Posted on 7-7-2002
A
Tale of Two Coups
By Greg Palast*, New Internationalist Magazine, July 3, 2002
(Photo shows
Hugo Chavez)
April's big business-led coup in Venezuela failed, where international
finance's coup in Argentina over the last year has succeeded.
Greg Palast
gives us the inside track on two very different power-grabs.
Caracas -- On May Day, starting out from the Hilton Hotel, 200,000
blondes
marched East through Caracas' shopping corridor along Casanova
Avenue. At
the same time, half a million brunettes converged on them from
the West. It
would all seem like a comic shampoo commercial if 16 people
hadn't been
shot dead two weeks earlier when the two groups crossed paths.
The May Day
brunettes support Venezuelan President Hugo Chavez. They funneled
down from
the ranchos, the pustules of crude red-brick bungalows, stacked
one on the
other, that erupt on the steep, unstable hillsides surrounding
this city of
five million. The bricks in some ranchos are new, a recent improvement
in
these fetid, impromptu slums where many previously sheltered
behind
cardboard walls. 'Chavez gives them bricks and milk,' a local
TV reporter
told me, 'and so they vote for him.' With 80 per cent of Venezuela's
population at or below the poverty level, elections are not
attractive to
the protesting financiers.
Chavez is dark and round as a cola nut. Like his followers,
Chavez is an
'Indian.' But the blondes, the 'Spanish', are the owners of
Venezuela. A
group near me on the blonde march screamed 'Out! Out!' in English,
demanding the removal of the President. One edible-oils executive,
in high
heels, designer glasses and push-up bra had turned out, she
said: 'To fight
for democracy.' She added: 'We'll try to do it institutionally,'
a phrase
that meant nothing to me until a banker in pale pink lipstick
explained
that to remove Chavez, 'we can't wait until the next election'.The
anti-Chavistas don't equate democracy with voting. With 80 per
cent of
Venezuela's population at or below the poverty level, elections
are not
attractive to the protesting financiers. Chavez had won the
election in
1998 with a crushing 58 per cent of the popular vote and that
was unlikely
to change except at gunpoint. And so on 12 April the business
leadership of
Venezuela, backed by a few 'Spanish' generals, turned their
guns on the
Presidential Palace and kidnapped Chavez.
Pedro Carmona, the chief of Fedecamaras, the nation's confederation
of
business and industry, declared himself President. This coup,
one might
say, was the ultimate in corporate lobbying. Within hours, he
set about
voiding the 49 Chavez laws that had so annoyed the captains
of industry,
executives of the foreign oil companies and latifundistas, the
big
plantation owners.
The Banker's Embrace
Carmona had dressed himself in impressive ribbons and braids
for the
inauguration. In the Miraflores ballroom, filled with the Venezuelan
lite,
Ignazio Salvatierra, president of the Banker's Association,
signed his name
to Carmona's self-election with a grand flourish. The two hugged
emotionally as the audience applauded. Carmona then decreed
the dissolution
of his nation's congress and supreme court while the business
peopled
clapped and chanted, 'Democracia! Democracia!' I later learned
the Cardinal
of Caracas had led Carmona into the Presidential Palace, a final
Genet-esque touch to this delusional drama. This fantasy would
evaporate
'by the crowing of the cock,' as Chavez told me in his poetic
way.
Chavez minister Miguel Bustamante-Madriz, who had escaped the
coup, led
60,000 brunettes down from Barrio Petare to Miraflores. As thousands
marched against the coup, Caracas television stations, owned
by media
barons who supported (and possibly planned the coup) played
soap operas.
The station owned hoped their lack of coverage would keep the
Chavista
crowd from swelling; but it doubled and doubled and doubled.
On l3 April,
they were ready to die for Chavez.
They did not have to. Carmona, fresh from his fantasy inaugural,
received a
call from the head of a pro-Chavez paratroop regiment stationed
in Maracay,
outside the capital. To avoid bloodshed, Chavez had agreed to
his own
'arrest' and removal by the putschists, but did not mention
to the plotters
that several hundred loyal troops had entered secret corridors
under the
Palace. Carmona, surrounded, could choose his method of death:
bullets from
the inside, rockets from above, or dismemberment by the encircling
'bricks
and milk' crowd. Carmona took off his costume ribbons and surrendered.
Taking On the Oil giants
I interviewed Carmona while I leaned out the fourth floor window
of an
apartment in La Alombra, a high-rise building complex. I spoke
my pidgin
Spanish across to his balcony on the building a few yards away.
