By Pasqualina Curcio – Oct 7, 2020
Everything is a matter of perception:
“The Tiger, the lion and the panther are harmless animals.
Instead, chickens, geese and ducks,
they are highly dangerous animals,
a worm said to his children.”
Bertrand Russell
I read the Anti-Blockade Law draft that President Nicolás Maduro presented to the National Constituent Assembly, I read it several times trying to decipher many questions that arose in my reading. I did not manage to clear some, for this reason I celebrate the call made by the president himself for it to be debated, and since we are in revolution, the debate must be participatory and above all protagonists, it is the people, everyone, who must know and comment on a law with these characteristics and of such significance.
So we join the debate, and we do so by sharing our doubts, that we hope will be heard and above all answered by the Constituents, the main historical leaders of such a decision. We do it from the trench of struggle that has corresponded to us in this revolutionary process. A trench that is neither more nor less important, neither more nor less respectable, neither more nor less necessary, than the rest of the trenches. A trench from where ideas are fought not only to combat the real enemy, imperialism, but also to contribute to the safe advance towards Bolivarian socialism. And I do not mean the academic trench, I mean the people’s trench, the working class.
We are aware of the attack that -as a people- we have suffered since the physical disappearance of Commander Chávez in 2013. We are not only aware, we have been alerting him since at least 2015, when it was still imperceptible, when the enemy’s practices were still covert. From that moment, we not only limited ourselves to sounding the alert about unconventional warfare, and in particular to economic warfare as one of its dimensions, we also showed and demonstrated the weapons that were incipiently employed, and we described how these weapons acted [1] .
We are also aware of the criminal magnitude of the attacks. We have calculated it [2]. Just between 2016 and 2019, according to our estimates, they have had an economic impact of $194 billion, of which, around $25 billion corresponds to the financial blockade and theft of our assets abroad; apart from that $25 billion, $6 billion are frozen in the international financial system. The other $168 billion that adds up to this impact, we have stopped producing between 2016 and 2019 for two reasons: $105 billion due to the attack on the bolivar and $63 billion due to the impact on PDVSA [3] .
We do not ignore or doubt the economic war and its magnitude, but we insist that it is not only the financial and commercial blockade that is the weapon used by imperialism to politically, economically and socially destabilize our country and with it, accompanied by a discourse that seeks to hold accountable the “failed socialist model” to overthrow the Bolivarian revolution. The Attack on the Bolivar is also a weapon and has greater weight and impact internally and for the everyday purposes on all Venezuelans than even the blockade itself (not that it does not have it), as the programmed shortage also has a selective impact that during the first moments of the attack played a leading role. Or is it that we are going to forget the long lines to which we were subjected to buy corn flour, rice, pasta, cooking oil, margarine, eggs, milk, or the anguish to get an antihypertensive, a simple physiological solution or insulin, or even a battery for your car? Or is it that we are going to ignore the collapse of the purchasing power of Venezuelans as a consequence of the rapid increase in prices, in turn induced by the political manipulation of the exchange rate? Or is it that we are going to put aside the underfinancing of the entire public administration, also a consequence of the increase in the prices of supplies and maintenance services, in turn induced by the attack on the bolivar?
It is not only the blockade that is affecting the living conditions of the Venezuelan people, which, incidentally, must obviously be fought, which is why we celebrate a bill that should have been thought about long before. But it is also the attack on the bolivar and it is the induced, programmed and selective shortage of essential goods, of which the national government makes no mention.
First question: What about the attack on the bolivar, purchasing power and national production?
So one of the questions that arises when reading the bill is to what extent a regulation like the one proposed there, with all the legal implications that have been exposed and pointed out by lawyers regarding the discretionary and confidential non-application of the rules, would have a real effect on the living conditions of the population if the attack on the bolivar and the shortage of supplies are not even considered.
To what extent will the additional foreign exchange earnings that we would obtain thanks to this law, and that in the best of cases are destined to the nominal salary or to finance the services of the public administration, will not end up again diluted as a consequence of an onslaught in the attack on the bolivar?
