Where Hugo Chavez gets his economic development ideas

[Louis Proyect <lnp3@xxxxxxxxxxxxx>]

[This is chapter 14 of the newly published "In the Shadow of the Liberator:
Hugo Chávez and the Transformation of Venezuela" (Verso), by Richard Gott.]

LA CAUSA R, PATRIA PARA TODOS AND POLITICS IN GUAYANA

"La Causa R rejected a strategy of sustaining the mega-projects involved in
the export-oriented industry of primary products... and concentrated
instead . . . on medium-scale manufacturing industry that would transform
raw materials within Bolívar state itself."

--Margarita Lépez Maya

Ciudad Bolívar, once called Angostura because of the narrowness of the
river, is a tiny colonial town perched high above the Orinoco on its
southern shore. A tree-girt walk borders the river, with railings to
prevent anyone falling victim to the crocodiles that were once such a
feature of this strategic waterway. Walter Raleigh came here, to Angostura,
and so too did the German scientist and traveller Alexander von Humboldt,
recovering for several weeks after a bout of fever.

Simon Bolívar was also based at Angostura, in the years before the town was
renamed in his honour. He came here first in 1816 before his dramatic
advance through the Andean passes to Colombia. Then, in 1819, the congress
that he had assembled from the liberated peoples of the lands of the
Orinoco and the shores of the Caribbean appointed him to be the president
and military commander of the new state of Gran Colombia.

?Fortunate the citizen,? said Bolívar at the opening of the Angostura
Congress, ?who, under the protection of arms, calls on national sovereignty
to exercise its unrestricted will.? President Chávez was to quote the same
words when he summoned a new National Assembly to draft a new constitution
180 years later, in 1999.

Angostura, or Ciudad Bolívar as it now is, was once an important trading
centre but today basks in the glory of its forgotten history. It still
retains some significance as the capital of Bolívar state and as the
gateway to the plains of the lower Orinoco and the eastern region of
Guayana. Beyond the town, a great motorway leads on to Ciudad Guayana, the
centre of Venezuela?s largest planned industrial complex, an area with an
heroic, pioneering feel, reminiscent of the Soviet Union in its heyday.
This is the power house of Venezuela, a place where the state assumed
responsibility for the development of heavy industry and for the energy
provisions once deemed necessary for a modern economy.

You might think that because Venezuela has so much oil it would have been
content to build oil-fired power stations. But this is not so. Ambitious
governments long ago decided to sell oil on the foreign market and to
develop hydro-electric power at home for local industry. The Guayana region
now contains the second largest hydroelectric complex in the world, on the
Caronf river at Gun. Only the Itaipü dam on the Parana river, on the border
between Brazil and Paraguay, is larger. Here too are the excavations of the
immense iron mountain of Cerro Bolívar, the huge steel works run by
Siderürgica del Orinoco (Sidor), and the embryonic aluminium industry. All
these were set up and run by the all-powerful state.

To serve and manage these gigantic enterprises has required a huge labour
force, attracted to the region from all over the country, and not
surprisingly, the region has become famous for its radical politics. A
powerful workers? movement, independent of the unions of the previous
governments and developed over a period of 30 years now furnishes President
Chávez with strong support.

Ciudad Guayana is the birthplace of La Causa R, a political organization
that is unique to Venezuela. Originally set up in the early 1970s, La Causa
R, or Radical Cause, developed in 1997 into Patria Para Todos (PPT), the
Fatherland for Everyone, now an integral part of Chávez?s governing
coalition, the Polo Patriótico. The PPT provides the government with
several of its most important ministers, and many of its most lucid ideas.

