In his article, 'Venezuela's Monetary Revolution Vis-a-Vis Economic Sanctions,' Nino Pagliccia reports on the new economic model based upon the petroleum-backed cryptocurrency, the Petro, introduced in March of this year. The new initiative brings a series of economic measures to begin on August 20 with the circulation of a new currency, the Sovereign Bolivar (Bolivar Soberano, BsS). It should be understood that the BsS is not simply a matter of printing new bills, dropping zeros from the old currency as it's been presented in the western corporate media. Rather, the value of the Sovereign Bolivar will be linked to the petro whose value is fixed at the price of one barrel of petroleum. Giving substance to that value, PDVSA, the national oil company, is transferring a huge oil field in the Orinoco Belt with about 30,000 million barrels of oil to the Venezuelan Central Bank, not unlike gold-based currencies planned by other countries.
Venezuela: 'Currency Conversion Will Eliminate Money Mafias'
Pagliccia describes the model as the Maduro Administration's response to "foreign-induced hyperinflation, crippling sanctions and [the] financial U.S. blockade." He adds: "Undoubtedly, this sent shockwaves to the world monetary and financial system in what may be dubbed a 'monetary revolution' that signals the beginning of a possible trend to drop the U.S. dollar as a reference and the expansion of the use of crypto currencies." In that context, he refers to Iran's consideration of a similar path and reminds us that Russia and China have been building their gold reserves as a foundation for their respective national currencies and also mentions their economic interests in Venezuelan petroleum.
The author is also careful to note that "It is still too soon to understand the full implications of this monetary revolution, also considering that we do not know the details of the monetary conversion. We do know its stated intentions, which are to stabilize the currency, stop capital flight, increase production and encourage international investment all leading to economic recovery... But the difficulty of predicting any real impact on the Venezuelan economy is also due to a great extent to the level of trust from Venezuelans."
Pagliccia cites President Maduro's address to Venezuelans this week: "I ask for your confidence, I ask for your support, beyond ideologies and political positions, because Venezuela needs this change."
It is this last comment regarding the level of trust Venezuelans have in the government that I would like to address in this report "from the ground." The causes of Venezuela's economic problems are not the main focus of this article but will be addressed in part in concluding paragraphs. First, let's take a look at these concerns about confidence in the government and President Maduro's request for the support of all Venezuelans, a key to success or failure of this new initiative.
How does one measure a people's confidence in their government? Traditionally, polls are used to make such judgements but pollsters use statistical analysis and, depending on their own values (they all have them), can skew numbers by clever means including the ways in which questions are asked, the size and selection of the sample, and the lack of replication, questions of validity and reliability. Our challenge has been to observe and describe what we think we see in our interactions with Venezuelans, to use Maduro's words, "beyond ideologies and political positions."
In order to understand the level of confidence Venezuelans have in their current government, we have talked with individuals and probed their experience, thoughts, and emotional reaction to government over time. This method in behavioral science, known as 'single subject design,' is nothing new; it was first introduced by Jean Piaget (1896-1980), a Swiss psychologist, who used it to study cognitive development in children, following changes in individual children over time.
To say more about that now would be a digression, so in order to get a sense of how Venezuelans of both pro- and anti-government tendencies perceive the Maduro government, we look at their history over the last 28 years and the impact that massive changes have brought about in their daily lives. Admittedly, this endeavor is ambitious but hopefully will help the reader better understand the Venezuelan people and their relationship to the current government.
Venezuelan President Announces New System of Wages and Prices
Caracazo: All Venezuelans have experienced tremendous changes in their lives and country from the time of the Caracazo which began on February 27, 1989. Then President Carlos Andrés Pérez reversed his campaign promises, adopting U.S.-backed neoliberal policies recommended by the International Monetary Fund (IMF). Soon after his election he began privatizing public services, imposing new taxes, suspending a number of articles of the Constitution, including Article 60 (right to individual liberty and security), Article 62 (inviolability of the home), Article 66 (freedom of expression), Article 71 (right to gather publicly and privately) and Article 115 (right to peaceful protest), virtually eliminating the people's role in government. The people had elected him as the candidate who would protect them from these 'reforms,' based on his campaign statements in which he had described the IMF as "a neutron bomb that killed people, but left buildings standing."
