ISABEL GARCIA NEVETT
EL UNIVERSAL

Cooperatives under President Hugo Chávez' job-generation Vuelvan Caras operation have become the cornerstone of the so-called 21st century socialism. Social production companies (EPS) could also have the same fate. EPS are a new model of business organization the government has been launching from state-run oil holding Pdvsa for subsequent implementation in other economic areas nationwide.

Unlike cooperatives, whose business formula was designed several decades ago in other countries, EPS are a Venezuelan native creation. They base on Chávez' promised endogenous and sovereign development. Given their novelty, EPS are hard to define clearly. Further, a number of related key details are still to be tuned up.

According to Rosa Amelia González, a professor with the Institute for Advanced Studies in Management (IESA), EPS can have advantages and disadvantages. Her major question relates to the inherent obligation EPS have to invest in social projects.

González ensures that imposing social obligations on EPS can be a weakness. "If there are market advantages favoring the creation of cooperatives or EPS, then you have to harness such advantages, from a logical economic standpoint. But when things are not made voluntarily, there are disadvantages. A corporation that undertakes social projects willingly, out of conviction, has a tendency to keep them over the time. It is a commitment of shareholders and managers. However, when we talk about these other forms (cooperatives and EPS), they usually have to do with profit seekers. For instance, amid the boom of cooperatives, only birth rates are reported, not death rates. Rotation indices are significantly high, as many cooperatives do not last much."
   
Under government plans, EPS are set to become a massive source of jobs, mainly focused on people who have participated in education and social programs Robinson, Sucre, Ribas, Piar, Vuelvan Caras, and the New Pdvsa. However, according to González, Chávez' government should be careful not to "deproletarianize" workers. The State is expected to be EPS' major client and source of funds, but it is to have no labor liabilities with workers. Concepts such as minimum wage, severance payment and social benefits, and social security are lost in the social framework of the new company, where everybody is an owner.

Ideological framework
In a paper currently being distributed in pro-government circles, titled "The role of social production companies in the new productive model", the ideological grounds of EPS are outlined. "If the government wants to conquer the second and ultimate independence of the country, our challenge in the ideological arena is even bolder: to make citizens feel the collective sentiment, love their neighbors as themselves, identify a common solution to get out of the swamp of egocentrism, alienation, lack of commitment and indifference, exacerbated by neoliberal globalization."

EPS are therefore essential to create "new" men and women within the framework of socialism for the next millennium.

Likewise, through EPS the government intends to control exaggerated consumption and desire of lucre. Based on the premise that "being rich is wrong," the document questions the citizens' basic needs. "We cannot fall into the trap of boosting extreme consumption, luxury and exaggeration. Is the subway or the bus enough to meet the transportation needs of an individual who lives in Guarenas (in the outskirts of Caracas) and works in Plaza Sucre (west Caracas)? Or are we all going to own a car? Are we all going to claim two cars to see our basic, essential needs met? Minimum wage is VEB 405,000 (USD 108.88), and many earn less than that. Should not there be standards for basic, essential needs?"
 
In the medium to long term, the document proposes to replace currency relations, i.e., money, with moral and material incentives. Material incentives may comprise foreign language courses, learning travels abroad, and bonds for purchases in Mercal, among others. This idea, according to the paper, is based on Ernesto "Che" Guevara's "Budgetary Financing System" created in 1963-1964.
 
Tomás Páez, an expert in planning and professor at the Central University of Venezuela, thinks it is inadequate to talk about a business concept today that does not comprise competitiveness, quality levels, productivity and capacity for internationalization.

"I find it more accurate, as a State, to say that you are facing social problems and a growing poverty rate, and that you need businesses intended to solve employment, social or infrastructure problems. But such companies have to preserve the business sense and generate both wealth and jobs," Paez claims.

He adds that creating new social control mechanisms is not the right way to eradicate poverty and social problems in Venezuela.

Meanwhile, Eduardo Gómez Sigala, president of the Venezuelan Confederation of Industries (Conindustria), while reluctant to talk about EPS, warned that EPS and co-management are the beneficiaries of the official policy of raw materials supply, but for Conindustria "this is not an industrial policy sufficient to outline growth strategies for the future."
igarcia@eluniversal.com

Translated by Maryflor Suárez R.