Venezuela: The
Nationalisation of Banco de Venezuela
By Alan Woods
02/08/08 "ICH' -- - In a television programme broadcasted to the
whole of the country on July 31st, President Chávez announced
the nationalisation of Banco de Venezuela, the Venezuelan bank
owned by the Spanish banking multinational Grupo Santander. "We
are going to nationalize Banco de Venezuela. I make an appeal to
Grupo Santander to come here so that we can start to negotiate".
He added: "Months ago I received the information through
intelligence sources that Banco de Venezuela, which had been
privatized for years, was being sold by its Spanish owners; that
an agreement had been signed between Grupo Santander and a
Venezuelan private banker, then the Venezuelan banker needed the
permission of the government to buy a bank, this is not a small
operation (...) and then I sent a message to the Spanish and the
Venezuelan banker, to tell them that the government wanted to
buy the bank, we want to recover it. Then the owners said ‘no,
we don't want to sell it'. So now I say ‘no, I will buy it, how
much is it? We are going to pay for it, and we are going to
nationalize Banco de Venezuela'." The President continued: "From
this moment the media campaign on the part of the Spanish and
international media is going to start. They are going to say
that Chávez is an autocrat, that Chávez is a tyrant, I don't
care, we are going to nationalize the bank regardless". "Ladran,
luego cabalgamos" (the dogs bark, therefore the caravan is
moving), he said, quoting from el Quijote.
"There is something obscure here because its owners first were
desperate to sell and now they are saying they do not want to
sell it to the Venezuelan state. We are going to nationalize it
so that it is put at the service of the Venezuelan people." He
added that the bank controls millions of Bolivars which belong
to "the Venezuelan people and also the Venezuelan government".
"We need a bank of that size. Because this is the Banco de
Venezuela, but this bank generates massive profits but these
profits are going abroad."
Chávez also assured that the savings of the account holders were
going to be guaranteed as well as the jobs of the workers, whose
conditions would improve "as has happened with the
nationalisation of SIDOR".
Chávez thanked the private managers of the bank for having
turned it into a very efficient institution, but added that the
bank would cease to be a capitalist bank to turn into a
socialist one: "Profits will not go to one private group, they
will be invested in socialist social development. Socialism is
stronger every day that passes!"
Super profits
Banco de Venezuela is one of the most important banks in
Venezuela, with a 12 percent share of the market in loans and
obtained profits of US$170 million in the first half of 2008, a
29 percent increase on 2007, when its profits had already
increased by 20 percent. It has 285 offices and three million
customers.
Banco de Venezuela was nationalized in 1994 after a massive
banking crisis which bankrupted 60 percent of the banking
sector, only to be privatized in 1996 and bought by the Spanish
multinational banking group Grupo Santander for only 300 million
US dollars. In only nine months Grupo Santander recovered its
original investment. The bank's assets are now estimated at 891
million dollars. In 2007 alone it made $325.3 million in
profits, which is more than what they paid for the bank in the
first place.
This is not the only example of scandalous profiteering by
Spanish bankers in Venezuela. Banco Provincial was also bailed
out by the Venezuelan state in 1994 and then sold in 1996 to
Spanish multinational group BBVA. As a result, the Venezuelan
banking sector is dominated by four groups: two Spanish
multinationals, BBVA and Santander, and two Venezuelan banks,
Mercantil and Banesco. The Spanish Grupo Santander is now Latin
America's largest banking concern with 4,500 branches and it
drew one third of its profits in 2007 from the region. This is
just one example of how big foreign multinationals are
plundering the resources of the continent.
The attempt of the Venezuelan government to regain control over
the resources of the country is entirely justified. Yet it has
been met by howls of protests from the multinationals. "It's
looking like a negative development, I don't see why the banking
sector needs to be under the purview of the public sector," said
Alberto Ramos, a senior economist with Goldman Sachs. "The
private sector does a much more efficient job of running that
type of business."
Lying hypocrisy
This is an excellent example of the lying hypocrisy of the
defenders of big business. How can these gentlemen speak of the
so-called efficiency of the private bankers when everybody knows
that the big banks in the USA and other countries have been
engaged in massive and criminal speculation for decades, which
has led to the collapse of one big bank after another in the
last 12 months, threatening the entire world financial system
with collapse?
Not long ago, the Federal Reserve Bank of New York was forced to
hand over US$29 billion to The Bear Stearns Companies Inc., a
major investment bank in the USA, to facilitate its purchase by
another big bank, JPMorgan Chase & Co. This is a perfect example
of the "efficiency" of the private bankers, who have made
fabulous profits from criminal speculation for years in the US
housing market, and now run cap in hand to the state to bail
them out with billions of dollars of tax payers' money. Instead
of going to jail for their crimes, which caused 77,000 American
families to be evicted from their homes in the month of May
alone, these wealthy parasites are richly rewarded by their
friends in the White House and Wall Street.
When President Chávez announces the nationalisation of a bank,
he is accused of committing a crime against private property.
But bourgeois governments in the USA and Europe have been
nationalizing banks themselves. The Federal Reserve, having
already poured money into the pockets of the bankers in the Bear
Stearns affair have now in effect nationalized the two huge
mortgage giants Fannie Mae and Freddie Mac at a cost to US
taxpayers of a further US$25 billion. George Bush and his
administration have no money for health or pensions, but plenty
of money to put in the pockets of their rich friends. In the
words of the celebrated American writer, Gore Vidal, it is a
case of "socialism for the rich and free enterprise for the
poor".
