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(So what happened?)
The Bolivarian Revolution: Building Industry in Venezuela
The rise of Hugo Chavez and the Bolivarian Revolution was the end of
democracy by pacts and coalitions in Venezuela. There would be no
power-sharing agreements, and no powerful economic groups would have
undue influence over the government. If it was the limitations of
liberal democracy that had prevented previous governments from carrying
out initiatives to build industry in Venezuela, it was the lack of those
very same limitations that would allow the Bolivarian Revolution to
engage in a flurry of industrial initiatives within the first few years
of the revolution. Revolution meant just that; class conflict would be
confronted, not avoided.
In search of the technology needed to build new national industries, the
Chavez government has not made the same errors of past governments.
Instead of attempting to arrange for technology transfer from the
dominant US and multinational corporations which are linked to powerful
local groups and are uninterested in cooperating with Venezuela's
industrialization, the Chavez government has built close relations to
countries that are interested in cooperating, such as China, Russia,
Iran, Argentina, Belarus, Brazil and others. And instead of worrying
about the impact their policies would have on powerful economic groups
in the country, the Chavez government has tended to focus more on the
impact they could have on national development and the lives of the
majority poor.
"We are going to be a power on this continent and in the world. In
petroleum, in gas, in petrochemicals, in industry, there is no doubt
about it," said Chavez recently as he announced the launch of a new
petrochemicals industry in the country. The industry would include the
construction of more than 50 factories across the country, with
investment and technology from Brazil, Russia, and Iran, to produce
plastic and chemical goods from Venezuela's abundant natural resources.
Chavez said the industry would not only supply the domestic market but
would also be for export to other countries in the region.[10]
From Argentina, the country plans to bring technology for more than 56
industrial projects to produce consumer goods, foods, auto parts,
furniture, home appliances, and more. And not only are cooperative
projects among the countries in the region rapidly increasing, but they
have the intention of building national industries through what one
Argentinean minister recently called a "new method of cooperation."[11]
"That is the idea, authentic cooperation in industrial technology
transfer, more than commercial agreements," he said. "Cooperation among
the southern countries is the true path to national development."
In an effort to construct industry in a socialist model, Venezuela
recently announced the construction of more than 200 "socialist"
factories over the next two years. With cooperation and technology from
Belarus, Vietnam, Italy, and Brazil, the factories will produce
electronics, motorcycles, housing and building materials, health care
products, and more. The factories will be managed and operated by the
communities where they are located and spread out around the country to
bring development to poorer regions.[12]
With Russia and Belarus, Venezuela plans to construct joint companies to
manufacture bicycles, heavy machinery, construction tools, and plastics.
Belarus has agreed to supply Venezuela with seismic technology needed by
the oil industry, a new aerial defense system, and needed aid in the
distribution of natural gas to Venezuelan cities. They have also agreed
to work with Venezuela in the areas of science and technology,
agriculture, petrochemicals, energy, and military cooperation.[13]
Russia has provided Venezuela with military equipment to update its
army, including a factory to manufacture Russian rifles, given that the
US has refused further arms sales to Venezuela. But Moscow has also
considered the creation of a bilateral development fund to finance joint
projects in the oil sector, petrochemicals, food industry,
transportation and construction.
From Iran, Venezuela is acquiring the needed technology to produce cars
and tractors. Through an agreement for the transfer of technology, Iran
and Venezuela have set up joint factories to produce 25,000 cars
annually and 20 tractors daily, and with an increasing percentage of
parts produced nationally. By 2011, Venezuela expects to have a line of
cars that is one hundred percent nationally produced.[14] Tractor
production is moving in the same direction and now, in a symbolic irony,
Venezuela rolls the new models out of the same old factory that
Venezuela's liberal democracy left abandoned for two decades.
Venezuela and Iran, which Chavez affirms are united in their opposition
to U.S. imperialism, are also cooperating in the exploration and
refining of oil, in petrochemicals, and technology for the production of
corn flour in Venezuela. Joint petrochemical initiatives are also being
set up in both Iran and Venezuela to the benefit of both countries, and
Iran has agreed to invest billions of dollars in these projects.
