Maduro’s government facing problems on the economic front

Agreements and understandings with the business groups

June 06, 2013

By Milton D’León, LTS
Friday, May 24, 2013

As a way of solving the severe economic structural problems that have been accumulating, like shortages, external and domestic over-indebtedness, accelerated inflation, and problems created by the capitalist manner of governing itself, no better choice has occurred to the current Maduro administration than leaning on the business sector, by carrying out a whole series of agreements and pacts that are expressed in profits for the capitalist class, and precisely not for the people, over and above the speeches.

The orientation that the government is taking on the economic plane is open and obvious, of greater openness to the business groups, through an accelerated process of meetings and discussions being carried out with almost all the sectors of the economy, from those tied to the food industry, the automotive sector, the manufacturing industry, and even with the highly-placed representatives of the country’s communications media, like Gustavo Cisneros and Omar Cameroy, stockholders in Globovisión.

For the current Finance Minister, Nelson Merentes, whose appointment was approved by all the business groups, it is a matter of “the new policy†that is being carried out by the government of Maduro, who has had meetings with the business sector, in order to facilitate for them not only the freeing up of dollars for imports and increasing the subsidies, but also bigger agreements with the government.

In the same way, in various other meetings with other economic groups, the Vice President of the Republic, Jorge Arreaza, stated that the whole agriculture and livestock sector has been exempted from the tax on earnings, and that they were freed from the value added tax on the importation of capital assets that they carry out. And, to show that it is a matter of an entire national orientation on the economic plane, President Nicolás Maduro himself came to an agreement with the highest representative of the Polar Companies, the country’s biggest corporation in the food sector, Lorenzo Mendoza, an expression of what Chávez usually called “the stateless bourgeoisie,†after they joined the sabotage work stoppage of 2002-2003. “We will give you all the support that you need; we are ready to support you, and we will tell the whole world so,†Maduro emphasized to Lorenzo Mendoza that it would only be the freeing of prices and the necessary economic services so that he would increase his profits.

For that reason, to show that it is not a matter of simple statements, Maduro authorized the 20% [price] increase of milk, meat and cheese products, that really means legalizing what is already increased on the streets by these same business groups. In the same way, he has been yielding to the business requests, by promising them to review prices every three months, facing the complaint that they need “to be adjusted†because of problems of “costs.â€

For the people, inflation, a high cost of living and low wages

While the government is moving forward with concessions and agreements with business groups, by reducing their taxes, subsidizing them, providing them with dollars for their “production,†and even promising them “to review†prices periodically, the government continues demanding money from the people, since it does not occur to them to exempt the people from payment of the 12% VAT, nor to “review†wages and the “structure of the cost†of living. In this way, inflation, that in the first months is already a cumulative 12.4%, continues devouring wages, that already declined because of the recent currency devaluations. The people continue to bear the high cost of living, with a 15.7% [price] increase in the food basket between January and April, according to official data, and, if we take the basic basket in its entirety, we are facing much higher rates, while the cost of living is felt more on the street than the economic indicators express. Meanwhile, the wages of the majority of the working class continue to stagnate, losing their real purchasing power with every day, and the small increase in the minimum wage, that the groups that are at this level of income received, was quickly consumed by the accelerated increase in prices.

If [the government] grants concessions to businessmen and exempts them from taxes, it tightens the screws on poor people, by demanding now that the thousands of dwellings handed over to broad disadvantaged groups be paid for. If the government says it is really favorable to the people, what it would have to do is demand money from the big capitalists, by imposing big progressive taxes on them, instead of exempting them, and stop paying the foreign debt. Eliminate the VAT for the people and impose control on corporate groups, to counteract the price increases. But, as we see, it does completely the opposite. Just imposing progressive taxes on the capitalists and non-payment of the foreign debt would be sufficient to finance all the big housing plans that would create jobs, and to decree a general increase in wages. But no, what’s going through their heads is obeying the capitalists and that those from below should pay with big taxes, like the VAT, and with the little that they earn.

The independent organization of the working class and the exploited is necessary

Charges of corruption of this and that political group become public knowledge once in awhile in national life, and we see how those from above fight each other in a war that they carry out on the heights, and, while this is happening, government tends to lean back on the business sector in order to adjust its accounts and “settle†its economic “imbalances,†solutions that lead only to making them fall on the people. Because of all this, from the LTS we have been insisting that we working men and women, together with all the exploited, cannot remain with our arms crossed, that, now more than ever, the unity of the entire working class is needed in order to go out to struggle and fight for our demands, at the same time that we are laying out an independent working-class solution, by fighting for a political instrument of the workers, that will struggle for class independence.

The working class cannot remain a prisoner of choosing between the options that are competing for leadership of the bourgeois country, nor can it become paralyzed while waiting for what one or another group will do, the government of the devaluations, of the refusal to discuss the collective contracts and the criminalization of the workers’ struggles, and the pro-imperialist opposition that is hawking an “unrestricted†capitalism and bigger “freedoms†for the exploiters. Far from following one or another party, waiting for what one or the other group will decide, we must struggle to join together, get coordinated and discuss our problems and those of the country, as a social class. We must decide and demand from the union organizations that claim to represent the working class, a national emergency meeting of workers, that will lay out the struggle against all imperialist interference and will respond as a class, facing the current crisis and the economic and social reality of the country, that is being unloaded on wages and rights at work, with male and female delegates voted on in assemblies in each workplace. Fighting for a general increase of wages, so that no working man or woman earns less than what the family shopping basket costs, imposing the sliding scale of wages, workers’ and popular control of prices, among other demands, like the ones that we indicated in our May Day declaration. We cannot allow the right wing and imperialism to capitalize on the crisis that chavismo is beginning to go through and on the decline of the government. The working class will have to achieve its own political independence, both facing the right wing, and in front of the different variants of chavismo, now with Maduro and his milieu, in order to become a political factor that can respond to the current situation, by avoiding being a caboose of any of the bourgeois projects that the country’s leadership is now fighting over.

Translated by Yosef M.