Last Word On Chavez

When I said this post would be “the last post” on the matter, I meant posts written by myself. 🙂 Alexander Mercouris’ was too good to pass up, so it is reprinted here:

Any discussion of Chavez must explain why he was (to his detractors) such a terrible man. He was a terrible man because he did a terrible thing. This terrible thing was to distribute Venezuela’s oil wealth to the majority of its people by funding ambitious health, education and social security programmes.

To understand why doing this was so terrible one must understand something about the historic situation not just in Venezuela but throughout Latin America (Costa Rica being the exception). Briefly, political and social power in Latin America since before independence from Spain has been concentrated in a small group of wealthy families who conduct bitter and even violent political feuds with each other using labels such as “Liberal” and “Conservative” but who unite when faced by a challenge to their power. This oligarchy sustains itself through the support of a middle class that sees its social and economic interests as bound up with those of the oligarchy. Concepts of a wider social contract underpinned by shared patriotism and by a sense of social responsibility do not exist. The mass of the population are excluded and typecast as lazy, shiftless, dishonest and violent. This justifies denying them a share in the country’s economic profits, which supposedly neither belong to them or are deserved by them, and which makes any attempt to share these economic profits with them a theft from those to whom these profits supposedly actually belong. All this is underpinned by an ugly strain of racism with the middle class and the oligarchy priding themselves on their whiteness whilst often concealing their mixed origin whilst emphasising or exaggerating the colour of the poor.

The result is that governments in Latin America have historically failed to provide even the most basic services at even a remotely satisfactory level. The only institutions in Latin American that have historically been reasonably funded have been the very highest echelons of the state bureaucracy and the judiciary (which is usually recruited directly from the oligarchy) and the army and police whose main function is not to defend the nation from foreign aggression to keep the poor in order.

In such a system requiring the oligarchy and the middle class to pay taxes to fund say a good system of universal secondary education from which the poor might benefit is an idea so outrageous that it is guaranteed to provoke passionate and often violent anger and resistance. Americans, Europeans, East Asians and indeed Russians find all this very difficult to understand. As a Greek I am better able to understand it not only because it resembles the historic situation in my own society but because a section of my family emigrated to Argentina where they are today members of what was once the country’s oligarchy.

Not surprisingly in a Continent where basic education and health care for the bulk of the population was scarcely provided (though the means to do so was always there) economic development has been disappointing to say the least. However since this is a system that is deeply embedded and which is sustained by often extreme violence all previous attempts to change it have been largely unsuccessful with reformers likely to end up either in exile or dead. I am not going to discuss the role of the US in sustaining this system since it is so well known. I would say that I do think people who blame the US for Latin America’s problems overlook the many internal reasons why Latin American societies have historically been as dysfunctional as they are.

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A Few Myths About Chavez’s Venezuela

Okay, I promise this will be the last post on the matter. But some of the tropes that come up time and time again in coverage of Chavez’s legacy, from neocons and faux-leftists alike, just have to be addressed for me to rest easy. Note that this is NOT meant to be comprehensive; just some things that continuously get slipped in on the side and tend to get taken for granted.

Chavez rigged elections. Look, I like to think I’m objective here. Some politicians I like rule countries where electoral fraud is widespread. But Venezuela isn’t Russia in this respect. Not only are election results consistent with pre-elections, unbiased polls, but Venezuela’s voting technology makes fraud extremely difficult. See Mark Weisbrot:

In Venezuela, voters touch a computer screen to cast their vote and then receive a paper receipt, which they verify and deposit in a ballot box. Most of the paper ballots are compared with the electronic tally. This system makes vote-rigging nearly impossible: to steal the vote would require hacking the computers and then stuffing the ballot boxes to match the rigged vote.

Unlike in the US, where in a close vote we really have no idea who won (see Bush v Gore), Venezuelans can be sure that their vote counts. And also unlike the US, where as many as 90 million eligible voters will not vote in November, the government in Venezuela has done everything to increase voter registration (now at a record of about 97%) and participation.

Chavez closed down critical TV stations. And yet the old case of the failure to prolong RCTV’s broadcasting license continues to be cited as the main evidence of this media “suppression.” E.g. from the faux-liberal Daily Beast:

And yet Latin America’s new democratic leaders rarely spoke against the excesses of Chávismo, turning a blind eye when he canceled the operating license of independent broadcaster RCTV in 2007…

What typically goes studiously unmentioned is that RCTV gleefully and one-sidedly supported the foreign-backed coup attempt against the legitimately elected Chavez administration in 2002. In many other countries, this would have been considered treason, with the attendant penalties of long-term imprisonment or even execution. In humane Venezuela, however, you just lose your broadcasting license.

Electricity blackouts. Guardianista presstite Rory Carroll, who clearly has an agenda:

He leaves Venezuela a ruin, and his death plunges its roughly 30 million citizens into profound uncertainty.