La Causa R was founded in the 1970s by Alfredo Maneiro, a guerrilla fighter
of the Communist Party in the previous decade. Maneiro ?s group, like the
Movimiento al Socialismo of Teodoro Petkoff, had split away from the old
Venezuelan Communist Party in 1970 at the end of the guerrilla war.
Maneiro, born in 1939, had been a member of the central committee of the
Communist Party, and a guerrilla commander on the eastern front. When the
Communist Party splintered in the late 1960s, he was close to the Chinese
position in the Sino-Soviet dispute, an attitude radically different from
that of dissidents like Petkoff who were moving towards European-style
social democracy. One of Maneiro?s disciples was Pablo Medina, once a
labour organizer, now an important and prominent civilian supporter of Hugo
Chávez, and a member of the Constituent Assembly in 1999.

Maneiro?s group participated in the formation of MAS in January 1971, but
it soon moved off in a new direction. Maneiro had been highly critical of
the old Communist Party of the 1960s, and not just because of its ideology.
He began to question the desirability of political parties themselves, and
soon he had formulated an ideological position hostile to these
organizational constructs. In a collection of articles, Notas Neqativas,
published in 1971, he outlined the political position of a new left-wing
nationalist group he called ?Venezuela 83?. It was to be the forerunner of
the party known as La Causa R.

The figure ?83? was a reference to the year 1983. At that time, then more
than ten years distant, the foreign oil companies operating in Venezuela,
would, according to the terms of a treaty signed in 1944, be required to
hand over their concessions to the Venezuelan state. This was an event to
which Venezuelan nationalist opinion looked forward with keen anticipation.
(In practice, Carlos Andrés Perez, ever the populist demagogue, was able to
advance the date to 1976, the year when the oil companies were finally
nationalized.)

Maneiro?s political aim ? a highly original one ? was to canalize the
protest movements of the people without the creation of a party political
structure. The historian Margarita Lopez Maya has described his project:

"He said it was necessary both to create a political framework for the
extraordinary and spontaneous mobilizing capacity of the masses, and to
participate in the infinite and varied forms of a popular movement; but
this had to be done in the firm belief that the masses themselves would
decide on their own political direction. Instead of starting with a given
political structure, it was important to trust in the capacity of the
popular movement to take on the task of producing a new leadership from
within its ranks."

With this interesting and innovative political philosophy formulated and in
place, Maneiro and his group decided to concentrate on three particular
areas of popular mobilization where the necessary vanguard leadership might
eventually emerge. One was the student movement based at the Universidad
Central in Caracas, an effervescent political organization housed in the
magnificent modernist buildings of Carlos Raul Villanueva. With strong
roots dating back over the generations to 1918, 1928 and 1958, as well as
to 1968, the university had been associated for many years with the left. A
second area of popular protest was the western Caracas suburb of Catia,
with a mixed population of half a million people and considerable
traditions of popular struggle.

Political activity on both these fronts ? in the university and in Catia ?
was initially successful but eventually proved politically unrewarding. La
Causa R concentrated its efforts on the third area chosen by Maneiro, the
workers? movement in Ciudad Guayana associated with the state steel
industry, Sidor. A long strike there had left the workers highly
politicized and critical of the government unions that were controlled by
AcciOn Democratica. Here the Maneiro philosophy was tested and found to be
satisfactory.

The great public works of Ciudad Guayana ? the Sidor steel works and the
great dams on the CaroM river ? were the fruit of decisions taken much
earlier, in the era of the last military dictator, General Perez Jiménez,
in the 1950s. Perez Jiménez, a figure that everyone has preferred to
forget, still lives, at a great age, in exiled retirement in Spain. In the
Miraflores Palace in Caracas, a row of presidential portraits moves
seamlessly from Romulo Gallegos (overthrown in 1948) to Rómulo Betancourt
(who took power in 1958). Perez Jiménez, who ruled in the ten years in
between, has become a nonperson, removed from history. Yet he took many of
the fundamental decisions that were to affect the Venezuelan economy for
fifty years, decisions of such dimension and implication that no subsequent
president ever had the courage or the opportunity to reappraise them until
the 1990s.

