Joint ventures on a purely state-capitalist basis: progressive?

[Die Neue Zeit]

I'd like to start this thread with a bullshit teaser from the far-right:

http://www.revleft.com/vb/hungary-s-bitter-t132827/index.html


Jobbik is also campaigning for the re-nationalization of companies sold to foreign investors in the 1990s, raising taxes for multinational companies and banks and barring foreigners from buying land.

According to their 2010 election manifesto (and I won't provide the link so as not to be a useful idiot for their propaganda):


Instead economic policy must endeavour to defend Hungarian [Insert Repetitive "Hungarian" Nationalistic List...] strategic national assets must also be protected, meaning our land, water, natural gas, and forests; while national wealth that has been frittered away must be reclaimed...

By reforming the Hungarian Development Bank, which still remains under state ownership, we will bring a genuine “Bank of Hungary” into being, by freeing it from the constraint of having to serve a narrow group of interests; as a result its sphere of activities could be significantly broadened. We will also strengthen those Cooperative Savings and Credit Unions already under the combined ownership of Hungarian citizens...

Following the regime change of 1989, a significant proportion of the nation’s wealth has ended up under the control of an elite, that has effectively remained in power since the days of the one-party state; moreover a sizeable part of our agricultural, financial and public service sectors have fallen into foreign hands, which have chosen to close down our own domestic production plants, and flood the country with their own produce. During the course of the Liberal-Left free-for-all of the last eight years, the majority of those companies which were still operating profitably have also ended up being sold off. Our aims are a comprehensive review of privatization contracts, the punishment of the felonious, and the prevention and removal of secrecy over issues that concern national assets...

By initiating legislative changes to land law, we will prevent foreign nationals from obtaining ownership of farmland even after the current moratorium expires; and will guarantee a purchasing right of first refusal to young local farmers, we will also ensure the destitute have the chance to use arable land via their local councils under a community farmland scheme...

On to the main point:

Besides state monopolies on foreign trade, can joint ventures on a purely state-capitalist basis be progressive? This is most evident in oil and gas today, where most of the big players are state-owned companies.

Jobbik's economic populism above obviously fails to consider the foreign technical expertise that would be lost upon re-nationalization of some privatized assets, even the expertise provided by state-owned companies.

On the other hand, do joint ventures on a purely state-capitalist basis yield more potential for imperialist maneuverings? This is where the domestic partner is a developing country and where at least one partner is a state-owned company from an imperialist power.

[Dimentio]

A lot of things cannot properly be categorised in the progressive vs reactionary dichotomy. One of these things is actually formal ownership systems under a progressive but pre-socialist administration.

The only thing which counts is how it serves the interests of the movement in the terms of control. Joint ventures could be beneficial as a temporary measure to gain access to capital in order to improve on the long-term interests. What I disagree with though is nationalisation. A state could change government, while a party cannot as easily change its ideology. Party-owned infrastructure is better than nationalised infrastructure.

[Dimentio]

Of course, joint-ventures with government-owned companies investing in your government/party/movement-owned company should be discouraged. If I was Chàvez, I would much rather enter a joint venture with a purely private company than one owned by a large state.

[RED DAVE]

What I disagree with though is nationalisation.Considering that this has long been a socialist demand, could you please explain why?

RED DAVE

[Dimentio]

Considering that this has long been a socialist demand, could you please explain why?

RED DAVE

Because the issue of control. A state could very well see its leadership changed. An election or a coup could bring in a new government which is privatising what is nationalised. Better yet to move the resources into the hand of a "third organisation" which cannot be controlled by the state but is under the control of the progressive forces.

[Q]

What I disagree with though is nationalisation. A state could change government, while a party cannot as easily change its ideology. Party-owned infrastructure is better than nationalised infrastructure.

That's an interesting point to make. What do you propose though in a concrete sense? Buy up shares of a privatised railway company for example?

[Die Neue Zeit]

Of course, joint-ventures with government-owned companies investing in your government/party/movement-owned company should be discouraged. If I was Chàvez, I would much rather enter a joint venture with a purely private company than one owned by a large state.


Because the issue of control. A state could very well see its leadership changed. An election or a coup could bring in a new government which is privatising what is nationalised. Better yet to move the resources into the hand of a "third organisation" which cannot be controlled by the state but is under the control of the progressive forces.

A purely private company (excluding your better suggestion of foreign party and/or movement ownership) abroad also could have its board and senior management changed. :confused:

Also, the pressing issue implicit in your concern is transnational struggle. Remember how I separated general reforms from "national-democratization," emphasizing transnational struggle for the former?

[Dimentio]

A purely private company (excluding your better suggestion of foreign party and/or movement ownership) abroad also could have its board and senior management changed. :confused:

Also, the pressing issue implicit in your concern is transnational struggle. Remember how I separated general reforms from "national-democratization," emphasizing transnational struggle for the former?

Yes, exactly. Especially if one is buying up majority shares. What one should remember is to never give them more than 49% of the shares. Never.

[Die Neue Zeit]

It's not that simple. "Control" does not need 50%+1 of the voting shares. There are other features that clearly indicate control.