Because that exactly describes an increase in GDP per capita from $4,105 in 1999 to $10,810 in 2011 (according to his own newspaper). As Craig Willy says:

But particularly hilarious is this statement:

Underinvestment and ineptitude hit hydropower stations and the electricity grid, causing weekly blackouts that continue to darken cities, fry electrical equipment, silence machinery and require de facto rationing.

Because of course they never happen in pro-Western, investor-friendly countries.

Chavez stole $2 billion. These are rumors that keep slithering about in the comments from various neocons, although they rarely pop up into mainstream media texts outright. Apparently this claim comes from some right-wing law firm in Miami that claims the Castro brothers of Cuba are billionaires too. I find it about as credible as claims about Putin’s $40 billion fortune (or is it $70 billion now?), initially made by some non-entity Russian political scientist, and Gaddafi’s $200 billion fortune, probably spread by the CIA or somesuch in the course of NATO’s assault on the Libyan Arab Jamahiriya (very ironic, coming from thieves who had seized Libya’s foreign-based assets). Funny how it’s always those who dare stand up to Western imperialism who get accused by their flunkies of massive corruption, no? I wonder if one causes the other?

Oil dependence. A lot of the presstitutes have accused Chavez of increasing Venezuela’s oil dependence, e.g.:

Former minister Gerver Torres points out that in 1998 oil represented 77 percent of Venezuela’s exports but by 2011 oil represented 96 percent of exports. That means today only around 4 percent of the goods that Venezuela exports are non-oil products! The Venezuelan economy relies almost exclusively on the price of oil and the ability of the government to spend oil revenues.

That’s kind of what happens when the oil price goes from being $11.91 per barrel (in 1998) to $87.04 (in 2011)! Funny how they harp on about how rising oil prices “unfairly” helped Chavez but then instantly shut up about it when making THIS particular point.

Higher violent crime. Not a myth. In fact, as I made clear, it’s one of the Chavez administration’s very biggest failings. Then ago, we also have many of the presstitutes claiming he was a dictator – even though the precise opposite happens with real dictators (they don’t tolerate alternate sources of violence, and they don’t bother with legal niceties; they just put all the suspected mafiosi up against a wall – put the two together, and violent crime almost always plummets under the rule of real dictators. The Sicilian Mafia actually provided help to Allied troops against the Mussolini regime).

He was friends with Ahmadinejad. Plenty of Western politicians are friends with Saudi prices. Drop the double standards.

He was anti-American. Well, what can you expect if you plot a coup against someone and then incessantly demonize him for not respecting democracy? Like Castro, incidentally, he actually started out fairly pro-American. It didn’t have to be this way.

He didn’t build skyscrapers. This has to be read to be believed. From AP’s Pamela Sampson:

Chavez invested Venezuela’s oil wealth into social programs including state-run food markets, cash benefits for poor families, free health clinics and education programs. But those gains were meager compared with the spectacular construction projects that oil riches spurred in glittering Middle Eastern cities, including the world’s tallest building in Dubai and plans for branches of the Louvre and Guggenheim museums in Abu Dhabi.

The author’s agenda speaks for itself. (Not to mention her ignorance – while Venezuela remains fiscally sound, Dubai’s big tower remains 80% unoccupied and needed a $10 billion bailout. Had Chavez listened to people like these then Venezuela would have gone bankrupt for real, not just in their sordid, bitter like imaginations).

Samuel Moncada, Venezuela’s Ambassador In London, Personally Responds To Emails

Not sure you can say that of many national ambassadors! This is what I wrote to this email for expressing condolences on Chavez’s passing:

After a heroic battle with cancer, Hugo Rafael Chávez Frías has shuffled off this mortal coil, but his dream will endure forever and continue giving hope unto the hearts of men and women all over the world. In his dream, nations can triumph over comprador elites, even when the latter are backed by international plutocrats and the world’s greatest superpower. It is the dream of 21 century socialism, which has resoundingly proven that social justice, better living standards, and democracy are not trade-offs, but complementary to each other. It is the dream of a Venezuela and a Latin America that is democratic, socially cohesive, independent, and sovereign. Salutations to the late Comandante, in the firm conviction that Venezuela will find worthy successors to continue pursuing the Bolivarian dream.

Here is his response:

Dear Anatoly,

Thank you very much for your kind message.

During this difficult time for us as Venezuelans, your words were greatly appreciated.

In spite of Chavez’s absence, we will always carry with us his example, perhaps the most important of which was his true dedication and constant perseverance to realise his dreams of independence, sovereignty, justice and solidarity.

Thanks again for your support.

Samuel Moncada, Ambassador.