Luis Miquilena, Chávez?s most prominent political adviser, has an
interestingly ambivalent attitude towards the dictatorship of Perez
Jiménez. Although a victim of the repression at that time, Miquilena now
has a rather appreciative view of the achievements of the dictator:

"The dictatorship had a rather more developed idea of what the country
could be than the supporters of Accion Democratica had at that time. Perez
Jiménez established the foundations of our development ? and I can say that
with the authority of someone who was imprisoned for seven years during his
rule.

"During that time, the steel industry was developed, and the principal
roads in the country were laid down, indeed there was a plan and a concept
of what the country ought to be that had never existed before."

These ideas, says Miquilena, were important, and they were only recovered
?when Chávez presented the idea of establishing a new country by taking the
democratic road?. Venezuela?s industrial development, envisaged by the
Perez Jiménez government, should have been a straightforward task. With
cheap iron and bauxite, cheap electricity and cheap transport on the
Orinoco (as well as the proximity of a large market in the United States),
the way forward appeared simple and attractive. Yet the state enterprises
of Ciudad Guayana were to become the cause of endless economic headaches to
successive governments, and, as with the Soviet Union, the disadvantages of
state capitalism became increasingly apparent over the years.

The powerful state development agency in the area, the Corporacion
Venézolana de Guayana (CVG), became a state within a state, corrupt and
bureaucratized. Industrial development had been financed from the rent from
oil, but when the oil price collapsed in the 1980s, the economic ruin of
the Guayana region became increasingly apparent.

On the surface, everything remained much the same. Great motorways plunged
across the land, the vast steel works at Sidor remained hard at work, the
pharaonic construction of the Gun dam was in full functioning order. Yet an
examination of the books revealed the extent of the ruin. Money from oil
revenues was channelled through to the political party in power in the
region ? in league with the unions (themselves a branch of a political
party) ? permitting gross overmanning. Huge debts were incurred without any
thought as to how they might be paid off. Sidor employed 6,000 more men
than was economically justifiable. The hydro-electric plant at the Gun dam
could not survive if it did not charge an economic price for the
electricity it was producing. Other industrial plants required substantial
fresh investment, and little was now available from the state. New money
would have to come from the foreign investor, and that in turn would demand
greater efficiency and more competition ? a sea change for state-coddled
Venezuela.

Suddenly the workers of the region began listening to the spokesmen of La
Causa R. Pablo Medina, another supporter of the guerrillas of the 1 960s,
had been sent to Sidor as an infiltrated worker years before, in January
1972. The climate for political activity appeared propitious. The new city
of Ciudad Guayana had become a magnet for unorganized migrant workers from
all over the country, and the growth potential of a creative union
organization was rapidly made evident. Medina worked at the steel works on
the night shift; during the day he produced a paper, Eli4fatancero, highly
critical of the dominant Accion Democratica union.

The account of these early activities by Margarita Lopez Maya describes how
Medina?s paper moved into areas of political struggle that had previously
been neglected:

"El Matancero battled against the corruption of traditional unionism, and
it also fought for the right of workers to democratic participation in
union decisions that affected them ? something previously unknown in the
region ? as well as in decisions concerning conditions and safety at the
work-place ? subjects never touched by other union leaders."

An early recruit to the cause, fulfilling Maneiro?s ambition that a new
leadership should arise from specific struggles, was Andrés Velazquez, a
skilled electrician who was later to become a presidential candidate of the
left. In 1977, after five years of sustained political activity, another
recruit, Tello Benitez, secured an elected position in the steelworkers?
union Sutiss, the Sindicato Unico de los Trabajadores de la Industria
Siderürgica y Similares.

After nearly a decade of political work, the activists associated with El
Matancero made a momentary breakthrough. At union elections in 1979, the
Matancero slate, headed by Velasquez, won a controlling stake in the Sutiss
union. It was a pyrrhic victory. Two years later, in 1981, Sutiss was taken
over by its parent federation, Fetrametal, an organization controlled by
AcciOn Democratica. Velasquez and Benitez both lost their jobs at the steel
works. La Causa R was now at a low ebb, and soon its founding father was
gone. Alfredo Maneiro died in November 1982 at the early age of 45.

