Maduro, Hugo Chavez’s successor in Venezuela, has been facing increasing street protests since last year. More recently on 17 July, the opposition held an unofficial referendum, wherein it boosts that over 7 Million voters have rejected Maduro’s bid to change the constitution of the country. Maduro, in contrast has planned a July 30 vote to create a legislative body that will have the power to rewrite the constitution and dissolve state institutions.
Right after the referendum results, US president Donald Trump warned that the United States would impose “strong and swift economic sanctions” if Venezuelan president Maduro establishes a National Constituent Assembly (ANC) on 30 July to rewrite the constitution.
Before Maduro, Dilma Rouseff, another champion of South America’s socialist revolution has been ousted last year through impeachment for a crime she hadn’t committed. Renowned intellectual and activist, Noam Chomsky has said of Dilma, “we have the one leading politician who hasn’t stolen to enrich herself, who’s being impeached by a gang of thieves, who have done so. That does count as a kind of soft coup”. Is it Maduro’s turn now and is there another soft coup in the making?
Here’s a little history; Post WW2, many states that gained independence or were striving to, turned to the Socialist ideal. This move was not because they were to completely convert to the idea, but because Socialism was the one working option against the Capitalists they were fighting with to get their freedoms from.
No two countries have the same model for Socialism except for the attractive slogans of ‘grass-root ownership’ and ‘people’s power’. Rather the popular indicators that a state is up for Socialism are: its ousting of West-owned Capitalist multinational companies, aligning of its foreign policy with Russia or China and poverty alleviation reforms at the grass root level. And since the 1990s, Venezuela has shown all three.
In the 1990s Hugo Chávez of Venezuela, Lula da Silva of Brazil & Evo Morales of Bolivia rejected the “Washington Consensus” and threw out US interests from their countries, creating a revolution in South America, called the Pink Tide. This Tide meant the end of over a century and a half of US extortion of South America that had begun with the Monroe Doctrine. By 2008, Chile, Argentina, Uruguay, Ecuador, and Paraguay all came under Chavismo, with new, leftist and center-left leaders winning the high office.
The truth about Chavez’s Socialism, which he specifically terms as 21st Century Socialism as opposed to the 20th Century one that was rife with failures, is not gloomy at all. By 2009 poverty fell from 55% to 26% in Venezuela and millions were lifted out of abject poverty and misery. Chavez’s democratic values were exemplary, he made workers’ councils, student councils and campesino rural workers councils, creating a participatory process at the communal level.
A similar revolutionary process was going on in Brazil, where at the end of Lula’s two terms, income inequality had declined sharply, household per capita income had increased by 27% from 2003 to 2011 and unemployment rates had fallen from 9.1% in 2002 to 6.8% in 2011. Lula’s successor Dilma Rousseff, vouched to eliminate extreme poverty in just five years. 2.5 million Brazilians living below the poverty line were given monthly stipend to balance the enormous income gaps between rich and poor in the country. According to the UNDP, Brazil has successfully raised living standards through its anti-poverty programs.
But mainstream media has been poisoning the images of these leaders, as ones who have brought misery and death to their people with their ‘failed socialism’. This Miami Herald report presents a typical example, it says, ‘tragic story of the totalitarian, Communist government of Hugo Chávez and his handpicked successor, Nicolás Maduro, is one of rampant crime, astronomical inflation, and an accelerating level of hunger and despair’.
There is a somewhat degree of truth to such allegation, the socialism pursued by these ambitious new-comers lacked full-spectrum. Though they implemented attractive grass root social programs, they could not address the real cause of inequality –the rich private sector that controlled 71% of the economic activity in Venezuela as of 2011. Many of these elite businessmen had ties with foreign companies that been ousted by Chavez and were waiting for the opportunity to revive their lost profits.
Between 2004 and 2010, Chavez diverted $61.4 billion funds from Venezuelan Oil Company PDVSA to the government’s social development projects. Critics say that this pouring in of free funds to the poor caused what is called the Dutch Disease and eventually destroyed the economy. Meaning that social programs, subsidies on food and basic goods and excessive spending on health and education caused decline in manufacturing or agriculture. Or, it may be said that all this social spending relied excessively on oil revenues from PDVSA, and once the oil prices dropped in the international market, Venezuela had nothing to spend and the economy went into ruins, to the point that people have come to starving and daily protests. This shows that Chavismo was unprepared for unpredictable global economics and immature in its spending and planning.
But how did the oil prices drop?
Looking at the bigger canvas, if we look at the Cold War politics that ensued as the aftermaths of the wave of independence-struggles after WW2, we see the world becoming bi-polar by aligning with either the USSR or the USA. Most of South America however was already aligned to USA since the 1850 Monroe Doctrine, which foresaw end of European imperialism in both North and South America, rendering them completely as US domains. The US had, by setting puppet regimes in South American states, kept most of them economically enslaved and crippled in poverty for a century and a half.
Now, in the 1990s, Chavez broke the spell of US hegemony in South America, by literally arraying the whole of South America, except Columbia, with him and against the US. As the only alternative against the US, Chavez and other South Americans cultured trade and security relations with the Russian and Chinese camp. This brought great loss to US extraction companies and industries that depended on cheap raw material from the South – one of the reason for US economic recession. In the same decade, the USSR after losing in Afghanistan, had broken down into just Russia, and the long-awaited unipolar moment was embraced by the US. But this superpower status was venerable from the day it was beholden, and the US necessarily needed to regain South America, both for economic survival and for power display.
The same decade in the Asian spectra was just as intriguing, the Russians had retreated from Afghanistan and the US could think of advancing in this front now, but Iran was left just as staunch after the Iran-Iraq War, out rightly rejecting any cooperation with the US. Nevertheless the Iran-Iraq War had left Sunni unity in aggression against Israel, lately been displayed by Iraq, Syria and Egypt, practically impossible – the Yom Kippur War, 1973, was the last Arab coalition against Israel.
Yet to US dilemma, the long-awaited unipolar era was not to last for more than a decade or two. Taken together, political and economic maneuvering by China, Russia and Iran were enough to leave much of US interest in Asia dry. Obama’s failure in his 8 years long endeavor to launch the Trans Pacific Treaty, stalemate in Ukraine and embarrassing situation in Afghanistan, Syria and Iraq are symbolic indicators of a US retreat from its unilateral hegemony.
At such a time, a prolonged decline in oil prices in the global market would mean loss for all oil-producers, but would direly hit those whose revenues depended largely or solely on oil-sale and who did not have much saved reserves that could be used in times of crisis. These were especially Russia, Iran and Venezuela, whereas states like Saudi Arabia, US, China and the Gulf States have plenty of reserves.
With the fall in oil prices the socio-economic structure, begotten with much zeal and resolution, has started falling. However, it is to be seen if the turn of events that might favor the socialist nations against the West in the on-going reignited Cold War, would find for Maduro means of survival against the underground coup being carried out by the US and its rich collaborates in Venezuela!
Author is a geopolitical analyst. She tweets at @aneelashahzad.