Committee for the Abolition of Illegitimate Debt

A few hours after the last polling stations closed, with 92% of the votes counted, Hugo Chavez admitted defeat without waiting for the final tally. He congratulated the referendum opponents and his own supporters. He said he was pleased to see that those who voted No were in favour of the 1999 Constitution adopted at the beginning of his first term, and which the opposition had violently denounced up to at least 2004 when, in a reverse move, it had used it to try to remove the president from office. Just after the president’s speech, Manuel Rosales, the loser in the presidential election of December 2006, speaking for the majority of the leaders of the No campaign, hailed the attitude of Hugo Chavez, appealed for reconciliation, declared that Chavez would effectively remain president until 2012 and proposed that certain provisions of the constitution that had been rejected should be adopted by law in the Assembly with their backing. As examples he cited the creation of a social security fund for workers in the informal sector and the reduction of the work week. This last point is highly significant: that the leader of the right should himself propose reducing the work week shows just how clearly the scales are still weighted to the left. The constitutional reforms proposed by Chavez included a reduction of the work week from 44 to 36 hours, and the government announced that to compensate for the difference, a new labour intake would create over 10,000 new jobs.

Double standards practised by the national and international media
It is important to note the difference between the US presidential election of 2001 and other more recent elections. In the US election the final vote count dragged on for days and Al Gore, the democratic contender against G.W. Bush, contested the republican candidate’s victory. Bush was hailed the winner thanks to the governor of Florida, who happened to be his brother. We should also remember the fraudulent election in Mexico in July 2006 of Felipe Calderón of the pro-Washington rightwing PAN party. The leftwing candidate, Andrés Manuel Lopez Obrador, never accepted the final result, and at each of Calderón’s public appearances the opposition organised demonstrations to protest against this fraud. But was the situation ever reported in the western media? Another glaring omission can be seen with the election of Pervez Musharraf of Pakistan, orchestrated without universal suffrage in October 2007 and shamelessly hailed by the majority of western media as the best solution. These media neglected to denounce an election won thanks only to voters automatically acquired by Musharraf after he seized power in a military coup d’état, while they are quick to denounce the supposedly dictatorial leanings of Hugo Chavez, a man elected last year by universal suffrage with a 3 million-vote advance on his adversary, Manuel Rosales. The western media only began criticising Musharraf after he declared a state of emergency on 3 November 2007 and jailed 10,000 political opponents. Double standards seem to be standard practice in these matters. The press closes its eyes to the fraudulent and anti-democratic politics of the allies of Washington and European capitals while it publishes misinformation on the democratic presidencies of Evo Morales, Rafael Correa and Hugo Chavez. What would have happened if the referendum had resulted in a 51% win for Chavez’ proposal and a 49% defeat for his opponents? Doubtless much of the media would have spoken of fraud. Washington and other capitals would have expressed their rejection of the current regime in Caracas.

To go back to what happened on 2 December 2007 in Venezuela ...

Why did a 51% majority reject the constitutional reforms proposed by Hugo Chavez?

As certain Chavez supporters said: “it wasn’t the opposition who won, but we who lost”. And they are right: the right-wing opposition mobilised scarcely more voters than their candidate did against Chavez in 2006 (Manuel Rosales got close to 4,300,000 votes on 3 December 2006 while the No campaign won just over 4,500,000 votes on 2 December 2007, in other words a mere 200,000 more.) Yet the No campaign was very actively supported by the majority of the TV, radio and print media, by the Venezuelan Federation of Chambers of Commerce Fedecamaras [1] and by the catholic hierarchy. Most importantly, there was the unprecedented and powerful support of a high profile militant student movement that in April 2007 had opposed the suspension of the hertzian channel of the reactionary TV network RCTV, and later the modification of an article in the constitution concerning universities [2]. This movement, mainly active in private universities but also in certain leading public institutions [3], boosted the number of street activists appealing to citizens to come to the polling stations and cast a No vote. Also reinforcing the No camp was Podemos, a social democrat party that usually supports the government [4], and the retired general Raúl Baduel [5], a former defence minister and Chavez ally up to the summer of 2007. Podemos is in power in four States (out of Venezuela’s 23), yet these States recorded a Yes majority. For example, in the industrial State of Aragua, where Raúl Baduel is based, 53% of the votes were for the referendum proposals, as opposed to 47% against. But we should not under-estimate the shift in votes among those who supported Hugo Chavez in December 2006. According to Edgard Hernandez, an analyst and Chavista, the number of people who elected Chavez as president a year ago and who voted No in the referendum is effectively high [6], particularly in the industrial State of Aragua where Chavez had previously achieved a very high score.
“The industrial States with the largest concentration of workers: Aragua, Sucre, Carabobo and Lara, are those that, along with the capital, recorded the biggest exodus of voters who previously voted for Chavez and who have now voted No (…). The exodus in these States was decisive in providing the extra votes for the No victory at national level (over 200,000 votes in all). Consequently one can conclude that this was the reason the reform was not approved [7].”
The charts reproduced in Edgard Hernandez’ study show that in the working-class districts of Caracas (Petare, Caricuao, Libertador and Sucre) where people had previously voted en masse for Chavez (65%), this time the No vote prevailed. Edgard Hernandez adds: “This reveals a dissatisfaction with the reform even in Caracas’ most working-class areas.”

