What Does the Uber Scandal Have to Do With Venezuelan Special Economic Zones?

By María Páez Victor – 13 July 2022

“The greatest challenge facing societies has always been how to conduct trade and credit without letting merchants and creditors make money by exploiting their customers and debtors.”

(Michael Hudson) (1)

It is necessary to examine the mega-taxi industry of Uber. Its story is like one of Aesop’s fables that contains a deep moral.

Except that it is not a fable.

A few days ago, the British newspaper The Guardian (2) revealed a huge scandal related to the Uber taxi industry. It is well known that this company is based on not giving employment to drivers but any person with their own automobile can join the company as a driver but will have no benefits as an employee would have. Uber has proliferated all over North America, Europe, and beyond at the expense of employed drivers, their unions and their revindications. Up to now, only the French taxi drivers have gone out in protest against Uber.

The newspaper reveals that Mark McGann, top-ranking Uber executive during 2014 and 2016, directed the campaign to extend the company in Europe, Middle East and Africa. His conscience bothered him for the acts he himself had committed, and felt compelled to reveal how, knowingly, Uber flouted the laws and regulations of more than 40 countries, openly lying about the supposed economic benefits that Uber represented for their economies and to drivers. McGann handed over to The Guardian more than 124,000 documents and e-mails to back his statements. On their part, the newspaper shared these documents with more than 100 other news and media outlets and began a journalistic investigation, called The Uber Files, with all the dirty details.

Admitting his part in all of this scandal, McGann confessed how Uber inserted itself into markets, violating laws and regulations on taxis and transport. They even backed violent demonstrations of protesters because they believed it would help them look good, like “the victims.” McGann’s job was to persuade governments to change laws to “create a more beneficial atmosphere for business,” that was the song of the sinister siren.

Uber even paid thousands of dollars to top professors in Europe and USA to write studies that favored Uber, some receiving up to 100,000 euros for their false reports. Uber penetrated the highest levels of political power in countries that include USA, UK, France, Russia, Holland, Belgium, Italy, Spain and Canada, with a network of corruption and illicit influence that is really astounding.

McGann admitted that he was surprised at the ease with which the doors in the corridors of power were opened to him, knowing that the way he did it was unjust and anti-democratic. He said “I regret being part of a group of people which massaged the facts to earn the trust of drivers, of consumers and of political elites.”

What should set off alarms is how politicians, owners of the media and directors of industry, ran to embrace Uber’s false promises: they lied to convince European Union commissioners, ambassadors, high ranking politicians, presidents, prime ministers, ministers of transport, municipal politicians, all in all, anyone that had some political power. The promise was: “to favor business.”

Uber objectives were to eliminate labor and safety regulations of the taxi industry, obtain monopolies in cities, transform transport systems to favor them, and promote the day when they can get rid of drivers altogether and install self-driving cars.

The stink of conspiracy, corruption, injustice and bribery is at such a scale that it will be difficult for Uber to have again all the adulation it had enjoyed.

And what has all this to do with Venezuela’s Special Economic Zones (SEZ)?

The National Assembly of the Bolivarian Republic of Venezuela has recently and almost unanimously approved in principle, to establish certain areas of the country where investors, especially foreign investors, can carry out economic activities. They plan to give industries established there certain privileges related to taxes and regulations. The details of these arrangements have yet to be determined; and there’s the rub. As they say, the devil is in the details.

SEZs have been established in other countries that also wanted to obtain foreign currency and economic growth. Unfortunately, the consequences have not been uniformly beneficial. It is necessary to thoroughly determine which are the best conditions and principles that should pertain to these zones so that they can truly benefit the country as a whole.

The starting point needs to be the fact that Venezuela must develop its industrial capacity; that is, its means of production. However, any economic policy of any note, has to be in accordance to the Plan de la Patria, the multi-year Policy Plan of the government, and the principles of Bolivarian socialism because these are the basis of the popular acceptance of the government. And, no environmental destruction can possible be allowed.

It was no small thing how Washington has attacked the Venezuelan economy with its hybrid war.

