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Lula, Chavez, A Very Thorny GW Bush

Marcel Idels | 04.03.2003 08:02 | Venezuela | Globalisation | World

Leftist movements are rapidly organizing barrios and rural areas everywhere. If Chavez, Gutierrez and Lula’s PT can formulate a sustainable economic program for the people to fight for then a new world is born. Leftist governments provide a safe haven for ideas and space for the masses to organize and formulate demands.

Lula, Chavez, A Very Thorny GW Busg
Lula, Chavez, A Very Thorny GW Busg

ECOSOLIDARITY ANDES 4520 words (Espanol)

Lula, Chavez and One Very Thorny “Bush”

By Marcel Idels at

- Marcel Idels is a writer-activist who refuses to pull punches in his efforts to present the truth from a leftwing humanitarian perspective. He is a veteran of many environmental and political campaigns in the US and worked in and out of Nicaragua for the Sandinistas during 1983-1990. He sees only two choices in Latin America: Bush convinces the EEUU, Brazilian and Argentine elite to surrender and do everything they can to push and pay for radical reform in the next year or else violent revolution and counter revolution will consume the region. He accepts all challenges to debate political economy and international affairs.

During December 2002, Venezuela’s President Hugo Chavez Frias waited for President Lula Da Silva’s help. The Venezuelan people held on against the rich and in 2003
Lula’s moral and material support assured Chavez’s survival over a second US attack on democracy.

“Chavez is still here, tougher and stronger than ever… This is the Year of the Revolutionary Offensive!” declared a triumphant Hugo Chavez. “It’s our turn at bat.” – New York Times, February 7, 2003, p. A6.

Lula follows Chavez using him as a shield and the spearpoint of social change in South America. Chavez is the shield for the poor of Venezuela too and under the Bolivarian theme of the Chavistas the people have now become their own spearpoint in defense of their revolution. Historic social forces are on the move and the US and Bush have no idea what they are up against.

Popular leftist movements are organizing in barrios and rural areas in every country. If the institutional left of Chavez, Gutierrez and Lula’s PT can formulate a long term sustainable economic program for the people to fight for then a new world is born. The left cannot perform miracles in the midst of a severe crisis in economics and the collapse of faith in institutions. Leftist governments do provide a safe haven for ideas and space for the masses to organize and formulate demands.

Brazil and its partners in South America are establishing a paradigm of social solidarity and alternative development based on regional cooperation and economic integration. This is necessary in order to inspire the people in healthy and sustainable ways and to thwart the US counter-strategy. The US will seek to divide and conquer, to pick off Ecuador or Venezuela and thus isolate Brazil and constrain its options. Change is always part substance and part education. The hostility of the US will be high on Brazil’s list of priorities. From reducing the US military presence in Latin America to trade disputes it will be an uphill battle for Lula to effect change without hostility turning to conflict. A fine line between boldness and diplomacy will haunt Brazil and its new leaders. And there is no precedent or obvious path to follow.

Mr. – “I have to destroy Iraq” - Bush opposes the changes in South America, but has no plan. Every time Bush does anything to oppose change it only helps the left. Europe is torn between its historic role as a progressive longterm voice of sustainable capitalism combined with social democracy and the new European reality of stagnation and rising anti-immigrant rightwing trends. Europe has its hands full opposing Bush over Iraq, trade and the International Criminal Court. Europe supports change in South America but is preoccupied with the expansion of the EU and other world problems. The new Latin American leftist governments will have to face the US alone and take the difficult path of transition through conflict. The EU donated 600,000 Euros to Chavez in February.

Lula’s Leadership and Regional Integration

Lula emphasizes the economic complimentarity of different countries in the region and how together they can move forward in solving the serious social and economic crises that plague the region after decades of corruption and failed US policies. Lula’s leadership lends support to the left and grassroots groups in Argentina, Uruguay, Paraguay and elsewhere.

He has proposed an expanded Mercosur trade group complete with a legislature, common passport and a common currency. This proposal is having an impact on the elections in Argentina and the debate throughout South America. So far the expanded Mercosur proposal is inadequate in scale and in its membership guidelines. This is the moment for bold leadership and an overly cautious Lula may squander a rare opportunity for the poor and the left in South America.

