The West vs. The Rest, The Current State of Play; Latin America Pt 2.2, Colombia and Venezuela.

As we have seen in the previous parts covering Latin America, the story of the region is one of domestic colonial elites that escaped the rule of the home country and have maintained power ever since. Any exceptions, such as Haiti, and more recently Cuba, Nicaragua and Venezuela, are dealt with harshly by the West. The main differences are within the elites, between the more neoliberal oriented coalition of landed elites, financiers and upper middle class and a neo-development grande bourgeoisie (industrial capitalism). In the past few decades the former coalition has re-established its dominance across Latin America with the help of the US.

Even in Mexico, where the PRI ruled a developmental state for many decades, much if not all of the gains made during that period were reversed in the past few decades. Mexico’s manufacturing sector is dominated by Western-owned maquiladora plants, and its food sovereignty destroyed by a US-subsidized ago-business sector through NAFTA. Even the oil and gas sectors were in the process of being privatized, in the years leading up to the AMLO presidency.

Whenever the general population gained some hope overthrowing the elites and redirecting the nation’s resources for their benefit instead of that of domestic and foreign elites they were crushed through repression, stolen elections and outright coups. Colombia and Venezuela are no different, the latter being a case of the combination of domestic and US elites combining in a two-decade war to regain their dominance over the general population.

Colombia (52 million; US$1 trillion GDP)

An independent Greater Colombia was established in 1819, encompassing modern day Colombia, Panama, Venezuela, Ecuador and northern parts of Peru. It dissolved into Colombia, Venezuela and Ecuador in 1831. Colombia was riven by civil wars between the Conservative elements (landowners and the Catholic Church who wanted a unitary state) and the Liberals (who wanted a federalized state), as in so many other Latin American nations – with much conflict between 1851 and 1891 interspersed with uneasy times of peace. In 1899 the Thousand Days’ War broke out between the two groups, ending with a Conservative victory and Conservative rule until 1930; 2.5% of the population died, society was severely affected, and Colombia has been a unitary state ever since.

During this 28-years of Conservative rule, the US worked with a regional separatist group to facilitate the creation of Panama as a separate state from Colombia in 1903, under US domination. It could then go ahead with the construction of the Panama Canal under US control. In 1930 the Liberals won the presidency and policies focused on the development of national industry and infrastructure. The Liberals also became more progressive, with support for labour unions, producing a failed military coup attempt by Conservative elements in 1944. The Conservatives regained the presidency in 1946, due to the Liberal vote being split between a right-wing candidate and the more socialist-leaning Gaitan.

Jorge Gaitan was the leading presidential candidate for the Liberal Party in 1950 and had been pushing it toward socialist policies that were anathema to both the Conservatives and the right-wing of the Liberal Party, as well as the US. In 1948 he was assassinated, with the involvement of the CIA. This was a pivotal moment for Colombia, where a successful counter hegemonic movement was poised to take power, only to be quashed. The assassination was followed by La Violencia, a ten-year civil war with a death toll of 200,000 to 300,000 (2-3% of the population) between the Conservatives and security services on one side and the Liberals and Communists on the other.

The civil war ended with a National Front government (1958-1974) agreed between the Conservatives and the right-wing Liberals, with power rotating between them for four presidents. The hope of a truly progressive, or even socialist, Liberal president had been quashed and remained so for over seven decades. The National Front governments did carry out some modernization of the country and implement some social reforms, aided by rapid global post-war growth and the developmental orientation of US foreign policy. In 1974 the National Front ended, and the Liberal Lopez was elected, but his breaking of many election promises that would benefit working people and his cutting of government subsidies in a time of high inflation created a great deal of disappointment and frustration leading to widespread strikes and increased guerilla activity. His Liberal successor, Turbay (1978-1982) launched a widespread campaign of severe political repression to maintain elite rule as communist and guerilla forces (the FARC and M-19) threatened to gain hegemony as both Conservatives and Liberals had lost legitimacy among the wider population.