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To what extent will this law, that will give concessions to transnational capital to “bring” its foreign currencies, allow a reactivation of national production, if one of the main weapons of the economic war is being ignored, the attack on the bolivar; which as we have been showing and demonstrating econometrically not only induces hyperinflation, but also contracts national production? Let us remember the sequence: they attack the bolivar, production costs increase, prices rise, purchasing power falls, the quantity of goods and services demanded decreases, the producer or supplier does not produce because he has no one to buy from him, national production falls.
To what extent will this law, which will confidentially provide all kinds of protection and incentives to transnational capital, including economic freedoms, for example, for exchange rates, not prevent additional foreign exchange earnings, instead of taxing the national production for the reasons stated above, but result – as has happened throughout our economic history, particularly in times of free currency exchange markets, in tax havens – even more so in the situation of an induced depreciation of the bolivar that is an incentive for such flight?
We have stopped producing around $170 billion between 2016 and 2019. Although of these $170 billion, $65 billion correspond to the attack suffered by PDVSA due to the blockade which, among other reasons, has affected production levels of hydrocarbons, which in turn has had an impact on oil exports and the possibility of attracting greater foreign currency earnings necessary to reactivate national production, the other $105 billion have been the consequence of the attack on the bolivar.
In the best of cases, if this bill prevented PDVSA from being blocked, and allowed it to reactivate oil production, increase hydrocarbon exports and generate foreign exchange for the nation, that does not exempt imperialism from intensifying the attack on the bolivar, counteracting any positive effect of circumventing the blockade against PDVSA. Let’s look at some examples.
In 2014, according to the BCV, exports amounted to $76.583 billion dollars, not bad for our economy, however that year national production did not register growth, on the contrary, it fell 4%. That year they intensified the attack on the bolivar and induced a 170% depreciation.
The same happened in 2015, exports were US $37.236 billion, not bad either, and with an availability in international reserves of US $16.37 billion, however, the economy decreased even more, 6% mainly due to the intensification of the attack on the bolivar that generated a currency depreciation of 430%.
Another good example to show that the recovery of oil exports, even as a source of foreign currency, will not necessarily translate into an economic recovery as long as the attack on the bolivar as a weapon of war persists, is what happened between 2016 and 2017. In 2017, oil exports increased 24% compared to 2016, amounting to US $34.03 billion, not bad either (remember that in 2016 oil exports were relatively very low due to the greater fall in the price of oil, also a weapon of war), however national production did not show recovery, it fell much more than in 2014, 2015 and 2016; the fall was 16% in 2017. That year, the attack against the currency induced a depreciation of 3,420%.
As long as the attack on the bolivar as a weapon of war persists (a weapon that is not even recognized in the bill, which surprises us because US Republican Senator Richard Black has already confessed that it has been the empire that has led us to depreciate the bolivar, in addition it has been an explicit part of the Southern Command’s plans to overthrow the government), any additional foreign exchange income, whatever the way to obtain it, will not necessarily be reflected in an economic reactivation, or in a recovery of purchasing power. Unless the attack on the bolivar magically stops.
At this point other questions begin to arise. We wonder why the empire, all of a sudden, would lay down its best and most powerful weapon without having achieved its objective of overthrowing the Bolivarian revolution? Under what conditions would they agree to lay it down? In exchange for what? The price that they would set us for our Republic, our Nation State, our sovereignty, for the entire people, would be very high given the power of that weapon. Sovereignty that Venezuelans are not willing to surrender.
In any case, it is necessary that, within the framework of the debate, it is explained to us how and through what mechanisms this legal instrument would allow the improvement of the purchasing power of the working class and economic reactivation, as well as the control of induced hyperinflation, a key factor to defeat.
The possibility of generating additional foreign exchange earnings to import food and medicine, which is undoubtedly necessary, does not affect the recovery of real wages or economic activity.
As we continue reading and rereading the law, many other questions arise, which we continue to share.
Second question: the sale of assets, what to sell and what not to?
