Financing Venezuela’s Communal Councils


Source: Venezuela Analysis

Peering through the metal gate she asks me again, "Why do you want a Community Council? What is the reason?" The simplest response, that we want to improve our community has twice already failed to convince. The truth is I never expected to be really questioned as to "why", and though reasons race through my head, each appears less likely than the last to persuade such a staunch supporter of the Venezuelan opposition.

The truth is that alongside the thousands of councils[1] there already exist all sorts of neighbourhood organisations that do function; ours has arranged security, maintenance, and some infrastructure improvements like a back up water supply.

I tell her that with a Community Council we would receive government money with which we could undertake major projects without having to self-fund – my apartment paid the equivalent of one month’s wages as our contribution to the water storage facility. This is an appeal to the lowest common denominator and it works. She wants a council for the exact same reason and will now help us construct one. She is an important member of the community and can help us hugely, but if this is such a success why do I feel uncomfortable?

David Velásquez, Minister of Popular Power for Participation and Social Development, declared in 2007, "We have the enormous responsibility of going beyond those who want to convert the Community Councils into instances for receiving and administering resources, or instances that fail to realize that they (the councils) are a new form of state, of government, a new form of society in construction."[2] In a country where corruption and incompetence are serious problems, participation is seen as a potential antidote, sidelining and replacing ineffective, inefficient, or corrupt parts of the state. With the financial crisis only temporarily contained by Venezuela’s foreign reserves, the prospect of reduced government revenues makes these concerns urgent. Yet if the logic is clear, how do I know this argument will fail to convince?

The reality is that although Velásquez aspires to a new participatory state, many exist to be "gone beyond." A large number of Venezuelans do not understand the community councils as transformative, seeing them simply as a means of accessing finance with which to improve their communities. The results coming from councils have been extremely varied,[3] and while it may appear unsustainable, we should recognize community based development is far from bad. This said, the corresponding mentality indicates something at fault, some gap between the participatory ideology and Venezuelan reality. It is in this gap that my response has fallen.

Popular conceptions of the councils have a number of causes ranging from a major lack of information concerning participatory ideology to the stagnation of the higher-level participatory initiatives, the Councils for Local Public Planning.[4] Yet the government of Hugo Chávez needs to recognize its role in the precipitation of this perception. The ad hoc transfers of resources[5] to Community Councils by central government that have taken place facilitate the belief that money is available for the time being to those ready to grab it. The Bolivarian government has thus actively undermined its own participatory project. Participatory structures receiving ad hoc transfers do not represent the kind of transformation of state Velásquez envisions, we generally do not make sporadic transfers to police forces, civil services or militaries.

What’s worse is that where money is handed to communities in an ad hoc relationship, the situation can rapidly turn clientelistic. The run up to the recent regional elections seems to provide evidence of such a relation as on the 10th of November, thirteen days before the elections, President Chávez handed over 140 million dollars worth of credit to just over 1,000 communal banks via a fund for micro finance. Though the label "vote buying" is too crude for this relationship, this is a rapid impact mode of governance, which is therefore easily used for electoral purposes. This further undermines the Bolivarian project by politicizing participation.

Fortunately the majority of transfers are not ad hoc. By Chávez’s initiative and with the National Assembly approval 2007 saw the modification of laws governing the distribution of petroleum revenues, 50% of these, which were previously directed to state and municipal governments, now go directly to the banks of the Community Councils.[6] This legally embedded transfer of funds is a part of creating the new Venezuelan state.

Yet if the Bolivarian government is serious about the creation of a participatory state to match the participatory society envisioned in the constitution,[7] it must eliminate these kinds of inconsistencies. Funding must be stably assigned to communities across the entire country from central government as well as local, so that they do not need or receive ad hoc transfers and thereby avoid the complication of electoral politics. This needs to be accompanied by a concerted information campaign to address public (mis?)conceptions of the Community Councils.

The survival prospects of the councils depend on their ability to implement meaningful development projects and thereby inspire participation. The embedding of funding in law independent of hydrocarbons revenues is therefore made especially important given declining oil money,[8] which make further ad hoc transfers less likely and shrink existing council income.

Only when all the signals from government suggest that what we see is a sincere attempt to transform the Venezuelan state will activists in their communities effectively be able to argue against all comers that councils are necessary not simply because money is available, but because money is the legitimate entitlement of the community as a part of the state. The creation of Community Councils to pursue development could be the same as the creation of a police station to ensure public order, and it is this logic that holds the potential to win the lasting loyalty of all sectors of Venezuelan society to the participatory project.

[1] Estimates as to the number of councils vary from 20,000 to an optimistic 30,000 – see for an example of the difficulties with official statistics


[3] Compare the cases cited in 1 and 2

[4] These councils are supposed to direct municipal development but have made little headway in the face of resistance from mayors, councils, and poor conceptualisation – Municipio Libertador in Merida for example went 2 of its 3 years without a technical office – a major requisite of effective functioning



[7] Preamble to the 1999 Constitution of the Bolivarian Republic of Venezuela