THE FACTS ABOUT THE „ECONOMIC WAR‟ ON VENEZUELA
“We cannot stand idly by and watch a country go communist by the irresponsibility of its own people.”
Henry Kissinger, justifying destabilization of Allende‟s Chile.
Francisco Dominguez
The false argument that the reasons for Venezuela‟s economic woes is down to chavista
fiscal profligacy and irresponsibility, attributed landmarks of populism, which –it is
argued- bought Hugo Chavez the votes of the poor has been repeated ad nauseam by the
corporate media. Some media have even been – for over three years – predicting an
economic collapse and a catastrophic default. One of them –evidently relishing food
shortages in Venezuela – titled an article Let them eat chavismo1. Here, the chief argument is
that the cause of Venezuela‟s economic difficulties lay in gross economic
mismanagement, where the acute egocentrism of Hugo Chavez led to grandiose,
wasteful, projects, which combined with unbridled populist economic policies left the
country in a quasi state of collapse. Thus thanks to his handouts to the poor
Mr Chavez’s supreme political achievement was that many ordinary Venezuelans credited him
with the handouts and did not blame him for the blemishes.” Even worse “Chavez
squandered an extraordinary opportunity for his country, to use an unprecedented oil boom to
equip it with world-class infrastructure and to provide the best education and health services
money can buy.2
Exactly the same view was taken by James Robbins in a 2011 BBC “documentary” in
which he claimed that, apart from the metrocable installed in the hills for the poor,
which he labeled
A extravagant showcase for Hugo Chavez’s socialist revolution”, so little else of Venezuelan oil
wealth has been spent on similar infrastructure projects which are desperately needed to try and
bridge the gap between the richest and the poorest in this society.3
That reputable media such as the BBC and The Economist resort to such degree of crude
bias shows the intense hostility of many world media outfits towards the Bolivarian
Republic of Venezuela. Such hostility neatly coincides with that of multinational capital
and that of the U.S. State Department. In fact, there is a one-to-one correlation between
U.S. aggression against Venezuela and intense media negative reporting on the Bolivarian
Republic.
However, within a framework of negative reporting and bias the mainstream media seem
to be in two minds about the economic war against the Bolivarian government of
Venezuela. On the one hand they argue that Venezuela‟s economic woes stem from
„unsound populist policies‟, i.e., income redistribution to eradicate poverty and social
exclusion, thus dismissing the „economic war‟ as a flimsy excuse deployed by President
Maduro‟s government. Yet, at the same time, these very same media relish at the severe
dislocation the very economic war (hoarding, black market speculation, contraband and
currency speculation) that they deny exists, brings about, thus confirming its very real
existence.
The Economist 20th Jan 2015.
The Economist 5th March 2013, day when President Hugo Chavez passed away.
3 Venezuela – Oil Politics and Hugo Chavez, BBC Our World Documentary, 2011
https://www.youtube.com/watch?v=aAhvkS2oMp8
1
2
Such extraordinary claims so flagrantly
contradict the facts of Venezuela‟s reality that
they must be categorized not as mistakes but as
deliberate propaganda. As is universally known,
Venezuela since 1999 has taken huge strides in
the areas of education, health, and poverty
reduction meeting the Millennium Goals several
years earlier than expected. In the infographic
we can see the tremendous achievements of the
Bolivarian government resulting from the steady
increase in social spending in sharp contrast to
the ancien régime.
There is no question that lately Venezuela has been facing serious economic problems,
but most of them are associated with external factors well beyond its control. These
include the severe and sharp fall of the oil price – from US$146.12 the barrel (May 2008)
to US$37.23 (13 November 2015) – a massive decline of US$108.97 per barrel – which
has substantially reduced the income accruing to the state. Furthermore, in this highly oil
export dependent economy, oil revenues represent over 85% of the total. And since
Venezuela oil exports are on average about 2.3 million barrels per day, it would be
incredible if such development did not create severe economic difficulties, but it is
thoroughly disingenuous to blame it on the Bolivarian government, as some media do.
However, the collapse in oil prices is not at all
the reason for Venezuela‟s current scarcity of
essential goods, food shortages, supermarket
queues, national and hard currency speculation,
and the like. Venezuela, as Chile in the 1970s,
has been subjected to an economic war that
takes the form of hoarding, large-scale
contraband to Colombia of basic necessities,
especially foodstuffs and gasoline, and the use
of existing shortages to carry out large-scale
black market speculation. Furthermore, the
Bolivar‟s low official exchange rate has led to
large-scale currency speculation both in
Venezuela but particularly in Colombia. Tens of
billions of dollars have been lost to the
country‟s economy as a result. These have massively fuelled inflation and it lies at the
heart of the country‟s shortages. In the graph inserted we can see how profitable the
criminal activity of contraband to Colombia can be.