It is not clear which additional foreign exchange earnings the bill refers to, but we know the ways to obtain it: 1) by exporting, 2) by borrowing, or 3) by selling assets, which brings us to other questions.
Which assets will eventually be sold in full or in part equity? Will they be those from strategic sectors, so strategic that they touch our independence and sovereignty, such as, for example, the oil, gold or mining industry in general? Or will the state-owned companies in revolution be, also and undoubtedly strategic because they are a guarantee of sovereignty, among them electricity, telecommunications, water, air and land transport, financial banking, insurance companies?
We have heard that this law will not yield an inch of our sovereignty. For this reason and given the strategic importance of this matter not only to advance in revolution, but to combat imperialism, we suggest that if this law is approved, it is explicitly written what the assets of the Republic are, so that under no circumstances can they be sold to transnational capital, regardless of their legal status, be it parent company or subsidiary. Knowing the scope and limits of this law is necessary.
In revolution, sometimes you have to give in, give concessions, Chávez and Fidel said and did, if and only if they do not touch the revolutionary principles and values, much less sovereignty. Assets that were nationalized in the revolution are a guarantee of independence and sovereignty, as is all of our wealth and the income it generates.
Third question: And the conditions of the lenders, to what extent will they compromise the revolution?
Continuing with the “additional inflows of foreign currency”, we are concerned about the conditions that will be required in the event that these come from the eventual restructuring of the external debt or new credits. Whoever lends the money sets their conditions, and if we do not ask the IMF, of course we are not saying that the negotiation is going to be with that nefarious body, but no one gives credits without conditions, mortgages, guarantees, etc.
It is for this reason that the domain of indebtedness is in the legislative body where, after a debate attached to the Constitution and the laws, the decision of the majority prevails. We consider it risky, as well as unfair, for the National Executive to assume the role of having to deal with international financial capital that will seek to impose their leonine conditions, surely contrary to the socialist project. Even more so when we will soon have the opportunity to change the current and stateless National Assembly.
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Fourth question: Are you sure they won’t run away again?
Another aspect that is not clear to us is the need for confidentiality in the use of such additional foreign exchange earnings, whether they come from exports, borrowing or the sale of assets. Why should these resources be managed in a parallel system of the national treasury that, according to what is established by the same bill, will be kept in absolute confidentiality, preventing the mechanisms of control? Why so much secrecy in the use of these resources, or is it that the intelligence agencies of imperialism through the financial systems will not find out about these transactions?
Although the bill establishes that said additional income will be destined to “the satisfaction of the economic, social and cultural rights of the Venezuelan people, as well as the recovery of their quality of life and the generation of opportunities through the promotion of their capacities and potentialities,” it is necessary to take into account the way through which these resources could reach the Venezuelan people. There, other questions arise.
Will they reach the people through the strengthening of the public and the collective, as we would expect in revolution, or through greater incentives to a transnationalized private sector that historically has done business with the foreign currency it receives from the State, without necessarily being reflected in greater investments in our territory? Let us remember that the great business of transnationalized capital has been to take the currencies of Venezuelans; since 1970 they have taken $700 billion, of which more than half is in foreign bank accounts. Additionally, the more foreign currency they have received from the State, the less private investment has been made in the national territory.
It would be important to explain how, within the framework of a liberalization of the exchange market accompanied by a permanent attack on the bolivar, we would prevent the additional income of foreign currency from ending up escaping.
Fifth question: Compensatory salary system?
Another question that arises when reading the bill is, why is a “compensatory salary system” spoken of? Where did that term come from? Here and everywhere, salary is salary. The salary is the price of the labor force’s merchandise, it is the compensation for the worker’s work, after subtracting the surplus value of course. There is no such figure of compensatory salary. Either it’s salary, or it’s worker’s compensation. We ask ourselves, compensation for what and how? Why not increase and recover the real wage directly?