The new social movements in South America need a Trade and Solidarity Zone whose membership guidelines include: Removal of US military bases and advisers; Reductions in domestic military spending; Opposition to death squads and paramilitaries; A ban on genetically modified organisms (GMO’s); Transition to organic farming and agroecology; Major land and agrarian reforms; Trade preferences for struggling members; And support to collectives and cooperatives engaged in basic food production and import substitution enterprises. Such a program is similar to the program of the European Union and what Europe would do in Brazil’s situation.

The possibility of fully joining a Brazilian-led Trade and Solidarity Zone would guarantee election victories for the left throughout South America and beyond. A Trade Zone will have multiple benefits for its members and create a new counterforce to the US. In the event of US/corporate hostility member countries of a Trade and Solidarity Zone could retaliate as a block: seize US/corporate assets, expel foreign diplomats and declare mutual defense pacts. Bans on importation of US products and a fossil fuels embargo are also tactics to be considered as are general boycotts of US products and anti-US advertising.

Lula has the global stage. The world listens to his every word. But the hero of the masses who stand ready to defend real change is Hugo Chavez, Lula’s spearpoint. Chavez has captured the hearts and the enthusiasm of millions of poor people around the world. In words and in deeds, he has been the strongest proponent of measures to counter corporate globalization. He supports participatory economics, currency controls, import substitution, sustainable development, regional integration and an end to the militarized US drug war, Plan Colombia and Bush’s Andean Initiative. Chavez was an early critic of Bush’s attacks against Afghanistan and US threats against Iraq. At the World Social Forum, January 2003, in Porto Alegre, Brazil, Chavez spoke in favor of Lula’s economic program and called for a Latin American Monetary Fund to replace the rightwing IMF and its failed policies. He also announced that Venezuela would be the first country to adopt the Tobin tax on international financial transactions, a move that Europe and other Latin American countries will follow.

Excitement over Chavez’s speech at the World Social Forum threatened to upstage Lula and the whole event. With Lula, Gutierrez, two victories against the US and the momentum of a changing world behind him, Chavez is more than invincible, he is a cross between Simon Bolivar and Che Guevara – a living legend in the making. More heroic figures are emerging in Bolivia where students, police and workers have joined with indigenous cocaleros, the retired workers’ movement, peasant farmers, the parents of soldiers movement, and victims of US-supported violence to demand the resignation of the puppet regime of Gonzalo Sánchez de Lozado. President Lozado’s entire cabinet has resigned and the collapse of Bolivia’s government is imminent.

Debt Negotiation or Debt Cartels: Brinkmanship at the Theater of the Absurd

The debt bomb, which the rich countries created in Latin America in order to extract profits has turned into a powerful device for forcing the rich to accede to the demands of the poor. The US knows that a unified leftist block of nations in Latin America could easily pursue a generalized default on public and private debt. This requires the US to behave and to work hard to avoid a multi-nation default that would threaten the global banking system and takedown many large US corporations. Debt negotiations will test the vulnerability of the US and create a spectacularly suspenseful drama
Before joining a radical debt cartel some countries may choose to dabble in the debt negotiation game. Debt default is an important policy weapon in the arsenal of any developing country with international bonds outstanding. The burden is borne mostly by foreigners.

Bond investors know the risk of lending to sovereign nations, or Ecuador's bonds would yield the same as U.S. Treasury bonds. Bankruptcy procedures don’t exist for individual countries. With international loans, one is exposed to the borrower's willingness to pay, rather than their ability to pay. The trigger for default isn't the arrival of an interest bill when there is no money in the bank, but the reality that to pay the debt or even the interest on the debt would require a politically unsustainable level of domestic austerity.
"If investors chose to buy foreign bonds with a yield of 10 percent rather than British government bonds with a lower yield, they should not expect as a matter of right that the British government would intercede on their behalf in the event of a default." - Sir John Simon, British Foreign Office, 1848

Mississippi, USA still hasn't paid a penny on its bonds of 1870.

