| Number 397 | January 16, 2008 |
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This Week: Venezuela, Part III -- Double Issue!
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Greetings, As I publish Part III of the Venezuela Series—a special Double Issue—I continue to be haunted by a comment sent to me by a reader in response to an article I wrote on Venezuela back in May of 2005. She mentioned that she had seen the news account from Venezuela about which I was then writing, and she wrote, "Earlier in the day I ...heard my mother-in-law referring to the ‘problems' in Venezuela, and how the US really was going to have to do something." Part of the purpose of Nygaard Notes is to explore exactly how such deeply-felt needs to "do something"—or to support leaders that "do something"—are manufactured inside of the hearts and minds of the otherwise moral and compassionate people that live and pay taxes in the United States of America. This week I look briefly at what the leadership in Venezuela is actually doing, domestically and internationally, and my hope is to illustrate the nature of the "threat" posed by that country to U.S. power. Then I take a look at part of the "something" that U.S. leaders are already doing to deal with the "threat." I failed to clearly label Issue #395 as "Part II" of the Venezuela series. My apologies. This is Part III, in any case. Next week will conclude the series, I expect. In solidarity, Nygaard |
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The San Francisco-based non-profit Global Exchange recently put out a paper called "Alternatives to Corporate Globalization: Venezuela's ALBA." They were explaining the Venezuelan initiative that is an alternative to the U.S.-centered "Free Trade Area of the Americas." The acronym "ALBA" is the shorthand for "Alternativa Bolivariana para América Latina y El Caribe" or, in English, the "Bolivarian Alternative for the Americas." Global Exchange summarizes this development as follows: "A key foundation of the entire Bolivarian project in Venezuela is to strengthen alliances among southern countries to redraw the global political map, and end U.S. economic domination in the hemisphere. Venezuela is promoting concrete programs of regional integration that are real alternatives to the failed model of corporate globalization. These projects appear threatening to the Bush administration, because they aim to reduce Latin America countries' dependence on the U.S., and build stronger ties among the nations of the Americas." |
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As I pointed out in Part II of this series (NN #395), U.S. intelligence concluded in 1970 that the United States had "no vital national interests in Chile" and believed that "the world balance of power would not be significantly altered" by the election of a socialist (Salvador Allende) as president of Chile. Yet a massive destablilization campaign was nonetheless undertaken on the grounds that "an Allende victory would ... create considerable political and psychological costs..." Thirty years later, there is no doubt that the ongoing popularity of Hugo Chávez—evidenced by repeated electoral victories—also has "considerable political and psychological costs" in the eyes of U.S. planners. But there is more to the story in Venezuela. First of all, unlike the case in Chile, the U.S. has significant "national interests" in Venezuela. Oil, that is; Black Gold. Texas "T." Fully 14 percent of U.S. petroleum imports come from Venezuela. Secondly, and perhaps more importantly, Venezuela has taken the lead on several initiatives that are aimed precisely at altering "the world balance of power," and they just may be successful. Let's have a look at them. Challenging the "Washington Consensus" Sociologist and economist Vicente Navarro tells us that "At the end of the 1970s and the beginning of the 1980s an ideology originating in the United States... spread worldwide. According to this ideology, the role of the state in all dimensions of economic and social life should be reduced in order to free up the enormous potential of market forces (usually referred to as ‘free' market forces), by deregulating world trade, increasing the mobility of capital and labor, and eliminating social arrangements (such as social pacts and protectionism) that stood in the way of the full development and expansion of capitalism. Capitalism without borders became the name of the game in world affairs, reproducing a narrative that became known as neoliberalism..." The application of neoliberal policies to the international economic order became known as globalization, and the nearly universal agreement on the soundness of this ideology—among elites—has come to be known as the "Washington Consensus." While such policies have been touted as successful by their supporters, economist Mark Weisbrot points out that "Over the last 25 years [that is, in the period of the Washington