Petroleumworld`s
Opinion Forum:
viewpoints
on issues in energy, geopolitics and civilization.
Sunday's Feature
Why
Chávez Wins
By Francisco Rodríguez
Anti-American autocrat Hugo Chávez was sworn in for a third
term as Venezuelan president on Wednesday, after promising to nationalize
"strategic" sectors of the economy and bring "21st
Century Socialism" to the masses. But his appeal among Venezuela’s
poor is based on a lie. A new analysis of his government’s
own statistics finds that his policies don’t actually help
them.
The
commanding heights: Just before being sworn in for a third term,
Chávez announced a major round of nationalizations.
On December 3, President Hugo Chávez was reelected by Venezuelans
to a third term with the support of nearly 63 percent of voters.
Most observers quickly attributed Chávez’s victory
to support among the country’s poor, stemming from his strategy
of broadly redistributing Venezuela’s oil wealth.
The
myth that Chávez has redirected Venezuela’s priorities
toward the poor is so widespread that it is even commonplace among
his critics. But there is a problem with this diagnosis of Chávez’s
success: It isn’t true. Most existing statistics do not
show significant improvements in either the well-being of or the
share of resources being directed to Venezuela’s most disadvantaged
citizens. And the few statistics that do appear to support this
notion are so filled with inconsistencies that they can’t
be trusted.
The
most commonly cited statistic in defense of the Chávez-helps-the-poor
hypothesis is the decrease in poverty rates, from 42.8 percent
when he took office in 1999 to 33.9 percent in 2006. But this
decrease is neither unprecedented nor surprising, given that the
Venezuelan economy is in the midst of an economic expansion fueled
by a five-fold increase in global oil prices since his first term
began. Historically, drastic declines in poverty in Venezuela
are associated with periods of substantial real exchange appreciation
similar to the current one. The last such episode, which lasted
from 1996 to 1998, coincided with an even larger decline in the
poverty rate, from 64.3 percent to 43.9 percent. The fact that
Venezuela is presently running a fiscal deficit despite unprecedented
global oil prices signals that the current improvement, just like
previous ones, will sooner or later be reversed.
A
full reading of Venezuela’s health and education statistics
shows no signs of the dramatic turnaround in well-being often
claimed by the Chávez government and its supporters. For
instance, the percentage of newborns who are underweight actually
increased from 8.4 to 8.8 percent between 1999 and 2004. The infant
mortality rate has declined, but it has been declining steadily
since the 1940s. There isn’t even much evidence that the
government is trying to do more for the poor. The average share
of social spending, excluding social security, has actually decreased
during the Chávez administration (29.3 percent for the
period from 1999 to 2004, in contrast to 31.5 percent for period
from 1990 to 1998 before Chávez was in office).
The biggest challenge to evaluating Chávez’s success
in poverty reduction is disentangling fantasy from reality in
official announcements and data. One example is the government’s
claim of having eradicated illiteracy by teaching 1.5 million
Venezuelans how to read and write. Several colleagues and I analyzed
the veracity of this claim by studying official Venezuelan government
data. According to our estimates, in the second school semester
of 2005, there were still 1,014,441 illiterate Venezuelans over
the age of 15, only slightly less than the estimate of 1,107,793
people at the start of the program. Even this small reduction
can be traced back primarily to changes in the demographic composition
of the population.
Similar
inconsistencies can be found almost everywhere in the government
claims. The administration says it mobilized more than 3 percent
of the labor force to work in social programs called misiones,
but official employment statistics show no evidence that these
people were ever employed, and official budget figures show no
evidence that they were ever paid. Estimates of the percentage
of Venezuelans with access to sanitation services derived from
government data are also inconsistent with official claims of
large improvements.
But
if Chávez’s social policies are not working, why
did he win such a clear victory in the December elections? The
explanation lies largely in Venezuela’s economic growth.
The country has experienced three straight years of near-double-digit
growth, partly because of the recovery from the 2003 national
strike and partly because of the dramatic increase in worldwide
oil prices. If there is one universal rule of voting behavior,
it is that incumbents do well when the economy is growing.
That
high economic growth would obviously be a point in favor of Chávez
if it weren’t so clearly unsustainable. Despite a five-fold
expansion in oil prices, Venezuela is currently running a fiscal
deficit projected at 2.3 percent for 2006. A decline in oil prices,
or perhaps even something less dramatic, will make this house
of cards come tumbling down. When it does, it will be the Venezuelan
poor who will pay the heaviest price.
And
when that time comes, Venezuelans of all stripes may have no choice
but to accept Chávez’s continued rule. He has used
his time in office, and his country’s ample resources, to
consolidate a formidable political machinery whose power is based
not only on its ability to hand out rewards to supporters, but
also to punish its opponents by systematically denying them access
to employment and public services. Every arm of the state, from
the tax collection agency to the judicial system, is being used
to ensure that Chávez’s opponents pay a high cost
for their political opinions.
The
centerpiece of this system is the elaborate Maisanta database,
an electronic registry of the political allegiances of 12.4 million
Venezuelans. In what Venezuelan economist Ana Julia Jatar has
termed a “21st century apartheid,” the list is routinely
used by government offices to screen job applicants and those
seeking social assistance. The Inter-American Commission on Human
Rights is currently processing 780 cases of political discrimination
against signers of the petition to hold the 2004 recall referendum.
Only time will tell whether Chávez’s elaborate system
for the suppression of dissent will be sufficient to counteract
the effect of an economic downturn. In the meantime, another oil
boom will have been squandered and another chance for Venezuela’s
development will have been thrown into the dustbin.
Francisco
Rodríguez
is assistant professor of economics and Latin American studies
at Wesleyan University and former chief economist of the Venezuelan
National Assembly. Petroleumworld does not necessarily share these
views.
Editor's Note: This commentary was originally published by Foreign
Policy Magazine, on 01/2007. Petroleumworld reprint this article
in the interest of our readers.
All
comments posted and published on Petroleumworld, do not reflect
either for or against the opinion expressed in the comment as
an endorsement of Petroleumworld. All comments expressed are private
comments and do not necessary reflect the view of this website.
All comments are posted and published without liability to Petroleumworld.
Fair use Notice:
This site contains copyrighted material the use of which has not
always been specifically authorized by the copyright owner. We
are making such material available in our efforts to advance understanding
of issues of environmental and humanitarian significance. We believe
this constitutes a 'fair use' of any such copyrighted material
as provided for in section 107 of the US Copyright Law. In accordance
with Title 17 U.S.C. Section 107. For more information go to:
http://www.law.cornell.edu/uscode/17/107.shtml.
All
works published by Petroleumworld are in accordance with Title
17 U.S.C. Section 107, this material is distributed without profit
to those who have expressed a prior interest in receiving the
included information for research and educational purposes. Petroleumworld
has no affiliation whatsoever with the originator of this article
nor is Petroleumworld endorsed or sponsored by the originator.
Petroleumworld encourages persons to reproduce, reprint, or broadcast
Petroleumworld articles provided that any such reproduction identify
the original source, http://www.petroleumworld.com or else and
it is done within the fair use as provided for in section 107
of the US Copyright Law. If you wish to use copyrighted material
from this site for purposes of your own that go beyond 'fair use',
you must obtain permission from the copyright owner.
Internet web
links to http://www.petroleumworld.com are appreciated.
Petroleumworld
News 01/14/07
Copyright
© 2006 Francisco
Rodríguez.
All rights reserved.
Your
feedback is important to us!
We invite all our readers to share with
us
their views and comments about this article.
