Maduro announces partial privatization of state-owned companies

During the evening of Monday, May 11, 2022, in a speech broadcast by the state-owned Venezolana de Televisión (VTV), Nicolás Maduro announced measures for the privatization of strategic state-owned companies, which would be carried out through the mechanism of offering shares of public companies in the country’s stock exchanges.

By: Leonardo Arantes- UST (Venezuela)

Among the strategic state-owned companies, whose shares the government intends to privatize, would be included the mixed oil companies, CANTV, Movilnet, and Guayana’s public services. The government will offer between 5 and 10% of its shareholding package starting Monday, May 16 of this year.

In his speech, Maduro called attention to and makes it clear that the measure is aimed at “national and international investors,” stating that “we are going to take out between 5% to 10% of the shares of several public companies for national investment, fundamentally, or international investment.”

The government’s arguments, its explanation of the crisis of the strategic state-owned companies, and the real reasons for their bankruptcy

To justify such measures, Nicolás Maduro argues that “we need capital for the development of the public enterprises,” suggesting that the lack of capital is and has been the main cause of the deplorable situation of state enterprises. As such, his logic goes, the country has no other choice but to resort to the search for capital from the national or transnational private sector. This argument is similar to the one used by the Cuban bureaucracy to justify the capitalist restoration on the island at the beginning of the 90’s.

It is necessary to always clarify the difference between what was the Cuban workers’ state and the Venezuelan state. In the case of the latter, it never ceased to be a capitalist state. Not even in the process of the boom of nationalizations initiated at least 15 years ago, when, taking advantage of and relying on the high oil revenues, the Chávez government carried out a process of nationalizations of companies considered key or strategic, reserving for the state 100% of its share package or the majority of the shareholding in the case of mixed oil companies.

But beyond the official arguments, we, the workers and the Venezuelan people, must be clear that the catastrophic situation of such strategic state-owned companies is a consequence of the sustained process of disinvestment in them. Disinvestment that prevented, among other things, to guarantee their production and maintenance, as well as to guarantee decent salaries and working conditions for their workers.

This whole process of disinvestment was carried out in order to guarantee foreign debt payments and the profits of transnational corporations, mainly oil and mining companies in joint ventures, as well as the profits of bankers and national and foreign speculative businessmen, to the detriment of the benefits that these companies could bring to the country.

To this, we must add the corruption of high-ranking military and civilian officials and the abysmal government management, and the absolute lack of workers’ control, which has guaranteed the high profits of government bureaucrats.

Thus, in the midst of this chaotic situation of strategic enterprises, the Maduro government, in order to continue guaranteeing the profits and benefits of national and transnational capitalists as well as civilian and military government bureaucrats, announces measures of public privatization of state enterprises in strategic branches of the Venezuelan economy.

Continuity and advance of the privatization policy

These announcements constitute a continuity and advance of a policy. Beyond its false socialist discourse, the bourgeois government of Maduro, taking the reigns of the Chavista regime, has been gradually renouncing the exclusive state ownership of companies in strategic sectors. These include the oil industry (PDVSA), telecommunications, electricity, water, petrochemicals, and basic sectors, or the majority shareholding in sectors where the state was never the exclusive owner, such as mixed oil, gas and mining companies [1].

From 2015 until the end of 2021, with a special boom beginning in 2019 (the year imperialist sanctions began that aggravated the already calamitous situation of the country and consequently of the state enterprises), the government has handed over to private capitalists the control of at least 33 companies [2]. These companies are located in the agri-food sector (roasting plants, sugar mills and seafood canneries, several of which are still inoperative), tourism (Venetur Hotels, Hotel Humboldt, among others), and manufacturing.

Three other large state-owned corporations, although they have not been totally surrendered, have established agreements with private sectors that concentrate all the market power in their respective sectors. This is the case of Bolivariana de Puertos (which manages the seven main ports of the country), Corporación Venezolana de Minería (CVM – which controls this area and manages the Arco Minero Orinoco), and to a certain extent also PDVSA (the main oil industry of the country, mainly through the surrender and privatization of subsidiaries and refineries abroad).

All this has been carried out through opaque agreements with private capitalists and without clear and complete formal announcements, violating the legal framework in force until then and even the national constitution itself (as in the case of placing oil assets and reserves as guarantees for foreign debt payments).

To protect such illegal agreements was the reason why, in 2020, using the fraudulent National Constituent Assembly (ANC), the government passed the unconstitutional Anti-Blockade Law.

It is here where we find the element of progress in said policy: the government renounces to the state ownership of strategic companies and makes possible their privatization, now in a public manner, offering a percentage of their shares through the stock exchanges, which can be acquired by sectors of the traditional bourgeoisie and the Bolivarian bourgeoisie of the country and by transnational bourgeois sectors. The ultimate purpose of this measure is to guarantee sources of income and benefits for these bourgeois sectors and for the government bureaucracy.

All this is a clear demonstration (better said, one more example among many) of the falsity of the socialist and anti-imperialist discourse of the bourgeois government of Maduro.

Faced with these measures of the government and as a real option to recover the strategic state enterprises, the socialists organized in the Socialist Workers’ Unity (UST). We demand the end of the foreign debt payments that bleed the national economy, the repatriation of the capital that has fled the country, the confiscation of said capital, and its investment in the recovery of the state enterprises and the economy as a whole. All this under workers’ control of the strategic public enterprises and other sectors of the economy!

Note:

[1] Mixed enterprises are associations between state enterprises of these sectors and private enterprises, where the state must have at least 51% of the shares and private capital maximum 49%, when the offer is opened from 5 to 10% of the shares to be acquired by private capital, the quality of the enterprise changes, becoming in fact private enterprises with state participation. It is worth mentioning that in recent years, the State had already illegally handed over the majority of shares in some of these companies, and with the entry into force of the measure announced by Maduro, this handing over becomes official.

[2] Data provided by the NGO Transparencia Venezuela, updated on 12/9/2021