The development of Venezuela's popular economy.

• Author: Ullrich, Jan
• Position: Essay

Venezuela has experienced five years of continual economic prosperity. Its gross domestic product almost doubled between 2003 and 2008. Poverty significantly declined with a large reduction in inequality. (1) While those macro-economic indicators are recognized by most critics of Venezuela's economic policies, the qualitative economic development of the country is the subject of polemical discussions from different scientific, political, and ideological points of view.

Certainly the Chavez government has broken with the neoliberal agenda of the preceding decades. But has it developed instead a shift toward a participatory and democratic economy as the core of 21st Century Socialism? The new "Law for the Development of a Popular Economy," which I will refer to as the Popular Economy Law, could be counted as a step toward a participatory and democratic economy because it promote the democratization of the relationship between communities, production, and consumption. The concrete experiences of "Solidarity Exchange Groups" that were defined in this law and established in 10 communities across the country illustrate how the relationships of communities to production and consumption could be re-organized.

Apart from the excessively growing consumption of imported goods and the expansion of state control over strategic economic sectors that we observe currently in Venezuela, grassroots and community initiatives, as well as government legislation, have established a variety of innovative practices and approaches that aim for a more democratic and participatory economy in Venezuela. Unlike a scientifically determined project, the so-called "Bolivarian Revolution" has been until today an open process in which alternative conceptions of production and re-production can be developed.

The Venezuelan government has oriented its economic policies around the principles of desarrollo endogeno, or "endogenous development," as an alternative to the neoliberal development model known as the "Washington Consensus." Endogenous development had already been discussed by leftist and reform-oriented forces in the 1970s and 1980s in Venezuela. The Movement to Socialism party (MAS), which today has converted into a right wing social democratic party, and the Revolutionary left Movement party (MIR) were the principal promoters of an idea of development that basically proposes the integration of the community's cultural, economic, and social potential into autonomous...