Venezuela’s vice president Ramón Carrizalez announced on April 9 that President Hugo Chávez will nationalize the Argentine-controlled steelmaker Ternium Sidor after it refused to budge on a protracted labor contract dispute.
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The news follow an April 3 announcement declaring that the cement industry would be nationalized, with the government acquiring at least a 60 percent majority stake in the top manufacturers. In recent years, electricity, telecommunications and oil were all nationalized.
The Bolivarian government is taking another step toward a key element of its 2006 electoral campaign platform: that all that was privatized would be nationalized. The steel and cement takeovers may be the rising crest of a new wave of nationalizations.
Ternium Sidor’s management had been in contract negotiations with the United Steel Industry Workers Union (SUTISS) for 14 months. SUTISS demanded a daily pay raise of 53 bolivars ($24.65), the doubling of retirement pensions and the inclusion of a portion of the company’s 9,000 contractors into the collective contract.
Management offered instead a meager raise of 44 bolivars ($20.50) and no concessions regarding contractors. The offer was recently rejected with 96 percent of workers voting against it in a referendum, yet Sidor stubbornly refused to increase the offer.
Carrizalez described Sidor’s attitude as “a grand arrogance” reflective of “a colonizer attitude” of a company seeking to continue its “barbarous exploitation” of its workers. (Venezuelanalysis.com, April 10)
Workers were thrilled by the news. According to SUTISS Finance Secretary José Meléndez, workers had endured abusive propaganda in the media and violent intimidation of strikers in March.
Revolution must take the reins of the economy
The nationalization of the cement industry stands to greatly increase the construction of affordable housing for Venezuelans.
The government plans to construct around 60,000 houses of this kind per year using PVC forms filled with concrete. PVC is manufactured from petroleum, one of Venezuela’s most abundant resources and the foundation of the country’s ongoing energy revolution.
“We have to increase the pace of replacing shantytowns with real communes, and communities, where the people can live fully, with the highest sum of happiness,” Chávez said recently
Mexico’s Cemex, France’s Lafarge and Switzerland’s Holcim produce around 6.3 million tons of cement in Venezuela annually. Beholden to their stockholders, these companies produce largely for export, which yields greater profits than selling to the Venezuelan market.
The very nature of for-profit capitalist production makes it impossible for these companies to prioritize the domestic market, which consequently lacks cement for affordable housing. Government figures show a deficit of 2.7 million homes in Venezuela; this number accounts for the hundreds of thousands who live in run-down urban shantytowns.
As long as private capital controls any key industry, the needs of Venezuelans cannot be fully met. When the Chávez government tried to impose price controls on food in order to rein in capitalist interests and help poor Venezuelans, private producers tried to undermine the measure by withholding their products and keeping food off the shelves of grocery stores.
Progressive legislation such as price controls may provide some short-term relief, but the capitalists use their control over production as a weapon to undermine any obstacles to profit-making. Ultimately, the state must wrest away control from the capitalists so that the revolution may move forward.
Bourgeois governments may nationalize key industries during rough economic times to ensure that the needs of the capitalist class as a whole are secured, often at the expense of the needs of the working class. In a revolutionary context, nationalization is the opposite—it ensures that the needs of working people are not threatened by those of the capitalist class.
Keeping counterrevolution at bay
Cemex management and the Mexican government immediately challenged the legality of the move. Mexican government officials said that Mexico “will do everything within its reach to protect the legitimate interests of Mexican companies abroad.”
France’s minister of finance Christine Lagarde, taking a stand for Lafarge, affirmed that the ministry is “closely following the situation and will ask for explanations.”
According to the U.N charter, the right to nationalize industries is the prerogative of any sovereign state. The people of Venezuela and its revolutionary leadership owe no explanations to any capitalist, foreign or domestic, on how they choose to manage their nation’s wealth.
The Bolivarian government has stated it will compensate foreign companies for their investments. Chávez said, “I want to guarantee that we respect the rights of those companies. Venezuela has proven to be a responsible country. By that we mean, we recognize their investments and we’ll pay them to the last cent, but we will recuperate our cement industry that was sold and given away to the multinationals.”
While expropriation without compensation would be perfectly justifiable as a revolutionary act, the government has paid in full for all companies that have been nationalized to appease more extreme bourgeois elements and avoid a potential counterrevolutionary backlash.
A major challenge for Chávez’s government has been to balance the needs of the revolution with the ever-present threat of counterrevolution. Sectors of the Venezuelan working class have been pressing for expanded nationalization and faster revolutionary change. Ternium Sidor workers campaigned to have it nationalized in 2007; the company escaped at that time by agreeing to increase production for the domestic market.
The latest developments may reflect a calculation by the Chávez government that the conditions exist to charge ahead with the revolution.
