based on the criteria of profitability and trade advantage but on solidarity and complementarity. Cuba receives Venezuelan oil in exchange for Cuba sending medical brigades and other forms of social assistance. Yet Chavez stated on numerous occasions that Venezuela is constructing its own model of socialism. Sure the relationship has been mutually beneficial, but more to the point, that relationship reflects the broader matter of international political and economic relations among socialist-oriented countries, or countries whose governments are seeking relations based on cooperation and solidarity rather than on competition.

Venezuela (together with Cuba) has played a leadership role in Latin America in forging a political union, economic integration, and an alternative regional cooperation and development model based on solidarity rather than profit and driven by member states rather than transnational corporations and such international financial agencies as the IMF and the World Bank. In 2004 Venezuela and Cuba set up the Bolivarian Alliance for the Peoples of Our America, or ALBA to promote integration and solidarity on the principle of solidarity not competition. Bolivia, Ecuador, Nicaragua, and several other countries have joined ALBA. While Venezuela has provided oil on concessionary terms through ALBA, it has, more importantly, promoted projects such as a regional bank and currency, regional public agricultural and industrial enterprises, and joint infrastructural, social, and communications programs. In December 2011 the Community of Latin American and Caribbean States, or CELAC, held its inaugural summit in Caracas. The CELAC brings together every country in the hemisphere excluding the United States and Canada and is a direct political challenge to Washington’s historic domination in the region.

Beyond Latin America, Venezuela has diversified its international economic relations – China is becoming the major trading and investment partner – and promoted South-South cooperation. Venezuela has come out strongly in support of the Palestinian struggle and other such causes, and against U.S. intervention around the world, even when it has cost the country political capital and economic support internationally. In sum, Venezuela has pursued not a self-interested and opportunistic foreign policy such as that of the former Soviet Union but one based on what would be true socialist principles of solidarity and cooperation.

Socialism in Latin America is on an upwards spiral since the late 2000s. What explains its rise at this particular historical juncture?

It is not difficult to understand the rise of socialism, or certainly, the spiral of anti-capitalism. In the wake of the 1970s crisis of world capitalism the bourgeoisie in the centers of the system, together with state elites and organic intellectuals who serve that bourgeoisie, launched capitalist globalization and undertook a vast new round of “primitive accumulation” around the world, destabilizing hundreds of millions of people. One of the key vehicles for this new round of capitalist expansion was neo-liberalism, a program which has facilitated the transfer of resources from the poor and working classes everywhere to a new transnational capitalist class, especially transnational finance capital, and to emerging middle and professional strata enjoying the fruits of the new global capitalism. Very simply, global capitalism has thrown countless millions into misery and uncertainty. The system has demonstrated that it is a failure for a majority of humanity.

It is in this context that starting in the late 1990s resistance forces around the world began to coalesce into a critical anti-capitalist mass and the banner of “another world is possible” was raised. But what kind of a new world? It is in this context that the Bolivarian revolution and its worldwide impact must be understood. And it is in this context that the extraordinary vision, charisma, and foresightedness of Hugo Chavez must be appreciated. Venezuela under Chavez, much more than resistance to global capitalism, is an example that a new world truly can – and must – be created, once based on the principles and practices of democratic socialism, if not on the label.

Venezuela will hold presidential elections on April 14. Will the United Socialist Party manage to sustain the momentum without Chavez, especially since it is a well known fact that his party is fractured by intra-party rivalries?

The greatest danger to the Bolivarian revolution, in my view, has always come from within, from the “endogenous right,” or the “Chavista right-wing,” that is, from portions of the Chavista movement that wish to see in Venezuela a more mild social democratic project and also from bureaucratic state and party elites who are more interested in acquiring their own power, privilege, and authority, often through corruption, than in helping to develop the self-empowerment of the working and popular classes. Yes, there are intra-party rivalries but I think that in the larger political analysis these must be seen in light of the struggle to avoid a bureaucratic top-down hijacking of power-from-below.

