Hugo Chavez- 21st Century Socialism and Co-operatives

So farewell Commandante Chavez!  I was very sad to hear of the death of Hugo Chavez, taken from us whilst there was still so much work to be done cementing the Bolivarian Revolution. A great leader winning the hearts of the people and expanding the realm of the possible in Latin America. He had huge charisma and a ready wit which he often used to wind up the “the Empire”!

His attitude to the United States hardened, and who could blame him, after the attempted coup of 2002 which had US fingerprints all over it. The good news is that it will be extremely difficult to undo the opening up of citizen power in Venezuela. Having flexed their muscles it is hard to imagine any circumstances in which the people would wish to give it up.

As a co-operator one of the most exciting aspects of the revolution was his commitment to co-operatives. The growth in the number of co-operatives was astonishing in 1998; there were fewer than 800 legally registered co-ops in Venezuela with about 20,000 members. By the middle of 2006 the National Superintendence of Cooperatives (SUNACOOP) had registered over 100,000 coops with over 1.5 million members.

Since then they have continued to grow and some now estimate that there are 200,000 co-ops employing 20% of Venezuelans. There have been heated debates in the co-op movement about top-down versus bottom-up co-ops, if they are truly voluntary and even if some conventional businesses are calling themselves co-ops just to gain tax advantages.

The government have been active promoting the creation of new co-ops by providing cheap credit, preferential purchasing arrangements particularly on government contracts, and technical support. At this rate of growth it is unsurprising that in the academic and technical literature there are reports that a large number of Venezuelan co-operative members have serious weaknesses in administrative and technical skills, as well as in motivation.

It is also true that producer co-operatives are also having great difficulty in competing with their capitalist counterparts to purchase inputs and to find customers. There is a fear that their dependency on state institutions for access to capital and contracts is threatening their sustainability.

It is clear that post Chavez a new wave of co-operative development is needed to consolidate the gains of the revolution. The lack of integration amongst co-operatives needs to be addressed. The key is co-operative principle 6, co-operation amongst co-operatives. This requires an active national co-operative centre to provide advice and support for co-operative enterprise and the creation of secondary co-operatives or what are called federals linking together smaller co-ops to gain the market advantages of larger businesses especially when it comes to trading, either buying crucial inputs or selling their wares to the public.  

I am sure Venezuelan co-operatives can overcome these challenges by coordinating their activities among themselves and by exploiting the special relationships they have with their neighbouring communities.

A good dose of democratic planning and co-ordination could also serve to consolidate their organizational and ethical principles, and to transform them into true socialist enterprises that effectively and efficiently satisfy social needs.

There is no area of the Venezuelan economy in which this is more important than food production and distribution. The government broke the private sector stranglehold on food distribution with Mercal created in 2003 which markets food at low prices to some 15,000 stores about (10per cent of the total) supported by the Venezuelan Agricultural Organisation (of 2004) which owns a series of processing subsidiaries which supply Mercal. In 2010, after months of negotiations the Government purchased the supermarket chain, “Supermercados Exito”, the French group, “Casino”, and the Colombian “Almacenes Exito” then in November, they also bought the CATIVEN Supermarket Chain (also owned by the Casino Group).

With these acquisitions, they became the owner of 35 stores - renamed Abastos Bicentenarios and six stores of Gran Bicentenario (formerly Hipermercado Exito), eight distribution centres and a fleet of trucks. This new business controlled by the Socialist Market Corporation (COMERSO) gives the State a presence in the retail sector but certainly not a dominant one. Makro for example have 35 Hypermarkets compared with Bicentarios six.

These could form the backbone of a consumer co-operative retail sector that could seriously challenge the private sector. What is more our friends at Mondragon know how to co-operatise a retailer having done so with the Eroski chain across Spain.

Challenging the crony capitalist oligarchy in Venezuela is a huge challenge and Hugo Chavez deserves great credit for the progress that has been made but to consolidate these gains with out the huge charisma of an individual we need the collective engagement of a people and co-operative structures can make that possible.

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