AP/Marcelo Hernández

Venezuelans celebrate defeat of pro-imperialist recall August 15 outside presidential palace in Caracas.

“It’s a big victory for us,” said Lenin Dávila, an oil worker in Maracaibo, Zulia state, in an August 23 telephone interview. “Most of my co-workers have been celebrating. We are even happier today because some of the closest allies of los escuálidos came out and definitively rejected their claims of electoral fraud.” Dávila used a derogatory term—meaning the squalid ones—utilized widely in Venezuela to describe the pro-imperialist opposition that has Washington’s backing.

On August 23, U.S. officials announced that the White House accepted the results of the referendum after an audit by the Atlanta-based Carter Center and the Organization of American States (OAS) concluded there was no evidence of irregularities. “In our view, the results of that audit are consistent with the results announced by [Venezuela’s] National Electoral Council,” said U.S. State Department spokesperson Adam Ereli.

The opposition coalition Coordinadora Democrática, led by weighty sections of Venezuela’s capitalist class that enjoy Washington’s support, orchestrated the recall vote. After managing to get less than 41 percent, opposition leaders said fraud was involved and refused to recognize the outcome.

Their claims, however, have been rejected left and right. Former U.S. president James Carter, for example, said in a letter published in the Wall Street Journal that the August 15 vote was “free and fair.”

Even some of the right-wing media in Venezuela acknowledged the sweeping character of the victory for the vote “no” campaign. El Nacional, one of the country’s main privately-owned dailies, which has been campaigning to unseat the Chávez administration, said that a majority voted against the recall in every single one of Venezuela’s 23 states and the Federal District, which includes the capital, Caracas.  
 
Economic improvements
Advances in government-sponsored social programs—from literacy campaigns to public works, to free and competent neighborhood clinics operated by volunteer Cuban doctors and other improvements in health care—were a factor in the opposition’s electoral demise.

During the first half of this year, the country’s economy also improved, fueled largely by higher oil prices that reached a record of nearly $47 per barrel in August.

Venezuela is the fifth-largest oil producer in the world. Petroleos de Venezuela (PDVSA), the state-owned oil company, provides some 80 percent of the country’s export income and about half of its total revenue. More than 50 percent of oil exports go to the United States and Canada.

The surge in oil prices has boosted state revenues. The government increased spending 81 percent, to $8.6 billion, during the first five months of the year compared to the period a year ago. A large percentage of the outlay was devoted to public works such as road repairs and building other parts of the country’s infrastructure. Retail sales rose 59 percent the first four months of 2004, while car sales nearly doubled from the previous year, according to the Bloomberg news service.

Unemployment fell to 12 percent this year from its high of 20 percent last year.

The country’s Gross Domestic Product (GDP) grew 13.6 percent the second quarter of this year, while it had declined 9.5 percent during the same period in 2003, according to the Central Bank of Venezuela. GDP expanded 35 percent the first quarter of this year, recovering from a 28 percent drop in the first quarter of 2003, when an employers’ lockout crippled oil production for more than two months.  
 
Third blow to proimperialist opposition
The bosses’ “strike” in December 2002 and January 2003 crumbled as millions of workers defied the sabotage of the economy, taking over refineries and other plants and restarting production. It was the second attempt by many of the country’s capitalists and middle-class layers to overthrow the government. The first, a U.S.-backed military coup in April 2002 that lasted barely three days, was defeated after massive street mobilizations by working people throughout the country divided the military. The third, and meeker, attempt by the pro-imperialist opposition to topple the elected government—the recall referendum—has now failed, too.

Since it took office in 1998, the Chávez administration has angered Venezuela’s wealthy ruling families and their allies in Washington by passing measures such as an agrarian reform law, a bill protecting small fishermen from overfishing by large capitalist operations, and allocating state funds for affordable housing and other social programs. As workers and peasants have frequently mobilized to implement these and other measures that are in their class interests they have gained self-confidence and higher expectations, causing the wealthy to fear that working people may push for even more radical steps that would impinge on their property and prerogatives.

