The Chávez Administration at 10 Years: The Economy and Social Indicators

[This paper looks at some of the most important economic and social indicators during the 10 years of the Chávez administration in Venezuela, as well as the current economic expansion. It also looks at the current situation and challenges.]

The Chávez Administration at 10 Years: The Economy and Social Indicators

February 5th 2009, by Mark Weisbrot, Rebecca Ray and Luis Sandoval - CEPR

For the full report in its original PDF format, click here (255kb).

Executive Summary
This paper looks at some of the most important economic and social indicators during the 10 years of the Chávez administration in Venezuela, as well as the current economic expansion. It also looks at the current situation and challenges.

Among the highlights:
The current economic expansion began when the government got control over the national oil company in the first quarter of 2003. Since then, real (inflationadjusted) GDP has nearly doubled, growing by 94.7 percent in 5.25 years, or 13.5 percent annually.

Most of this growth has been in the nonoil sector of the economy, and the private sector has grown faster than the public sector.

During the current economic expansion, the poverty rate has been cut by more than half, from 54 percent of households in the first half of 2003 to 26 percent at the end of 2008. Extreme poverty has fallen even more, by 72 percent. These poverty rates measure only cash income, and does take into account increased access to health care or education.

Over the entire decade, the percentage of households in poverty has been reduced by 39 percent, and extreme poverty by more than half.

Inequality, as measured by the Gini index, has also fallen substantially. The index has fallen to 41 in 2008, from 48.1 in 2003 and 47 in 1999. This represents a large reduction in inequality.

Real (inflationadjusted) social spending per person more than tripled from 1998-2006.

From 1998-2006, infant mortality has fallen by more than onethird. The number of primary care physicians in the public sector increased 12fold from 1999-2007, providing health care to millions of Venezuelans who previously did not have access.

There have been substantial gains in education, especially higher education, where gross enrollment rates more than doubled from 1999/2000 to 2007/2008.

The labor market also improved substantially over the last decade, with unemployment dropping from 11.3 percent to 7.8 percent. During the current expansion it has fallen by more than half. Other labor market indicators also show substantial gains.

Over the past decade, the number of social security beneficiaries has more than doubled.

Over the decade, the government's total public debt has fallen from 30.7 to 14.3 percent of GDP. The foreign public debt has fallen even more, from 25.6 to 9.8 percent of GDP.

Inflation is about where it was 10 years ago, ending the year at 31.4 percent. However it has been falling over the last half year (as measured by threemonth averages) and is likely to continue declining this year in the face of strong deflationary pressures worldwide.

The current situation and challenges:

(click here to view entire press release)

Hillary Clinton and James Steinberg "Talk Tough" on Latin America

[While President Obama, Secretary of State Hillary Clinton and their appointees emphasise a return to diplomacy in foreign relations, so far they show little inclination to be diplomatic toward leftist governments in Latin America, including Venezuel. In fact, comments by Clinton and other recent appointees show a continuation of an antiquated analysis and a lack of understanding of recent Latin American social movements and regional integration.]

Hillary Clinton and James Steinberg "Talk Tough" on Latin America

February 2nd 2009, by April Howard - upsidedownworld.org

While President Obama, Secretary of State Hillary Clinton and their appointees emphasize a return to diplomacy in foreign relations, so far they show little inclination to be diplomatic toward leftist governments in Latin America. In fact, comments by Clinton and other recent appointees show a continuation of an antiquated analysis and a lack of understanding of recent Latin American social movements and regional integration.

On a visit to the State Department on January 23, Clinton promised "I will do all that I can, working with you, to make it abundantly clear that robust diplomacy and effective development are the best long-term tools for securing America's future." Obama made similar assertions in a speech to diplomats, and 'diplomacy', symbolizing a return to international peace and prosperity, was the word of the week.

Most recently, however, newly appointed Deputy Secretary of State James Steinberg, boldly stated that "Our friends and partners in Latin America are looking to the United States to provide strong and sustained leadership in the region, as a counterweight to governments like those currently in power in Venezuela and Bolivia which pursue policies which do not serve the interests of their people or the region." This begs the question of exactly who "our friends and partners in Latin America" are, as many Latin American countries are happily accepting funding for humanitarian projects from Venezuela, and Bolivia is hardly in an economic position to pull strings around the continent. These and other comments by Clinton show that the Obama administration intends to continue a foreign policy in Latin America based on corporate benefit and a misplaced fear of Latin American nationalism.

