The Conference…

NSI Researcher Pablo Heidrich recently travelled to Venezuela to attend the Annual Conference of the Latin American Association of Political Economy which took place in Caracus from October 7^th – 11^th. The conference theme for this year was very timely: “Southern Solutions for a Global Crisis”. These writings contain impressions on some of the presentations heard during the conference, discussions with some of the participants and what was seen, heard or smelled while in Venezuela.

Day 2 and 3

The conference starts for real today. We have 40 participants from 12 countries, mostly from Latin America. Here are a few lines for each of the more interesting ones.

Claudio Katz (Buenos Aires Univ.): the current crisis is not due to lack of regulation but rather to the excessive accumulation of profits in one particular economic sector — the financial one. Such over-accumulation of profit is created through the over-production of goods for consumption, financed in turn by super-profitable consumer debt. It is a systemic crisis and as such, a lesson in capitalism for the people. How it will affect average workers should be the main issue, not how to save the financial sector. Socialism is the way to go now, more urgently than ever, as capitalists will otherwise recover from this crisis by making us all pay for their bail out.

Eric Toussaint (CADTM, Belgium – Comité pour l’Annulation de la Dette du Tiers Monde /Committee for the Abolition of Third World Debt): now is the time for developing countries to default on their foreign debts. The US-led system is weakened and has no capacity to react. Recall that 12 Latin American countries defaulted on their foreign debts in the 1930s. Brazil renegotiated and got a 40% discount, Mexico obtained a 90% discount from what it owed since 1910, etc. This is also the best time to move forward with nationalizations, repeal of international economic treaties, etc. Mercosur and Andean Pact must be reversed, as they represent subordinated capitalist delusions, ALBA should be promoted instead.

Pedro Paez (Ecuador’s Minister of Economic Coordination): His government envisions a multi-year program to build a people’s economy anchored on public enterprises, cooperatives and some private businesses, linked internationally by the Andean Pact, other bilateral agreements, and ALBA, too. The Bank of the South is a fundamental piece in this project, now so much so that building a people’s economy is the only way to maintain a democratic structure in Ecuador’s politics. If the Bank of the South remains stalled, a tight network of Latin American central banks might be a second best.

Haiman El Troudi (Venezuela’s People’s Minister of Economic Planning): Measures by OECD countries to contain crisis are a cartoonish expression of their lack of understanding of capitalism. Neo-liberalism hopes to save itself by regressing into classical liberalism, a paradigm already proven wrong in the 20th Century. Since Latin America has experienced several financial crises recently, we have a clear understanding of what specific crisis stage the OECD countries are going through and thus, how much time we have left to make our own reforms, strengthen our own systems and prepare for their backlash once they recover.

Jorge Marchini (University of Buenos Aires): We ought to move forward from celebrating the downfall of Wall Street and its vociferous neo-liberalism and from fretting about the possible consequences on our margins of manoeuvre. Instead, we should go deeper in our understanding of the future architecture of global finance in order to both protect our recent social gains, and also to further our autonomy from the dominant Triad i.e. how to maintain fiscal income stability in times of volatile international prices, how to curtail capital flight, how to rein in the international banks with branches in Southern countries, and other similar issues should be guiding most of our attention.

Delfa Narciza Mantilla (Asociaciones Civiles del Ecuador): The crisis of one paradigm does not necessarily strengthen another, it is their own praxis that can carry the day or not. Ecuador’s situation today illustrates this well, as policy changes for the specific material interests of the majority is what is supporting an overall change in the direction of economy. We wasted years or decades pondering over dilemmas imported from the North on what path to follow, just to understand that what the people really want is food, water, sewage, jobs, housing and freedom of expression. Whatever is materially useful in this direction ought to be taken up, the rest might as well go with Wall Street bonds.

There were several other presentations worth summarizing but being a blog, it ought to be a finite amount of text.

Journalists from Venezuelan, Cuban and Ecuadorian TV and radio stations kept on asking for interviews during the breaks, collecting sound-bites and offering more air time if we stayed longer. The Venezuelan government people also asked several of us if we wanted to stay longer as the President had noted his interest in meeting us Saturday evening, after the closing of the event. They did not seem to hear the answer when it was not yes, so they just kept asking…

Day 4

Flight back to Miami. US Homeland Security takes a particular delight in freezing the lines handling the flights from Caracas and Bogota while a rare flight from Habana (via Mexico) is given preferential passage. Cubans are escorted in groups by smiling US guards while we watch them and wait for over 2 hours to be “handled”. Our luggage from Caracas is also thoroughly checked for drugs since Venezuela is, according to the US, not cooperating any more on drug controls.

Given these issues, I miss some flights but eventually arrive in Ottawa.

-siempre Pablo

Red berets and Nike shoes…(aka – Caracus, Conferences and Chavistas- part 2)

NSI Senior Researcher Pablo Heidrich recently travelled to Venezuela for the Annual Conference of the Latin American Association of Political Economy which took place in Caracus from October 7^th – 11^th. The conference theme for this year was very timely: “Southern Solutions for a Global Crisis”. These writings contain impressions on some of the presentations heard during the conference, discussions with some of the participants and what was seen, heard or smelled while in Venezuela.

Day 1

Staying at the Hotel ALBA, named in honour of the regional block Venezuela is building and now already includes Cuba, Nicaragua, Bolivia, Honduras and some of the smaller Caribbean island-nations. ALBA (which stands for Bolivarian Alternative for Latin America) was chosen as the name for this recently “nationalized” Hilton hotel. In fact, it was a government-built hotel being managed by Hilton, whose lease Chavez chose not to renew. However, there was a referendum late last year and so, the non-renewal of the Hilton’s lease was repackaged as a “nationalization”. A cheap one, indeed, since some of the other have cost billions of dollars.