The inescapable reality is that the more than 600 so-called “sanctions,” really illegal, unjust, coercive measures, of the USA and its allies, for seven years have mercilessly made the Venezuelan people suffer. It is estimated that more than 100,000 people died directly due to these coercive measures to the economy (3). They stopped the country from buying food, medicines and even vaccines; they impeded the production and selling of petroleum which reduced the oil income of Venezuela by 99%. Washington destroyed the Venezuelan currency, effectively blocked the country from using the international banking system, openly stole the Venezuelan oil company CITGO and worse, handed it over to that bounder Juan Guaidó, a puppet whom Washington, in its imperial hubris, pretended was the real president of Venezuela. Venezuelan assets in foreign banks became a piñata: European banks stole billions worth, and even the Bank of England has taken 32 tons of Venezuelan gold in its vaults.

1- M. Gebewalde (4), an Ethiopian analyst, from a more capitalist viewpoint, has analyzed the economic zones of many countries and considers that those that have had more success are those that cluster the firms, facilitating technology and market access. Some companies are frequently part of global value chains which limits the firm’s exporting earnings; employment and wage issues are a concern, and lastly he indicates that the SEZ have not had a great impact in promoting technology usually due to limited domestic supply chain development. Gebewalde concludes that only the SEZ of China can be said to have attained the objectives desired. It is very significant that the major benefits of these zones have occurred in China, which has a strong central government that does not allow itself to be bullied by capitalist instruments such as the IMF and World Bank, or the big directors of industry of the West. It is necessary that Venezuela profoundly study this Chinese achievement.

In today’s world the global economy is really in the hands of a large oligarchy that shares the same ideology, as indicated by the economist Michael Hudson. The imperial system seeks to place in debt the weaker nations so that they can then take control of their economic policies. Venezuela needs to develop its means of production without falling into the trap of debt and financing that could tie a government’s hands for generations.

Uber has indicated how a commercial industry, merely of taxis, can undermine political decisions, influence with lies and corruption, to obtain economic advantages. How much more powerful will the huge oil companies of the world and the multinational industries that want to open businesses in the economic zones of Venezuela be? Robert Reich has denounced that enormous corporations—Boeing, Koch Industries, Home Depot, FedEx, General Dynamics, Toyota, AT&T, Valero Energy, Lockheed Martin, UPS, Raytheon, Marathon Petroleum, GM, and FedEx—have acted to undermine their own government and democracy by backing Trump’s attempted coup; then how much more will they be willing to do so to a foreign nation? (5)

There is still time for the parliamentarians and the Executive to analyze with greater detail the circumstances for the development of the SEZ. They could consider, for example:

• Developed along with CELAC a series of principles and practices for establishing SEZs in the region, in such a way that there is some coordination so that these multinationals cannot play one nation against another in their negotiations.
• Designate a committee—or even one person—that would assume comprehensive responsibility for the SEZs. There cannot be impunity, it will be necessary to have keen vigilance so that the agreements are carried out and there be no abuses. Especially, there should be vigilance against bribery and corruption.
• The firms allowed to set up business in the SEZ should not duplicate or unjustly compete against the national industries that the country wants to flourish.
• Venezuelan sovereignty should be respected; no penal, labor or environmental law should be violated. And, if exceptions are permitted, these should be of short duration with a start and ending date, and for very extraordinary reasons.
• The Communal Councils should be allowed to operate in these zones.

The moral of this Uber “fable” that is relevant to Venezuela, is the following: You can invite the crocodile to enter, but you must never forget that it is a crocodile.

Notes:
(1) Michael Hudson, “The End of Western Civilization”, Naked Capitalism, 12 July 2022, https://popularresistance.org/the-end-of-western-civilization-why-it-lacks-resilience-and-what-will-take-its-place/
(2) The Guardian, https://www.theguardian.com/news/2022/jul/10/uber-files-leak-reveals-global-lobbying-campaign
(3) Alfred de Zayas, “Economic Sanctions Kill”, 18 March 2022, COUNTERPUNCH, www.counterpunch.org
“Former UN Rapporteur on Human Rights: US Sanctions Have Killed More Than 100 Thousand Venezuelans”, Orinoco tribune, Black Agenda report, 4 March 2020; Venezuelanalysis.com, “US-Led Sanctions Against Venezuela: a Primer” July 2022
(4) Tewodros Makonnen. Gebewalde, “Special Economic Zones: evidence and prerequisites for success”, International Growth Centre, May 2019, https://www.theigc.org/wp-content/uploads/2019/05/SEZ-policy-brief.pdf
(5) Robert Reich, “Boeing, GM, FedEX: these are as complicit as the far right in threatening US deomcracy”, https://www.theguardian.com/commentisfree/2022/jul/14/uber-democracy-trump-capitol-attack-january-6?CMP=Share_iOSApp_Other