The
one-time petrochemical mogul was under house arrest -- the lucky
bastard.
If he had attempted to overthrow the President of Kazakhstan
(or for that
matter, the President of the US), he would by now have a bullet
in his
skull. Chavez, in a gracious if strained nod to the ultimate
authority of
the privileged, simply confined Carmona to his expensive flat.
In response
to my question about who gave him authority to name himself
president, coup
leader Carmona responded, 'Civil society'. To him this meant
the bankers,
the oil company chiefs and others who signed his proclamation.
Most telling were Chavez's laws to which Carmona and coup leaders
objected.
The prime evil was the Ley De Tierras, the new land law which
promised to
give unused land to the landless, in particular, properties
held out of
production by the big plantation owners for more than two years.
But Chavez's tenure would not have been threatened had he not
also taken on
the international petroleum giants. Chavez's crimes against
the oil
industry's interests included passing a law that doubled the
royalty taxes
paid by ExxonMobil and other oil operators from about 16 per
cent to
roughly 30 per cent on new finds. He had also moved to take
control of the
state oil company PDVSA -- nominally owned by the government,
but in fact
in thrall to the foreign operators. Chavez's crimes against
the oil
industry's interests included passing a law that doubled the
royalty taxes
paid by ExxonMobil and other oil operators.
Chavez had almost single-handedly rebuilt the Organization of
Petroleum
Exporting Countries (OPEC) by committing Venezuela to adhere
to its OPEC
sales quotas, causing world oil prices to double to over $20
per barrel. It
was this oil money, which paid for the 'bricks and milk' programme
and put
Chavez head to head against ExxonMobil, the number-one extractor
of
Venezuelan oil. This was no minor matter to the US. As OPEC's
general
secretary Al Rodriguz says: 'The dependence of the US on oil
is increasing
progressively. Venezuela is one of the most important suppliers
of the US,
and the stability of Venezuela is very important for [them].'
It was the
South American nation that broke the back of the 1973 Arab oil
embargo by
increasing output from its vast reserves way beyond its OPEC
quota. Indeed,
I learned from Al Rodriguz that the 12 April coup against Chavez
was
triggered by US fears of a renewed Arab oil embargo. Iraq and
Libya were
trying to organize OPEC to stop exporting oil to the US to protest
American
support of Israel. US access to Venezuela's oil suddenly became
urgent.
In an interview Chavez told me: 'I have the written proof, I
have the time
of the entries and exits of the two military officers from the
United
States into the headquarters of the coup plotters -- I have
their names,
who they met with, what they said on video and still photographs.'
He
elaborated: 'I have in my hands a radar image of a military
vessel that
came into Venezuelan waters on 13 April. I have radar images
of a
helicopter that takes off from that ship and flies over Venezuela
and of
other planes that violated Venezuelan air space.' With such
powerful
enemies, it seems unlikely that attempts to remove Chavez will
stop there.
Exception to the New Order
While the immediate cause of America's panicked need to remove
Chavez was a
looming oil embargo, the Bush administration's grievances go
much deeper.
Miguel Bustamante-Madriz, a member of Chavez's cabinet, paints
a bigger
conflict with the global corporate agenda: 'America can't let
us stay in
power. We are the exception to the new globalization order.
If we succeed,
we are an example to all the Americas.' "America can't let us
stay in
power. We are the exception to the new globalization order.
If we succeed,
we are an example to all the Americas." -- Miguel Bustamante-Madriz,
member
of Venezuelan Cabinet
Despite the European and American media's hoo-ha over how Chavez
has
'ruined' Venezuela's economy, in fact last year its Gross Domestic
Product
grew by 2.8 per cent. And it wasn't all due to improvements
in oil-prices;
excluding crude oil, economic activity jumped by about 4 per
cent. Compare
the 'ruined' Venezuelan economy to Argentina's. That 'poster
boy' of
neoliberalism ended last year in a depression which has since
turned into
an economic death spiral.
Old Style Reform Clashes with Free Market Agenda
Chavez is an old-style social democratic reformer: land to the
landless,
increasing investment in housing and infrastructure, control
over commodity
export prices. But with Marx discredited as the philosophy of
the 'losers'
of the Cold War, 'Chavismo' is as radical as it gets. His redistributionist
reformism offers an operating, credible alternative to the
corporate-friendly free-market prescriptions of the kind currently
being
handed to Argentina by the World Bank and the International
Monetary Fund
(IMF).
