This essay (vea al español original después de la traducción) came to my attention well over a year ago and I found it so powerful that I decided to translate it. Luz Varela teaches history at the University of the Andes in Mérida, Venezuela. Like so many thoughtful academics, she’s worked to refute the simplistic and incorrect assumptions of the Bolivarian Left and its allies around the world. She addresses here the belief pushed by Maduro and his regime that the “imperialist” US intends to invade Venezuela and steal her oil and other resources. And the erroneous notion that the problems in Venezuela are a result of a struggle between the “Left” and the “Right.” And etc.
Her argument deserves a hearing, even if in such a small venue as my blog. Feel free to repost. I only regret that it’s taken me so long to post this extraordinary essay. The Spanish original follows the translation.
How the Venezuelan Crisis wasn’t Orchestrated by the Right nor the “Empire” and other Simplistic Ideas of the International Left
by Luz Varela, Universidad de los Andes
The USA didn’t create the conditions for an invasion of Venezuela. It was the “revolutionary” regime that did. The great North American power has no need to invade such a conflicted Latin American country such as ours if the aim is to take control of its oil. The fact is that the USA is a very wealthy country. It has dollars, lots of dollars to pay for Venezuelan oil. And that’s what it did throughout the twentieth century when it took all the oil without shooting a bullet. It did so paying market prices or by means of royalties, high royalties, paid to the [Venezuelan] State; so high, in fact, that they made Venezuela a rich country, so rich that it drew a very large number of immigrants from Europe and Latin America from the Second World War and throughout the entire century. This all happened up until our economy began to contract with the drop in the price of oil in the 1980s, forcing the country to implement neoliberal measures from 1989, through the nineties and into the first years of the new century.
The explosion of the Barroso II oil well in 1922 inaugurated the oil extraction industry in Venezuela. That process was carried out by foreign corporations but neither in its beginnings, nor later, throughout the twentieth century, did the wells nor the oil reserves come to belong to the “empire.” As a result of a constitutional disposition inherited from Spanish law, all the wealth of the subsoil has historically been property of the State and this, throughout the twentieth century, made it impossible to sell, burden, donate or in any way turn over that wealth to private parties. Yet oil could be exploited through oil concessions. Nevertheless, there was as yet no industry of which anyone might take control. The foreign capitalists had to build up that industry through concessions granted by the State that allowed them to explore, extract, produce and dispose of that oil.
The concessions, on the other hand, were granted for a limited time. Moreover, Venezuelan oil laws began raising taxes and royalties until the 1940s when a fifty-fifty rate was approved, giving the State 50% of the profits oil companies made from sales. That is to say, Venezuela came to see half of the profits produced by an industry for which it had no responsibilities, but many rights. We had, then, foreign companies putting up the capital, assuming the risks, paying wages and the expenses of infrastructure, reinvesting, paying extremely high taxes and still making huge profits. (Invasion? For what?)
After the enormous rise in the price of oil in 1974, Carlos Andrés Pérez (CAP), the Social Democratic president of Venezuela, nationalized the oil industry on January 1, 1976, pushing forth the reversion of all concessions scheduled for 1983 and reserving for the nation the extraordinary profits that would otherwise have gone to the foreign corporations. And on the infrastructure of the expropriated industry he founded PDVSA (Petróleos de Venezuela, SA). CAP also nationalized SIDOR (Orinoco Steel, or Siderúrgica de Orinoco C.A.), putting in the hands of that company the management of the so-called “Basic Industries” of Guayana that produced iron and aluminum. (Was there, by the way, a hint of an invasion given these nationalizations?). And so we have since the 1970s Venezuela directly in charge of the production of its oil, with PDVSA in the 1990s coming to be one of the 500 most powerful companies in the world. At the same time it continued to supply oil needed by the USA at market prices.