Nicolas Maduro has been a leader of the radical left for several decades and comes from a trade-union background. The Chavista movement has rallied around his leadership and his candidacy. He has proven, since Chavez moved into a terminal state in December, that he is a capable leader and the Chavista mass base understands that its struggle to defend and to deepen its revolution is now tied to electoral support for Maduro’s candidacy in the upcoming vote.

William I Robinson is Professor of Sociology, Global Studies, and Latin American Studies at the University of California at Santa Barbara, and author among other books of Latin America and Global Capitalism (2008).

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March 21, 2013 Posted by | Economics, Solidarity and Activism | , , , , , | 1 Comment

Somnambulant in Cartagena

By ROBERT SANDELS | CounterPunch | April 27, 2012

“I watched Obama closely at the famous ‘summit gathering.’  Fatigue sometimes overcame him, he involuntarily closed his eyes and occasionally slept with his eyes open.”

– Fidel Castro [1]

The Sixth Summit of the Americas, held April 14 and 15 in Cartagena de Indias, Colombia was supposed to be about what President Barak Obama wanted to talk about; instead it was about everything he didn’t want to hear.

The theme of the summit was “Connecting the Americas: Partners for Prosperity,” but what most of the 33 leaders present wanted to discuss with Obama was decriminalizing drugs, supporting Argentina’s claim to sovereignty over the Islas Malvinas (Falkland Islands) and an end to US exclusion of Cuba from the summits.

Having no good answers on these and other matters Obama shut down, — if Fidel observed correctly — put his mouth on auto pilot, recited the words to the anthem about free trade, national security, and prosperity for all and then refused to sign the final declaration.

The US agenda of prosperity through promotion of market capitalism, asymmetric free trade agreements, privatizations, unfettered flow of capital, and excessive protection of intellectual property rights is currently out of favor in most of the region.

Free trade of the kind pedaled by Bill Clinton and George W. Bush is no longer a regional issue.  In a sense, all of these summits have been pointless if one recalls their main purpose.  When Clinton convened the first one in Miami in 1994, it was not to address the forever problems of the region but to follow up on the successful negotiation of a dubious free-trade agreement with Mexico (NAFTA) by extending US commercial and financial penetration into the rest of the region under a Free Trade Area of the Americas (FTAA).  That drive was stopped cold at Mar del Plata, Argentina during the 2005 summit.

Led by Brazil, – the largest regional economy and the “B” in the BRICS — many leaders in Cartagena saw Obama’s free trade and monetary obsessions as his way to help resolve US economic problems but not theirs.  The cheap-dollar strategy may help US exports, job growth and narrow its trade deficit but those gains are seen as other people’s losses.

Meanwhile, the Federal Reserve makes nearly interest-free dollars available to financial institutions that then can engage in the lucrative carry trade – moving cheap dollars to places like Brazil where, perforce, interest rates are higher.

Brazil’s President Dilma Rouseff has complained to Obama’s face that the Fed’s actions have caused a “monetary tsunami” and are driving up Brazil’s currency.  [2] The central bank has tried to reduce upward pressure on the Brazilian real through capital controls and dollar purchases, a situation that seems at odds with Obama’s “partnership for prosperity.”

Cuba: the Phantom of the Summit 

Most or all the delegates (except Obama and his faithful Canadian companion Stephen Harper) wanted an end to the US policy of excluding Cuba from the summits and to the 50-year old blockade of the island.  The Bolivarian Alliance for the Peoples of Our America (ALBA), which includes Bolivia, Cuba, Ecuador and Venezuela, had already formally demanded that Cuba be invited to Cartagena.  Ecuador’s President Evo Morales reported that it was not just ALBA but Rouseff and other leaders in the Caribbean and South America who were saying, “there will not be another summit without Cuba.” [3]

In his speech opening the Cartagena summit, host President Juan Manuel Santos said that another summit without Cuba was  ”unacceptable.”  [4]

Of all the speeches and rumors of speeches in this hermetically sealed summit perhaps Santos’ remarks were the most striking.  Here was a conservative president of one of the few loyal US allies left in Latin America, the recipient of billions in US aid to fight a proxy war on Colombia’s coca leaves under Clinton’s 1999 Plan Colombia, one of the few countries to sign a free trade pact with the United States and host to US troops on seven Colombian military bases telling Obama that his views on Cuba were based on an “outmoded ideology.”  It was a “cold war anachronism,” he said.  [5]

