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Slaughtering a sacred cow in Venezuela

Observers of the Venezuelan oil sector did a collective spit-take on Tuesday when the proudly socialist administration announced that it intends to privatize part of the state-owned oil industry. It's a decision that barbecues perhaps the most sacred of all sacred ideological cows in the Bolivarian Republic. In a first for the Chávez era, a portion of Venezuela's vast oil industry is to be floated on the stock market. (Characteristically, perhaps, the stock exchange involved is Hong Kong's, rather than New York's or London's.)

The decision involves Petropiar, a joint venture between Venezuela's state-owned oil firm, Petróleos de Venezuela (known as PDVSA), and U.S. oil major Chevron. Petropiar, which has the capacity to transform 190,000 barrels of thick, tar-like, extra-heavy crude into 180,000 barrels of light, easy-to-refine synthetic crude every day, has been 70 percent PDVSA-owned for years, while Chevron holds the remaining 30 percent.

On Tuesday, PDVSA announced that it would sell a 10 percent stake in the company to Chinese state holding firm CITIC. In itself this was unremarkable; the Chávez era has often seen Venezuelan state firms selling stock to state-owned companies in other countries. The surprise came later in the same announcement, when PDVSA announced it had agreed to allow CITIC to float a portion of its share on the Hong Kong Stock Exchange, essentially allowing any Tom, Dick, or Harry to buy into Venezuela's state-owned oil sector with a simple call to his broker.

For Venezuelans, the irony here is impossible to overstate. For years now, whenever someone even hinted at the notion that it might make sense to sell off part of Venezuela's state holdings in the oil sector, the Chávez Administration invariably reacted with outraged revulsion, branding any such move as tantamount to "selling out the homeland." Emotional, often borderline-hysterical denunciations of opposition politicians as schemers intent on handing over Venezuela's hydrocarbon birthright to foreign speculators have been at the heart of chavista resource nationalism from the beginning. And while pragmatic acknowledgement of the need to attract foreign investment into the oil sector have been known to lead the government to specific partnership deals with given companies to operate given oil fields, floating any part of the industry in foreign markets crosses every ideological red line chavismo was supposed to hold dear.

That PDVSA would allow CITIC to privatize any part of the oil industry speaks to the government's increasing desperation to attract investors into the country's vast but hard-to-develop extra heavy oil fields. Though Venezuela boasts the world's largest recoverable oil reserves on paper, tough geology and one of the world's most hostile investment climates have left PDVSA short of the huge capital flows needed to develop the area properly. With the need to bring production online to help finance chavismo's unlimited thirst for fiscal largess, PDVSA is left with an increasingly weak hand in negotiating with potential partners. So weak, in fact, that it has now willing to compromise one of the most hallowed principles of the Chavez era in its desperation to entice investors in.

 

RAMON SAHMKOW/AFP/Getty Images

Democracy Lab

A Ugandan land grab shortchanges the poor

There's an old Acholi proverb: "Land is like a fish with its mouth wide open, waiting to swallow you." If there's one thing that unites the Acholi people, it's the obsession with land.

For the past four or five years I've been observing the growing land conflict in Acholi. The land question has become a leading subject of debate and discussion.

There seem to be many different people who want to have land in Acholi, and they have many ways of getting it. Some have used the government structures; others have simply grabbed it by force. Officers of the Uganda People Defense forces (UPDF) have been accused of amassing huge chunks of land in the region in the wake of the devastating conflict with the Lord's Resistance Army (LRA).

Multinational companies are coming in for criticism, too. Firms from the UK and Germany have also joined the land rush in Uganda, by means both peaceful and dubious. Many people in the country worry that the local people's loss of the right to own and access land completely subverts efforts towards poverty reduction and will instead deepen income disparities, making the poor even poorer.

The majority of Ugandans live in rural areas or villages, so they rely on land as their major source of livelihood. This places land at the centre of any social, political, and economic relationships between individuals and the state. Most of them are peasant or subsistence farmers growing food crops. Cattle raising and grazing are a big part of their way of life.

Some of those who have traveled around the northern part of Uganda see that the land is vast and empty, capable of supporting a much greater population. Others view these huge chunks of land slightly differently, as idle and non-productive. This is certainly true to some extent, since most of the people occupying the land here do not have the capacity to cultivate it or make investments on a larger scale. For many, the LRA War and the displacement that followed it disenfranchised them, also economically.

Having just spent days traveling across northern Uganda, I can confirm that the land is mostly unoccupied, especially as you move away from urban centers.

"When one flies over Acholi land, the entire countryside is just a dark jungle. It looks like land just created by God yesterday, and that God is still thinking about creating human beings to occupy it." That quote comes from the Honorable Okello-Okello John Livingstone, former Chairman, Acholi Parliamentary Groups (APG). (The photo above shows another MP, Gilbert Olanya, addressing the locals in a village in the Amuru district, where people are being evicted to make way for the Uganda Wild Life Authority.)

Many who do not come from the Acholi region have wrongfully presumed that these enormous lands do not have owners. Some have seized the opportunity to settle illegally, turning this alleged "idle land" into commercial ventures, making profits at the expense of the rightful land owners who continue to languish in poverty.

"Land grabbers who use force or tricks to acquire the land will be fought in all possible ways," says Okello-Okello John Livingstone. "They are not different from bank robbers. Land is the only asset that the people of Acholi are left with."

The 1995 Constitution vests ownership of the land in the citizens of Uganda. Article 237 provides for the tenure systems under which land should be owned: customary, freehold, leasehold, and mailo. This was a revolutionary constitution that returned rights to ownership of land to the people. Needless to say, its principles have often been ignored or abused.

Land as a factor of production has become vital in understanding the political economy of Uganda. What I have realized is that the uncontrolled practice of capitalism and land-grabbing in Uganda has become a serious problem.

It has become evident that capitalism is the major root of the problems the ordinary Ugandan citizen experiences, from war, to poverty and crime -- not to mention flagrant land-grabbing, and not only in the northern part of the country, but elsewhere as well.

What is happening in Uganda is totally unacceptable, and there is a desperate need for a solution, but nobody is doing this. The poor are being stripped of their last assets and made poorer. When I was growing up in the early 1990s, the land question almost never came up in the Acholi or Uganda at large. This may have been because the population was relatively small, and people knew their traditional land boundaries.

Following the end of the LRA war and the subsequent displacement, it was easy to foresee that a number of people would become vulnerable and lose their lands precisely in northern Uganda, where many held land without legal documentation. This has been dramatized by the recent land rush and conflict in this region and the controversial Madhvani court ruling. Following the ruling, Judge Wilson Musalu Musene ruled that the local plaintiffs failed to prove that the land they owned was theirs by customary ownership. This was disputed by the community, who saw that they were being robbed of their land.  

As the people in northern Uganda try to return to their land and start their lives anew, land is the only springboard for recovery that they have left. For many, losing their land means losing everything.

Denis Barnabas