On the other hand, it’s necessary to clarify the issue of “nationalization of oil” that Chávez undertook. In the 1990s, after a large national debate, new concessions were granted for the Orinoco Oil Belt, the exploitation for which became very costly to PDVSA. During his rule, in 2007, with great publicity and fanfare, the comandante [Chávez] expropriated the oil companies of the Belt so as to later discreetly and quietly turn them over—along with much more—to other foreign companies. It was all a propaganda piece that hid the oil concessions he made to his preferred countries that Chávez considered “friendly.” It was also a scam trapping those who believed in the defense of Venezuelan sovereignty implicit in the presumed nationalization.
Nor in the twenty-first century does the United States have any need to invade Venezuela to “take” its oil, above all because it has begun to daily produce in its own territory such a quantity of oil that it has no need of ours (in Alaska alone they’ve discovered oil reserves that are possibly greater than Venezuela’s, aside from the fact that studies on non-fossil-based energy resources lead to the conclusion that there will soon be a great diminishment of the need for the use of fossil fuels). In fact, a key medium-term security objective outlined as North American policy, is to cut back on purchases of foreign oil and thus avoid the risks of blockades or pressures that affect energy stability.
On the other hand, since capitalism functions by maximizing profits and minimizing costs, what sense would it make for the US to engage in a conflict to take our oil (or any other asset) for which it has always paid for at market prices? Moreover, at prices that are infinitely less than an armed invasion would cost. But the simplistic analysis based on a general theory of Latin America which doesn’t account for national particularities and, above all, is ignorant of the history of Venezuela, the plans outlined for United States oil policy (and also ignores notions of basic economics) insists on the idea that the “gringos” want to take our wealth. And certainly, they’ve always done so, but paying for it with dollars! But that’s why throughout the twentieth century Venezuela was a rich and prosperous country with ample resources at its disposal to fully develop itself, economically and otherwise. This resulted in, among other things, the construction of a national electoral system, aqueducts, highways and airports, theaters, museums and universities, schools and hospitals, and social housing projects. All this to the point that the government was criticized for being paternalistic. In sum, in the twentieth century the Venezuelan state used the “imperialist” money coming in from oil sales to build up the national infrastructure that the “revolutionary” regime that came to power in 1999 would inherit.
Many of those who put out their opinions about Venezuela base them on a simplistic narrative formed from ahistorical generalizations. Such simplisms allowed the “comandante” [Chávez] to deceive the international left with his discourse, allowing them to interpret Venezuelan history according to their theories or beliefs and, possibly, on the basis of their own national experience, but not according to the facts and the historical processes of Venezuela. For the most part, the history of Venezuela is unknown, and so many uncritically accept the narrative of the regime. And so, for instance, this narrative omits the concession, under murky conditions and without approval of the National Assembly, of large areas of the Venezuelan territory in the so-called Arco Minero(Mining Arc), the exploitation of which is seriously affecting local indigenous communities and destroying our ecological reserves. Moreover, these concessions represent the looting of the nation, given the secrecy around the contracts of the ceded territories.
In Venezuela there is no struggle between a right and a left. It’s a battle between civil society and the military; between an institutional opposition and organized crime that has taken over the fountain of the wealth of the country. Ironically, that which then-retired Lieutenant Colonel Chávez decried as a national reality when he came to power as president in 1999 was paradoxically created as a result of his administration: A majority of poor, malnourished, emaciated Venezuelans with a public health system in ruins that condemns to death those who unable to purchase, in dollars on the black market, medicines and other medical supplies for surgical operation or other emergency medical treatment—and at the same time, other routine treatments are available only with great difficulty. The majority of Venezuelans at best can dispose of twenty dollars per month while medical products for treatment can easily pass a thousand dollars!