(click here to view entire article)

Francisco Toro and Venezuela’s “Savage” Democracy

[In a recent online debate about the 10^th anniversary of Hugo Chávez’s presidency in Venezuela Francisco Toro described what he saw as the corrupting of Venezuela’s democracy and general descent into authoritarianism. While Toro’s conception of democracy appears at first glance to be an orthodox one, on closer inspection it becomes highly idiosyncratic and sheds a great deal of light both on the democratic revolution taking place in Venezuela and the type of opposition it has had to confront.]

Francisco Toro and Venezuela’s “Savage” Democracy

February 8th 2009, by Samuel Grove - Red Pepper Venezuela Blog

In a recent online debate about the 10^th anniversary of Hugo Chávez’s presidency in Venezuela Francisco Toro described what he saw as the corrupting of Venezuela’s democracy and general descent into authoritarianism. While Toro’s conception of democracy appears at first glance to be an orthodox one, on closer inspection it becomes highly idiosyncratic and sheds a great deal of light both on the democratic revolution taking place in Venezuela and the type of opposition it has had to confront.

The ‘anti-democratic’ charge is one frequently levelled at Chavez by commentators and groups (and more controversially an international human rights organisation). However, it has to be conceded, even by those making this charge, that it is counterintuitive to say the least. Under Chavez, Venezuelans have gone to the polls a record number of times. In the most recent municipal elections Chavez’s PSUV received an impressive 52.5% of votes cast and won 17 of 22 governorships in the process. Participation was 65% (unheard of in western democracies for this type of election), a figure which tallies with recent findings of the respected polling agency Latinobarómetro which reported that satisfaction with democracy in Venezuela was the second highest in the region. So the anti-democratic charge has nothing to do either with the degree of public consultation or public endorsement.

However Toro remains defiant on this point; he writes “democracy means more than just elections” and while Venezuela has had “more and more elections” this has coincided with “less and less democracy”. In terms of tangible evidence to support his assertion, Toro makes the same two allegations Human Rights Watch (HRW) made back in September; both of which are distinctly dubious.

The first allegation concerns the independence of the judiciary. The Chavez government, Toro claims, has undermined democracy by “purging all but die hard loyalists” from the Supreme Court. Yet this was the same Supreme Court that was complicit in the April 2002 coup that briefly removed Chavez from power. As pointed out by Gregory Wilpert, it is difficult to imagine any “government in the world [that] could tolerate a Supreme Court that claims there was no coup when everyone else in the world recognizes that there was one”. It is also worth noting that since Chavez’s Supreme Court alleged “purge” countless decisions have gone against Chavez and his supporters.

The second allegation refers to freedom of expression. Echoing HRW’s accusations (only more hysterically) he writes “the Venezuelan state has morphed into an extension of a single man's will, where every dissenting idea is presumed treasonous and where only unquestioning submission to the president's ideology protects you from the increasingly brazen abuse of state power.” In Venezuela there is an abundance of dissenting opinion as the vast majority of newspapers and television channels are in the hands of the opposition. This freedom is not confined to the educated “articulate” elites. Public opposition regularly expresses their dissatisfaction with the government, sometimes even violently.

If this were the sum total of Toro’s case against Chavez then it would be a meagre one indeed. However the thrust of Toro’s criticisms do not concern the state of Venezuela’s democratic institutions so much as the discursive climate in which they preside. He writes that the period under Chavez has seen a “gradual debasement of our public discourse” to the extent that its “relentlessly polarising” character threatens “our capacity to co-exist peacefully, side-by-side, with people whose political ideas we do not share.”

Toro, a Venezuelan journalist, political scientist and blogger who has reported for the Washington Post, the New York Times and the Financial Times, is unquestionably a major contributor to the public discourse he describes. It is then worth taking a look at whether Toro himself promotes such a discourse of “co-existence”.

Fortunately we do not need to conduct a deep and thorough analysis of Toro’s writings in order to find out his views of “political ideas [he does] not share” as he has provided his own detailed synopsis of it here.

