President Hugo Chavez said on 27 May that 21st Century Socialism will tear down (“derribar”) the “three pillars of the capitalist system.”
Chavez says that the three pillars his revolution aims to demolish are private banking, imports and land ownership.
Referring to what’s left of Venezuela’s traditional productive sectors, Chavez says that “they control two-thirds of the banking system. They give loans to each other and live from public deposits. They cheat in one and a hundred ways.”
Chavez warned that he may order all public deposits withdrawn immediately from the private banking system. A couple of weeks ago he threatened that if private banks don’t start to fund his regime’s social programs with loans he might seize the banks.
Chavez also is determined to reduce imports significantly. He dismisses the economy’s 5.8% contraction in first quarter 2010 as being part of the necessary collapse of the capitalist system. Never mind that Venezuela is extraordinarily dependent on imports for everything, including its food supply.
Venezuela’s future industrial development depends “almost exclusively on agricultural development,” he said on 27 May.
Chavez’s nutty remarks tend to confirm several things:
*The regime has a critical cash flow crunch. It’s almost out of money, literally. That’s why Chavez wants to replicate the special Venezuela-China loan-for-oil money mechanisms with other countries. He’s fishing for cash anywhere he can get it. If forced to choose between allowing imports needed to keep the economy running, or curbing imports sharply to direct more of the country’s dwindling cash supply to revolutionary activities (i.e. keeping Chavez in power), the president will screw the economy in a heartbeat.
*Chavez is on the brink of seizing many (all) of the country’s private banks in order to take the money owned by depositors and spend it on keeping his criminal regime afloat a while longer. It’s the people’s money and must be used for the nation’s economic development, he said on 27 May. Chavez apparently thinks the private banks are hiding mountains of cash, which isn’t true. And apparently he thinks that people who deposit their savings in private banks are not “pueblo.”
*The revolution also plans to seize full control of the food sector, from the farm to the grocery store shelf. This is a strategy inspired by Chavez’s Cuban advisers. If the state has total control of the national food supply, it can control the people. This has been the case in Cuba, and Chavez’s advisers apparently (and mistakenly) think that it can be replicated in Bolivarian Venezuela.
Chavez is trying to survive at any cost until his fortunes (i.e. oil prices) rise again. That won’t happen in the near-term, certainly not before the 26 September legislative elections. In fact, the imploding Greek economy threatens to drag Spain and Portugal in its wake and derail the Eurozone, causing ripple effects in the US particularly, and China. If anything, oil prices may go down again over the next 6-12 months.
Chavez also announced a week ago that Venezuela will raise crude production by 300,000 b/d starting at end-2010, and within three years or so add 1 million b/d of crude production to its current official output of just over 3 million b/d, which of course is BS, real output being closer to 2.1 million b/d. The president said this will be done mainly with China’s help (Cuba is very big in Venezuela now, but China soon could eclipse Cuba, if Chavez has his way).
But Chavez is talking trash. Pdvsa doesn’t have the cash to carry out its 60% end of whatever financing is needed for the Orinoco production deals it has signed with the Chinese, Russians, Cubans, Italians, Vietnamese, Angolans, Repsol, Chevron, etc.
Chavez is focused increasingly on the legislative elections, where it looks like the regime will get a “people’s” whuppin’ that will cost the PSUV control of the legislature. Caracas Gringo thinks that Chavez will cheat to retain control of the National Assembly if he can’t win fairly.
But even if Chavez admits defeat, the regime is rapidly setting up its parallel Federal Council/Communal Council system that will effectively strip all power and financial resources from the traditional municipal and state authorities elected by voters. If Chavez loses control of the legislature, it too will be displaced by the new centralized (in Chavez’s hands) federal system.
Opposition legislators who think they will have a real voice and vote in the next National Assembly should consider the plight of Greater Caracas Mayor Antonio Ledezma, who was effectively neutralized as soon as he won the elections when Chavez stripped his office of all funding and set up a parallel authority to govern Greater Caracas.
However, the revolution isn’t invincible, according to no less an authority than Ilich Ramírez Sánchez aka Carlos the Jackal, who is serving a life prison sentence in France for murdering three French police officers in 1975.
During a recent telephone interview from the prison at Poissy with an AFP reporter in the office of the Venezuelan terrorist’s French wife and attorney, Isabelle Coutant Peyre, “Carlos” said that Chavez is alive today “thanks to Fidel and Raul…thanks to Ramiro Valdes…But one bullet and the revolution in Venezuela is finished because it would not resist the death of Chavez.”