Another significant feature of the 2 December vote concerns oil-rich Zulia, the most populous State and up to then a bastion of the right. Its governor, Manuel Rosales, was Chavez’ main challenger in 2006. A majority voted against, as was expected, but it is interesting to note that total votes against were 58,202 less than the score achieved by Manuel Rosales in 2006, or in other words, a loss of 8.5%.

Conclusion: the campaign against the reform, in spite of receiving considerable reinforcements, did not manage to mobilise much new support from the right, and even lost some in certain of its strongholds. The failure of the Yes campaign can be imputed to the loss of support for Chavez in his own camp, as he himself acknowledged on the night of 2-3 December 2007. Some 7,300,000 people voted for Chavez in December 2006, giving him a lead of 3 million votes over his main adversary, Manuel Rosales. Total votes in favour of the referendum proposals amounted to just over 4,300,000 votes [8], in other words 3 million less than a year previously.

Why did Chavez lose 3 million votes? This is what we have to understand. A number of them, albeit not many, obviously went to the No side (possibly 100,000 or 200,000, or even 300,000 votes, it is difficult to tell). This being said, even if there had been no more than 150,000 left-wing votes shifting to the No, they were decisive, since all things being otherwise unchanged, the proposed reform would then have been approved with a simple majority. As Chavez put it shortly after the vote, it was better for the No to win by a short majority than for the Yes. Indeed if the Yes option had won by 10,000, 20,000 or even 100,000 votes, a large part of the opposition forces would have claimed there had been cheating and launched demonstrations that would have been supported by foreign governments such as those of the USA, Spain, Germany, Britain, Mexico, Colombia, or Peru.

Now why did supporters of Chavez and left-wing citizens turn down the proposal ? [9] Many of the citizens who voted No to the constitutional reform are just as favourable to changes for social justice and more democracy as those who voted Yes. And why did so many Chavez supporters fail to vote at all? To find answers to these questions we have to briefly analyse the content of the proposed constitutional changes.

About the proposed constitutional changes

Voter fatigue alone cannot account for the failure
It would be wrong to think that the high abstention rate was due mainly to voter fatigue among the people, though the phenomenon does exist. Over the past ten years citizens have participated in more than ten national votes, and so far Chavez or his supporters have won every one in democratic conditions. However, those who organised the Yes campaign [11] knew that there was a risk of a large number of Chavez supporters not voting. The triumphant tone of the Yes campaign led by the vice-president, several ministers and leaders of the national assembly failed to convince the hesitant. Moreover Chavez’ speech on 30 November 2007 did not help those who were still undecided to go out and vote Yes. He announced that the United States intended not to recognise a Yes victory so as destabilise Venezuela. He accused some members of the opposition of playing into the hands of Washington. He ordered the army to occupy the oil fields with the workers and asked his oil minister to be ready to cut off oil supplies from Monday 3 December if the United States carried out its threat. Such dramatisation was double-edged. It may have induced some hesitant citizens to vote, but it may also have frightened those who wished to avoid a repetition of the worst tensions experienced in 2002 – 2003 and led them to feel that it was better not to incense the United States by claiming that Venezuela is a socialist country. Wiser, perhaps, to stay home.