Consensus] Latin America has suffered the worst economic growth performance in its modern history. From 1980-2005, income per person in the region grew by only 10 percent. In the prior 20 years—1960-1980—it grew by 82 percent." Despite this failure, the Bush administration came into office in 2001 pushing for something called the Free Trade Area of the Americas (FTAA). It had little to do with "free trade," but what it would have done is to lock into place much of the ideology of the Washington Consensus. That ideology was already being pushed by international financial institutions (IFIs) like the World Bank and the International Monetary Fund, which not only support the Western Hemisphere-oriented "Washington Consensus," but also its European sister, sometimes called the "Brussels Consensus." It was in this context of a failing economic "consensus" imposed by Washington and its operatives in the IFIs that Venezuelan President Hugo Chávez, at an Association of Caribbean States Summit meeting in 2001, first proposed the idea of an alternative to the FTAA. He called it the "Bolivarian Alternative for the Americas," or its Spanish acronym of ALBA. The California-based advocacy group Global Exchange, in an undated paper, explains that "ALBA is grounded in the principles of complementarity (rather than competition), solidarity (instead of domination), cooperation (not exploitation), and respect for sovereignty (instead of corporate rule). And ALBA is based on grassroots citizen participation, as the citizenry are both the implementers and the beneficiaries of the agreements under the banner of ALBA." Several international agreements have already been brought into being under the umbrella of ALBA, and the project is still developing, with "further plans for increased trade, exchange and solidarity" between Latin American countries in the works. For all of these reasons, the Thailand-based non-profit Focus on the Global South notes that "ALBA... flies in the face of the Washington Consensus." In addition to the initiatives pursued under ALBA, Chávez has also re-worked Venezuela's relationship with the Organization of the Petroleum Exporting Countries, or OPEC, of which Venezuela is a founding member. Lee Sustar, writing in the July/August 2007 issue of International Socialist Review, points out that, soon after taking office, Chávez "reversed Venezuela's longstanding policy of undercutting OPEC quotas," which was "credited with helping to reverse the trend towards low oil prices and restore pricing clout to oil producing nations." Again, this defies the wishes of Washington. Cuzco, Cochabamba, and the Caribbean In December of 2004 the leaders of 12 Latin American countries met and formed the "South American Community of Nations," which they hoped would "develop a politically, socially, economically, environmentally and infrastructurally integrated South American area." This intention was affirmed in December 2006 in the "Cochabamba Declaration," which specified the "guiding principles" for the Community, which are dramatically different from the guiding principles of the Washington Consensus. Six months later, in June of 2005, the heads of state from 14 Caribbean countries signed an agreement, initiated by Venezuela, to create a regional oil company called Petrocaribe. The company was created to supply oil to participating countries on preferential terms. Petrocaribe just concluded its fourth annual summit last month, "with member nations signing new agreements to promote economic and social development and regional energy integration." Chávez, speaking at the summit, said that "Petrocaribe is creating a ‘new geopolitics of oil' that serves the people's interests, and not those of imperialists or big corporations," according to Kiraz Janicke reporting for Venezuelanalysis.com. Most recently, on December 9th 2007, in a direct challenge to the IFIs, six South American countries launched a new regional development bank that they are calling the "Bank of the South." The Bank of the South claims as members South America's two largest economies, Brazil and Argentina, as well as Paraguay, Ecuador, Bolivia and, of course, Venezuela. According to the Washington research group the Council on Hemispheric Affairs, "The Bank of the South appears to be one of the region's most compelling projects leading towards authentic Latin American financial bolstering, as well as helping to allow for a new-found autonomy. It appears that for the first time in its history, the region actually will have its own entirely autonomous financial institution with each of its members having one vote and which is most likely scheduled to be capitalized from 7 to 8 billion dollars." |