Countries that are planning a debt payment holiday should aim for an exchange of all outstanding bonds for new bonds worth 40 percent of face value. You hold the cards. Pay the army and reduce interest rates as much as you can. Inform the IMF and bond holders of your default or the debt-deal decision that you find acceptable. You can now pass the budget you want with a greatly reduced external payments line. Don't hurry to remove currency controls.
This advice has been followed by Argentina, Uruguay and Brazil (so far). Now we are in uncharted territory. Commodity prices, especially in coffee, tea and sugar continue to plummet; AOL-Time-Warner is headed to bankruptcy; many of the banks in Japan and Korea are bankrupt; high rates of domestic debt and deflation in a zero-interest-rate-trap threatens the world’s growth machine; Europe is stagnating; Bank of America and others are pulling out of Brazil ahead of its collapse; and defaults and nationalizations in Latin America will tip the scales and send major US corporations over the edge. US war in the oil fields of Iraq will be the final nail in the coffin of consumer and business confidence. More terrorist attacks are a certainty.

If orderly defaults are not possible due to US pressure, then Brazil and other countries should form a debt cartel and negotiate a general and full default. The negotiating position would be: “Support this general default and behave or we will nationalize all your assets.” Irregardless of negotiations, the banks would be nationalized with strict currency controls to stop capital flight. Reserves and deposit withdrawals would be prioritized for key imports, the poor and the lower middle class – and not for the wealthy. The mistakes of Argentina are instructive. Commercial debt and foreign ownership deals would be abrogated in the name of social debt relief (redistributive policies).

The global economic crisis will push moderate policies out the window. As in the 1920’s and 1930’s regions will be forced to band together to avoid autarchy. In the spirit of the new left in Latin America we will see the democratization of investment. People want a say in the money (their money) that rests in their banks. Voter referendums to set national priorities for investment and the increased use of participatory budgeting by popular assemblies will serve as vehicles for engaging the poor in these important decisions.

VENEZUELAN LESSONS: Helping the Rightwing to Discredit Themselves

“In Venezuela, the word “democracy” has come to mean the overthrow of the elected President. Bosses organize the strikes and corrupt union leaders complain about the government defending workers’ legal rights. And the military, armed with cement mixers and bricks, invade the shantytowns to build houses, not to destroy them. The [bosses] strike is a showdown between the right wing opposition and the government over the control of the country’s vast oil reserves, which provide Venezuela with two thirds of its export earnings. Wresting control of the PDVSA from the old pro-American management, who had run it as a personal fiefdom and who favored privatization, is seen as pivotal to Chavez’s ability to deliver on his promises of homes, health and education for the poor… the slow defeat of the strike in the PDVSA, has provided Chavez with the opportunity to dismiss 7,000 anti-government executives and saboteurs, and press ahead with the long overdue reform of the company.” Kevin Tucker (

After his landslide election in 1999, Chavez had the luxury of a mandate to purge and restructure the judicial, military and administrative branches of the government. The right wing in the US applauded some of these efforts. Cleaning up the vastly larger bureaucracy of Brazil could take time or many resources (money, personnel, political favors). Venezuela has 24 million people, Brazil 175 million. Lula also needs to cut back the military budget and direct these public monies to social investments, but this is a large problem to tackle as well. He may follow Chavez’s path of reorienting the military to social and ecological restoration programs as he eases some of the older and reactionary military leaders out of the armed forces.

Chavez has shown remarkable ingenuity and patience in his confrontations with the US-backed upper classes. Rather than confront them directly he allows them to throw temper tantrums and expose themselves as the spoiled brats they are. Hoping to wear down the downtrodden, the US follows a strategy of grinding attrition that it used against the people of Chile, Jamaica and the Sandinistas of Nicaragua in the 1980’s. A strange alliance of Anti-Castro Cubans, Media-Billionaires and the US White House prod the Venezuelan business class to extend the bosses-strike indefinitely. The US hopes to scare the people and wear down their resolve until they give up sovereignty. With the armed forces on their side the people of Venezuela have successfully weathered these terrorist tactics of the US.