Any policy that maintains real wage levels at current levels, but seeks to “compensate” for it through the State, is nothing other than an alleviation of the burden on the bourgeoisie, a burden that the State would be assuming, understanding that the relief of said load will be reflected in higher profits. Let us remember that, in the discourse of capitalism, especially neoliberalism in its greatest expression, the participation of the State is frowned upon unless it serves to cover or deal with the responsibilities that correspond to the bourgeoisie, allowing it a greater profit margin and accumulation. We are not saying at all that the State should not intervene, obviously it should, especially if the idea is to advance towards socialism; what we are saying is that the intervention of the State in this class struggle must always be on the side of the working class, and not to ease the burden on the bourgeoisie, they should assume their responsibility.
If indeed this law will generate the resources that, according to some spokespersons we do not have today, to be able to increase salaries, once said income is obtained, then the adjustment of salary to decent levels should be considered, as established in the Constitution, and not “compensatory systems”. Not only because of the salary itself, but because of the repercussions on social benefits and on pensions and retirement plans.
We will formulate our doubt in another way. If today they tell us that, due to the blockade, there are not enough resources to increase wages, but they also tell us that if this law is approved we will have sufficient income, why is it not clearly established in the law that this income will be used to recover the real wage of workers to decent levels through nominal wage adjustments instead of saying that “the use of resources will be oriented towards developing compensatory systems of wages or of real workers income.” It is not compensatory salary, nor real income, it is a living wage.
One more question: And the sanctions?
There is a doubt, but above all a great void that remains every time we read the Project, and that is that the first thing that one thinks when they talk to us about an anti-blockade law is that, to avoid it, fight it and/or circumvent it, among other actions, penalties should be considered. We do not read anywhere the sanctions to be applied to anyone who within our territory lends or promotes the economic blockade. The law does not touch those who go around the world stealing our assets, sending letters to banks to carry out financial transactions with our country, or simply those who call for the blockade. In this regard, it seems to be missing a title on sanctions, especially when Article 1 establishes that the blockade constitutes a crime against humanity.
Anyway, these are some of our doubts, questions, concerns. They are mainly related to the economic impact. We hope they serve as input for the debate.
Other doubts
Other aspects such as those related to constitutionality, as well as the implications and legal risks of the power given to the National Executive to apply legal regulations at their discretion; the confidentiality of all acts; the risk of selling our strategic assets; or the fact that the measures adopted pursuant to this Law will continue to be effective even when it loses its validity; or the possibility of going to international tribunals or arbitration courts to decide for us the compensation of foreign capital; or disapplying judicial decisions, among others, we leave to the specialist lawyers.
Argued and supported opinions have been expressed regarding these other doubts by specialists in the matter, which we hope will be considered and above all respected in the framework of this debate convened by President Nicolás Maduro. As well, we hope that each and every one of the observations that any person in this country is happy to make will be respected, exercising our legitimate right to comment, criticize and propose. Thus, we are waiting for clarifications and answers to the doubts shared here.
[1] Curcio, Pasqualina (2016). The invisible hand of the market. Economic War in Venezuela. Editorial Nosotros Mismos. Caracas. https://pasqualinacurcio.wixsite.com/pasqualinacurcio/libros
[2] Curcio, Pasqualina (2020). Impact of the economic war against the Venezuelan people. https://pasqualinacurcio.wixsite.com/pasqualinacurcio/single-post/2020/07/10/impacto-de-la-guerra-econ%C3%B3mica-contra-el-pueblo-de-venezuela-versi%C3% B3n-long
[3] Curcio, Pasqualina (2020). Impact of the economic war against the Venezuelan people. https://pasqualinacurcio.wixsite.com/pasqualinacurcio/single-post/2020/07/10/impacto-de-la-guerra-econ%C3%B3mica-contra-el-pueblo-de-venezuela-versi%C3% B3n-long
Featured image: File photo.
Translation: OT/JRE/SL
Pasqualina Curcio
Economist (Central University of Venezuela). PhD in Political Science from Simón Bolívar University (Venezuela). Master in Public Policies of the Institute of Advanced Studies in Administration (Venezuela). She is a Full Professor of the Department of Economic and Administrative Sciences of the Simón Bolívar University. She was Deputy Minister of Collective Health Networks.