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Hugo Chávez was first elected President of Venezuela in 1998. He was briefly unseated in a military coup d'etat in April of 2002 (and brought back into office after massive popular protest) and the coup was followed by "a devastating oil strike from December 2002-February 2003," which sent the economy into "a severe recession." Since the second quarter of 2003, when the political situation began to stabilize, the Venezuelan economy has been strong. Nobel Prize winning economist and former vice-president of the World Bank, Joseph Stiglitz, visited Venezuela on October 10th, 2007, and noted that "Venezuela's economic growth has been very impressive in the last few years." Indeed, notes Kiraz Janicke, "Venezuela... has experienced the highest economic growth rate in Latin America in recent years, with fifteen successive quarters of expansion and looks set to close the year with 8-9% growth." [Final numbers are in: 8.4 percent growth in 2007. Nygaard] But the Venezuelan economy under Chávez is about more than "growth." As Stiglitz says, "It is not only important to have sustainable growth, but to ensure the best distribution of economic growth, for the benefit of all citizens." He added that "Venezuelan President Hugo Chávez appears to have had success in bringing health and education to the people in the poor neighborhoods of Caracas, to those who previously saw few benefits of the country's oil wealth." The Center for Economic and Policy Research in the U.S. published a brief (23-page) study in July of 2007 called "The Venezuelan Economy in the Chávez Years." Since it's the easiest-to-understand study I've come across, I'll quote extensively from it here. "The most commonly held view of the current economic expansion [in Venezuela] is that it is an ‘oil boom' driven by high oil prices, as in the past, and is headed for a ‘bust.' The coming collapse is seen either as a result of oil prices eventually declining, or as a result of the government's mismanagement of economic policy. There is much evidence to contradict this conventional wisdom." "The government has planned conservatively with respect to oil prices" with the result that "Venezuela has a large cushion of reserves to draw upon before an oil price decline [unlikely, in any case] would begin to squeeze its finances." This is due to large "official international reserves" and "other government offshore accounts." Also, the country's "low foreign debt" would allow it to "tap international credit markets in the event of an oil price decline." While government spending has increased under Chávez, so has private spending. While "Central government spending has increased from 21.4 percent of GDP in 1998 to 30 percent in 2006," CEPR points out that "the private sector has grown faster than the public sector over the last 8 years, and therefore the private sector is a bigger share of the economy in 2007 than it was before President Chávez took office." In fact, "The central government's spending, at 30 percent of GDP, is far below such European capitalist countries as France (49 percent) or Sweden (52 percent)." Social Spending CEPR tells us that "The central government's social spending has increased massively, from 8.2 percent of GDP in 1998 to 13.6 percent for 2006." "Social spending per person has increased by 170 percent over the period 1998-2006... When spending by the state oil company is factored in... social spending reached 20.9 percent" of the economy in 2006, "at least 314 percent more than in 1998." What has this "social spending" accomplished? Much of it has been "spending on health care, subsidized food, and education." Health Care: "In 1998 there were 1,628 primary care physicians for a population of 23.4 million. Today, there are 19,571 for a population of 27 million." Food: "The Venezuelan government has also provided widespread access to subsidized food. By 2006, there were 15,726 stores throughout the country that offered mainly food items at subsidized prices." Education: "Access to education has also increased substantially. For example, the number of students in ‘Bolivarian schools' (primary education) increased from 271,593 for the 1999/2000 school year to 1,098,489 for the 2005/2006 school year. Over one million people also participated in adult literacy programs." Poverty: "The poverty rate has decreased rapidly from its peak of 55.1 percent in 2003 (during the recession) to 30.4 percent at end of 2006..." "If we compare the pre-Chávez poverty rate (43.9 percent) with the end of 2006 (30.4 percent) this is a 31 percent drop in the rate of poverty." And, adds CEPR, "this poverty rate does not take into account the increased access to health care or education that poor people have experienced. The situation of the poor has therefore improved significantly beyond even the substantial poverty reduction that is visible in the official poverty rate, which measures only cash income." Unemployment: "Measured unemployment has ... dropped substantially to 8.3 percent for June 2007... If we compare to the beginning of the Chávez administration, unemployment stood at 15 percent in June 1999. By any comparison, the