Because the right wing opposition political parties are so detested and weak in Venezuela, the rich, the corrupt labor unions and the broadcast media have had to fill the vacuum and coordinate the strike. Chavez has allowed them to play out their hand and to break many laws so that now he has every right to seize some of these seditious media organizations and other companies that they own. Criminal charges are also being prepared. One example is the Coca Cola bottling plant, Panamco. Part-owned by the billionaire coup plotter, Gustavo Cisneros, Panamco was shut down just before the strike and its output hoarded in warehouses to help add to shortages and the peoples’ fears. After initially supporting the strike, the thirty-something billionaire, Lorenzo Mendoza, has kept his Polar beer factories humming. He controls 75 percent of the beer produced in Venezuela! Cisneros controls most of the rest of the market for beer with his Regional Beer Company.

Like beer a few billionaires control most of the broadcast media in Venezuela. Unlike beer, information and news are a public good that benefit all people, just like clean water, clean air and schools. The airwaves are a limited resource and the right to complete information in a democracy is crucial. If broadcasts are to be private, then a large collective editorial board that is held responsible to present the unbiased news should run them. A diversity of programming and slots on all channels for unedited commentary and video presentations from all sectors of society is a common sense addition.

Miraculously the poor of Venezuela don't need the media to tell them what they already know: “Never be fooled again by the old political parties – only support the parties of the poor people.” The main effect of the Venezuelan strike - besides hurting the economy - has been to mobilize poor neighborhoods and support for Chavez. The strike has also forced Chavez to intervene more directly in the economy than he desired. In Brazil, Lula worries that the business class will soon challenge his economic program too.
The problems at the Venezuelan state oil company, PdVSA, suggest actions that Lula must take at Brazil’s state-owned mega-corporation, Petrobas – the largest corporation in Latin America. He should split up the company into smaller management units, sell off foreign assets, fire rightwing and redundant managers and train loyal replacements to run the company. His appointment of Senator and environmentalist, Marina Silva, to Petrobas’ council of directors is a good first step.

Chavez and Lula should take advantage of the public’s mood and the disasters caused by the rightwing to institute tough currency and credit controls, the takeover of financial institutions and to seize the properties of business criminals and the many businessmen who are organizing illegal activities against the government. Popular referendums would demand the asset seizure of the coup plotters, the financial backers of the illegal strikers and the companies (broadcast media especially) who participated. Chavez is moving to arrest the rightwing ringleaders who threaten the people and democracy because they refuse to stop their illegal activities.

Audits of businesses and multinational corporations will reveal major fraud and many land titles can also be challenged. Workers should be encouraged to investigate and reports abuses. Preparation should be made for the inevitable worker management of many factories.

Brazil and other countries should declare a quick and broad program of land reform - get it over with. Make it fair in that landowners of idle or large estates would eventually get "fair" market value for expropriated lands – if they cooperate and behave. Countries can follow the path of the MST and other experiments in land reform like those put forth by the Via Campesina. Through a participatory budgeting process community assemblies and agricultural advisors will plan credit, investments and general crop decisions.

Rural improvement policies are well known. The basis is agro-ecology. This technology makes the best use of natural and cultural attributes and is the only system likely to survive the vagaries of global warming and ecological collapse. Organic production techniques and agroecological approaches are now fully proven and reliable systems. The experiences in Brazil are consistent with other studies that show how poor farmers with secure land tenure and minimal support exhibit higher productivity with fewer purchased or imported inputs. The job creation potential for labor intensive farms and urban market-gardens is high. A rural renaissance that engages the poor and the small farmers can increase jobs, export earnings and rural development spin-offs, such as community centers, better roads, improved water quality, environmental protection, enhanced marketability of products and new processing enterprises. No wonder that even the richest countries still heavily subsidize their farm sectors.

A number of experimental programs like the women’s Grammen banks, micro-credit, alternative medicine, traveling coop merchandisers and village capital recirculation are all showing promise. Many new ideas and innovations will arise if we support them. People are creative when encouraged by a structure of cooperation instead of one based on fear and desperation (capitalism). A whole new kind of economics is easily achievable. People have to demand the world that they want, erase the concept of a middle class and tax the oligarchy into oblivion. Economic growth that comes at the expense of the ecology or social development can never benefit anyone for long.