Since 1980, the World Bank and IMF have peddled a four-part
free-market
agenda: free trade, 'flexible' labour laws, privatization and
reduced
government budgets and regulation. Chavez rejects it all outright,
beginning with the phony 'free' trade agenda under the terms
of the World
Trade Organization (WTO) and the North American Free Trade Agreement
(which
the US would expand to South America under the aegis of the
Free Trade Area
of the Americas). Trade under these terms is anything but free
to the
peoples of the Southern Hemisphere. Instead he calls for a change
in the
North-South terms of trade, increasing the value of commodities
exported to
Europe and America. Chavez's longer-term policies of rebuilding
OPEC and
higher tariffs on oil must be seen in the context of smashing
imbalanced
trade relations epitomized by the WTO.
World Bank and WTO rules have also forced nations such as Argentina
to sell
off their state-owned and locally owned banks and insurance
companies to
foreign financial giants such as America's Citibank and Spain's
Banco
Santander. These swiftly vacuumed up the country's hard currency
reserves,
setting the stage for the national bankruptcy at the first hint
of
speculator-driven currency panics.
The 'Anti-Argentina'
Argentina accepted the World Bank's four-step economic medicine
with fatal
glee. Not that it had much choice. I have obtained the secret
June 2001
'Country Assistance Strategy' progress report of the World Bank,
ordering
Argentina to pull out of its economic depression by increasing
'labour
force flexibility'. This meant cutting works programmes, smashing
union
rules and slicing real wages. Contrast that with Chavez's first
act after
defeating the coup: announcing a 20-per-cent increase in the
minimum wage.
Chavez's protection of the economy by increasing the purchasing
power of
the lower-paid workers, rather than cutting wages, is anathema
to the
globalizers. His Venezuela is the anti-Argentina, taking a path
exactly
opposite to the guidance given, and ultimately imposed, on Argentina
by the
World Bank and IMF.
For example, in the June 2001 document, World Bank President
James
Wolfensohn expressed particular pride that Argentina's Government
had made
'a $3 billion cut in primary expenditures'. Slicing government
spending in
the midst of a recession is economic suicide, killing demand
when it's most
needed. Who could have pushed the banks to demand such a berserk
programme?
The answer is hinted at in the document. That $3 billion cut
will
'accommodat[e] the increase in interest obligations' to pay
off those
foreign banks -- Citibank, Chase Manhattan Bank, Bank of America,
Credit
Suisse, and Lloyds Bank -- who, having bled the nation of capital,
lent
Argentina back its own money at rates that can only be called
usury.
Foreign banks working with the IMF had demanded that Argentina
pay a
whopping 16-per-cent risk premium above US Treasury lending
rates.
Chavez would take Venezuela in the opposite direction. His plan
is to pull
out of a downturn threatened by a corporate embargo of investment
in his
nation by taxing the oil companies and spending -- the 'Bricks
and Milk'
solution, old-style Keynesianism. And while Chavez moved to
renationalize
oil and rejects the sale of water systems, Argentina sold off
everything
including the kitchen-sink tap. The World Bank beams: 'Almost
all major
utilities have been privatized.' That includes the sale of water
systems to
Enron of Texas and Vivendi of Paris, companies which immediately
fired
workers en masse, let the pipe systems fall apart and raised
prices as much
as 400 per cent. Wolfensohn, for some reason, is surprised to
note that
after these privatizations, the poor lack access to clean water.
Coup Nouvelle
George W. Bush is an oil man; he owned oil companies, now it
looks like
they own him.
Certainly the Keystone Kops-style plot against Chavez by Venezuela's
military-industrial complex served Big Oil's interests. But
that's an
old-style shoot'em-up coup, likely to fail. The coup d'états
of the 21st
century will follow the Argentine model, in which the international
banks
seize the financial lifeblood of a nation, making the official
presidential
title-holder merely inconsequential except as a factotum of
the corporate
agenda.
* Palast's latest book is the best selling, "The Best Democracy
Money Can
Buy: An Investigative Reporter Exposes the Truth about Globalization,
Corporate Cons and High Finance Fraudsters," published by Pluto
Press. At
www.GregPalast.com
you can read and subscribe to Palast's London Observer
and Guardian columns and view his reports for BBC Television's
Newsnight,
including his interview with President Hugo Chavez
|