Knocking over Dominos in Latin
[Venezuela & Bolivia]
by Sarah Wagner
Venezuelanalysis.com, May 29,
On Monday, May 16th tens of thousands
of Bolivian Indigenous descended from the shantytowns surrounding
La Paz, the capital, demanding that the government of Carlos Mesa
increase royalties on foreign transnational corporations from
18% to 50%. By the time the march ended that night in a shower
of tear gas, rubber bullets and water hosing, their demands had
changed. Protesters, known as the "Pact of Unity,"
were back on the streets on Tuesday, but now they demanded the
outright nationalization of gas and oil companies, the closing
of Congress and the impeachment of the President.
The protests continue under their new
battle cry for accountable government, and an oil policy that
ensures that the country's vast natural gas reserves - the second
largest in Latin America - will be used to respond to the social
needs of the Bolivian people.
It is not a new demand. In October, 2003,
hundreds of thousands of Aymará and Quechua Indigenous
and poor Bolivian miners took to the streets to protest the privatization
of natural gas and water companies and the decision to build a
natural gas pipeline that would export the natural resource through
Chile. Then-Vice President Carlos Mesa condemned the violence
of what came to be known as the October rebellion of 2003, and
replaced former-President Gonzalo "Goni" Sánchez
de Lozada. Yet Mesa has followed in his predecessor's footsteps,
continuing to court the United States and international lending
institutions and pushing through the privatization of the country's
natural gas and water companies.
Guillermo Aruguipa Copa is a member of
Bolivia's largest political party, Movement Towards Socialism
(MAS), and part of the Commission of Economic Development in the
Bolivian Congress. He says Bolivian's no longer distinguish Mesa
from Sánchez. "The Bolivian people are demoralized.
Mesa has the same 'people of confidence' that Sánchez had.
Many of the people who make decisions in Mesa's government came
from the Sánchez's government."
What little political stability was left
in the country came close to collapsing in March when Mesa, once
again proving to be more of a US ally than a public servant of
the Bolivian people, refused to sign the Hydrocarbons Law arguing
that it would scare away foreign investment. The law, which would
impose a 32% tax on energy corporations (maintaining the 15% royalties)
and require that they renegotiate their contracts with the government,
was initially supported by protestors. But Mesa's intransigence
emboldened them, radicalizing their demands. In the face of mounting
protest, Mesa held up his resignation as a means of blackmailing
protesters into accepting his decision.
The 157-member Bolivian Congress prolonged
the façade of stability in this "ungovernable"
Andean nation by unanimously rejecting Mesa's resignation offer.
Protests were quelled using a legislative loophole that opened
space for the President of Congress, Hormando Vaca Díez,
to pass the law without Mesa's signature on May 17th.
While Mesa avoided both the legacy of
infuriating his neoliberal allies and (at least temporarily) of
meeting the same fate as Goni, it is important to emphasize that
the Bolivian people, disillusioned with their government, were
able to force its hand and achieve the passing of the law. Aruguipa,
spells out the political climate, assuring that "the people
are mobilized.they are demanding that the government of Carlos
Mesa takes the same path that Chávez has."
Since the election of Hugo Chávez
Frías in 1998, Venezuelan democracy has evolved from an
elitist privilege to a tangible instrument. Based on popular participation
and inclusion, it has empowered the previously marginalized majority
and is changing the complexion of Venezuelan society and politics.
Riberg Díaz works at Venezuela's state oil company Petroleos
de Venezuela S.A. (PDVSA) in the state of Zulia. "We are
fulfilling the very important job of consolidating what social
justice, equality, peace and true democracy mean," he says.
"The workers [in Zulia] are not just putting in an eight
hour day; they are defending the sovereignty and security [of
PdVSA] and their participation" in el proceso (as Venezuela's
revolutionary process is known).
Realizing that a country cannot have
a democracy with its masses plagued by illiteracy, unemployment
and malnutrition, the Bolivarian government last year alone dedicated
over 3.7 billion dollars to empowering, educating, nourishing,
curing and employing Venezuelans. Through educational missions,
illiteracy has all but been eradicated and hundreds of thousands
of people are taking advantage of opportunities to earn a high
school or college degree. Co-ops, micro-credits and endogenous
development programs have mitigated crushing under and unemployment.
Barrio Adentro, a program that exchanges Venezuelan oil for Cuban
doctors, has given millions of Venezuelans free access to health
care in their own neighborhoods. Over 10 million Venezuelans shop
at Misión Mercal, the government subsidized grocery stores,
where they buy high-quality basic food staples at discounts of
up to 50 percent.
Far from your average dose of populism
designed to meet the peoples' immediate needs and garner votes,
Chávez is pursuing a strategy aimed at turning Venezuela
from an oil-rich country of the global South to a sovereign state
in which the people reap the riches of their natural resources.
It is a goal that resonates inside and outside of Venezuela.
In order to ensure that the bulk of oil
profits reach Venezuelans citizens instead of remaining in the
pockets of corrupt and exploitative national elites transnational
corporations, the Bolivarian government announced last month that
it will reestablish its sovereignty over its oil industry by finally
implementing the 2001 Hydrocarbons Law.