The government’s normalization of trade and diplomatic relations with Cuba, and the work in Venezuela of some 16,000 doctors, literacy teachers, and other volunteers from Cuba for the last two years, have also drawn the ire of many Venezuelan capitalists and their backers in the United States.

Even before August 15, however, as it became evident that the opposition campaign was rapidly losing steam, international capital in the oil industry made it clear it was increasingly favorable to the stability they hoped would come from a strong win by the Chávez administration. This is despite the fact that the government passed legislation in 2001 doubling royalties that investors have to pay for oil exploration contracts and mandating a majority stake by the state in any joint ventures with foreign investors.

“Before the referendum took place, and perhaps in anticipation of the result, U.S. oil giants ExxonMobil and ChevronTexaco signed agreements pledging to invest billions of dollars in two new projects in Venezuela,” said an article in the August 22 Financial Times.

An article in the August 9 issue of the London daily had quoted Fareed Mohamedi, chief economist of the Washington-based PFC Energy, saying, “The companies are a lot more sanguine about the political situation and they have become convinced that Mr. Chávez is a man they can do business with.”

The August 22 Financial Times article, though, cautioned against overoptimism. “At the same time,” it said, “two multinationals took out insurance against expropriation of their assets, according to a diplomat in Caracas.” It quoted Miguel Díaz, South America analyst at the Center for Strategic and International Studies in Washington, D.C., saying, “Given the relations between the U.S. and Venezuela, the oil companies, especially the Americans, really are on their own when it comes to their investments in Venezuela.”  
 
Class contradictions
For his part, Chávez tried to reassure the capitalist class that it faces no new danger to its property rights and its hold on Venezuela’s economy following the defeat of the August 15 referendum.

During his weekly “Hello President” television and radio show on August 22, the president said he would pursue his “revolution for the poor,” and pledged to accelerate land distribution and government credits to peasants and other exploited producers. He also said he no longer recognizes the Coordinadora Democrática opposition coalition because of its insistence that electoral fraud took place and its refusal to accept the referendum results. The result of this vote allows the president to serve his full term until 2006, when he will be eligible to run again. “I don’t recognize the Coordinadora as the political opposition,” he said. “There is no dialogue with this Coordinadora.”

The Venezuelan government has so far rejected calls by the pro-imperialist opposition to postpone state and local elections scheduled for September 26, after Coordinadora Democrática threatened to boycott them unless its demands are met for further investigation into its claims of fraud in the recent referendum.

At the same time, Chávez said, the government is keeping the door open to work with any of his opponents who recognize the voters’ will as expressed August 15.

“What we want is national unity,” Chávez said in his August 22 address. “This revolution should not frighten anybody…. All this stuff about Chávez and his hordes coming to sweep away the rich is a lie. We have no plan to hurt you. All your rights are guaranteed, you who have large properties or luxury farms or cars.”

Partly as a result of the course expressed in Chávez’s remarks, and because of the recent improvements in the economy, a minority of Venezuela’s capitalists and landlords and substantial middle-class layers backed the vote “no” campaign and don’t see an immediate threat to their class prerogatives under this government.

Many working people in the cities and countryside, however, 70 percent of whom live under the official poverty level, see it differently. Some say there is no way to defend themselves and make progress in substantially improving working and living conditions for the vast majority without taking on the ongoing rule of the industrialists, bankers, and large landowners.

“Among the biggest challenges we face now, even more clearly, are the rich in the government and the wealthy who present themselves as ‘pro-Chávez’,” Napoleón Tortolero, a peasant in the Los Cañizos farm cooperative in the northwestern state of Yaracuy, who has taken part in struggles for land over decades, told the Militant. “These people use their positions to block implementation of agrarian reform, even its modest parts. More than 80 peasant leaders have died the last two years fighting for land. We intend to intensify the struggle after August 15.”  
 
 
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