The Cuba issue could not have taken Obama by surprise.  What did he expect after it was pounded into him when the previous summit foundered on the issue?  At the 2009 summit in Port of Spain, Trinidad and Tobago, his colleagues wanted to talk about readmitting Cuba to the OAS.  The summit ended with no agreement on the final declaration, which only the host government signed, but there was consensus that Cuba could re-apply for admission.  That is not going to happen because Cuba does not want to rejoin the OAS and even if it did, Obama could impose the majority-crushing one-country veto arguing that Cuba isn’t democratic.

The constant harping about the lack of democracy in Cuba seems especially odd considering that the US government has never paid attention to the annual lopsided vote in the UN condemning the blockade.  And in this very summit there was little exercise of majority rule when the United States and Canada blocked agreement on a final declaration because it contained inconvenient resolutions.

Obama, in office only a few weeks when he went to Port of Spain in April 2009, was well regarded in the region.  He talked about cooperation and admitted that mistakes were made by his predecessors.  He was generally praised for dropping Bush’s harsh restrictions on Cuban-American travel to Cuba.  He has tried to live on those meager crumbs ever since, pretending that by reverting to the travel rules in play under Clinton he was “easing” Cuba policy when in reality the policy has remained the destruction of the Cuban revolution.

Soon after Port of Spain, however, Obama supported the June 2009 Honduran coup that followed the arrest and defenestration of President Jose Manuel Zelaya — who of course was democratically elected.  Then as now Obama never tired of calling upon Cuban President Raul Castro to hold elections, without which, the island could never attend a Summit of the Americas.

Honduran President Porfirio Lobo, the direct beneficiary of that coup, attended the summit.

The lesson of Port of Spain was that John F. Kennedy’s 1962 expulsion of Cuba from the OAS was now reversed.  The lesson of Cartagena was that there wouldn’t be any more of these summits without Cuba.

Who said summits are pointless?

A war on the war on drugs

Latin American leaders of all political hues have been murmuring recently about legalization or decriminalization of drugs.  Guatemala’s President Otto Perez Molina is probably the furthest to the right in that group, which includes ex-presidents Cesar Gaviria of Colombia, and Ernesto Zedillo and Vicente Fox of Mexico and current Mexican President Felipe Calderon, who, against a background of some 50,000 deaths in his militarized war on drugs, has lately suggested the idea should be on the table.

Appearing slightly flexible on the issue, Obama told Univision News, “I don’t mind a debate around issues like decriminalization,” but added, “I personally don’t agree that’s a solution to the problem.”  [6]

Whether or not there was a debate on drugs during the closed-door sessions, Vice President Joe Biden had already made the rounds in Mexico and Central America to promise there would be no legalization while Obama was in office.

And, as if to drive the point home, the summit had barely closed when General Douglas Fraser, chief of the US Southern Command, (Was there a democratic vote among the peoples of the region to include themselves in a US military zone?) made it clear that what Obama doesn’t like, the United States doesn’t like.  The general called for greater cooperation from the region on planning for the naval side of the war on drugs.  It seems that Operation Hammer, which will cover the Caribbean coast of Central America and the Pacific coast of South America, is about to begin and he wants “the naval forces of all the region” to get with the plan.  [7]

If Obama’s views on legalization were not clearly spelled out in Cartagena, they are in his 2012 National Drug Control Strategy, which “rejects the false choice between an enforcement-centric ‘war on drugs’ and the extreme notion of drug legalization.”  [8]

His 2012 budget to pay for that strategy authorizes $15.1 billion for traditional enforcement methods and $10.1 billion for prevention and treatment.  The Marijuana News and Information blog notes that the percentage for enforcement is the same or higher than what Bush proposed spending.  [9]

While hinting at flexibility on the drug issue, Obama announced at the summit that the United States was increasing funds for the foreign war on drugs led by “our Central American friends” and pledged more than $130 million dollars for it in 2012.  [10]

As for the Malvinas, President Cristina Fernandez de Kirchner argued for inclusion in the final declaration of Argentina’s claims of sovereignty.