What does this case tell us about the "efficiency" of the
private bankers of the USA? Fannie Mae and Freddie Mac, which
account for at least 50 percent of all mortgages in the USA,
have issued $5 trillion in debt and mortgage backed securities.
Of that amount more than $3 trillion is held by US financial
institutions and more than $1.5 trillion is held by foreign
institutions. Their involvement in massive swindling and
speculation posed a serious threat to the stability of the
global economy. That is why the US authorities were forced in
effect to nationalize them. Yet nobody raises any questions
about this.
We saw exactly the same thing last year in Britain, where the
fifth biggest bank, Northern Rock, was nationalized by the
government to stop it from collapsing. These private bankers
were so efficient that they caused the first run on a bank in
Britain for over 150 years, with long queues of worried savers
waiting all night to withdraw their money. The nationalisation
of Northern Rock cost the British taxpayer £20bn (US$40bn). At
the same time, Prime Minister Gordon Brown tells the British
workers that there is no money for wage increases and everyone
must make sacrifices - everyone except the private bankers!
Appetite comes with eating
The workers of Venezuela and the whole world will welcome the
nationalisation of the Banco de Venezuela. They will understand
that the attacks and calumnies against Hugo Chávez are dictated
by hypocrisy, greed and hatred of the Venezuelan revolution. The
Spanish bankers, who have been shamelessly plundering Venezuela,
were quite prepared to sell the Banco de Venezuela to a private
Venezuelan banker, that is, a companion in crime, but they were
not prepared to allow the bank to be taken over by the state and
used to further the interests of the Venezuelan people.
For Marxists, the question of compensation in itself is not a
question of principle. Long ago, Marx advocated paying
compensation to the British capitalists as a means of minimising
their resistance to nationalisation and Trotsky raised a similar
possibility in relation to the USA. However, the idea of the
reformists that the capitalists' property must be bought at
market values is entirely false and impossible in practice. Our
policy should be minimum compensation in cases of proven need
only. In other words, we would consider compensation for middle
class small shareholders, old age pensioners, etc., but not
lavish sums for the super-rich who have already made vast
fortunes out of the plunder of countries like Venezuela. The
Grupo Santander bought the Banco de Venezuela at the
ridiculously cheap price of 300 million US dollars. This sum of
money has been paid for many times over. There is no
justification for paying them a single Bolivar more.
However, the real issue here is not the amount of compensation.
It is the fact that a big bank is being taken out of private
hands. What the capitalists and imperialists really fear is that
the tendency of the Venezuelan revolution to make inroads into
private property will become irresistible. The crisis of
capitalism means that an increasing number of banks and other
private enterprises will enter into crisis and close in the next
months, causing a sharp rise in unemployment. Already, private
investment in Venezuela has plunged. The Venezuelan economy is
only being maintained by state investment and the public sector.
This poses a serious threat to the revolution and can adversely
affect the results of the November elections, especially if one
takes into account the high and rising rate of inflation.
The argument of the reformists and Stalinists that the
revolution must form a "strategic alliance with the national
bourgeoisie" is dangerous stupidity. Everybody knows that the
bourgeoisie is the enemy of the revolution and socialism. It is
not possible to form a "strategic alliance" with the progressive
national bourgeoisie which does not exist. The reformists and
Stalinists would like to create a national bourgeoisie with
state money. What logic is there in this absurd proposal, which
they put forward as so-called realism? Instead of throwing money
at private capitalists who will immediately send it out of the
country to bank accounts in Miami, the state should take the
productive forces into its hands and use its resources to create
a genuine socialist planned economy. The prior condition for
this is that the productive forces should be in the hands of the
state, and the state should be in the hands of the working
people.
Despite all the exhortations, the private capitalists will not
invest in Venezuela. The only way forward is nationalisation.
The expropriation of SIDOR earlier this year was the result of
the movement of the workers from below. The threat of factory
closures in the next few months will undoubtedly lead to a new
wave of factory occupations and demands for nationalisation. The
nationalisation of the Banco de Venezuela will give a further
impetus to the workers' demand for expropriation and workers
control. Appetite comes with eating!! That is why the owners of
the Banco de Santander wished at all costs to avoid their
property passing into the hands of the state, even though the
President offered to pay for it.
In the television programme in which President Chávez announced
the nationalisation of the Banco de Venezuela he mentioned Marx
and Lenin and referred to the importance of reducing the working
week, as well as analyzing the world crisis of capitalism. He
said that only with socialism can societies achieve their
emancipation. That is absolutely true. But socialism is only
possible when the working class takes power into its hands,
expropriates the bankers, landlords and capitalists and begins
to run society on socialist lines.
The Venezuelan revolution has begun to take measures against
private property. Marxists welcome every step in the direction
of nationalisation. At the same time, we point out that partial
nationalisations are not sufficient to solve the fundamental
problems of the Venezuelan economy. The nationalisation of the
entire banking and financial sector is a necessary condition for
establishing a socialist planned economy, along with the
nationalisation of the land and all big private firms, under
workers' control and management. This would enable us to
mobilise the entire productive resources of Venezuela to solve
the most pressing problems of the people.
We therefore welcome the nationalisation of the Banco de
Venezuela as a step forward. But the main objective has not been
yet attained: the elimination of the economic power of the
oligarchy and the establishment of a real socialist workers'
state. The battle continues.
Barcelona, 1st August 2008
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