official unemployment rate has dropped sharply" under Chávez." Economic Challenges: Challenges to the economy include an overvalued currency and inflation. Inflation is running around 20 percent, and the high rate is due in part—ironically—to the increased well-being of the population. That is, the increased buying power of people increases demand. In the case of food, for example, producers "don't have the capacity to expand in the short term to meet increased demand," according to Finance Minister Rafael Isea. This has led to food shortages and thus inflation of food prices. CEPR points out that "it should be emphasized that double-digit inflation rates in a developing country such as Venezuela are not comparable to the same phenomenon occurring in the United States or Europe. Inflation in Venezuela was much higher in the pre-Chávez years, running at 36 percent in 1998 and 100 percent in 1996." Nonetheless, the government has declared inflation to be its top economic priority for 2008. While not a serious problem in the short term, the Venezuelan currency is at least 30 percent overvalued relative to the dollar, a problem "that must be dealt with sooner or later," according to CEPR. These are serious problems, yes, but not necessarily a threat to the basic economy. "Because of its large current account surplus, large reserves, and low foreign debt," says CEPR, "the government has a number of tools available to stabilize and reduce inflation—as well as eventually bring the currency into alignment—without sacrificing the growth of the economy." |
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After Salvador Allende was elected president of Chile in 1970, but before he took office, President Richard Nixon met with and was briefed by two people: an anti-Allende Chilean publisher named Augustine Edwards, and the CEO of Pepsi Cola, Donald Kendall. According to the CIA account, "Nixon was incensed by what he heard, and decided that more direct action was necessary. As a result, he called in [Director of Central Intelligence] Richard Helms and ordered a major effort to prevent Allende's accession. The CIA was instructed to play a direct role in organizing a military coup. Further, Helms was directed not to coordinate the CIA's activities with the Departments of State and Defense and not to inform Ambassador Korry." This was the super-secret aspect of U.S. intervention in Chile, and was labeled "Track II" to distinguish it from the "official" secret operation, known as "Track I." While we don't know of any super-secret operations currently underway to destabilize Venezuela (if they exist, they are, after all, super-secret), there is a lot that we do know about what might be called the Venezuelan "Track I." This article spells out a little bit of what we know, and much of it looks suspiciously familiar to the Chilean (and other) destabilization campaigns undertaken by the U.S. since World War II. The late Philip Agee wrote a piece in September of 2005 called "How United States Intervention Against Venezuela Works." It started out with these words: "It is no secret that the government of the United States is carrying out a program of operations in favor of the Venezuelan political opposition to remove President Hugo Chávez Frías and the coalition of parties that supports him from power. The budget for this program, initiated by the administration of Bill Clinton and intensified under George W. Bush, has risen from some $2 million in 2001 to $9 million in 2005, and it disguises itself as activities to ‘promote democracy,' ‘resolve conflicts,' and ‘strengthen civic life.' It consists of providing money, training, counsel and direction to an extensive network of political parties, NGO's [non-governmental organizations], mass media, unions, and businessmen, all determined to end the bolivarian revolutionary process." When Agee says "it is no secret," he means to those who care. For the average United Statesian who lives within the doctrinal system of public education and corporate media—that is, the person who passively receives official propaganda or are simply ignorant—this particular U.S. subversion of democracy remains a total secret. "Operation Pliers" The biggest political event in Venezuela in recent months was the constitutional referendum held on December 2nd 2007. While the narrow defeat of this Chávez proposal was widely reported in the U.S., allegations that the U.S. government secretly intervened to bring about that defeat were almost completely ignored. Venezuelan-American attorney and author Eva Golinger broke the unreported story on November 28th, just four days before the vote. Her report—"CIA Operation ‘Pliers' Uncovered in Venezuela," told of "an internal CIA memorandum [that] has been obtained by Venezuelan counterintelligence from the US Embassy in Caracas that reveals a very sinister—almost fantastical, were it not true—plan to destabilize Venezuela during the coming days." The