What kind of socialism?
Hugo Chavez self-critically said that he had overestimated people’s wish to move on to socialism. Yet as noted by former vice-president José Vicente Rangel, a convinced Chavista, in an interview published in the daily paper La Jornada, four million people in favour of socialism is a considerable number.
We certainly have to draw another conclusion based on the following observation: socialism was not clearly defined during the campaign. It is certain that the caricatures of socialism that dismally failed in the 20^th century have left a bitter taste, to say the least. In many people’s minds socialism is not synonymous with happiness and freedom. In order to vote for socialism they have to hear solid arguments. Besides, socialism cannot be decreed in a constitution. It must be a concrete construction. If the benefits to be obtained by socialism are not explained and if the steps to be taken are not defined, the notion remains too abstract. Or worse, socialism can call up the danger of authoritarian excesses. It was easy for retired general Raúl Baduel to say the new constitution had to be rejected because it did not define socialism: the word socialism does not have one meaning only, it can refer to different regimes ranging from Pol Pot in Cambodia or Stalin in the USSR to Nordic Socialism or European Democratic Socialism. What socialism are we supposed to embrace? Why are we not told clearly where the Nation is heading for? As a people we must demand that our leaders tell us clearly what direction they want our country to take and not deceive us with a so-called Venezuelian socialism. [12]

Other elements that can account for the high abstention rate
The constitutional changes were presented by Hugo Chavez in his role as president, and their content, as opposed to the constitution of 1999, was not debated by a constituent assembly. Hugo Chavez, together with a select committee, elaborated the proposal [13] which was then completed by the National Assembly, almost exclusively made up of Chavez’ supporters [14]. This is a first important weakness. A major process of debate and refining of proposals should have taken place, leading to a limited number of constitutional amendments that would have made it clear to voters what their options were. Hugo Chavez wanted to rush through these necessary steps, though, previously, this approach has often been successful. The crushing victory won in December 2006 convinced him that he could obtain an unequivocal Yes for his proposals, to which he had already alluded during the electoral campaign. In fact, he had announced that there was a need to change the constitution and in particular, to introduce socialism into the text. He mistakenly did not seek to build a consensus among Chavistas on the proposed changes to the constitution. This would have entailed a degree of willingness to compromise over some of the proposals and the additional powers that he sought. Instead, he forged ahead, believing that his supporters were firmly behind him. During the final meeting on 30 November, he declared: “Those who vote Yes are those who are with Chavez, those who vote No are those who are against Chavez.” A majority of the population undoubtedly think that he is the best person to be president, but this does not automatically mean rubberstamping all his projects. And the constitution is not a small project.

The power of right-wing propaganda should not be underestimated as a factor that reinforced abstention, but this is nothing new. The media that support the right systematically used lies in previous campaigns, but this did not prevent Chavez or his proposals from winning.

Among the factors that led to the defeat, the lack of enthusiasm among a non-negligible portion of Chavista elected officials, particularly at state and city level, should not be ignored. In fact, the extension of presidential powers in terms of the reorganisation of politico-territorial entities was perceived by some of them as a danger, attached as they are to a network of power relationships, and perhaps certain forms of clientelism, in their regions.

Finally, is there not a degree of discontent among the population, which has up to now supported Chavez, over the disparity between discourse and reality? In fact, there is no shortage of problems. How is it possible that despite massive oil revenues, there is a problem ensuring a regular supply of certain basic products such as milk and sugar? Why is the housing situation not improving faster? Why are some local Chavista administrators more preoccupied with their own personal futures Futures A futures contract is a standardized advance commitment, negotiated on an organized futures market, to deliver a specified quantity of a precisely defined underlying asset at a specified time – the ‘delivery date’ – and place. Futures contracts are the most widely traded financial instruments in the world. than with the public good? It is clear that those who harbour these perfectly legitimate frustrations decided to abstain because they considered that the new constitution would not necessarily provide an answer to their individual and collective problems. To appease their doubts and discontentment, it will not be enough to tell them that they should have voted in order to increase their leverage Leverage This is the ratio between funds borrowed for investment and the personal funds or equity that backs them up. A company may have borrowed much more than its capitalized value, in which case it is said to be ’highly leveraged’. The more highly a company is leveraged, the higher the risk associated with lending to the company; but higher also are the possible profits that it may realise as compared with its own value. through the popular powers proposed in the constitution. They perhaps followed an alternative logic: by showing that they were unwilling to follow the Chavista leaders in the Yes vote to gain the approval of the higher echelons, they sent them a warning sign. They are certainly giving a warning to Hugo Chavez himself.

