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VENEZUELA
Showdown with oil workers
Mike Ceaser
4/24/2002
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Simmering tensions between Chávez and workers in the petroleum industry helped spark the coup.

The recent dramatic fall and recovery of Venezuelan President Hugo Chávez was driven by a complex combination of class antagonisms and social problems. One of the sparks that ignited the coup, however, was a strike by dissatisfied managers at the state petroleum company.

On April 5, after waiting for 40 minutes in a line of cars outside a Mobil gas station in Caracas, Felipe Da Silva was upset. He was more worried, however, about the days to come.

The 25-year-old construction worker was one of thousands of Venezuelans who rushed to fill their cars’ gas tanks after managers of the state-run oil company, Petróleos de Venezuela S.A. (PDVSA), went on strike on April 4.

"I drive for five hours each day. How am I supposed to do that without gasoline?" Da Silva asked, leaning out the window of his battered yellow pickup truck. "And if I stop, so does the rest of the country. Just imagine the disaster."

The strike was the latest chapter in a drama that began when the PDVSA managers protested President Hugo Chávez’s Feb. 26 nomination of a new board of directors for the company. The strikers called the new directors inexperienced and said they did not earn their jobs through a merit-based promotion system, but were appointed only because they were the president’s allies.

Chávez argued that the company has been run inefficiently and should contribute more to the nation and his "Bolivarian revolution" for the poor. The president called the company a "black box" that was impossible to audit, and said that it had practically operated as "a state within a state."

The strike by the oil company managers was soon joined by Venezuela’s largest labor group, the Confederation of Venezuelan Workers (CTV), and the national chamber of commerce, FEDECAMERAS. Thousands of people poured into the streets and began to demand the president’s resignation. Chávez was briefly ousted by a coup before junior military officers insisted on his return.

The strike was the latest — and most effective — of a series of protests by PDVSA workers. In early March, they staged several strikes to demand the managers’ return. Another strike in December won pay raises.

After the most recent strike began, newspapers pointed out that PDVSA workers had won all previous confrontations with the Venezuelan government.

Chanting, "Not one step backward," PDVSA workers and managers blockaded the nation’s two largest refineries and demanded that the previous board of directors be restored. As the days passed, the strike partially disabled the nation’s petroleum industry, which is the backbone of the economy, accounting for almost one-fourth of gross domestic product and nearly 80 percent of exports.

The country is the world’s fourth-largest petroleum exporter and the United States’ third-largest and most reliable supplier. The country has reserves estimated at 77 billion barrels. This year’s US$35.5-billion national budget includes $10.5 billion in oil revenue.

PDVSA was nationalized in 1975. Although it has opened up to foreign investment over the years, the Chávez administration has strongly rejected any move toward privatization and has increased the royalties paid by foreign companies.

Chávez’s oil policy has caused friction with the US government. Since taking office, he has become a key figure in the Organization of Petroleum Exporting Countries (OPEC), breaking with the country’s long tradition of high production and low prices. Early last year, oil began to play a larger role in Chávez’s diplomatic arsenal (LP, March 12, 2001), and US officials have been concerned about his relations with Iraq’s Saddam Hussein and Libya’s Muammar Gaddafi.

Besides inconveniencing motorists, the strike threatened to idle many of the industry’s 40,000 workers at a time when unemployment hovers around 15 percent. Power outages were also likely, because the nation’s hydroelectric system has been crippled by drought and the strike would place further pressure on international petroleum markets already strained by conflicts in the Middle East.

When FEDECAMERAS chief Pedro Carmona was sworn in as president after the coup, he announced an end to the preferential deal under which Venezuela supplied oil to Cuba. That change of policy was reversed again, however, when Chávez returned to power.

The strike occurred when discontent with the Chávez administration was already high and pollsters estimated that two-thirds of Venezuelans opposed his regime. Political analyst Manuel Malaver compared the petroleum strike to protests that forced Argentine President Fernando de la Rúa (2000-2001) out of office in December (LP, Jan. 14, 2002).

The Chávez administration, however, took a firm stand. PDVSA "has to be in line with the nation’s general development plan," Bernardo Alvarez, vice minister of hydrocarbons, said.

Chávez even vowed to replace striking PDVSA workers with military personnel, an idea that was widely criticized because of the technical expertise needed for many industry jobs.

When the strike began, Vice President Diosdado Cabello interrupted TV and radio broadcasts with a 10-minute speech accusing the media of manipulating coverage in support of the strikers and saying that the government would not negotiate.

"We are going to use whatever means may be necessary to reestablish normalcy," he said. "There are no problems."

But an employee at the gas station where Da Silva was waiting predicted that the station’s tanks would run dry the next day.

"This is going to bring an economic disaster," Da Silva said. "The president has to give in."

In the end, the PDVSA strikers won. When he returned to power two days after the coup, Chávez took a more conciliatory stance. One of his first acts was to restore PDVSA’s original board of directors.

 


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