[Dimentio]

It's not that simple. "Control" does not need 50%+1 of the voting shares. There are other features that clearly indicate control.

Yes, for example for what purpose and for what time the partnership is supposed to exist. The last thing any progressive entity should do though is to borrow money from capitalist entities.

[Die Neue Zeit]

Since I'm thinking of jump-starting this section, I'm wondering how this could be extended to economic cooperation between sovereign wealth funds. However, precisely because of increased capital mobility associated with these, this variant of economic cooperation on a still-state-capitalist basis would yield more potential for imperialist maneuverings.

[Dimentio]

Since I'm thinking of jump-starting this section, I'm wondering how this could be extended to economic cooperation between sovereign wealth funds. However, precisely because of increased capital mobility associated with these, this variant of economic cooperation on a still-state-capitalist basis would yield more potential for imperialist maneuverings.

I'm not really too fond of that idea. Economic equality is all good, but not if one party is a capitalist business.

[Die Neue Zeit]

I suppose such "cooperation" would be better labelled joint speculation rather than joint venture.

[Die Neue Zeit]

(Too short to be a full-fledged article)

National-Democratization, Energy-Industrial Complexes, and Joint Ventures

“Incidentally, it is only the Anglo-Saxon countries (the United States, United Kingdom, Australia, and Canada) where the energy sectors are not the property of the state.” (Vyacheslav Nikonov)

Apart from the Anglo-Saxon countries, almost all countries maintain energy companies under state ownership. This was asserted in late 2004 by the aforementioned grandson of Vyacheslav Molotov (Stalin’s long-standing foreign minister) in his capacity as a pro-Kremlin political scientist. In fact, and according to the Baker Institute for Public Policy, state-owned energy companies control at least 77% of the world’s proved oil reserves, and prohibit any form of minority equity shares held by domestic or foreign private-sector energy companies. Here are a few of these state-owned energy companies, seven of whom were dubbed by the Financial Times as the “new Seven Sisters” in energy: Gazprom, Iraq National Oil Company, National Iranian Oil Company (NIOC), Petrochina (now vying to become the world’s biggest company by market capitalization), Petróleo Brasileiro (Petrobras), Petroleos de Venezuela (PDVSA), Petroliam Nasional Berhad (hence Malaysia’s extravagant Petronas Twin Towers), Saudi Aramco, and Statoil. It should be noted that the “new Seven Sisters” alone control more than a third of the world’s proved oil reserves. Nowadays, the old “Seven Sisters” – among them ExxonMobil, Chevron, Royal Dutch Shell, and the troubled British Petroleum (troubled with its recent oil spill) – control less than 10% of the world’s proved oil reserves, and this number will only decrease. Joint ventures between private-sector energy companies and state-owned energy companies amount to 7%, but this number is expected to decrease as well.

In South America, a new form of joint venture has emerged: between state-owned energy companies. In 2008, Russian President Dmitry Medvedev started his first trip to Brazil by stopping at the corporate headquarters of Petrobras and made clear Gazprom’s intentions to pursue further joint ventures with Petrobras apart from the existing ones. In 2009, Petrochina and PDVSA made a similar joint venture by agreeing to build a refinery in the Guangdong province. Although not an agreement between state energy companies, the state-owned China Development Bank agreed to lend Petrobras up to $10 billion for developing further its oil reserves, most notably development under a newly created and purely state-owned Petrosal. Although this form of cooperation between state-owned companies has yet to be seen in other industrial-complexes of the global economy, the key demand to be gleaned from this modifies the national-populist demand to abolish foreign ownership stakes in the domestic economy; the modification is the taking into account of technical expertise provided by national-democratized commercial entities from abroad in joint ventures.

While all of the above deals with the upstream operations in oil and gas – exploration, recovery, and production – national-democratization should cover the entire energy-industrial complex, which includes downstream oil and gas operations (refinement, commercial distribution, and the typical retail distribution outlets on street corners), energy utilities such as those running hydroelectric dams and fission-based nuclear plants, everything that has to do with more environmentally friendly and longer-term renewable energy sources such as wind or solar or geothermal energy, and of course all fusion-based nuclear power research and development.



REFERENCES



The Putin Strategy by Vyacheslav Nikonov [http://eng.globalaffairs.ru/numbers/10/813.html]

Corporate Strategies of Saudi Aramco by Yoshikazu Kobayashi [http://www.rice.edu/energy/publications/docs/NOCs/Papers/NOC_Kobayashi%20SAramco.pdf]

The new Seven Sisters: oil and gas giants dwarf western rivals by Carola Hoyos, Financial Times [http://www.ft.com/cms/s/2/471ae1b8-d001-11db-94cb-000b5df10621.html]

Analysis: Gazprom enters Brazil by John C.K. Daly [http://www.energy-daily.com/reports/Analysis_Gazprom_enters_Brazil_999.html]

PetroChina-PDVSA refining project in Guangdong wins gov't approval, report by Lin Fanjing [http://www.istockanalyst.com/article/viewiStockNews/articleid/3805807]

The Twilight of the Western Oil Majors by Lisa Viscidi, Foreign Policy [http://www.foreignpolicy.com/articles/2010/04/26/the_twilight_of_the_western_oil_majors?page=full]