That’s just the beginning of the crisis Venezuela is living through. The State only with great difficulty supplies hospitals with basic needs; at present it’s unable even to provide them with quality electrical generators to reestablish electrical service which is constantly failing, impacting patients undergoing surgery and those connected to intensive care or life-support systems. But it should be remembered that nearly all the public hospitals were built before the “revolution,” with the exception of the Infant Cardiological of Caracas, which today is in a lamentable state. That hospital was opened by Chávez, along with hundreds of Integral Diagnostic Centers (CDIs). The CDIs are staffed with integral Cuban “doctors” and Venezuelans trained by Cubans, and only offer primary care, for which they are equipped. But they don’t have adequate qualified staff or facilities that allow them to undertake even minor surgery. Much less are they able to deal with serious emergencies such as wounds, heart-attacks, births, etc.
Presently Venezuelan hospitals are in stark deterioration and ruination, without an adequate budget for maintenance and with an infrastructure built more than 20 years ago to serve an infinitely smaller population. When the regime obtains some credit to equip them, the distribution networks, controlled by the military, divert the medical items to the black market, that is, to the “bachaqueo” (trafficking) of medicines. But the “bachaqueo” is not the product of any economic war. It is savage capitalism in action and not the work of traditional entrepreneurs. The controls, regulations and expropriations carried out by the regime have led to the creation of parallel marketing networks at the top of which are high-ranking officials, who control and distribute on the black market the essential goods for Venezuelans (such as food and medicines, among others).
Venezuelans not only suffer serious problems of food and health. The educational system has been almost destroyed despite the creation of an endless number of universities. If it weren’t real it would be laughable because a university is not simply created by decree, by the will, or less, overnight. Meanwhile, the national public and autonomous universities (free since 1958, with the birth of the democratic system) have been shoved into a corner because they refused to bend before power. They did not do it even in the sixties when they gave shelter to the militants of the PCV and the MIR – parties of the Venezuelan left – in their process of armed struggle, or later, after the Pacification of the irregular groups (1969). In fact, during the decade of the seventies many guerrillas were incorporated as university professors. Some even entered the National Congress as deputies after clean and transparent elections (not like those that have been taking place in Venezuela for 15 years, with a Chavez CNE, “committed to the revolution,” that is, bent on power). Our universities were never “right-wing” or “fascist,” and this was so much the case that, for example, they also welcomed many professors exiled from the dictatorships of the Southern Cone.
But when the Lieutenant Colonel Chávez came to power in 1999, he tried to bring the universities “under order” by directing academic policies. Before such attempts the universities defended their autonomy, their plurality and their freedom. Hence arose the need for the regime to create its own “universities” and, according to its notion of democracy, to financially choke those it qualified as “universities at the service of the oligarchy.” Let me say thay I don’t understand how a public university can be considered an “oligarch,” unless the defense of academic freedom is considered as oligarchical, that and insisting on maintaining a high level of academic excellence.
The so-called revolution can naturally claim that it has solved the food, health and educational problems in Venezuela. There aren’t, in fact, that many social achievements to defend, unless it can be understood as a revolutionary advance the delivery (irregular in time and quantities delivered) of a box or bag with some food, to a sector of the population. The recipients of such gifts, in counterpart to such a “benefit” must be “loyal” and march with a red shirt and a sign where and when required; vote in the continuous and repeated “electoral processes” and on condition that the voter show a photograph of the voting ballot stub or the stub itself, after scanning the “carnet de la patria” in the so-called “red spots”* located openly right next to the electoral centers—and in violation of the current electoral law.
If any sector has seized the wealth of Venezuela it has to be the elite formed after 1999, which clearly operates as an oligarchy. This “Boligarchy” has rapaciously seized our wealth and has also allowed the Cubans, Chinese and Russians to do so in return for political, military and/or financial support. Venezuela is now truly ruined but this is an achievement of the “revolutionary” elite. The amount of money they have taken from our country is immeasurable. I can’t write that number because new figures are constantly coming to light and my capacity for mathematical abstraction is hampered by numbers of such magnitude. Venezuelans and the informed international community are aware of the robbery perpetrated by these criminals because the display of their wealth is public and notorious. Suffice to keep track of the news about the freezing of personal accounts and of the vast wealth that Venezuelan officials and military officers own in foreign countries. These include bank accounts with extraordinary amounts: millions, hundreds of millions and even billions of dollars.