In 1982 the Conservative Betancur (1982-1986) came to power and attempted to gain peace between the establishment forces and those the communists and guerillas. The Palace of Justice siege by M-19 took place in 1985, with 12 magistrates, senior members of M-19 and many others killed in the storming of the Palace. This was also the period of rapid growth in the Colombian drug trade, and the prominence of traffickers such as Pablo Escobar, covered in the series Narcos. Under the next president Vargas (1986-1990) there were renewed dialogues with left-wing groups, but at the same time increased violence as the government moved against the drug cartels. Under Gaviria (1990-1994), the war with the cartels intensified resulting in the death of Escobar in 1993 (the Medellin Cartel) and escalation of landowner and cartel funded paramilitary groups aimed at both fighting the guerillas and pacifying the general population. Under Samper (1994-1998) the drug war was intensified and greatly militarised, in conjunction with increasing US support, and the Cali Cartel collapsed.  

The defeat of the Medellin and then the Cali Cartel simply allowed the rise of another cartel, given that the demand for the incredibly profitable cocaine in the US and Europe was not going away. So, the Norte del Valle Cartel (broken up in 2008) and the North Coast Cartel (broken up in 2004) arose to fill the vacuum created by the destruction of the other two cartels. After their destruction, the drug trade became dominated by a more diverse set of para-military groups working with the Mexican drug traffickers (after the US interdiction of the Caribbean routes to the US). In 1999 then president Pastrana (1998-2002) had agreed Plan Colombia with the US, which greatly increased the US involvement and militarization of attempts to crush the drug trade and left-wing guerillas. The reality was that Plan Colombia was extremely good at crushing the FARC and its challenge to the Conservative/right-wing Liberal elite coalition, while having little or no real impact on drug production. The war on the guerillas went into overdrive under the presidency of Uribe (2002-2010), who has been accused of extensive links to right-wing paramilitary organizations and also implemented extensive neoliberal policies of privatization and austerity. The lack of any acceptance by the Colombian elites of the very real grievances of the general population were dealt with repression, with a large helping hand from the US. The general atmosphere of military and para-military violence also greatly aided the opening up of Colombia to international capital, by demobilizing the Colombian population.

In 2010 Uribe protégé Santos (he had held the position of Defence Minister under Uribe) won the presidency and held it until 2018. He held talks that lead to a successful end to the ongoing civil war with the guerillas, and the demilitarization of the guerillas and the right-wing paramilitaries. A substantial proportion of the paramilitaries did not disarm through, and numerous murders of disarmed ex-guerillas followed. Santos’ successor, Ivan Duque (a mentee of Uribe) undermined the 2016 peace agreement and has also carried out extensive extractive-industry supportive policies such as the legalization of hydraulic fracking. During his term nearly 1,000 social leaders were murdered, and extensive street protests in 2019 and 2020 broke out that were met with state violence and repression. His attempts to make the tax system more regressive through increased value added taxes, and to privatize healthcare, produced more extensive protests in 2021. In 2022 the former guerilla Gustav Petro was elected President of Colombia, 74 years after the assassination of Gaitan. Surrounded by establishment politicians in a Congress that he does not control, and establishment military leaders, institutions and bureaucrats he will find it hard to push forward his progressive agenda that includes a turn away from a dependence on extractive activities (agriculture, mining, oil and gas). Only a year into his presidency he is already being tied up in what has been termed a “soft coup” driven by the establishment forces in the Congress, the military, the judiciary and the media. In the background hovers the possibilities of an outright coup or even assassination. Nothing has really changed in Colombia since the times of Gaitan, and the US is working hard with the Colombian elites to keep it that way.

https://theintercept.com/2023/06/07/colombia-gustavo-petro-letter/

Venezuela (28 million; US$0.21 trillion GDP)

After Venezuela split from Colombia in 1831, the country was ruled by Paez on behalf of the Conservative elite for twenty years, after which open conflict broke out between the reform-resistant Conservatives and the Liberals who as in Colombia wanted greater regional autonomy. This culminated in the Federal War (1859-1863) which lead to the deaths of hundreds of thousands out of a population of just over a million. Unlike in Colombia, the Liberals won the war and routed the Conservatives, establishing a federal political system. Liberalism rapidly degenerated though with ongoing conflicts between regional caudillos (strong men) and in 1899 a Liberal Restoration lead by Castro took place that nearly immediately had to defend itself against a combination of regional caudillos led by a banker. In 1908 Castro was overthrown by Gomez, who acted as the de facto ruler of the nation until 1935. Although deeply corrupt, and head of a brutal autocracy, Gomez also used Venezuela’s oil wealth to pay down the foreign debt and modernize the nation.

