In Economics, Venezuela

The president of Venezuela, Nicolás Maduro, next to an image of the of former president Hugo Chávez, during the May Day rallies (of 2017) in Caracas. (Carlos Becerra – Anadolu Agency)

By William Serafino,

Published on Resumen English, Feb 18, 2023:

As William Serafino, the author of this piece, explains, the being promulgated by the mainstream media is that the government of Venezuela and the country’s President Nicolás Maduro has adopted a neoliberal economic policy but he contends that this is based on nothing more than a series of unconnected fragments of reality that result in an incongruous and unreadable mosaic.

(Se puede leer esta nota en español aquí.)

The narrative about the Venezuelan government’s turn towards a neoliberal economic policy has been running for some time now and is being promoted by the mainstream media. Presented as a bombastic slogan, as a general and extravagant yet blurry statement, this narrative is based on unconnected fragments of reality that result in an incongruous and unreadable mosaic.

For those who propagate this thesis, the supposed neoliberalism of President Nicolás Maduro is so many things at once that it is difficult to see where the center of gravity that certifies his supposed ideological conversion really lies.

According to the BBC, the turbo-capitalism of Las Mercedes, an upper class area of Caracas, with its luxury stores, high class restaurants and casinos, would confirm this shift. For the media Al Navío, the issue lies in the lifting of price and exchange controls.

According to El País, the offer of jobs in Yummy-type platforms or the circulation of dollars in the economy and their establishment as a massive means of payment reflect the leap towards liberalization. For Alberto Barrera Tyszka, in an article published in The New York Times some years ago, neoliberalism would be the economic leg of Maduro’s “dictatorship”.

While, for sectors of the left whose reference is the Communist Party, the low salaries, the reduction of public spending and the alleged privatization attempts framed in the Anti-Blockade Law are expressions of that neoliberalism that would confirm Maduro’s distancing from Chavismo.

This minimal record of how the issue has been presented is relevant to visualize one of the central problematic aspects of this narrative: its all-encompassing, diffuse and sometimes abstract character. To characterize as neoliberal regular issues of economic activity such as the commercial boom or the movement of money in the streets implies a crude reductionism that relies on the abusive use of the resource of generalization for manipulation purposes.

Conceptual ambiguity, premeditated to a certain extent, also plays a role in massifying the narrative. The word neoliberalism in relation to Maduro has served to name different phenomena, mostly independent of his decision calculus, to such an extent that any aspect of his economic strategy enters, apparently without contradictions, in that register.

Thus, such category is assumed with a conclusive sense without an initial definition that establishes the limits of the concept itself and its relationship with a Venezuelan political and economic context marked by very particular elements. Only from there, starting from the beginning, is it possible to shed light on the Venezuelan president’s strategy and how its application differs from the much-vaunted neoliberalism.

In general, according to the historical experience left by the policies implemented by the Reagan-Thatcher duo in the early 1980s, as well as a few years earlier by the dictatorship of Augusto Pinochet in Chile, when we speak of neoliberalism we refer to a policy of structural adjustment marked by privatizations in strategic sectors, financialization of the economic fabric, deregulation of essential public services and an increase in the decision-making power of concentrated companies to the detriment of the authority of the State.

Neoliberalism is also a current of thought developed in the Chicago School, whose visible figures were the economists Milton Friedman and George Stigler, and which after 1989 became hegemonic on a world scale following the collapse of the Soviet Union, which established the dominant ideological framework of a new globalizing impulse centered in the United States, its transnational corporations and Wall Street.

For an economic policy to be neoliberal in the strict sense of the word, certain conditions must be met. One of them is the deregulation of everything possible in terms of economic activity. This means, in a nutshell, the elimination of all control, supervision or management by the State over strategic sectors, financial and essential services.

As a recent and handy example of a neoliberal shock therapy we have the government of Mauricio Macri in Argentina (2015-2019). On the political side, the “neoliberal laboratory” he headed involved the rise of bankers and technocrats in high positions of power, which configured a corporate government full of CEOs.

On the economic and financial side, his administration executed an unprecedented indebtedness with the International Monetary Fund (IMF) and private creditors, whose external commitments of the country reached more than 250 billion dollars. The speculative bicliquefaction of the debt, together with the deregulation of services with the so-called “tarifazo”, were the main moves of the neoliberal manual of loss of sovereignty and mutilation of the State applied by the Macri administration.

In view of these theoretical and political references, if Maduro were a full-fledged neoliberal, not only Petróleos de Venezuela, S.A. (PDVSA) but also the basic enterprises, the Caracas Metro, the electricity, telecommunications and water supply companies, just to mention a few cases, would already be in the hands of the private sector.

Public banks, for example, would represent a small fraction of the national banking sector, almost entirely dominated by private bankers. At the regulatory level, there would be no restrictions such as reserve requirements or public orientation of credit portfolios.

Likewise, tax collection policies would be reduced to a minimum. This pattern would be reproduced in every area of the economy.

Clearly, none of this has happened or is close to happening, so the thesis that Maduro is neoliberal is flawed in its general premise.

Another more specific aspect of such narrative has to do with the notable presence that the dollar has acquired in recent years as a means of payment and savings in the population, part of the flexibilization over the exchange market that began since 2018.


Source: La Pupilia Insomne, translation Resumen Latinoamericano – US

Original title: Maduro a Neoliberal?


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