Oil Wars

As the saying goes there generally isn't anything bad from which at least a few good things don't come. The oppositoin led oil strike of 02/03 is a prime example. It definitely did devestate the Venezuelan economy, cause billions of dollars of damage, and impose great hardships. But it also got a lot of dead wood and reactionaries out of the state oil company PDVSA which has facilitated turning PDVSA into a better run and more provitable company.

And today I leared, thanks to Bugs Blog, of yet another good thing to come out of that strike - the Venezuelan move to open source software. Here is the article referenced by Bugs that comes from Salon.com:

Free software, Big Oil and Venezuelan politics
This month, a new law goes into effect in Venezuela mandating that all government agencies migrate their information technology infrastructure to free, or open-source, software. While it has not been uncommon in recent years for nations in the developing world to cast a leery eye on the licensing fees and technological dependency associated with relying on proprietary software made by Western corporations, Venezuela's determination to move everything to free software may be the most extreme example yet of the emerging global politics of open source.

And why not? Under the leadership of President Hugo Chavez, Venezuela, a country that vehemently rejects the status quo historically imposed on South American nations by the United States, has become a critical flash point for North-South stresses. Venezuela isn't the only South American nation resisting the "Washington Consensus"-style globalization advocated by institutions like the World Bank and the IMF, with their demands for privatization, deregulation and trade liberalization, but it is certainly the most controversial.

Chavez's avowed socialism is one obvious reason, but the more important factor is the reality that Venezuela sits on top of a whole lot of oil. And one intriguing aspect to Venezuela's law mandating the use of open source is the role Venezuela's oil industry played in demonstrating how valuable free software can be.

The great drama of the Chavez presidency has been Chavez's effort to assert control over PDVSA, the state oil company in Venezuela. The struggle reached its high point in December 2002, when anti-Chavez PDVSA bureaucrats staged a labor action and attempted to shut down the company. According to sources friendly to the Chavez government, its attempts to get the company operating again were frustrated by information technology "sabotage."

The IT operations of PDVSA had been outsourced to a joint venture called INTESA, which was run by the American company SAIC, Science Applications International Corp. SAIC, whose board is populated by former Defense Department and intelligence agency officials, is a conglomerate that epitomizes the concept "military industrial complex." As one might assume, its executives operate on the opposite end of the ideological spectrum from Chavez.

According to one account, "INTESA was part of the strike. When the government, with the cooperation of some of the workers, started to get oil production going again, everything had to be done manually."

"The result was that PDVSA could not transfer its data processing to new systems, nor could it process its orders and bills for oil shipments ... PDVSA ended up having to process such things manually, since passwords and the general computing infrastructure were unavailable, causing the strike to be much more damaging to the company than it would have been, if the data processing had been in PDVSA's hands."

The software at issue: Microsoft Windows. The moral of the story: When you have to hack your way into proprietary software to keep the mainstay of your economy running, maybe it's time to find a better way.

Last month, Jeff Zucker, a free software advocate who has visited Venezuela several times, published an article about Venezuela's move to open source software. (For some insight into the political passions incited by anything to do with Venezuela, check out the comments appended to Zucker's story.)

I asked Zucker if there was any truth to an assertion I had seen in several places that the SAIC "sabotage" had motivated the Chavez government to push for open source. Zucker just so happens to be writing an article on this very topic. Here's what he told me:

"Yes SAIC and/or INTESA blocked the passwords during the walkout and did a number of other kinds of IT sabotage. Yes, PDVSA was using Windows at the time. Yes the events of the walkout were indirectly related to the eventual adoption of the open-source software law. But I wouldn't put it as simply as saying that because proprietary software was involved in the sabotage that therefore Venezuela moved to open source. Certainly the events made many in Venezuela think about the issues of computer security and that is one of the motivations of the law. But the reasons behind the open-source law are also related to the wider social and economic policies of the Chavez government -- developing a national software industry as a counter to neoliberal policies of privatization and globalization; developing computer mechanisms to support greater citizen-participation in governance and greater transparency of public agencies; broadening the base of local software developers to avoid the kind of one-source-of-IT-expertise situation that allowed the PDVSA sabotage; building bridges between the oil industry and the rest of Venezuelan society."

In the ongoing debate over the pros and cons of globalization, the Internet has been rightly viewed as a facilitator of the outsourcing and offshoring that is having such a clear impact on worker wages and job opportunities in the developed world. But the Internet is also the distribution vehicle for both free software and the free software ideology, which holds that sharing information can be both morally good and economically and technologically productive. Whatever one thinks of Hugo Chavez's politics, it's hard not to be fascinated by the emergence of open-source software, itself a technological artifact, as a political response to globalization, a force that is also in large part driven by technological change.

UPDATE: On Friday, Jeff Zucker contacted me with a clarification of his comments:

"There was extensive software sabotage carried out against the PDVSA IT systems including the blocking of passwords and remote control of PDVSA computers. SAIC/INTESA refused to help in recovering from the damage and many in Venezuela believe that they were directly responsible for the sabotage. Given their broad involvement in PDVSA's IT management and the extent of the sabotage (impacting many systems in many locations), this conclusion seems inescapable."

Now, I don't know much about software but this sure sounds good to me. And here is another interesting twist that the author of this article probably didn't know. Back in the 1990s when Venezuela had its HUGE banking scandal the bank executives who fled abroad were able for weeks to log into the banks computers and steal more money and destroy important files. Just goes to show, the old vendepatria PDVSA management and the corrupt bank managers had quite a bit in common.
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