This all-out economic assault is being led by very powerful internal and external forces,
including the powerful Venezuelan and Colombian oligarchies and criminal gangs with a
dominant participation of Colombian paramilitaries in the highly lucrative business of
cross border contraband. Venezuela has been subjected to this economic assault for at
least three years and, since it is the poorest who are the hardest hit, the explicit aim is –
as with Allende‟s Chile – to erode political support for the government in order to create
the conditions for its ousting. Furthermore, the US government, State Dept., National
Endowment for Democracy, the NSA, the CIA, the OTI, USAID, the IRI and NDI, the
U.S. Congress and Senate, actively fuel the destabilization seeking to bring about
Washington‟s most precious regional geopolitical objective: oust the Bolivarian
government to recover control over the world‟s largest oil reserves.
U.S. policy to Bolivarian Venezuela, as with Allende‟s Chile, is the customary US strategy
to governments it does not like: regime change. The 1975 Report of the Select
Committee of the U.S. Senate to investigate U.S. cover action in Chile confirms it (p.33)
United States foreign economic policy toward Allende's government was articulated at the
highest levels of the U.S. government, and coordinated by interagency task forces. The policy was
clearly framed during the Track II period. Richard Helms' notes from his September 15, 1970,
meeting with President Nixon, the meeting which initiated Track II, contain the indication:
"Make the economy scream."
U.S. strategy of regime change involves a whole gamut of policies. The Covert Action in
Chile 1963-1973 Report4 details them in the case of Chile and they are eerily identical to
what U.S. state and para-state agencies have been and are carrying out against the
Bolivarian government of Venezuela. They include negative media propaganda, support
for opposition media, gaining influence in domestic institutions and groups, major
efforts to influence elections, support for opposition political parties, support for private
sector organizations, direct efforts to promote a military coup, enlist the support of US
multinational companies to contribute in most of the mentioned fields, subsidize “civic
action” groups (today‟s NGOs), sowing divisions among the governing coalition,
support for right wing terrorist organizations, and such like. Thus, the real commander in
chief of the ongoing economic war and destabilization against Bolivarian Venezuela is in
Washington, not Caracas. One example of this was the April 2002 coup against President
Chavez that had Washington‟s fingerprints all over.5
Nevertheless, and against all odds, the Bolivarian government remains committed to
social progress, and in the very difficult context deliberately created by the economic war,
it has adopted an array of policies aimed at supporting the majority. These policies have
included a vigorous state-led housing programme building 800,000 houses, wage
increases and increases in the minimum wage and pensions, 300,000 more people regardless of contributions - have been given pensions, and pensioners have been
additionally given a health bonus.
Also several new social programmes – known in Venezuela as missions - such as Mision
Barrio Tricolor (to improve the quality of existing housing), Misión Jóvenes de la Patria, Misión
Niños y Niñas del Barrio, Misión Transporte, Misión Hijos de Venezuela, and a few more, have
been established by President Maduro all of which enhance social services and benefits
to the majority of Venezuelans.
Additionally various infrastructure projects have been inaugurated by President Maduro.
They include the TrasnMaracay corridor to improve the transport system in the Aragua
state, 13 km of motorway to the country‟s East, a new metro station in the Caracas
district of Bello Monte, five new trains were acquired for the Caracas-Valle del Tuy
railway line, similar works are being completed for the states of Barinas, Carabobo,
Covert Action in Chile 1963-1973, Staff Report on the Select Committee to Study Governmental Operations with Respect to
Intelligence Activities, United States Senate, U.S. Government Printing Office, Washington, 1975.
5 See the irrefutable documented evidence of the U.S. central participation in the 2002 coup in Eva Golinger, The Chavez
Code, Pluto Press, 2007.
4
Miranda, and others in Caracas, also a tunnel connecting Cota 95 and the Caracas-La
Guaira motorway, in Caracas there has been the widening of various main thoroughfares,
and other such road projects have begun this year. The above shows that it is blatantly
not true that apart from “prestige projects” nothing else has been done.
As the inserted infographic show, in the period 1998-2014, social expenditure has been
increased as follows:
Health
9 times
People‟s participation
9 times
Education
6 times
Science & technology
10 times
Culture
6 times
Housing
6 times
Minimum wage
28 times
Social security
21 times
Furthermore, this year and in 2014, the two worst years of the economic war, Venezuela
paid US$13,500 bn and US$13 bn respectively. Furthermore, Venezuela has fulfilled all
of its international financial obligations.
In conclusion, media misreporting, echoing the stance of Venezuela‟s Right Wing, that
Venezuela is on the verge of collapse, and that the oil revenues from the bonanza under
Chavez have been squandered, are false. In Chile elements of the media - in cahoots with
U.S. agencies and the domestic Right Wing - were central in destabilizing the
government, and eroding Allende‟s popular support. In the end we saw the violent
overthrow of a democratically elected, constitutional and legitimate administration. In
Venezuela, exactly the same combination of U.S.-led reactionary forces seeks to bring
about the same results but with twenty times over more resources. The siege of Chile
lasted three years. The Revolution in Venezuela has been under siege for 16 relentless
years.