The people were furious but their protests were put down by a police state that beat and shot them down in the streets, killing up to 3,000. There are photos today on the internet showing state dump trucks hauling away bodies for burial in mass graves. Ask any Venezuelan, even those who were adolescents at the time, and they will remember where they were and the horrors of the Caracazo. This had a profound impact on the ways that Venezuelans think about government then and now. We might call it an awakening, one that reminded the people of their 200-year history, the independence wars and Bolivar, The Great Liberator who led them to freedom from the Spanish yoke.
Advent of Hugo Chavez: After Caracazo, the next big change commenced with the advent of Hugo Chavez, a young military officer who led the Bolivarian Movement-200 in a military coup in 1992, one that failed but lit a candle of hope in the darkness. This led to more changes for Venezuelans when they successfully elected him as their president in 1998 after his release from prison.
A new constitution was written in 1999 with protections for the people unheard of in Western Democracies. In 2002 Venezuelans saw their president kidnapped in a failed coup attempt, one that CIA records show was foreknown and supported by the U.S. government and media. Those who elected him demanded his return and with the support of the military, triumphantly restored him to his elected position within 48 hours. This was followed in 2002-2003 by a managers' walkout and lockdown of PDVSA, the national oil company, meant to destroy the Venezuelan economy, but the workers successfully brought the company back online. As president, Chavez led the masses out of poverty and through education and a series of new institutions formed a 'participative democracy,' empowering the formerly disenfranchised. The majority chose him as their president repeatedly in multiple elections thereafter, investing their lives and futures in the Bolivarian Revolution.
Chavez's death and a new president: None of this went down well to say the least with the former oligarchy and privileged class, creating a great divide in Venezuelan society. Chavez's death in 2013 was a grueling psychological shock for the people who support the revolution and a period of great sorrow and disappointment followed. But it also shocked those who opposed Chavez because we must remember that any big change in our personal lives or our country, whether perceived as negative or positive, carries with it stress, and some adapt to change more easily than others who resist change and as a result experience distress.
When Nicolas Maduro was elected president in the same year, albeit by a small margin, the people experienced a change in leadership causing joy for the Bolivarians and dismay for the opposition. Since then, Venezuelans have experienced the election of an opposition-controlled National Assembly (Congress) on December 6, 2015, later deemed unconstitutional and dismissed by the Supreme Court, and the formation of the Constituent Assembly (the people's congress) – both acts entirely constitutional, supported by the Chavistas and condemned by the opposition and foreign enemies. But all this amounted to more changes, both political and practical, for the Venezuelan people.
After Maduro's first term as president, and even more after the people elected him the second time on May 20, 2017, Venezuelans have suffered great hardships. The opposition blames those hardships on corruption and mismanagement in the Maduro government, while the revolutionaries point the finger at foreign intervention by the United States and its Latin American vassal governments.
But based on my research it would be an error to view this as embodiments of individuals, loyal to their own groups regardless of what they may say in public, and that simple division certainly does not indicate how individuals will vote in an election. It's against this 20-year backdrop that we consider President Maduro's request for the people's confidence and support.
Psychological effects of personal and societal changes: In my many conversations with fellow Venezuelans, both revolutionaries and members of the opposition, I observe the effects of all these changes in their daily lives, attitudes and perceptions of government. Most notably I have seen the stress caused by the economic crisis, rising prices, personal insecurity and crime and their conflicting ideological, economic and political views. Again, some adjust to these conditions more readily than others, but they have a psychological impact and the resulting stress lies just beneath the surface.