The Hydrocarbons Law stipulates that
any foreign investment in the oil sector must be in the form of
a joint venture instead of a service agreement. It limits foreign
companies to a 49% stake in any project, reserving at least 51%,
the majority, for PdVSA. And it raises royalties (the money to
be paid to the government before a foreign company subtracts its
expenses) from 1% to 16% for extra-heavy crude production in the
Orinoco belt and from 16.6% to 30% in the rest of the country.
The law calls for Venezuela's tax agency
Seniat to investigate all 32 service agreements the government
currently has with foreign oil companies and to take legal action
against any transnational who has committed tax fraud or breeched
it's contract. According to Minister of Energy and President of
PdVSA Rafael Ramírez, 90% of the corporations involved
have either falsified documents enabling them to declare losses
and thus did not pay taxes or simply did not pay taxes and royalties,
causing combined losses of US$3 billion in taxes and $1 billion
in royalties. Additionally, it has recently come to light that
several of these transnationals have broken their contracts by
increasing production, up to double the quota stipulated in their
contracts, mixed heavy and lighter crude and did not comply with
their responsibilities to invest in PdVSA.
The Threat of a Good Example
Venezuela is a country that has simultaneously
been branded by Washington as a member of the "axis of subversion"
and held up by Leftists as exemplary of a democracy transformed
from elite-dominated to participatory and inclusive. Such contradictory
international sentiment reflects the domestic polarization of
those who love Venezuela's charismatic leader, and those who hate
him. However, polarization in Venezuelan politics, both nationally
and internationally, is far from a 50/50 split. Pegged by Datanálysis,
a polling firm traditionally linked to opposition party Democratic
Action, as having a 71% national approval rating, Chávez'
popularity has never been higher.
Internationally, as the idea of the "socialism
of the 21st century" reverberates through Latin America and
as the Bolivarian version of social justice further resonates
with the vast majority of Latin Americans, calls to emulate Chávez
have grown stronger. They reverberate from Mexico City, where
prospective presidential candidate Lopez Obrador threatens to
challenge US economic dominance, to Uruguay, where Tabaré
Vazquez broke the 170 year two-party dominance in Uruguayan politics
to usher in what is hopefully expected to be a shift to a socially-oriented
Yet it would be erroneous to buy into
sweeping generalizations asserting that the influence of the Bolivarian
Revolution has given rise to a political shift to the Left in
Latin America. It is frequently postulated that three-quarters
of Latin American countries are governed by "leftist"
leaders based on the mere fact that they ran on leftist tickets
or belong to parties traditionally associated with the Left. The
people of Argentina, Brazil, Ecuador, Bolivia and Peru voted for
leaders who spouted anti-imperialist and anti-neoliberal campaign
promises-platforms that were far more radical than the policies
they implemented once elected. This is illustrated by the riots
in Ecuador and Bolivia, Peruvian President Alejandro Toledo's
4% approval rating, the poor showing of Lula's Workers' Party
in recent regional elections; and the hordes of Mexicans, numbering
in the hundreds of thousands who gathered in the Zocaló
to voice their support for López Obrador.
The current social unrest across the
board in Latin America reflects the people's disgust with their
elected leaders' deceit. Prior to Chávez, Latin Americans
demanded change, better wages and working conditions, social services
and educational opportunities. With Chávez's arrival, they
have a concrete example to emulate and are holding up Venezuela's
Bolivarian Revolution as a model for change for their own countries.
"We don't have anything," notes
Aruguipa, "therefore, there is no other path than to recuperate
our strategic resources." "This is key for our future
generations," he continues, "this is why I believe that
we are strengthened by the different interventions that Chávez
has done. This strengthening is seen everywhere in Bolivia: in
the Congress as well as in the reunions of different social organizations."
The Bolivarian revolution's accomplishments
have forced Latin American Presidents and presidential candidates
to walk a thin line between professing to follow Chávez'
example in order to avoid alienating their bases, and not pissing
off Washington. As illustrated by Rumsfeld's and Rice's failed
efforts to isolate Venezuela during their recent Latin American
tours, it would appear that Latin America is prioritizing its
political ties with Caracas rather than with Washington.
But Venezuelan oil worker Riberg Díaz
PdVSA Zulia cautions that it is not Chávez's style but
rather the success of the "Bolivarian revolution" that
resonates with people around the world. "The CIA and Bush
say that Chávez has influence. That is not true. It is
the Revolutionary Movement that has the influence. Other movements
take the Bolivarian Revolution as a point of reference. And the
Bolivarian Revolution has influenced on an international level,
not only in Latin America, but in Spain, in France, in Iraq and
in IranEvery day the people are assuming a greater consciousness,
a greater commitment to Latin America, to the world, to peace
and to the exploited," Díaz asserted passionately.