While it’s true that there has always been corruption, what happened in Venezuela in the last 20 years is unique in history. Never had an elite stolen in the magnitude nor with the rapacity and cruelty with which the present government has. A painful example is the case of the Bolichicos, who cheated the nation with the purchase in Russia and China of power plants used to provide and protect hospitals when faults occur in the electricity service. Many have died when these plants stop working at critical moments of surgical operations and in intensive care rooms. Did no one in the regime know that the Bolichicos bought what was effectively scrap metal that they delivered as if it were first-class power plants? It should be noted that Bolichicos do not belong to any “rancid Venezuelan oligarchy.” They are a group of young people, children and friends of high officials and military linked to power, who did what they pleased with impunity. In that style, many more cases of corruption could be enumerated. Ad Infinitum.
When the lieutenant colonel came to power in Venezuela, the price of oil was around US $15 per barrel. Even so, the country functioned and PDVSA was very prosperous. But it was autonomous, something that the new president didn’t like. As luck would have it, Chávez saw the price of oil rise in an increasing and accelerated form during his term, surpassing US $110 per barrel which, we all know, the “empire” paid accordingly and without any need for an invasion. The oil bonanza allowed the “comandante” Chávez to act as a mixture of Sheikh and Jesus Christ, handing out money by the handfuls, without reinvesting, and without thinking about saving for lean times. And finally, despite his anti-imperialist preaching, he never stopped selling oil to the “evil empire.”
In principle, it wasn’t easy for Chávez to freely spend the funds of PDVSA. The company was autonomous and by operating according to the principles of economy, it refused to deliver the money in an uncontrolled manner. That’s why Chávez decided to force the situation. Thus, the first company in the country, our goose that lays the golden eggs, was forced to expel its most capable professionals—who were not coincidentally also critics of the regime. Approximately 20 thousand of 28 thousand employees of the company were dismissed in 2002 and from that moment on, the company began to work like the property of the president. In addition, PDVSA was now burdened by the hiring of more than 120 thousand employees whose professional merits, in most cases, were no more than their cards as “revolutionaries.” Subsequently, the price of oil fell in 2009 (although it did not reach the low figures of the 1990s). The price of oil recovered in 2011, but never again would the Venezuelan oil industry. Of more than three million five hundred thousand barrels a day that it produced at the beginning of this century, today it produces around one million five hundred. Even such figures are often questioned by OPEC, an organization that has come to demand from the regime transparency in its numbers, since the ones it offers are no longer reliable.
It should also be pointed out that in recent years, and without any interruption, the US has been buying half a million barrels a day from PDVSA and, apparently, until recently, it was the only customer that paid regularly. It should also be noted that, in spite of the sanctions of 2017 that prohibited the purchase of a new issue of Venezuelan debt, there has been no “blockade” of our oil. It was not until January 28, 2019, with the freezing of PDVSA’s assets, that the US government applied economic measures that affected Venezuelan oil business activity. Until now, the “blockade” has only been a romantic excuse that fed the epic revolutionary narrative. On the other hand, other countries such as Russia and China are receiving oil in payment for debts previously incurred by the regime. That is, for years these criminals have been borrowing on future oil sales, compromising our present, and something completely illegal according to our oil laws.
