The employers' offensive takes place in the midst of a deepening economic crisis aggravated by a drop in oil prices, a world recession that has hit semicolonial countries particularly hard, especially in Latin America, and a massive flight of capital that has shaken the confidence of the capitalist rulers.

On February 18, in open defiance of the Chávez government, Vice Admiral Carlos Molina, the country's ambassador-designate to Greece, called on the "armed forces and the people to publicly show their opposition to Chávez's unpatriotic stand," and for the Venezuelan president to step down. Molina is the fourth high-ranking officer in two weeks to publicly call for Chávez's resignation.

Echoing the condemnation of Chávez's "authoritarian" style of government, the military officers are attempting to discredit him and present themselves as true defenders of Venezuela's "democratic system" and "the rule of law."

On February 7, thousands of anti-government demonstrators rallied in central Caracas, the country's capital, banging pots and pans and chanting, "Chávez is on his way out." In response, government supporters gathered in front of the presidential palace, calling for the defense of "the Bolivarian revolution."

The International Herald Tribune reported that Molina said "the combative style" of the Chávez government, which has organized its supporters in neighborhood committees, "could provoke unnecessary bloodshed between Chávez defenders and an increasingly potent opposition."

"All this is carrying us to the cliff edge," said National Guard captain Pedro Flores, one of the dissenting officers, in anticipation of further polarization.

Chávez and top military commanders have insisted that the military remains loyal to the government and that the officers' statements do not reflect the sentiment within the armed forces. Since their declarations, Soto and Flores have turned themselves in for questioning by the high military command.  
 
Rulers see limited land reform as threat
Since he came to power in 1998, Chávez, a bourgeois nationalist, has implemented a series of measures that have included a land reform act. The legislation allows the government to take over the idle lands of wealthy landlords and hand it over to peasants. This measure has raised the expectations of workers and peasants for better working and living conditions, a development viewed as a threat by the capitalist rulers. Chávez has also placed a steep tax on oil exports to keep more of the national patrimony in the country, and has expanded educational programs.

Twelve percent of Venezuelans live in the countryside, yet land ownership remains in the hands of just a few landlords. The Economist reports that 250,000 farms occupy only 1.6 percent of the arable land. At the same time, 1 percent of the farms incorporate nearly half the arable land. According to Fedenaga, the Venezuelan cattle ranchers' federation, some 139 farms have been taken over by landless peasants.

The Venezuelan ruling class has received the support of Washington and Madrid in their criticisms of Chávez. U.S. secretary of state Colin Powell claimed that he was concerned with the actions of the Venezuelan president and "his understanding of what a democratic system is all about." The foreign minister of Spain, Josep Piqué, said that he hopes Venezuela "recovers its political stability within the framework of democratic institutions."  
 
Economy wracked by falling oil prices
Big-business groups have put great pressure on the regime to let the national currency--the bolivar--fall in order to lower the cost of goods they export. The country's economy has been slammed by the decline in world oil prices, on top of a world recession, and by the fears of the ruling rich of impending political turmoil in the country. Oil sales account for more than half of Venezuela's income and three-quarters of its total exports. Since the beginning of February when individuals in the military brass began calling for Chávez's resignation, domestic and foreign capitalists have pulled millions of dollars in investments out of the country.

On February 12, Chávez announced a 22 percent cut in government spending. He stated the budget cuts would not affect spending on health, education, and social programs and presented the government as a "friend of the poor." That same day, as the bolivar was declining in value, he reported the Central Bank would float the currency on the world market.

In the week after the Central Bank abandoned the fixed currency exchange setup and floated the bolivar, the currency fell 17 percent against the dollar. From November the Venezuelan government had spent more than $3 billion from the treasury in an unsuccessful attempt to prop up the bolivar and avoid such a currency devaluation.  
 
Cuba-Venezuela trade ties
Sections of the capitalist class are also opposed to the increasing trade ties between Cuba and Venezuela. A recent bilateral cooperation pact, which includes a major oil supply deal for the island, has made Venezuela Cuba's biggest trading partner. Two-way trade rose from $461 million in 1999 to $912 million in 2000, and reached $541 million in the first half of this year.

Chávez's government has strongly defended its right to establish closer relations with several governments that have been labeled "terrorist" by Washington, from Cuba to Iran, Iraq, and Libya. "We're not against anything or anyone," Chávez has said. "We're defending Venezuela's interests."

The bourgeoisie, with its backers in the military and trade union bureaucracy, is preparing for a showdown with the Chávez-led government. The same capitalist spokes-people who demanded that Chávez implement austerity measures and devalue the currency are now blaming the government for the economic downturn.

Carlos Ortega, the head of the pro-capitalist Confederation of Venezuelan Workers, called for an anti-government march of public sector workers February 27. He also announced that the union plans to hold a one- or two-day nationwide work stoppage in March as part of the rulers' efforts to destabilize and weaken the government. The officialdom of the confederation also supported a recent strike and march organized by the capitalist class.
 
 
Related article:
Coup threat in Venezuela  
 
 
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