Several more years elapsed before Sutiss was able to regain its
independence, and the Matancero slate won again in 1988. The tide was
turning, and La Causa R came for the first time to national prominence. In
the congressional elections of 1988, three LCR candidates for deputy were
successful. The following year, the year of the Caracazo, Andrés Velasquez
was elected as the governor of Bolívar state in December 1989. Three years
later, in December 1992, he won again, and another LCR activist, Aristdbulo
Isturiz, a prominent figure in the teachers? union who had given veiled
support to the Chávez coup, was elected mayor of Caracas. Finally, in the
presidential elections of December 1993, Velasquez won 22 per cent of the
national vote. It was an extraordinary triumph.

The programme of Velasquez in 1990 provides some indication of the national
ambitions of La Causa R at that time, and it also gives a flavour of the
ideas that were later to inform the government of Hugo Chávez.

According to the account by Margarita Lopez Maya, the programme of
Velasquez had four principal guidelines: the practice of democracy was to
be understood not just in terms of elections, but in the actions of
government itself; corruption was to be rooted out; and in the provision of
services, especially in health, education and social security, competence
and transparency were to be secured.

The fourth guideline, which referred specifically to the development of the
Guayana region, was to outline criteria rather different from that
conceived at the time by the Venezuelan state:

"La Causa R rejected a strategy of sustaining the mega-projects involved in
the export-oriented industry of primary products (iron, aluminium, and
bauxite); and aimed instead on the downstream activities on the Orinoco,
concentrating on medium-scale manufacturing industry that would transform
raw materials within Bolívar state itself."

There were to be no more mega projects for which the state could no longer
guarantee financing, and a lot more medium-scale enterprises that could be
locally sustained. This is the intellectual legacy that La Causa R has
bequeathed to the government of Hugo Chávez. Some writers have suggested
that La Causa R, with its emphasis on workers and on unionism, bears some
resemblance to the Partido de los Trabalhadores of Lula in Brazil. in
practice, a more satisfactory parallel is with the Green parties in Europe,
particularly in Germany. La Causa R is not in any way a traditional leftist
party.

In the aftermath of the Chávez coup of 1992, La Causa R secured one of its
most prominent recruits, Colonel Francisco Arias Cárdenas, the companion of
Chávez in the Bolívarian Revolutionary Movement and the officer who seized
Maracaibo during the coup attempt. Arias was a native of the state of
Zulia, and in the elections for state governors in 1996 he was elected to
his home state as the candidate of La Causa R.

This was probably the high point of what had once been Maneiro?s
organization. La Causa R subsequently became swamped by the spring tide of
the Chávez phenomenon. Like all political movements in Venezuela, it was
confronted with unexpected decisions. Should it support Chávez for
president or reject him?

In February 1997, La Causa R divided into two different groups: a small
rump remained with the name La Causa R while a new and larger organization
came into being called Patria Para Todos (PPT), Fatherland for Everyone.

The division brought Andrés Velasquez into conflict with Pablo Medina.
Velasquez remained with La Causa R, supported by Ana Brunswick, the widow
of Alfredo Maneiro, while Medina, supported by Aristobulo Istñriz, Ali
Rodriguez Araque and Alberto Muller Rojas, formed the PPT and threw their
weight behind the presidential campaign of Hugo Chávez.

The PPT became an important component of the Polo Patriotico alliance
created to support the presidential bid of Hugo Chávez in 1998. At least
four of its members play influential roles in the Chávez government. One of
them is Colonel Arias Cárdenas, the governor of Zulia. Another is Ali
Rodriguez Araque, a former guerrilla comandante of the 1960s who became the
minister of energy and mines in 1999, and who is now the man behind the new
dynamic policy towards Opec. Yet another is Aristóbulo Isturiz, the
vice-president of the Constituent Assembly. Pablo Medina is the PPT?s
secretary-general, while Alberto Muller Rojas is Chávez?s ambassador in
Santiago de Chile.


Louis Proyect
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