From China, Venezuela is bringing the necessary capital, technology and
expertise to make advances in transportation, the oil sector, the
manufacture of electronics and more. China has invested several billions
of dollars in Venezuela's oil industry, creating a joint company with
Venezuela to explore new oil fields. The agreement will give Venezuela
needed investment in technology and infrastructure for the heavy-crude
oil in Venezuela's Orinoco river basin.[15]
"It's the infrastructure that our nation needs to take a step forward in
areas of industrialization and joint-companies, as well as in other
non-petroleum initiatives," said oil minister Rafael Ramirez.
The joint venture will include the construction of oil tankers for the
transport of oil between Venezuela and China, an exchange that has
greatly increased in recent years. China has also agreed to invest
several billions of dollars in the construction of a national train
system in Venezuela, not only for the transport of oil, but also
passenger trains.
In addition, Venezuela is now producing computers with Chinese
technology. The joint project will produce computers for the Venezuelan
and Latin American market, with an agreement to progressively transfer
the technology for the production of computer components inside
Venezuela. The project is not only meant for import-substitution inside
the country, but to also export units internationally. A $6 billion
dollar bi-national development fund will serve the purpose of financing
future projects like these between the two countries including the
manufacture of cellular phones, automobiles, and more.[16]
With Brazil, Venezuela has plans to build joint oil and natural gas
refineries, as well as the huge Gas Pipeline of the South project that
will carry Venezuelan gas through the Brazilian Amazon all the way to
Argentina.
The Chavez government has also created new subsidiary companies to the
state oil company PDVSA. These different branch companies will work to
promote development in different sectors of the economy such as
agriculture, industry, shipbuilding, and even consumer goods like shoes,
clothes, tools, and electronics.
PDVSA Naval, the shipbuilding subsidiary, has signed an agreement with
Brazil to build a joint shipyard in Venezuela for the 42 new oil tankers
that the country intends to build by 2012. The Russians intend to help
Venezuela build special natural gas tankers as well.[17]
"Within ten years we will be witness to an unprecedented jump in the
heavy and light industry of the country, allowing us to penetrate new
markets in the maritime industry in line with the strategy of PDVSA and
the national government," assured Chavez last year.
And the list of industrial projects goes on and on. Two weeks ago, the
president inaugurated a new steel industry as well as a factory to
produce piping for the national oil industry, a product Venezuela has
traditionally imported. Huge deposits of iron, bauxite, and natural gas
will supply the new industries, thanks in part to new government
policies that limit the export of raw materials and guarantee these
basic inputs to Venezuelan producers.
The country is building an industrial framework by establishing
lower-level industry to work with its huge natural resources. These
lower-level industries will then supply more advanced industry in the
future such as the automotive and shipbuilding sectors, creating a
vertically-integrated industrial system. Venezuela, as Chavez says,
"must walk on its own feet." Its "feet," he assures, are the massive
minerals and natural resources abundant in Venezuela on top of which the
nation's industry is being built.
And the policies have had results. Not only has the Venezuelan economy
shown impressive growth rates in recent years, but the manufacturing
sector has been one of the fastest growing sectors since 2003, growing
faster than the overall economy.[18] Imports of final-consumption goods
have gone down as well, accompanied by an increase in goods devoted to
gross capital formation, such as the machines and equipment needed for
industrialization.[19]
Venezuela is building industry like never before in the history of the
country and they are doing it by going against almost everything the
free trade model calls for. The Chavez government has actively
controlled foreign investment from a variety of nations, funneling it
into productive projects and nascent industries with Venezuelan
majority-ownership. The state has greatly intervened, nationalizing
major sectors of the economy, carrying out agrarian reform, using
currency controls to control capital flight and regulate imports,
nurturing import-substitution industries and directing their production
towards more advanced national industry. The government has also made
significant efforts toward building alternative sources of funding and
bilateral development funds to escape the mandates of the World Bank and
other international lending institutions, and increase the country's
economic sovereignty.
The Venezuelan state is playing a very active role in directing,
planning, and guiding the development of the country, totally rejecting
any illusions that the market will magically bring modernization. The
Chavez government is pursuing sovereign industrial development and
technology transfer on its own terms, with the help of a variety of
allied countries, and there are few powerful groups in Venezuela, or
abroad, in a position to stop them. To put it mildly, Venezuela has
clearly shown that following the demands of Washington is not
well-advised. To put it more bluntly, the Bolivarian Revolution seems to
be demonstrating that the real path for the industrialization and
development of the third world is social and economic revolution.
full: https://venezuelanalysis.com/analysis/2689
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