Pressed to declare himself, Obama pleaded neutrality.  That’s a “no.”

There was a certain airy dismissiveness about Obamas demeanor at the summit.  He danced away from the serious issues and, apparently forgetting he was the U.S. president, said, “I’m not somebody who brings to the table here a lot of baggage from the past, and I want to look at these issues in a new and fresh way.” [11]

That was a curious, even astonishing statement by a man who has willingly shouldered a good deal of imperial baggage.  Of course the baggage is his to dump or carry: 54 years of it since Dwight Eisenhower tried to block Fidel from taking power, 51 years of it since the Bay of Pigs, 50 years of it since JFK got Cuba kicked out of the OAS and now nearly four years of Obama continuing the blockade, instituting his own cyber warfare against Cuba and continuing to pay Cubans to act as agents of US policy inside the island.

What baggage has he not made his own?

The other summit 

Obama’s election-year intransigence on the issues at Cartagena has badly damaged and probably sunk the Americas summitry and with it maybe even the OAS.  The best thing for Obama is to let the summits die and blame it on Fidel and Raul Castro (also on Santos, Rouseff, Morales, Rafael Correa, among many others).

Waiting to take its place is the Community of Latin American and Caribbean States (CELAC), inaugurated in Caracas last December as an OAS without the United States and Canada.

Behind it is ALBA, which held its own, little noticed meeting in Caracas just before the Cartagena summit. It was the summit that most of the Cartagena delegates most likely would have preferred.  Its final declaration supported Argentina on the Malvinas, condemned the blockade of Cuba and called the exclusion of Cuba from the Americas summits “unacceptable.”  [12]

“Perhaps,” wrote Fidel, “CELAC will become what it should be, a hemispheric political organization without the United States and Canada. The decadent and unsustainable empire has earned the right to rest in peace.” [13]

Robert Sandels is a writer for Cuba-L and CounterPunch.

Notes.

[1] Fidel Castro, Reflexiones, Granma, 04/17/12,
http://www.granma.cu/espanol/reflexiones/17abril-reflexiones.html.

[2[Reuters, 04/14/12,
<http://www.vancouversun.com/news/Scandal+mars+Obama+wooing+Latin+America+wi
th+video/6473757/story.html>.

[3] ALBA-TCP website, http://www.alianzabolivariana.org/modules.php?
name=News&file=article&sid=8495.

[4] La Jornada (Mexico), 04/14/12,
http://www.lajornadajalisco.com.mx/2012/04/14/inaceptable-una-nueva-cumbre-s
in-cuba-santos/.

[5] Ibid.

[6] Interview, Univision News, 04/14/12,
http://univisionnews.tumblr.com/post/21081359245/obama-dont-mind-debating-le
galization-of-drugs.

[7] United States Southern Command website, 04/18/12,
http://www.southcom.mil/newsroom/Pages/Western-Hemisphere-Defense,
-Security-Leaders-Gather-to-Discuss-Transnational-Organized-Crime-in-Central
-America.aspx.
[8] White House,
http://www.whitehouse.gov/ondcp/2012-national-drug-control-strategy.
[9] Marijuana News and Information, 04/20/12,
http://www.theweedblog.com/obamas-2012-drug-strategy-is-a-reminder-the-feds-
are-addicted-to-the-drug-war/.

[10] Xinhua, 04/14/12,
http://news.xinhuanet.com/english/world/2012-04/15/c_131527076.htm.

[11] Washington Post, 04/15/12,
http://www.washingtonpost.com/world/the_americas/obama-concludes-summit-of-t
he-americas-on-the-defensive-about-inviting-cuba/2012/04/15/gIQAVrgAKT_story
.html.

[12] Granma Internacional, 04/18/12,
http://www.granma.cu/ingles/cuba-i/18abr-17gobierno.html.

[13] Fidel Castro, Reflexiones, Granma Internacional, 04/17/12,
http://www.granma.cu/espanol/reflexiones/17abril-reflexiones.html.

April 27, 2012 Posted by | Economics, Progressive Hypocrite, Solidarity and Activism | , , , , , , | Leave a comment