PDVSA has been effectively dismantled and is now on the verge of bankruptcy. Its profits, instead of being reinvested, were used for years to satiate Chávez’s desire to offer extravagant gifts, buy consciences and exert geopolitical influence with no thought for the future, and all with the gloss of “social justice.” Even before 2010, Venezuela was forced into debt to continue these wasteful practices of the “revolutionary” party. But today the regime has no one to borrow from, because it has now given all that it could of our wealth to a long list of “anti-imperialist” countries, among them: Cuba, Russia, China, Iran and Turkey, as a guarantee of large loans and various illegally arranged deals—illegal since none had not been approved by the National Assembly. Hence the major crisis of today. Apparently, at present a good part of our oil assets is in the hands of the Chinese and the Russians who are collecting in this way on the billions of dollars in debt contracted with them. The opacity with which the regime handles these deals prevents us from knowing in particular the size of the debts contracted and the conditions in which they were arranged, since it usually negotiates as if it operated with its own funds and not with public monies. But oil experts monitor and report the situation continuously, so anyone interested in the subject can check it online.
In Venezuela, as part of the transition, we will have to invest enormous resources and hard work to reactivate our industries—and not just the oil industry. In fact, most of Venezuela’s companies have been dismantled due to controls, regulations, invasions and expropriations. The cattle ranches and agricultural estates, the manufacturing and commercial enterprises and all other productive organizations that have fallen into the hands of the State are now in ruins. The regime can hardly blame the “right-wing sectors” for waging an economic war, when it controls all political powers, with the exception of the National Assembly, which it does not recognize but opposes with a parallel power it created, that is, the National Constituent Assembly. But the Maduro regime also controls the media, the Armed Forces, the Central Bank (after eliminating its autonomy) and manages, in principle, the nation’s oil and mineral wealth. In addition, as mentioned earlier, most of the “productive” industries, import companies, and almost all the marketing channels are in the hands of the State, the “Bolivarian” workers, the communes or the military.
And so I see as very simplistic the analysis of the Venezuelan situation based on belief—and furthermore, a belief without a historical basis—that the Venezuelan crisis can be understood from the desire of the US and the right-wing to seize our wealth. In regards to this point, it’s critical to recall that among the criticisms that liberals make of the Venezuelan opposition is to point out that their leaders are part of social democracy or the center-left as members of parties like Voluntad Popular, which includes militants such as Leopoldo López and Juan Guaidó. Nor are those “distressed” by the scenario of an “invasion” by the US, apparently bothered in the least by seeing the repressive forces of the regime used against the Venezuelan people; neither do they stand in solidarity with the hundreds of political prisoners tortured, the persecuted, the murdered, the exiles, or with the millions of Venezuelan emigrants who have been forced to flee their own country. It seems that the supporters of the regime can only “see” the plundering of our wealth, but clearly their vision is out of focus. They can’t seem to see who the real looters of Venezuela are.
We Venezuelans have to affirm, ironically, that neither the Chinese nor the Russians are doing tropical tourism in Venezuela. On the contrary, after the looting and dismantling of PDVSA by the “comandante” and his “work team,” our main industry, one of the richest and most powerful in the world in the 1990s, owned by the State and supported by the nation, may never return to our hands. Now, 43 years after the oil nationalization, it’s possible that the “gringos” will return, but they will do so by sharing spaces with the Russians and the Chinese. After the “revolution,” not only have we not reached a supposed “true Independence;” now we have to pay our soul to the Chinese and a part of our spirit to the Russians. And it seems that now, for the first time in Venezuelan history, the ownership of our wealth (and we are not referring only to oil or the oil industry) is in the hands of foreign companies. It is probable, yes, that we have already lost a good part of PDVSA, but this has happened as part of a process created by the “revolutionary” regime, a regime that has delivered (and stolen as never before in the history of Latin American countries) our national wealth. If the “gringos” were to enter our country, as the Cubans, the Russians and the Chinese already quietly have, it won’t be the result of a plan orchestrated by the “empire” but rather because of the folly manifested in the mismanagement of a corrupt, repressive and irresponsible regime.
Luz Varela.
University of the Andes, History Department
Mérida, Venezuela – January 2019
revised in February 2019
Translated by Clifton Ross