AxisofLogic: Latin America, the European Union and the US: The New Polarities - by James Petras

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Latin America, the European Union and the US: The New Polarities - by James Petras

There are great many misunderstandings and confusion both on the Right and Left regarding the nature of the conflicts between Latin American nationalists and US/EU states and multi-national corporations. The first point of clarification is over the nature of the nationalist measures adopted by President Chavez of Venezuela and President Morales of Bolivia. Both regimes have not abolished most of the essential elements of capitalist production, namely private profits, foreign ownership, profit repatriation, market access or supply of gas, energy or other primary goods, nor have they outlawed future foreign investments.

In fact Venezuela’s huge Orinoco heavy oil fields, the richest reserves of oil in the world, are still owned by foreign capital. The controversy over President Chavez’ radical economic measures revolves around a tax and royalty increase from less than 15% to 33% - a rate which is still below what is paid by oil companies in Canada, the Middle East and Africa. What produced the stream of vitriolic froth from the US and British media (Wall Street Journal, Financial Times, etc) was not a comparative analysis of contemporary tax and royalty rates, but a retrospective comparison to the virtually tax-free past. In fact Chavez and Morales are merely modernizing and updating petrol-nation state relations to present world standards; in a sense they are normalizing regulatory relations in the face of exceptional or windfall profits, resulting from corrupt agreements with complicit state executive officials. The harsh reaction of the US and EU governments and their energy MNCs is a result of having become habituated to thinking that exceptional privileges were the norm of ‘capitalist development’ rather than the result of venal officials. As a result they resisted the normalization of capitalist relations in Venezuela and Bolivia in which state-private joint ventures and profit sharing , common to most other countries.