The Economic War: Government supporters and even some members of the opposition whom I know personally see their economic woes as induced by an economic war waged against their country by foreign powers. Others blame the Maduro administration and yet others place responsibility on both. In any case, the suffering is palpable, especially among the poor, visible in their body language and behaviors, audible in their words and emotive in their expressions of joy, fear, anger, sadness and resolve.
Until the economic war was launched with force 2-3 years ago, not all but many imported goods were generally available in the marketplace and many were affordable because of a steady increase in wages, salaries and pensions. Food and other essentials were also affordable to low-income people because they were protected under price controls. But leading up to and after the 20 May 2017 re-election of President Maduro, imports of essential products have been selectively and intermittently eliminated and prices for everything have made them unaffordable for many. Many Chavistas see it as the United States punishing them for their vote.
Venezuela's Monetary Revolution Vis-a-Vis Economic Sanctions
For me to discuss food and hunger these days carries the risk of both overstating and understating the reality. Most of the people in my constellation of friends, and those I observe, are poor by any standard and for the past year they struggle for food whereas items for personal hygiene, laundry detergent, house cleaning and such are prized and when they can be bought they are carefully conserved. When I visited the United States this year I was saddened to see an abundance of food in the markets and what people discarded after living with Venezuelans who so carefully preserve what little they have. On the one hand, people here have enough for a very simple but nutritious diet and nobody I know or have seen is starving, malnourished or 'eating rats, cats and dogs and fighting over food,' despite what the reader has probably read elsewhere, replete with photos and videos in the fiction of the United States and European corporate media.
I have no reason to believe that what I see in daily life here is any different in any other part of the country as my city of about 300,000 and the surrounding area are fairly representative of most urban, small town and rural communities. I have direct contact with poor people across the country due to my travels in each region, the northern coast, west to the Colombian frontier, throughout the Andean villages, to the Eastern shores and South to the Amazon and the Brazilian frontier.
However, are there people in Venezuela who suffer real hunger? Of course there are, and those are the people targeted for interviews by the domestic and foreign media, misrepresenting Venezuelans as a starving population.
I am also reminded of the hungry in London, 'sleeping rough,' and the poverty in U.S. cities and Appalachia and the 60,000 homeless within Los Angeles County alone. However, one must be careful when reporting on conditions here. Having enough for a family to eat today does not mitigate the stress and anxiety that comes with uncertainty about tomorrow as prices continue to soar and people struggle harder from week to week to find what they need.
Security, crime and violence: The psychological effects of the violent opposition protests that began with force in the 2014 'guarimbas,' continuing into 2017, have been dramatic. One can only imagine the experiences of the many who were injured and the families who mourn lost family members, friends and loved ones. In the lives of many others the increased violence achieved the objective of the perpetrators, foreign and domestic: social instability, anxiety, fear and sadness. Yet others find resolve in a deep desire for peace and a commitment to defend their lives, homes, communities, society and country against violence and enemies at home and abroad. In every country of the world correlations between poverty and crime are well documented. As people suffer any material loss from food to cars and cell phones, some become inventive to regain or at least maintain their standard of living while a minority turn to crime.
Crime and personal security are without a doubt serious and increasing problems in Venezuela. Last Friday night a close personal friend was robbed of his cell phone by a young man with a knife, a cell phone that he saved for and purchased only a week earlier. On Saturday, another close friend told me of a man whose car was stolen as he and his car were held hostage for ransom. Another friend of mine took great pride in painting the interior of her house. When I asked when she planned to paint the front porch she said that it would be too dangerous because "the malandros" (bad guys) would see it and think they have money. Robberies and some murders are reported in local papers every week for this city and the surrounding area. This breeds a great deal of fear and anxiety, another objective of the intellectual authors of the economic war and psyops. Some loyalists and opposition alike blame the government for a lack of security while others place responsibility beyond Caracas, in Colombia and the United States. Either way, instability, anxiety and fear lie just beneath the surface and come out in casual conversations.