This is precisely what makes Chávez
so dangerous to Washington. Oftentimes Washington's attacks on
the Bolivarian Revolution are written off as US concern for the
lifeblood of its economy: oil, and without doubt the geopolitical
importance of Venezuelan oil for the American economy cannot be
underestimated. Venezuela's oil reserves, the largest in the Western
Hemisphere, consist of 78 billion barrels, in addition to 1.2
trillion barrels of super heavy crude. However this is a reciprocal
relationship: the US depends on Venezuela's ability to churn the
oil out just as Venezuela depends on the US' ability to consume
Nevertheless, Chávez' control
over one of the world's most important geopolitical resources,
is not what makes him dangerous. The Venezuelan President and
his Bolivarian Revolution are feared by Washington and others
because of the example it is setting to other countries. And US
policy has always endeavored to squash alternatives.
Why else would the US have invaded Grenada,
a tiny island of 100,000 people? It has never been what one would
call a geopolitical goldmine. Why was Haiti, the most impoverished
nation in the Western Hemisphere invaded by US-led forces in 2004?
Why during the 1960s-1980s did the CIA train and fund Guatemalan
police forces to murder, torture and disappear 200,000 of their
countrymen and why was the same pattern repeated in El Salvador,
Argentina, Brazil, Paraguay, Uruguay, Chile, among others? Why
did Washington invade Panama in 1991? Why have they enforced a
forty-five year world-wide embargo on the Cuban people? Why did
they invest millions of dollars in destroying Nicaragua's peaceful
Revolution, it's Christian based communities, it's poetry workshops
and it's literacy campaigns?
The rationale lies in preventing an example.
In The Last Colonial Massacre: Latin America in the Cold War (2004)
Greg Gandin argues that the ideological battle during the Cold
War was not between capitalism and communism, but rather between
two kinds of democracy: one stagnant and tepid and the other vibrant
with the possibility to change the social fabric of society. The
US brought this battle to any country that attempted to implement
the latter; US governments have been bribing, killing and squashing
any form of sovereignty or resistance since the inception of the
The Cold War is over, yet this battle
between democracies continues. Since Mesa took office in 2003
in Bolivia there have been close to 900 (and counting) protests,
and the direction the Andean nation will take is far from clear.
Indications that Evo Morales is "the natural leader of Bolivia,"
in the words of Aruguipa and is ready to lead Bolivia are questionable.
Morales and the MAS' wide-reaching social movement want to increase
royalties on transnational corporations to 50% in addition to
the 32% tax. However, Morales' recent discourses seem watered
down and out of touch with the marches and the fiery protests
of the people and the MAS leader's calls to end road blockades
between principle cities and leading out of the country have not
been heeded. This has not gone unnoticed. Natural leader or not,
in the words of one MAS leader, Román Loayza, "the
bases are by-passing us. We want to march for more royalties,
but the people want nationalization. And for that we will struggle."
Dionisio Nuñez, a MAS Congressman, concurs. "We are
going to fight against the law," he affirmed. "The marches
have to continue because in Congress not all the senators and
deputies defend the people. Sometimes they defend the multinationals."
The Bolivian peoples' demands now revolve,
not around increased royalties or taxes as MAS advocates, but
rather advocate outright nationalization and even expropriation
- without compensation. They argue that transnational corporations
have pillaged Bolivia's natural resources and exploited and impoverished
its people. Raising taxes is seen as small potatoes. "The
people have a right to nationalize and expropriate," affirms
Jaime Solares, the leader of Bolivian Workers Central, affirming
that "the people no longer believe in neoliberalism."
While the United States would like to
isolate Chávez, Cuban President Fidel Castro, Bolivia's
protestors and anyone else who tests the status quo, they fail
to recognize that as the Bolivarian Revolution deepens, it is
unlikely that the Latin American people will tolerate unfulfilled
campaign promises. In the context of the achievements of the Bolivarian
model, protests and discontent are likely to increase until elected
leaders prove themselves worthy of the democratic rhetoric they
champion by bringing concrete results and deep change.
Washington, through indirect (and probably
direct) support for the short-lived April, 2002 coup and the oil
industry shutdown, has tried to overthrow Chávez and destroy
the Bolivarian Revolution. They failed. Now the success of the
Bolivarian Revolution is reverberating from Tijuana to Tierra
del Fuego and the voices of the Latin American people are demanding
change louder than ever. What will Washington's next move be?
Will it be sufficient to snuff the flame of inspiration, example
and hope that the Bolivarian Revolution has ignited in millions
of hearts in Washington's "backyard." Chávez
isn't alone," affirms Evo Morales. "The people of Latin
America support him. That is the new reality."
 The Pact of Unity included organizations
such as the Federation of United Neighbors of El Alto (FEJUVE-El
Alto), the Regional Workers Central of El Alto (COR-El Alto),
the Public University of El Alto, the Departmental Workers Central,
the Confederation of Original Peoples, the Federation of Peasants
of La Paz "Tupaj Katari," the Bolivian Workers Central
(COB), the teachers unions of El Alto and La Paz, coca growers,
and miners, among others
 In addition to the increase in royalties,
the Hydrocarbons Law lowered taxes from 67% to 50%. Foreign companies
will not longer be paid in US dollars, but rather Bolívares,
Venezuela's currency and expenses such as clothing, vehicles and
food can no longer be charged to PdVSA accounts.
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