Drawing from the work of the philosopher J.M. Briceño Guerrero, Toro describes a number of “separate, mutually incompatible strains” to Latin American culture. The strain that Toro himself belongs to is the “Western rationalist” strain. This strain derives from the European conquest of the hemisphere and is the “discourse of privilege” and “the privileged”. Western rationalists are committed to a “basic faith in reason… as the key to understanding… social reality.” Toro opposes this strain with the non-western/anti-rational Savage sentiments of Venezuela’s poor majority, a strain that expresses itself in a “deep loathing for the privileged [and] a guttural rejection of [rationalism]”. For Toro, the Savage strain has reached its apotheosis with chavismo, a man that has finally given voice to the “verbalist political impulse of the savage,” and more to the point turned those impulses into “something it has never been before: a discourse of power”.

Toro does not deny that Chavez and the PSUV represent the integration, possibly for the first time, of a popular poor majority into the political arena. What he rejects is the idea that this is a democratic development. Toro is able to criticise Venezuela’s anti-democratic tendencies only by inverting the meaning of ‘democracy.’ For Toro democracy does not mean ‘government by the people’, it refers to a peculiar brand of rationality exclusive to the West. This discourse of rationality, Toro explains is a discourse of privilege and the privileged. It is they alone who can realise the democratic possibilities of “deliberate social change and universal human rights, expressed in the texts of constitutions… and in the scientific conceptions of humanity.”

Toro’s intellectual sleight of hand is clever but not new. As Richard Seymour has pointed out this has been an ideological feature of imperialism and domination for as long as democracy has threatened to undermine them. “It is often implied that democracy is a kind of technology, a cultural state, rather than a political one. This is a common assumption on the part of those who would wish to deny the right to independence and self-government to non white peoples.”

Of course the notion that “rationality” is peculiar to either the West (or Western culture) is a myth. Chavez’s supporters can rightly claim that the development course Venezuela has pursued has been both rational in principle and in practice. Since Chavez has come to power Venezuela has experienced rapid economic growth (since 2003 alone GDP has grown by a remarkable 94%). Furthermore the proceeds have been shared out among the population. According to the National Institute of Statistics (INE), poverty in Venezuela has dropped by nearly 50% from 50.5% in 1998 to 26% in 2008. These economic successes have been coupled with rational social policies. In health care the number of primary care physicians has increased 12 fold from 1999-2007. In particular the Mision Barrio Adentro programme has provided free healthcare to millions of poor Venezuelans in the slums, many of whom had limited or no access prior to its introduction. Investment in education has increased from 3.9% of GDP back in 1998 to 7% ten years later, bringing approximately 1.3 million more children into the school system in the process. In higher education enrolment has doubled since Chavez came to power. All the while the national public debt has been cut by more than half from 30.7% in 1999 to 14.3% today.

In George Orwell’s 1984 language is manipulated to ‘meet the ideological needs’ of the powerful; the objective being to make certain ‘modes of thought impossible’. This involved the invention of new words, the elimination of undesirable words and stripping words of their orthodox meanings. While Newspeak is a dystopic vision, the device is common among political elites and their supporters. A brand of Newspeak particularly favoured by elite opinion is the dressing up of offensive half baked ideas into sophisticated technical jargon. The Guardian describes Toro’s blog as a must read. I strongly suggest that anyone who takes the Guardian’s advice not be intimidated by Toro’s [attempted] elaborate prose and high minded references to status figures like Derrida and Foucault. Instead they should stick with their gut reaction. Toro’s assertions are indeed both “relentlessly polarising” and quite breathtakingly offensive. More importantly they should remember what words mean. “Democracy”, if it is to mean anything at all, means the political inclusion of all—regardless of wealth or privilege. For those in favour of this principle, the last 10 years of the Chavez government is very much something to celebrate.

What Effect has 10 Years of Hugo Chávez Had on Venezuela? A Debate

[Francisco Toro, a writer on the anti-Chavez blog 'Caracas Chronicles', and Redmond O'Neil, Vice-Chair of the Venezuela Information Centre (VIC), debate the effects of 10 years of Chavez's presidency.]