Governments that a serious about promoting food sovereignty have to take firm control of the seeds that their farmers need and eliminate any threats to their seed “capital.” Strict bans on genetically modified organisms (GMOs) and a ban on all non-regional food and agricultural imports protects small farmers, exchange rates and agricultural productivity (through peasant and cooperative security/stability and higher valued crops). Brazil must move immediately to demand that Argentina cease the use of GMO soy and other GMOs near its borders. A continental ban should be a high priority. Failure to immediately ban GMO’s will mean continental contamination and the loss of a high-profit and market niche export product. The spread of GMO’s threatens the ecology of the Amazon basin rainforests and the agricultural productivity of Brazil.

China has signed a deal to import over a billion dollars per year of Brazilian GMO-free soy. With agricultural prices declining Brazil would be foolish to lose this market.

Fiscal Policy, Import Substitution, Localization and Sustainability Prioritization

National budgets should be redirected to educational programs that compliment a transition to a mixed economic structure focused on agrarian reform and localization. National budgets could fill in the gaps resulting from the main decision-makers who would be the participatory budgeting councils of municipalities and farming regions.
Inter-state and inter-nation revenues would be used to transfer wealth from rich regions and people to the poorer areas. Reduced military spending and elimination of foreign security involvement and weapons sales would free up resources and manpower for social development (schools, education and infrastructure). Some military related industries that cannot be converted or recycled for roles in the new economy could be sold to foreign investors of friendly countries who are willing to invest in pollution controls to provide jobs without harm.

An import substitution program utilizing tariffs to reduce foreign competition would protect the evolving (infant) industries of the Solidarity sector of the economy (cooperatives and worker-controlled enterprises). Justification for this program rests at the doormat of neoliberalism and the tremendous social debts that it created. The first decade of the Latin American import-substitution period (1966-1990) was positive, but corruption, bad investments and the US and corporate economic and political interference ruined the program. The alliance between white-collar bandits - the Latin American elite - and the US sponsored "extortion (debt) economics" replaced the import substitution program with neoliberalism.

The years of subsidizing corporations and capital intensive processes requires decades of new subsidies for green and lower-tech processes. Scientific panels with input from participatory budgeting councils could make recommendations and test prototypes of tools and equipment that would compliment localization and value adding industries (food processing equipment, lumber and furniture mills, and farm implements).

Countries should avoid exporting basic food crops and raw materials outside of the Trade and Solidarity Zone. Within the new trade zone value adding, processing and local use would take priority. For example soybeans should be converted to soymilk, tofu and packaged custom animal feeds or converted directly to animal products (meat and egg industries). Instead of live animal exports or exports of unprocessed goods, countries and localities would butcher, process and utilize waste products (leather, bone meal, blood meal, feathers, etc.) before transporting them away from the source. This creates additional jobs and keeps wealth in the rural areas and the nation.
Large tariffs on luxury imports and polluting technologies (cars) would also reduce capital outflows and currency stress. In the long run a fairer distribution of income and growing pride in Zone and local products will reduce the need for tariffs.

A worker self-management movement (WSM) is growing in Argentina and will soon spread to Venezuela and Bolivia. Unemployed workers movements (MTD) have organized their own enterprises in abandoned building and vacant factories. The MTD supports the WSM and they have opened a wide-ranging debate on the structure, trajectory and politics of the movement. The guiding organizational principles of the movement are direct democracy, horizontality, and autonomy. The distrust of representative democracy is based on previous barrio and trade union experiences where leaders were bought off or corrupted.

Leaders of the Piqueteros, the Argentine unemployed workers' movement, understand the limits of isolated islands of WSM in a capitalist market, and they project the need for active participation in the general political struggle at the national level. The workers and popular assemblies are resolving problems and building alliances while recognizing the importance of constructing local power. This local power and broader alliances are linked to the construction of a political force that will soon become a national social force for radical change. Ivana from the occupied Grissinoppoli factory stated, "We are learning every day…the struggle is long…but we are learning to jump over the obstacles because we listen and we understand each other".