Conflicting ideologies, economic and political views: During my first five years visiting Venezuela and the last 11 years living here I've seen gradual changes in the importance many people ascribe to their ideological and political views. Until the violence struck with force in 2014, it was common to see the Bolivarians and members of the opposition engage one another in robust verbal debates in restaurants, panaderias, bars, parks and other public places, mostly in good humor but never turning violent in my experience. Since the guarimbas, people have become more reserved, less argumentative, keeping their political opinions to themselves when socializing even with family, friends and acquaintances who might think differently.
When I went to the panaderia today for a coffee I saw a woman with 'MADURO' printed on the back of her shirt, not something I see often these days for reasons stated. Since Maduro's second election the opposition protests have melted and almost completely disappeared. But when government supporters are awakened by a national incident they end their silence and come out in force. On the night of the assassination attempt on Maduro on August 4, the Chavistas held a large protest a few blocks from my home supporting their president and condemning the U.S. and Colombian governments for the attack. Likewise, Chavistas marched and protested in similar fashion in Caracas and across the country and into last weekend. The opposition has remained silent about the assassination attempt and it's my impression that most were appalled because they do not want more violence and instability in the country, regardless of what they think of President Maduro.
Unfulfilled expectations: When President Maduro announced the new economic model, asking the people for their confidence and support "beyond ideologies and political positions, because Venezuela needs this change," he was obviously aware of the patience and long suffering the people have endured, especially throughout the last year. The war is designed to gradually wear people down to the point of surrender. When I ask my Chavista friends about their confidence in the government's ability to gain control of prices, to restore the economy of five years ago and to provide personal security, I see a mix of doubt... and guarded, unspoken hope.
Often people respond to my questions with lamentations about the high prices; the scarcity of products; the lack of cash in the system which makes purchases much more difficult; the hours spent making simple online banking transactions; and general failures of the electronic grid, internet, telephone disruptions, banks and cable television. They acknowledge there is an economic war taking place, the capital flight, smuggling of food and cash out of the country, the U.S. sanctions, the cyber attacks. But that doesn't answer the question: 'Can the government gain control and win this war?'
This is not to say that the majority even think about the possibility of surrendering their sovereignty and independence. If anything, the targeted oppression of the poor has only galvanized them to defend what they've gained under Chavez and Maduro and to recover their losses since the revolution began 18 years ago. But some members of the opposition wish for a change in government that will give them the U.S. lifestyles they see paraded on cable television and social media, 'the American Dream.'
How do average opposition members view Maduro's announcement of dramatic changes about to unfold in the economy? Of course they, like everyone, hope for a better economy and if Maduro delivers they'll enjoy and exploit it, but rather than crediting him most will continue calls to overthrow his government – but more softly. The main reason they have softened their voices is that their leadership has never offered a cogent national plan, even the candidates running for office. Each and every member of the opposition I know denounces their own opposition leaders and want little to do with them. So they secretly live with a ray of hope regardless of who brings it about.
Some enemy objectives partially achieved: As things stand now, some of the objectives of the CIA, U.S. State Department and Pentagon for Venezuela have achieved partial success in the following overlapping assaults: the sanctions; the war on the economy, including destruction of the bolivar (the national currency); foreign-induced hyperinflation rigged by the Dolar Today website in the United States; denial of credit by the international banking cartel for payment of external debt; rigging Venezuela's credit standing by S&P, Fitch Group and Moody's credit rating agencies (two based in the United States and the third in New York and London) which undermines confidence for foreign investors; denial of the country's access to normal international banking transactions; infiltrating and corrupting some important government officials such as former Attorney General Luisa Ortega, who fled the country, and all the former heads of PDVSA who are now behind bars; the outright military threats by President Trump himself and others in his administration; manipulating the price of oil in league with Saudi Arabia; corralling the Lima Group and other Latin American countries against Venezuela; attempting this week to break up UNASUR and strengthen the U.S.-Canadian backed OAS.