Under Betancourt (1945-1948 and 1959-1964), Venezuela transitioned to democracy. Betancourt came to power through a coup but implemented widespread socially progressive changes such as universal suffrage and secured half of the profits from oil for the state (the amount was much less previously). In 1947 elections were held, with Betancourt losing to Gallegos but a coup was launched in 1948 which resulted in the Jimemez dictatorships After Jimenez was overthrown by another coup in 1958, Betancourt won the resulting elections. For the ten years in between, he was in exile. In 1964, Leoni (1964-1969) took over and oversaw the development of heavy industries (hydroelectricity, iron and steel), transport infrastructure, and gave greater support to unions, but was unable to reform the tax structure. Caldera (1969-1974) ended a decade’s worth of left-wing guerilla activities by allowing them to disarm and take part in the political process, and also reoriented foreign policy to more balance between the West and the Soviet bloc (the position under Battencourt). In addition, he greatly increased the educational system, nationalized the gas industry raised the state’s share of oil profits, and extensively invested in infrastructure. Under his successor Perez (1974-1979), Venezuela was awash in oil revenues, which accounted for 70% of state revenue and one quarter of the economy. The oil and iron industries were nationalized, and extensive investments made in state-owned industrial projects, infrastructure and social programs; requiring massive increases in the national debt. The oil price rise driven increases in the value of the currency also stimulated imports, with 80% of foodstuffs becoming imported and a middle class becoming used to purchasing foreign goods. Venezuela had the highest per capita income in Latin America.

Perez’ successor Herrera (1979-1984) continued the debt-fuelled spending, with foreign debt increasing to US$20 billion, but the Volcker shock, together with the ongoing fall in oil prices produced a recession in the second half of his term. Oil prices peaked in 1981, at which time oil exports comprised 95% of exports. Revenues from oil fell 20% the next year and continued to fall. As the economy shrank unemployment reached 20%, a balance of payments crisis was exacerbated by capital flight, and living standards fell precipitously. In addition, the level of corruption driven by the massive oil revenues was immense, with up to US$100 billion being embezzled between 1972 and 1997 by state oil company managers and the elites. Debt default and austerity measures followed with the Lusinchi (1984-1989) presidency, together with an ongoing recession and falls in living standards. In !989 Perez during his second term (1989-1993) rejected his campaign promises and accept an IMF loan and structural adjustment program, that included privatizations of state assets, triggering widespread unrest. His government suffered a coup attempt lead by Hugo Chavez in early 1992, and a much bloodier attempt in late 1992. Perez was impeached for embezzlement and removed from office in 1993. After two interim presidents, Caldera returned to the presidency (1994-1999). With oil prices continuing to collapse during the 1990s, to a low around the Asian financial crisis and Russian debt default, the state cut spending by 10% and also had to rescue the financial system.

The year 1999 brought a huge change, with Hugo Chavez, an openly socialist candidate, being elected (1999-2013). He was blessed by the period of rising oil and other commodity prices. Once again, Venezuela was flush in oil money and Chavez could utilize it for increased social spending, independence from the IMF, and an independent foreign policy. The Venezuelan establishment immediately set about plotting against Chavez, with the first area of resistance the management of the state-owned oil company PDVSA that supplied so much of the state’s revenues (and massive embezzled revenues for the Venezuelan ruling class). This was crushed in April 7^th, 2002 with the firing of seven of the company’s executives by Chavez. A failed coup then followed between April 11^th and 13^th, with Chavez removed from power and then reinstated due to the mobilization of his supporters both within the military and in the general population. The events are detailed in the documentary “the revolution will not be televised”:

At the end of the 2002 management and senior employees initiated a strike at PDVSA, which was combined with many businesses closing their doors to paralyze the economy and bring down the Chavez government. The strike collapsed within months, and by April 2003 oil production had reached pre-strike levels and businesses reopened. About 40% of PDVSA employees were terminated to break the ruling class’ control of PDVSA, and the state greatly increased its control over the company; although lasting damage was done due to the loss of expertise. A 2004 coup plot was foiled when dozens of Cuban paramilitaries were discovered on a farm outside Caracas days before they planned to assassinate Chavez, as were many other attempts to assassinate Chavez. He was re-elected in 2007 with 63% of the vote in elections deemed free and legitimate by foreign observers and was re-elected again in 2012 with 54% of the vote. He died from cancer in March 2013, and there are still questions about whether or not he was intentionally poisoned. Although Chavez greatly expanded social programs and reduced poverty, he did not build out alternative industries to PDVSA and therefore left it at risk of another oil price crash; one which arrived in 2014. Chavez also had a foreign policy which met with the ire of the United States, as he aligned himself with Cuba, Nicaragua and other national leaders that wanted to limit US power in the region.