What Effect has 10 Years of Hugo Chávez Had on Venezuela? A Debate

February 3th 2009, by Francisco Toro and Redmond O'Neill - Comment is free

::: Francisco Toro to Redmond O'Neill

Venezuelans who understand that democracy means more than just elections have little reason to celebrate today. Ten years into the Chávez era, Venezuela is a more violent, less tolerant and far more divided country than it was. Despite an oil boom that has brought an unprecedented gush of petrodollars, Venezuela's economy is more oil-dependent than ever.

And while the oil boom has brought a much needed decline in poverty, the price we've paid has been the gradual debasement of our democratic institutions, our public discourse, and our capacity to co-exist peacefully, side-by-side, with people whose political ideas we do not share.

Let's be clear: by 1999, Venezuela's democratic institutions had become ossified and corrupt. They were in dire need of reform; nobody sane
would deny that. Rather than reforming them, Chavez has relentlessly
undermined them, purging all but die-hard loyalists from every state
body right up to the supreme tribunal and leaving notionally independent
agencies unable to curb on a hyper-empowered executive. Egged on by a
relentlessly polarising discourse, the Venezuelan state has morphed into
an extension of a single man's will, where every dissenting idea is
presumed treasonous and where only unquestioning submission to the
president's ideology protects you from the increasingly brazen abuse of
state power.

::: Redmond O'Neill to Francisco Toro

Objective discussion of a serious topic requires a thorough examination of the relevant facts. If the facts contradict a theory it must be changed.

For the half century before the election of President Chávez, income per head in Venezuela rose just a quarter of the average rate of the other large Latin American economies. Since the Chávez-led government gained control of the national oil company in 2003, this disastrous economic performance has been transformed, with one of the highest growth rates in the region, a dramatic reduction in debt and an accumulation of currency reserves sufficient to offer significant protection from fluctuations in oil prices.

This economic success has been used to eradicate illiteracy, provide free healthcare to the majority of the population for the first time and radically reduce poverty.

Social progress has been accompanied by a dramatic expansion in democracy with more national electoral contests than virtually any other country in the world and respect for the outcomes, including the defeat of Chávez in last year's constitutional referendum.

(click here to view entire debate)

'Guardian' Comment Piece Falsifies Venezuelan Reality

[Vanessa Neumann's negative comment piece in today's Guardian ('No, Chávez is not the answer to Venezuela's poverty and inequality') contains a number of false claims, including that "praise for the president [Chávez] flies in the face of facts on literacy and other social indicators."]

'Guardian' Comment Piece Falsifies Venezuelan Reality

February 4th 2009, by Venezuela Information Centre

Vanessa Neumann's negative comment piece in today's Guardian ('No, Chávez is not the answer to Venezuela's poverty and inequality') contains a number of false claims, including that "praise for the president [Chávez] flies in the face of facts on literacy and other social indicators." 5 of the key false claims in the piece, and the reality with regards to these, are below.

1) Claim: "None of Chávez's health and human development indicators are beyond that which is normal in the midst of the sort of oil boom which Venezuela recently enjoyed."

Reality: It is not the case that in all oil-exporting countries when oil prices go up that poverty or social inequality dramatically declines. The 1970s oil price increases were greater in real (inflation adjusted) terms than those recently. But in the 1970s, in Venezuela income per head fell relative to the average for the eight other largest South American economies, even though they did not have such oil wealth. To make use of oil price rises to decrease poverty, a country needs to have a strong state machinery capable of redistributing the wealth; something Chávez has gone about establishing in Venezuela. Additionally, the true scale of poverty reduction in Venezuela in recent years can't be underestimated – 75.5% percent of the population were in poverty in 1995.

2) Claim: There are "severe food shortages of staples such as milk, eggs, beans and rice."

Reality: Venezuela's National Nutrition Institute estimates that 98 per cent of Venezuelans eat three times per day thanks to government provision of subsidised food.

3) Claim: "In 2005 he [Chávez] announced that his Robinson programme had eliminated illiteracy…. That too looks false. A study conducted by Francisco Rodríguez (former chief economist of the Venezuelan national assembly) and Daniel Ortega (of Venezuela's IESA business school) found that at the end of 2005 there were more than 1 million illiterate Venezuelans, not significantly down from the 1.1 million in the first half of 2003, when the Robinson programme started."

