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      “What is Really Happening in Venezuela”
      Public Forum, October 21, 2018

      Excerpts of Prof. Steve Ellner's Talk

      I see myself as defending one central thesis, one central position, and that is that what is happening in Venezuela is complex, not simple. Just that statement is antithetically opposed to what the Trump administration is saying. The Trump administration demonizes President Maduro and supports, directly and indirectly, the radical faction of the opposition. He is simplifying, basically saying that there are good guys and bad guys. It is a much more complex situation than that.

      Typically, what happens it that two topics get conflated. Two topics, that really should be separated, get dealt with at the same time. One is the economic problems. What is said is largely true. The situation in Venezuela economically is very difficult. I believe that the Venezuelan government is partly responsible for that but, there are other factors as well. The price of oil, which has declined. Venezuela has always been very dependant on oil, going back to the 1920’s. This is a historical tendency - when the price of oil goes up everybody is happy, the politicians are popular, and then when the price of oil declines, visa-versa. That has always been the case historically, and it is happening now.

      I personally believe that part of the problem is that the government has overly-subsidized products. These products are for the poor, which is good, but there is a market, the laws of supply and demand. Venezuela is not a socialist country; it is a capitalist country. 80% of the economy is privately run, so you have to recognize the market. If you subsidize prices, that I believe justifiable, there is then a disparity between the cost of production and what is being sold. In other words, you are selling products or services below the cost of production, that is a recipe for problems. That is the second explanation.

      The third explanation and Alan [Freeman] did a good job briefly talking about that, and Carlos Ron did also, is that there is a war against Venezuela. The Chavistas use the term “economic war – guerra economica – in Spanish,” I use the word war because part of it is economic, but it also has other ramifications. It is not just the problems that Carlos talked about. For instance, Citgo, which is a very important company in the United States, an oil/gasoline company that is 100% Venezuelan-owned, and they can’t send their profit back to Venezuela. Alan said a $1 billion since the sanction began a little over a year ago. Also, Joe Emersberger, an expert who presents a lot of facts, which is good empirically, has stated $1 billion, Venezuela just in that has lost $1 billion. But also, there is what Carlos was saying about the fact that banks are afraid to handle money coming from the Venezuelan government. $1.6 billion was frozen in a financial clearinghouse in Belgium. That money was assigned to the purchase of food and medicine. These things are happening.

      Not only that, there is a definite relationship between what the Trump administration is saying, and before Trump, Obama and the investment activity of corporations. Obama issued an executive order, I think it was in 2015, then it was re-issued bi-yearly, and that executive order stated that the Venezuelan government was an “extraordinary” and “unusual” threat, I am quoting the statement: “A threat to U.S. national security.” I lot of people said that it was just talking, there wasn’t any implementation of anything, just that statement.

      The one U.S. oil company that stayed in Venezuela after Exxon left, and Conoco Philips, two very important investors in Venezuela, they left, but Chevron stayed. At the time of this executive order of Obama, they stopped investing in Venezuela. They have operations, but they don’t have new investments in Venezuela. Companies such as Halliburton and other service companies, they’re not engaged in direct operations. They have contracts, but they are giving those contracts to others to carry out – why? I would say this pressure from the Trump administration. Obviously, they are not necessarily friendly to the Maduro government, but they had investment, they were making money. Now, they’re making deals with other small-time operators, and those small-time operators are using the personnel of Halliburton, they are renting out the equipment to these small-time operators, but it means less money for the Venezuelan government. That is what has happened, and that is a fact of this war against Venezuela.

      Many of you may know that in the region over the last several years, beginning with the election of Macri in Argentina, there has been a right-wing swing. In Brazil, the progressive government was impeached in an unconstitutional action. Dilma Rousseff was impeached, and a conservative came in. In Chile, President Piñera was elected by two parties that were associated with Pinochet. So, you have right-wing Presidents throughout the region. The Trump administration is sending their top officials, and calling on those governments, that are already anti-Venezuela, to play an activist role. Nikka Haley, the U.S. Ambassador to the United Nations, went to Colombia. When he was inaugurated, she told President Duque from the right-wing party of Uribe, ‘we expect you to play a lead role,’ not any old role, ‘a lead role’ in the campaign against Venezuela. Rex Tillerson, when he was Secretary of State, he kicked off his Latin American tour in Austin, Texas and he said that ‘a military solution is on the table.’ Vice-President Pence has done the same thing. These are not low-down officials; these are top-officials in the Trump administration. That didn’t happen in the past. So, you can say that the opposition to the Venezuelan government has reached a new threshold under the Trump administration.

      In the 1990’s the Venezuelan economy, under neoliberalism, ceased to be Venezuelan. Steel, which was a Venezuelan company, was privatized, and a foreign consortium bought it. The electricity company of Caracas, which was owned by the family of one of the leaders of the opposition Maria Corina Machado, was bought out by a U.S. company. The telephone company was sold and eventually bought by the U.S. company Verizon. The oldest bank in Venezuela, the Bank of Venezuela, Banco de Venezuela, was bought out by Santander. The other big bank Provincial was bought out by Bilbao-Vizcaya of Spain also. You go from one to the other to the other to the other. Cement, cement was the pride of Venezuelan capitalism because the owner was the Rockefeller of Venezuela, Eugenio Mendoza. It was bought by the Japanese and then sold to CEMEX of Mexico. So, out of neoliberalism, the Venezuelan economy ceased to be Venezuelan.