memo tells of a Caracas-based CIA officer "emphasiz[ing] the importance and success of the public relations and propaganda campaign that the CIA has been funding with more than $8 million during the past month—funds that the CIA confirms are transferred through the USAID [Agency for International Development] contracted company, Development Alternatives, Inc. (DAI)" This supports what had been written three years earlier by Philip Agee, who said that "the consulting firm DAI [has been] financing the anti-Chávez propaganda campaign called Venezuela: Initiative to Build Confidence (VICC)." Among the "tactics and actions" proposed by the CIA and listed in the memo (bad grammar and all) were the following: "Take the streets and protest with violent, disruptive actions across the nation"; "Generate a climate of ungovernability"; "Provoke a general uprising in a substantial part of the population"; "Creating an acceptance in the public opinion that the NO vote [in the referendum] will win for sure"; "Using polling companies contracted by the CIA"; "Criticize and discredit the National Elections Council"; and "Generate a sensation of fraud." (This was all assuming that the referendum would pass; it did not.) The CIA memo also talks about: "Isolating Chávez in the international community..." "Trying to achieve unity amongst the opposition..." and "Sustain[ing] firmly the propaganda against Chávez." Listed among those involved in "Operation Pliers" are the CIA Office in Venezuela, the US Embassy in Venezuela, various Venezuelan political parties and prominent Venezuelans, and "the Media," including "International Press Agencies." "The document confirms," says Golinger, "that psychological operations are the CIA's best and most effective weapon to date against Venezuela, and it will continue its efforts to influence international public opinion regarding President Chávez and the situation in the country." There's no way to know if the memorandum is genuine or not, but the basic outline of the destabilization campaign closely resembles past campaigns managed by the U.S. in Latin America, so it must be taken seriously. Non-Secret Intervention Also unreported in this country is the ongoing "non-secret" system of U.S. money going into Venezuela, allegedly to "support democracy." Analyst Tom Barry, writing this past July on the website "Right Web," explains how "In the name of promoting democracy and freedom, Washington is currently funding scores of U.S. and Venezuelan organizations as part of its global democratization strategy—including at least one that publicly supported the April 2002 coup that briefly removed Chávez from power." The article, titled "The New Politics of Political Aid in Venezuela," tells how "the U.S. State Department established an Office of Transition Initiatives (OTI) in Caracas [in 2002], using money from USAID." Adds Barry, "USAID established OTI with the all-but-explicit intention of aiding efforts to oust President Chávez. The article explains the anti-Chávez activities of such groups as the International Republican Institute (IRI), the National Democratic Institute for International Affairs (NDIIA), and three U.S. nongovernmental organizations: Freedom House, Pan-American Development Foundation, and, again, Development Alternatives Inc. Barry concludes by saying that "Washington and its phalanx of democracy-building NGOs are not just raising concerns, but are also operating to influence internal politics inside Venezuela. Washington would not permit foreign countries and their agents to inject themselves into its own political process; it should assume no right to do unto others what it would not have done to itself." Keeping in mind that "that psychological operations are the CIA's best and most effective weapon" and that millions of dollars are being poured into Venezuela to support an "anti-Chávez propaganda campaign" we can put in perspective the news we've been hearing out of Venezuela. In addition to the lack of good news from that country, we can expect to see more headlines like this sample from the past couple of months: "Journalists Feel Muzzle in Venezuela" (Chicago Tribune); "Venezuela's Role in $800,000 Scandal Alleged" (Miami Herald); "Suitcase of Cash Tangles U.S. and 2 Latin Nations in Intrigue" (NY Times); "Politically Connected Venezuelans Live High Life" (St. Petersburg Times); and, just after the December 2nd referendum in Venezuela, the Washington Post editorial was headlined "Venezuelans Choose Freedom over Hugo Chávez." Whether such stories are specific propaganda pieces actually planted by CIA agents, or simply unconscious parroting of official propaganda by "objective" journalists, the effect is the same: to reinforce the impression of a corrupt, mismanaged, polarized, and frightening nation ruled by the Dictator Chávez. A large grain of salt is required before reading or watching any news item about Venezuela in the coming months and years. |