Many discussions take place as people debate strategy and past failures of WSM movements in Peru and Bolivia. Isolation hurt the workers in Bolivia and corrupt leaders helped to disempower the WSM in Peru. People are confident of avoiding those mistakes in Argentina. The key to the success of the WSM in Argentina depends on deepening the ties to the existing networks, with the neighborhood assemblies, the progressive trade unionists, and the organization of the unorganized. Unity of action is of the highest priority as the crisis deepens, factory closings multiply and repression increases. The basic policy of solidarity "tocas uno tocas todos" is a good starting point toward the task of creating a national political movement capable of challenging for state power.

A WSM movement allied with the unemployed must be pursued throughout Latin America. Radical unions need to explain the responsibility that workers have to the revolution and that their own self-interests lie in this direction. Factories will be closed no matter what they do and only through solidarity with other workers and the popular movements can they ensure employment and a society worth living in.

For Communities: Social and Small Scale Investment Projects

Housing continues to be one of the biggest problems in Latin America. It is calculated that a shortage of some 500,000 houses exists just in the State of Rio Grande do Sul, Brazil. This medium income state has 11 million people and the whole of Brazil over 170 million. Despite housing investments 11 times higher than that implemented by previous governments and significant support for construction cooperatives, housing is still in short supply. Millions of people in Brazil have poor housing and tens of millions more throughout Latin America are without roofs – Sin Techos. In Buenos Aires, Argentina the piqueteros and asembleas have formed "voluntary" roofing collectives to repair old houses.

They have also set up thrift stores to clothe the poor and the penniless; bakeries to feed the hungry and schools for children and adults where people can also learn about imperialism and the socialist solutions to capitalism’s crimes. Market gardens; sewer and water repair cooperatives; community-based TV and radio facilities; clothing manufacture and repairs; barter networks; and food processing are examples of local enterprises that governments and communities should subsidize. In remote areas or in nations lacking petroleum, a program for bio-diesel derived from African Palm plantations could be a beneficial enterprise for collectives and communities.
Under a government based on community socialism that repudiates the foreign debt, participatory budgeting can reinvigorate democracy, participation, citizen empowerment and oversight. Transparency (open books) and the training of competent citizen review boards will restrict corruption as the people keep an eye on the books, the revenues and the expenditures. Developing effective and inclusive participatory planning and budgeting procedures is a priority goal.

A Socialism of Communities for Localization
A paradigm emerges from the struggles in South America, a necessary vision of social solidarity and alternative development through regional cooperation and economic integration. The goal is a participatory economics and agrarian-based localization: a program of “Socialism for Communities” and Worker Self Management.

A year ago at the World Social Forum in Porto Alegre, Brazil there were sharp differences between the radicals and the moderates both in Brazil and the World. (see Petras: Emboldened by the electoral victories in Brazil, Bolivia and Ecuador and the heroic triumph of Chavez over the US-backed coup and sabotage in Venezuela, people and regional Social Forums all over the world have moved to the radical perspective and a call for socialism to defend people from the US and its predatory savage capitalism (Imperialismo!).

Great Backgrounders see:
1, “Why The US Fights Drugs With Drugs and No One Laughs - The Media Cover- Up: A Place Called the Bolivarian Republic of Colombia”:

2. Blackmail and Power: Bad Boys of Latin America and Team USA, February 2003. (Features)

3. Inside The Revolutions in South America: The Poor Don’t Need the Media to tell them what they already know: Endentro de Las Revoluciones en America Latin: Lula, Chavez y La Gente;

4. Mundo de Posibilidades: El Imperativo de Localization de Base Agraria;, Mayo 2002.
A World of Possibilities: The Imperative of Agrarian-Based Localization

5. “El Mundo de Tranciones Posible: Mega-Ciudades v. Localization de Base Agraria;” Deciembre 2002. (Transducientos de Espanol y Portuguese son disponibles.), A World of Possible Transitions: Mega Cities v. Agrarian Based Localization

6. “Class Conflict and US Intervention in Venezuela,”

Marcel Idels
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