Reality: Due to 'Mission Robinson' in Venezuela, 1.6 million Venezuelans have learnt to read and write. The Rodriguez/Ortega report quoted here has been discredited by the well-respected CEPR (see http://www.cepr.net/documents/publications/literacy_2008_05.pdf) who argued it "has serious problems and their statistical tests lack power and are not robust. Even overlooking these issues, it is only by ignoring reasonable assumptions about the [illiteracy] program's reach that they can claim to show that the program was not a large-scale effort." Indeed, Rodriguez is hardly a reliable source on the current government, having been part of the previous regime.

4) Claim: Chávez is guilty of "economic mismanagement."

Reality: Since the Government gained control of PDVSA in 2003, Venezuela has had one of the highest growth rates in the region, a dramatic reduction in debt and an accumulation of currency reserves.

5) Claim: "The average share of the budget devoted to health, education and housing under Chávez (25%) is identical to that in the last eight years before his election" and "inflation rates for healthcare [are] around 65%."

Reality: Prior to 1998, no system of free healthcare for the mass of the population was developed. Now, the share of national income devoted to public health has more than doubled. This has meant infant mortality has been reduced, from 21.4 per 1,000 live births in 1998 to 13.7 in 2007, with the World Health Organisation acknowledging "an accelerated decline in the infant mortality rate and prevalent childhood diseases." Additionally, the overwhelming majority of Venezuelans now have access to free public healthcare, rather than facing "inflation rates for healthcare."

Human Rights Coverage of Venezuela and Colombia Serving Washington’s Needs

[Rather than independently and critically assessing the Colombian and Venezuelan records, major corporate newspaper editors, to one degree or another, have subordinated crucial human rights questions to what they see as the U.S.’s interests in the region. ]

Human Rights Coverage of Venezuela and Colombia Serving Washington’s Needs

February 2009, by Steve Rendall and Daniel Ward and Tess Hall - FAIR

Click here to download pdf.

Any evenhanded comparison of the Colombian and Venezuelan governments’ human rights records would have to note that, though Venezuela’s record is far from perfect, that country is by every measure a safer place than Colombia to live, vote, organize unions and political groups, speak out against the government or practice journalism.

But a new survey by FAIR shows that, over the past 10 years, editors at four leading U.S. newspapers have focused more on purported human rights abuses in Venezuela than in Colombia, and their commentary would suggest that Venezuela’s government has a worse human rights record than Colombia’s. These papers, FAIR found, seem more interested in reinforcing official U.S. policy toward the region than in genuinely supporting the rights of Colombians and Venezuelans.

Colombia’s ‘appalling’ record . . .

Over the past 40 years, Colombia has been known for its rampant human rights violations, untouchable drug cartels, government-linked death squads and violent guerrilla groups. The principal specialist on Colombia for the nonprofit group Human Rights Watch (HRW), Maria McFarland Sanchez-Moreno, told Congress (4/23/07), “Colombia presents the worst human rights and humanitarian crisis in the Western Hemisphere.” She also noted that government-linked paramilitary groups are largely responsible for Colombia’s grim status.

(click here to view entire article; click here to view the BoRev blog's take on this)

Chávez Speaks to Social Movements About New Revolutionary Path at World Social Forum

[Social movements in Latin America have been in the “trenches of resistance” against global capitalism, and now need to move to an “offensive,” Venezuelan President Hugo Chávez expressed during the World Social Forum Thursday in Brazil.]

Chávez Speaks to Social Movements About New Revolutionary Path at World Social Forum

January 30th 2009, by James Suggett - Venezuelanalysis.com

Mérida, January 30th 2009 (Venezuelanalysis.com) -- Social movements in Latin America have been in the “trenches of resistance” against global capitalism, and now need to move to an “offensive,” taking concrete steps toward the creation of alternatives to capitalism, Venezuelan President Hugo Chávez expressed during a speech to thousands of participants in the World Social Forum Thursday in Belém do Pará, Brazil.

“Just like Latin America and the Caribbean received the biggest dose of neo-liberal venom, our continent has been the immense territory where social movements have sprouted with the greatest strength and begun to change the world,” said Chávez.

Chávez expanded upon the traditional slogan of the World Social Forum, “Another world is possible,” adding, “another world is necessary, and another world is being born in Latin America and the Caribbean!”

(click here to view entire article)