With the death of Chavez, Maduro became the interim president and was then elected president in 2013 by a narrow margin. The opposition refused to accept the election result, even though foreign observers and the National Electoral Council deemed it free and fair. By 2015 the economy had been severely hit by the crash in oil prices, with unemployment and poverty rising significantly, and the opposition won the National Assembly elections of that year (an election that they did not dispute). The opposition attempted to use this base of power to remove Maduro but were blocked by the Supreme Court when they swore in three members accused of voter fraud; their votes would have provided a super majority for the opposition that would have given it wide ranging powers. The opposition then worked to make the country unmanageable and triggered violent demonstrations in an attempt to trigger a coup. Maduro sidestepped these challenges, which threatened to overturn all the achievements since 1998, by calling elections for a Constituent Assembly which took place in 2017. After the election of the Constituent Assembly and the refusal of the National Assembly to work with them, the former took powers to restore public order and security. The opposition had garnered enough signatures for a recall election for the President, and that was held in 2018 with the opposition boycotting the very election that they had worked for. One candidate, Falcon, broke ranks with the opposition and stood for election and lost heavily to Maduro. The opposition and Falcon immediately claimed that the elections were fraudulent, a claim repeated by Western governments and the US-dominated Organization for American States (OAS), together with Western mainstream media.

This provided the pretext for the imposition of brutal economic sanctions by the US and other nations, designed to destroy an already weak economy and produce an economic and social environment supportive to removing Maduro. Aided by continuing economic sabotage and disruption by the elites. With Maduro continuing the foreign policies of Chavez (he was Foreign Secretary under Chavez) and providing an alternative to the elite-dominated governments of Latin America, he was seen as an enemy requiring removal by the US. The West then recognized the head of the National Assembly, Juan Guaido, as the President of Venezuela, even assigning Venezuela state assets to his control; highly reminiscent of the colonial days. There was a probable attempt on Maduro’s life using drones in 2018, and a further assassination plot was foiled in 2020. The sanctions were increased, producing an economic hyperinflationary depression made worse by the COVID epidemic. Growth bounced back at a 15% rate in 2022, and 4.5% in 2023, with hyperinflation ended. GDP per capita PPP had peaked at nearly US$19,000 in 2013 but was only half that in 2023.

With the depth of support outside the elites and upper middle class, and strong control of the security services, the Maduro government was able to survive and the Western attempt to install Guaido failed. Presidential elections will be held in 2024, and the opposition is currently planning on taking part in them given the failure of its previous election boycotts. The economy is benefitting from a slow recovery in oil exports (predominantly to China), but these are still about half those in 2017 before US sanctions specifically targeting the oil industry. Venezuela is deepening relations with its fellow heavily sanctioned oil producer Iran and is also looking to significantly expand its natural gas production. The also heavily sanctioned Russia has also shown interest in deepening economic relations with Venezuela. In addition, relations with neighbouring Brazil and Colombia have significantly improved with the election of progressive presidents in those two nations. Overall, the Maduro government seems to have survived the extensive attempts by the domestic economic elites, the US and the West in general, to topple it. Those attempts will not stop though, and the government needs to work through a growth model that can overcome Western economic aggression. A good source of news on Venezuela is Venezuela Analysis, much better than the propagandist tripe found in the Western mainstream media.

https://venezuelanalysis.com

Venezuela is an excellent example of what happens when the old elites are left in place, and the new socialist leaders attempt to negotiate with those elites and the US. The latter will never accept any type of rule that benefits the domestic majority over their own interests and will fight decade after decade to undermine and overthrow the rule of the many. In the next instalment I will cover Nicaragua as another great example of this, Cuba as the only nation to rid itself of the previous elites, Guatemala where hope was crushed by the US in the 1950s, and Haiti as the only country to carry out a true revolution in the 1800s.