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Venezuela economy surges, U.S. sanction policy crumbling

By Tom Burke |
January 8, 2023
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Chicago, IL- 2022 was a banner year for the Venezuelan economy. The Venezuelan Central Bank recorded a 19% growth rate, while the United Nations Economic Commission for Latin America put it at 12%. While inflation of food and gas prices ate at workers' income in the U.S. and much of the world this past year, Venezuela inflation was low compared with previous years. This is due to booms in both food and oil sectors in Venezuela owing to the ability of the Bolivarian Revolution to overcome U.S. sanctions. 

Oil industry recovery

PDVSA oil started flowing to the U.S. and EU again after March, when the Biden administration negotiated with the government of President Nicolas Maduro. The U.S. and EU are desperate to obtain oil from Venezuela due to the ongoing debacle of the U.S. war against Russia in Ukraine.

With the aid of chemical additives, new technology and machine parts from Iran, Venezuela has restored its oil industry and refineries are working at levels not seen since U.S. sanctions first went into effect under President Obama. There are still gas lines in parts of Venezuela, but the industry is fully recovered, and production is way up. A gallon of gas in Caracas is about 36 cents.

Grow your own food 

Likewise, following the agricultural policies begun under President Hugo Chavez, Venezuela is food self-sufficient and will begin exporting food in 2023. “We produce 94% of food in 2022 after importing 80% of everything [in previous decades],” said Venezuelan President Nicolas Maduro in a New Year interview with Spanish journalist Ignacio Ramonet. The agricultural revolution of the past 20 years involved land redistribution, recruiting Colombian farmers, and production geared towards feeding the 30 million Venezuelans. Anyone who claims people in Venezuela are starving is lying. 

Today, the CLAP food production and delivery program, begun in 2016, covers as much as 85% of Venezuela’s households. Boxes of staple foods with rice, beans, fruit and vegetables, even proteins are delivered every two weeks for low cost. The CLAP program (for Comité Local de Abastecimiento y Producción, or Local Committees for Supply and Production) was established after U.S. sanctions were imposed and big warehouse owners began hoarding to create shortages of goods and drive-up prices. Their plans were foiled. 

While Venezuelan workers and farmers have carried out production, much of the setup to activate production is due to the ability of Venezuela’s special envoy Alex Saab to negotiate and make trade deals, especially of food for oil. It has been over 900 days since the U.S. seized diplomat Saab in Cape Verde to charge him with conspiracy. The kidnapped diplomat is being held by the U.S. as a prisoner in Miami, Florida. A recent court ruling by a Miami judge ignored overwhelming evidence and rejected Saab’s diplomatic status. The logic of the judge is that if the U.S. government doesn’t recognize President Maduro, then the court should not either.

A productive economy

While oil remains important to the Venezuelan economy, much of the growth is in newer industries, with assistance from the national government. There are joint ventures between Venezuela’s government, Venezuelan firms, and foreign companies that produce or assemble laptops, motorcycles, delivery trucks and electric buses. Diversification and industrialization of Venezuela’s economy is the priority, to “free ourselves from the old oil-dependent rentier capitalist model” as President Maduro says. 

Bolivarian determination overcomes U.S. sanctions

It is clear the U.S. sanctions regime of Obama, Trump and now Biden is failing in its objectives. In fact, it has had the reverse effect - Venezuela’s economy has rebounded and strengthened through diversification. It continues to be an economy geared toward serving the people instead of profits. This past year President Maduro announced that 4.4 million new apartments and homes were built. These replace the horrible shanty towns, with huts that many people lived in under corrugated plastic roofs, with garden hoses for water, and extension cords for electricity. The new apartments are free or low cost with ownership by those who live in them.

Friends helping friends

The Bolivarian Revolution is succeeding under the leadership of President Maduro and the United Socialist Party of Venezuela, but it also has good friends. Cuba and Iran are solid friends, but China, Russia and Vietnam all have joint ventures or infrastructure projects in Venezuela. Turkey and India do business and trade with Venezuela, despite U.S. sanctions. How could they not when both the E.U. and U.S. are taking oil shipments?

In the current multipolar world where the U.S. empire is in decline, Latin American integration is full speed ahead. The U.S. is unable to isolate Venezuela. The New Year inauguration of President Lula in Brazil marks a big change for Colombia, Venezuela and the region. The Bolivarian Revolution, along with the Venezuelan economy, is likely to strengthen in the coming year. With the ten-year commemoration of Comandante Hugo Chavez coming on March 5, the PSUV and its millions of supporters will recommit to their Bolivarian principles and struggle towards a socialist future.

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