What happened within the United Socialist Party of Venezuela [15], created in 2007?
Hugo Chavez wanted to convince all the parties that support him to gather into one political entity, the United Socialist Party of Venezuela (PSUV). The majority of members of the Communist Party of Venezuela (PCV), of the Fatherland for All (PPT) and of Podemos refused. This did not prevent the first two from firmly supporting the Yes campaign, while Podemos actively campaigned for the No vote. Some activists from other parties joined PSUV. Officially six million Venezuelans joined the PSUV. However, the Yes campaign won only slightly over four million votes, some of which do not come from PSUV activists since the PCV and the PPT were also calling for a Yes vote. Why did two million or more members of the PSUV not vote for a Yes? A critical examination of the construction of the new party will be necessary.

Conclusions

All this healthy criticism should not be allowed to overshadow the fact that the socio-economic situation of majority of Venezuelans has greatly improved over the last ten years thanks to all the new policies which have been put into effect. Access to culture and education is far more widespread than before. Political and civil rights are respected: freedom of speech, of meeting, of protest, of participation in free elections and press freedom. An OECD OECD
Organisation for Economic Co-operation and Development OECD: the Organisation for Economic Co-operation and Development, created in 1960. It includes the major industrialized countries and has 34 members as of January 2016.

http://www.oecd.org/about/membersandpartners/ study said in a report published in several newspapers, which included even the Spanish daily El Pais [16] - a newspaper particularly biased against Hugo Chavez - that results for Venezuela were very good. In an opinion poll carried out in all of Latin America, and taken up by the OECD, 76% of the Venezuelan sample said they thought that of all the political systems, democracy was the best, which is far more than in Chili and Colombia, where only 56% agreed with this statement, 55% in Peru, 54% in Mexico and 46% in Brazil. The average for the whole of Latin America was 58%. In answer to the question “do you trust the way the government spends your taxes?”, Venezuela ranked highest with 38% replying they did, compared with 21% of Argentinians, 20% in Columbia, 12% in Brazil and 10% of Peruvians.
However, it has to be said that while Venezuela has acquired the reputation of being a country where the public sector is rapidly playing an increasingly preponderant economic role, this does not really correspond to the reality. Private capital (whether domestic or controlled by foreign, mainly Spanish banks) has so far made considerable profit Profit The positive gain yielded from a company’s activity. Net profit is profit after tax. Distributable profit is the part of the net profit which can be distributed to the shareholders. from the government’s programme. According to a recent study by Mark Weisbrot and Luis Sandoval, which is very favourable to the Chavez government, the private financial sector grew by 37.9% in 2004, 34.6% in 2005 and 39.2% in 2006, whereas the public sector (including all public sectors) grew only by 12.5% in 2004, by 4.1% in 2005, by 2.9% in 2006.
The manufacturing sector, private and public together, grew by 21.4% in 2004, by 9.5% in 2005 and by 10.4% in 2006 [17]. Large private banks fulfil their role of parasite and rentier, making enormous profit from the loans they grant to both the public authorities and individuals. Basically, they siphon off part of the revenue of the state and households to a non-productive accumulation of wealth. They do not assist the producers. If Venezuela wants to satisfy the increasing social needs of the population, it should put an end to the parasitic rich private banking system and develop alternative sources of financing for the various non capitalistic sectors of the economy: small producers, cooperatives, the public sector, etc. If the amended articles 112 and 115 had been adopted, it would have been easier to drastically reduce the role of large private banks. However, it is possible to put through laws enabling the country to move in this direction. At the same time, it is important not to continue taking out further public debts [18] which would be an enormous burden for the future. The Venezuelan government is not sufficiently rigorous on this point and the proposal for the new constitution did not make any provision for carrying out an audit of the existing debt. Furthermore, article 236 of the constitution, in both the existing constitution and that which was proposed at the referendum, mistakenly gives the chief of state complete authority to negotiate national loans, whereas it would be far preferable for the legislative powers to determine policies on public debt.
It is important that, since the end of 2004, Hugo Chavez, a head of state, has re-launched the question of the necessity of a socialist perspective for the 21^st century. It is now essential to define the content of this project, so that an increasing number of citizens are willing to adopt it as the means of achieving social justice and ending all forms of oppression.
The defeat of President Chavez’ proposal for the constitutional referendum can be converted into an opportunity to reinforce the on-going revolutionary process in Venezuela. In fact it provides a powerful stimulus for correcting the errors and shortcomings of the Chavez regime. Will this opportunity be taken?