(Although many of us had high hopes that Venezuela could move forward through a mixed economy, it seems that once again we are witnessing what happens when a revolution stops short of transforming the mode of production. The local capitalist class--assisted by imperialism--will strangle any progressive initiative and alienate the popular classes from the government.)
NY Times, Sept. 24, 2002 Venezuela Economy Falters, Despite Abundant Oil By JUAN FORERO CARACAS, Venezuela — When Pasquale Iachini and Alfonso Marozzi arrived here from Italy half a century ago, they started small, buying an old Fiat truck to transport dirt and supplies. Venezuela boomed in the years that followed, and their company, Yamaro Construction, grew into a leading builder of bridges, highways and other public projects. But now, the government of Hugo Chávez is pinched for cash, the economy is sliding fast and company officials are worried. Yamaro's payroll, once 1,000 strong, is down to 400 workers, and three major road projects are at a standstill, casualties of nonpayment by the government. "The private sector is not investing, and the public sector has no capacity to do so," said Armando Iachini, 38, a son of the co-founder who helps run the company. "There are projects we want to start, but we cannot get them going because of a lack of resources." The outlook is not likely to improve anytime soon, economists say, as Venezuela is convulsed by the deepest and most troubling economic recession it has experienced in more than a decade. The economic fortunes of oil-rich developing countries often soar and dive with swings in the price of crude, but this crisis in Venezuela is different: it comes when oil prices are high — now above $30 a barrel — and rising, and could shoot up further if the United States attacks Iraq. What is destabilizing the economy here now is politics, not petroleum. The left-leaning Mr. Chávez, survivor of one coup already, is still struggling to keep at bay the big-business groups and old-line politicians who are bent on removing him from office. Huge protests turned violent in April in the days surrounding the abortive coup; the upheaval claimed 18 lives. Mr. Chávez returned to power after two days, but his adversaries have not given up, and are now pressing for a referendum on the president's rule. The turmoil has turned the economy bleak. It contracted by 7.1 percent in the first half of the year, according to government figures, including a drop of nearly 10 percent in the second quarter. Unemployment reached 16.2 percent at the end of June, and inflation, which had been slowing for years, shot up again, to double last year's rate. full: http://www.nytimes.com/2002/09/24/business/worldbusiness/24VENE.html Louis Proyect www.marxmail.org