The conference does not begin in its pre-arranged location but in a different one, the auditorium of the new National Academy for Economic Planning. The reason, we are told, is that our conference has already created a lot of interest and many of the students want to attend.So, we are taken by bus to that institution’s campus. Once there, a rumour provides the real reason, Chavez himself will likely attend and the university auditorium is a more “appropriate” venue than a conference room for 50 at the top of some high-rise.

Besides rumour, however, nothing is ever formally confirmed. After some 3 hours waiting and polite but persistent strategic seating changes among the intelligentsia in attendance, we assume Chavez is ready to appear. First, some 300 students come in and fill the back of the auditorium, a couple hundred more are bused in just in case and told to take the day off and picnic in the park nearby. Secondly, a chorus of some 20 people takes-up position on one side of the auditorium and starts testing their harmonies. They are dressed in Venezuelan flags, Chavistas red berets and fluorescent-blue Nike shoes (specially made for them, I am told). Thirdly, some very large guys come in jeeps and take positions around the auditorium, while two stunningly beautiful young women in very tight military uniforms stand by the platform, next to the chair where Chavez is likely to sit.

The conference begins suddenly and just five minutes into it, as the People’s Minister for Economic Planning is giving us the opening speech, he picks up a cellphone call in front of the microphone and evidently talks to Hugo Chavez. He hangs up and tells us that the President is coming to listen in and participate in our discussions. An uproar of happiness and enthusiasm comes from the crowd and the Minister struggles to continue his formal speech.

Just 10 minutes later, Hugo Chavez does arrive with a rather average entourage of bodyguards and secretaries. He greets every person in the opening panel of the conference, thanks them for coming to Venezuela, and is sincerely polite with each and every one there. He then looks straight at the public calling his name, clapping strenuously, and smiles slightly, almost shy in the face of the multitude’s visible affection for him. The chorus comes in singing the national anthem. Right after, some people in the audience ask to sign the International Socialist, a request that Chavez fatherly ignores.

After thanking and expressing his interest in listening to addresses of the conference participants, he proceeds to talk for 2 hours and 18 minutes. It is a political speech on the virtues of progressing towards socialism, while capitalism is facing its ultimate fate: crisis, chaos and dissolution. While very heavy on Marxist theory, his discourse is anchored on material benchmarks, nationalizations of various industries, building of this or that hospital, very specific measures to reduce capital flight, prevent internet shopping, and channel credit away from consumption, etc. He can’t hide two contradictory thoughts through his speech. One is his visible joy at the Wall Street tumble taking place, and the other, his obvious worry about what this might mean for Venezuela’s economy.

So, Chavez ably uses one to give strength to the other, converting contradiction into logical cohesion. Chavez believes that this crisis is the most powerful endorsement of his route to socialism, as capitalism has shown that it can’t deliver. For example, nationalizations have made utility and productive enterprises stronger in Venezuela than they are in the rest of the region, where they depend on banks and stock markets for credit and function. Therefore, the more nationalized the economy is, the more insulated from global crises. His diversification away from US and towards China, Iran and Russia will also lower the vulnerability of Venezuela. Even having moved the national reserves from New York to Switzerland a couple of years ago is proving to have been a good, even profitable, decision.

After such long speech, punctuated by his attractive aids bringing him note cards with Bloomberg or Reuters cables he reads the news dispatches aloud to illustrate the depth of the crisis, sidetracks to tell of conversations with Fidel Castro, and crescendoes his discourse with new slogans (i.e. “a socialist country is the only defence against the crisis”), Chavez announces he must leave for another meeting and soon after, we are taken back to our hotel, too. After all, 5pm is a good time to perhaps have some lunch. No more speeches or presentations for that day.

-siempre Pablo

Caracas, Conferences, Chavistas…..

NSI Senior Researcher Pablo Heidrich recently travelled to Venezuela for the Annual Conference of the Latin American Association of Political Economy which took place in Caracus from October 7^th – 11^th. The conference theme for this year was very timely: “Southern Solutions for a Global Crisis”. These writings contain impressions on some of the presentations heard during the conference, discussions with some of the participants and what was seen, heard or smelled while in Venezuela.

Day 0

Leaving Ottawa for Chicago, Latin America already shows its borders. Spanish is spoken in O’Hare International Airport at least as much as French is in Ottawa. From Chicago, I fly on to Miami, where Latin America truly begins. Spanish is the language spoken here. English is spoken here, as well, as airport shop signs occasionally point out for those in doubt.

Caracas receives travelers in its 70s-style airport, and along a highway to the city which is slowly being eaten away by tropical forest. The taxi driver takes advantage of his resting spot against a pole to chat with me, and provide a first impression of life under Chavez. He goes from his thanks for a nearby new bridge, to puzzlement and dismay over the price of food and the problems of finding goods even at official prices. He is careful not to ever mention Chavez by name or in a way, make his government directly responsible for any policy mishaps.

My two neighbours on the Miami to Caracas flight were Venezuelan. One was a small town bakery-owner, returning from a 35-day vacation in Portugal, and a 5 day shopping spree in Miami. He laughed at how he could spend 5 whole days shopping, and replied that he was bringing back 8 suitcases, having left with just one. (for his whole family of four.) The other neighbour was Venezuelan with Canadian residency, returning for a relative’s funeral. He migrated to Canada as “he could no longer recognize his own country”. While the touring baker is witty and indirect in his depiction of domestic issues and troubles, the immigrant is bitter, direct and loud in his denunciations. Eventually, their conversation moves on to where one might buy the cheapest mp3 player, and how to beat currency controls (Venezuelans can only take US $ 4,000 per year our of the country) and, of course, baseball.