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Vol. 80/No. 37      October 3, 2016

(feature article)

Capitalist crisis, imperialist debt bleed
Venezuela workers

The world capitalist economic and social crisis is fueling ever more devastating conditions for working people in Venezuela, with widespread unemployment, sky-high inflation and scarcity of food, medicines and other basic goods. At the same time, the country’s coffers are being bled dry by payments of billions of dollars to the banks and bondholders in the United States and other imperialist countries who own Venezuela’s foreign debt.

In the face of these worsening conditions, capitalist opposition parties within the Democratic Unity Roundtable (MUD) coalition have been campaigning for a referendum to recall president Nicolás Maduro and force new presidential elections.

To press the demand for a referendum to be held this year, MUD staged a large protest Sept. 1 in the capital, Caracas. Government supporters held a smaller mobilization there that same day.

Washington remains committed to installing a regime more to its liking. It has pursued measures, however, that have deliberately sought to avoid provoking deeper political turmoil, economic breakdown and a social explosion in the country and the region. It hopes for a more orderly transition, counting on the crisis over time to exhaust and demoralize working-class support for the Maduro government. While it has backed the call for a referendum, the Obama administration has sought to initiate high-level contacts with the Maduro government, and has supported efforts to promote dialogue between the government and the opposition.

Talks between representatives of MUD and the government have taken place over recent months mediated by former Spanish Prime Minister José Luis Rodríguez Zapatero, former Panamanian President Martín Torrijos and former Dominican Republic President Leonel Fernández. The Vatican announced September 14 that Pope Francis had agreed to help mediate.

The government is open to negotiations as long as the country’s sovereignty is respected, said Maduro July 14.

Paying the bondholders

Meanwhile, the wealthy bondholders and their representatives in Washington and elsewhere are lining up to reap enormous wealth at the expense of working people in Venezuela.

The government owes $120 billion in debt. It has prioritized meeting payments on this, limiting its ability to import items desperately needed by working people.

For months, business forecasters have been predicting that Caracas will default on its debt payments. Petróleos de Venezuela, the national oil company, owes $7 billion on bonds maturing in 2016-17. It announced Sept. 13 that it would offer to swap these for new bonds that would mature in 2020, guaranteed by shares in its U.S.-based oil subsidiary, Citgo.

“For bond lords from New York to London, [Venezuela] is one of the biggest bangs for your buck,” noted a July 21 article in the business magazine Forbes.

If Venezuela was to default on payment of the debt, the international creditors, current and future ones, would use every means at their disposal to recoup as much of their losses as possible — from seizing sovereign assets to imposition of onerous conditions on future loans. In the case of Venezuela one of the measures being floated already is seizing Citgo’s refineries and its 6,000 gas stations in the U.S.

The foreign debt setup is a form of pillage through which the capitalist families in the imperialist countries suck massive amounts of wealth out of the semicolonial world. Only by revolutionary means can workers and farmers in Venezuela organize to confront the consequences of the crisis, overthrow capitalism and defend themselves from imperialist plunder. And workers in the U.S. should back their class brothers in Venezuela in that struggle.

“Since the consolidation of imperialism,” wrote Jack Barnes, Socialist Workers Party national secretary, in Capitalism’s World Disorder, “every action by finance capital in relation to the more economically backward countries ends up further warping the economies of the colonial or semicolonial countries. That is the effect of every bank loan to their ruling classes; every investment in landed, industrial, and commercial capital; every purchase of bonds issued by a semicolonial administration; every trade pact; every scheme to peg the value of weaker currencies to stronger ones.”

‘Let them fall’

The Sept. 12 Wall Street Journal reported that the Chinese government is “recalculating” its relations with Caracas and may make no fresh loans or investments. It quoted a Chinese company official reporting on meetings with an envoy from Beijing earlier this year. “The consensus was that no new money was going to be invested,” he said. “There was a clear message from the top: Let them fall.”

Anticipating a change in government and seeking to secure its investments, Chinese officials have also met with leaders of the Venezuelan opposition, according to the Journal. Beijing is Venezuela’s biggest creditor with $60 billion in loans.  
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