On the ground, they have also achieved some measure of success with the war on the economy, weaponizing food and hunger, cyber-attacks on the electronic infrastructure; organizing labor groups to strike against the government (e.g. bus drivers, Corpolec and CANT, the latter two state-run companies), the secondary effects of increased crime and psychological effects of psyops.
But returning to the original question, have all these actions resulted in their primary objective? Will the suffering and hardships endured by the people cause them to reject the new economic model for a lack of confidence in government? The answer is obviously no, for two reasons. The first is that the men and women in Congress, the Constituent Assembly, elected by the people, will wholeheartedly support this initiative. Second, why would a people who have so little cash, food and essential goods reject them and more when they are offered to them in a different form? People across the political spectrum often show me their new government-issued 'Carnet de La Patria,' a card that will be used for retail purchases and other business in the new economic model.
What about 'regime change?' The United States has already gone on record stating their intention to remove President Maduro for 'regime change.' Will the hardships cause the people to rise up against the government if this new economic model fails? Anything is possible and who can make such a prediction with certainty when there are so many unknowns? But even then, I don't see it happening.
The greatest weakness of the 20-year U.S. assault on Venezuela has always been the arrogance of the U.S. government and, more specifically, their inability to understand that the Bolivarian Revolution never belonged to Hugo Chavez, Nicolas Maduro or any other leader. A favorite story I often tell is of an 80-year-old woman I interviewed in the barrios of Petare, overlooking Caracas in 2005. She was standing behind the counter of her tiny store where she sold cheap knock-off watches. Her store was directly facing the sidewalk with a pull-down steel door to protect it when unattended. Squaring her shoulders, with dignity, pride and a bit of suspicion evident in her eyes, she agreed to the interview.
Through my translator in those days, I asked her about her business and community and toward the end of the interview I said that there are rumors afoot that some people want to overthrow Chavez and possibly even assassinate him. I asked her what would happen to the revolution if that happened. She gave me a grand smile and then turned it to my translator and said: "Pobrecito! Este pobre señor no sabe nada, ¿verdad? Amamos a nuestro presidente como nos amamos a nosotros mismos y si él muere, ¡estaremos muy tristes! Pero el señor no entiende que esta revolución no es la revolución de Chávez. Es nuestra revolución!" (Poor thing! This poor man doesn't know anything, does he? We love our president like we love ourselves and if he dies we will be very very sad. But this man doesn't understand that this revolution is not Chavez's revolution. It is our revolution.)
It was the first time in my life that I understood the meaning of 'empowerment.' Like all authentic revolutions, this one is from below, from the people. Of course I could be wrong, maybe the enemy will eventually succeed in overthrowing our government with a parliamentary, judicial or military coup as they have done in Honduras, Brazil, Paraguay, Ecuador, Argentina and are now attempting in Nicaragua. And there are some Venezuelans from all political backgrounds who would yield under enough oppression, pain and suffering. A 'successful coup' is possible, but the only way I can see the United States and transnational corporations gaining control of Venezuela's economy and resources is by destroying the very land and resources they so much covet, as they did in Iraq and Libya. Even then, for the empowered Venezuelans, their socialist ideology is part of their identity. It is what and who they are.
Many learned how to read and write using their new constitution as their only textbook. Even those with only a basic education are more geopolitically aware than any people I've ever met in the United States and in my travels abroad. They see this as a permanent revolution and if it were taken from them by force they would fight to defend it in the cities, towns, the countryside, mountains and jungles, bringing hell to any U.S.-installed puppet oligarchy, making it impossible for them to govern. A military invasion by the United States, Colombia or other country would be bloody and tragic, but then... the blood of the revolutionary is the seed of the revolution.
Les Blough, a U.S. citizen based in Venezuela, is the editor of Axis of Logic.