      Chavez nationalized those companies. If the opposition returns to power, they support neoliberalism, and they are fairly united about economic policy. But, about social programs, and about participation in the election, they are not united.

      I will give you two examples. One is a political leader by the name of Timoteo Zambrano. Timoteo Zambrano was involved in the dialogue with Maduro in Santo Domingo, and he stated that members of the opposition were opposing the dialogue but asking him to negotiate with Maduro for certain concessions. They are playing two games. On the one hand, publicly, they were saying that they are opposed to negotiations with Maduro, on the other hand, they were asking him, as a negotiator, to try and get something out of the Venezuelan government. The opposition called him ‘a collaborator.’ You know, the term goes back to the Nazi occupation of France, who were the collaborators? The collaborators were the Frenchmen who were in cahoots with the Nazis. That’s the connotation, and they call him a ‘collaborator.’ That’s the radicals against the moderates.

      The second example is much more important, and that is the case of Henri Falcon. Henri Falcon was the governor of the state of Lara, a very important state. The major city is Barquisimeto, one of the biggest cities in Venezuela. Falcon participated in the elections [the 2017 gubernatorial elections], along with all the other major parties, with one minor exception, the party of Marina Corina Machado, who I mentioned. Falcon was defeated and said, ‘I accept my defeat,’ and by accepting his defeat, he was catapulted on to centre-stage because people admired that. Some of the parties of the opposition, the radical parties of the opposition like Voluntad Popular and Primera Justicia did not accept their defeats in different gubernatorial races, but he did, and he announced his candidacy for President. He was the main candidate running against Maduro.

      The Trump administration is promoting radicalization within Venezuela. It is promoting polarization within Venezuela. That is a shame, because the one hope for Venezuela, at least in the short run, is dialogue. People always ask me, ‘what do you think is the best-case scenario for Venezuela?’ I would say that the best-case scenario for Venezuela is dialogue with the opposition. The economic situation is very difficult, and Maduro has to take very difficult decisions. The decisions that are not going to be popular in the short-run, but it’s the only way out. Now, if he has an opposition that is attacking him all of the time, and the opposition is going to take to the streets, anything that he does, he can’t do anything that is beneficial for the whole country. He can’t do anything, even things that the opposition supports, because if he was to do it, the opposition would be in the streets trying to overthrow him. The hope is dialogue, and that is exactly what the Trump administration is trying to undercut.

      There is so much that I would like to say, but I want to sum up with a couple of things. I believe that there are positive aspects of the Chavista governments, and there are negative aspects. I believe that on social policy they have been very positive; they have promoted empowerment, the participation of the popular sectors of the population who design public works projects for their communities, they get funding and oversee the carrying out of those projects. That means participation, that means incorporation, but there are also handouts. That’s negative. People have to work for what they get, although in some cases free items are justified. There are positive sides and negative sides.

      That’s also true with a lot of other things. But, there is one area which I think is just positive, I don’t see anything negative. That is foreign policy. That is exactly why the U.S. government is attacking Chavez and now Maduro because they have promoted this idea of a multi-polar world. This was Chavez’ language when he came to power in 1999. Chavez promoted these organizations that have already been mentioned: UNASUR (Union of South American Nations), CELAC (Community of Latin American and Caribbean States), ALBA (the Bolivarian Alternative for the Americas). These organizations are not just paper organizations. UNASUR played a very important role against the violence in Bolivia in 2009, and also in 2006 when Evo Morales assumed the Presidency. The Community of South American Countries played an important role. Then, in 2009 UNASUR intervened in favour of stability. As well as when there was an attempted coup against Correa in Ecuador, UNASUR played an important role.

      That goes against the tradition that when there is hot-spot in Latin America, it is the United States that comes in. The United States was the main player. UNASUR does not include the United States. CELAC does not include the United States. It is not based on pan-Americanism, which takes in the entire hemisphere, including Canada. It is based on another concept of Latin American unity. The position of Chavez was, ‘we support the economic union with North America, with Canada, the United States, but we have to develop ourselves first so that we can negotiate with you guys from a position of equality.’ That is the answer to pan-Americanism, and I think that that is just positive.

      I will sum up by saying two things. One is, there are problems. Anybody who pro-Chavez, and in conversation says ‘no, everything is hunky-dory,’ they are not telling the truth. There are problems, and there are errors that have been committed. If you don’t recognize those problems, then you are going to lose credibility. But, there are also positive aspects. No matter what happens in Venezuela, those positive aspects will serve as a point of reference, as a point of inspiration for many, many years to come. I think that that is what the right-wingers in Venezuela, in Latin America, in the United States, are trying to act against. This idea that there have been successes. Some aspects are successful that have promoted participatory democracy, that has promoted the incorporation of the marginalized sectors of the population. These are the sectors of the population that aren’t even Union members; they don’t have Unions, they are not members of the industrial workers, they’re members of the informal economy. They are now being incorporated into the decision-making process.

      It seems to me that the work of solidarity; the work of trying to get the governments of North America, the governments of Europe to take their hands off Venezuela, to leave Venezuela alone, to let the Venezuelans resolve their problems peacefully, that campaign will only be successful if you understand the positive aspects of the Chavista experience.

      Thank you.

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