Incidentally, Mr. Moncada has an impressive academic pedigree, with a PhD in history from Oxford University. Just goes to show that the claims that Venezuela has no meritocracy and all the prestigious political/diplomatic jobs go to chavista cronies are probably false or at least very exaggerated.

Another thing to note is that Samuel Moncada also writes for The Guardian. This article is particularly interesting – apparently he was almost arrested by the CIA-backed coup plotters in 2002. (Many in his apartment block were not so lucky). I try to keep from empty moralizing, but sometimes it’s really sickening how the same people who crow the loudest about Chavez’s “rollback” of democracy studiously ignore – and perhaps privately lament the failure of – the comprador elites’ attempt to unseat a democratically and legitimately elected President.

Hugo Chávez Shuffles Off This Mortal Coil, But The Light Of The Bolivarian Revolution He Ignited Will Endure Forever

We all suspected this would come sooner or later. As it happens, Chavez struggled heroically against his cancer, confounding the intensive Schadenfreude and concerted death wishes of his loathsome detractors month after arduous month.

But this is what you can expect to get when you look out for your own countrymen and stand up to imperialism. Probably no other modern national leader apart from Putin has been quite as consistently and caustically vilified by the Western media.

They say that he managed to squander Venezuela’s oil wealth. I suppose he is guilty as charged, if by “squander” you mean spending it on ordinary Venezuelans as opposed to funneling it away to foreign bankster rats. During his rule, real GDP increased by 50%, poverty has halved, inequality was reduced to a very low level at least by Latin American oligarchic standards, infant mortality was greatly reduced, and virtually the whole array of other socio-economic indicators that states care to track, from access to clean drinking water to enrollment in higher education (which increased by a stunning 138%), saw great improvements. At the same time, contrary to the claims of the neoliberal propagandists, debt hasn’t increased; it was a modest 45% of GDP as of 2011 (IMF), which reduces to 25% if only central government debt is accounted for. The national accounts have on average been balanced.

venezuela-gdp

This was all achieved despite the real negative impacts of the 2002-2003 oil industry strikes, which occurred in tandem with an abortive CIA-backed coup, and the global Great Recession; not to mention Venezuela’s own legacy of corruption and backwardness inherited from previous regimes.

The traitorous cockroaches, including on my very blog, claimed Chavez “oppressed” them and stole the elections. They said he was a dictator for refusing to extend the license of their opposition RCTV channel. The irony is that in any actually democratic country it would have been instantly shut down and they’d have been locked away for decades for treason, if not lined up against the wall like the rabid scum they are. They materially supported a foreign backed coup against a legitimately elected national leader and then had the gall, the temerity, the sheer chutzpah to complain that one of their talking shops was taken away from them! Even though much of the media in Venezuela remains in oligarch pockets and continues to tell lies about pro-Chavez electoral fraud, when all the polls indicate that that is indeed the will of the people. Of course there’s nothing contradictory about that. The seditious vermin despise the Venezuelan people and would much rather dissolve them and elect another (as opposed to emigrating and parasiting off some other country).

The incorrigibly thievish liberals, no doubt full of projection, claim that Venezuela under Chavez has become one of the most corrupt countries in the world. They cite the loathsome Corruption Perceptions Index in support of this view – i.e. the perceptions of the same internationalist banksters and “experts” who have such a withering hatred for those countries that dare to stand up against Western imperialism. Asking ordinary people reveals quite a different picture: Fewer ordinary Venezuelans (some 20% of them) said that had to pay a bribe in the past year than in Colombia (24%), the Western puppet state next door.

latin-america-homicide-rates

Perhaps the only real failing of the Chavez administration is its inability to control violent crime. Venezuela now has one of the highest homicide rates in the world. But this was part of a general Latin American trend, and what’s more, could just as easily be attributable to a regrettable if admirable surfeit of humaneness in the Venezuelan criminal justice system (it has not had the death penalty since 1863).

Hugo Rafael Chávez Frías brought hope and a credible promise of a better tomorrow to a benighted country, and was the bane of the rootless cosmopolitans and comprador elites that hypocritically shrilled about his supposed corruption and selling out to Cuba even as they frantically shuffled their ill-gotten billions into Swiss vaults and dialed their CIA handlers for advice. Yes, he was loathed by the Latin American offshore aristocracy, the neocons, and the Guardianista-type, “humanitarian bomber” Pro War Left and Western chauvinists in liberal clothing. But he was also beloved of the millions of Venezuelans, who resisted oligarch media pressure and mafia-like “international community” and continued to give El Comandante – in some of the world’s cleanest and most transparent elections – term after term to implement his vision of a just and sovereign Latin America.

If it is true that one gets to know a man by his friends and enemies, then he qualifies as one of the very greatest national leaders of modern history. He now shuffles off this mortal coil, leaving behind his struggles and haters, and ascending to the realm of God, where he can contemplate the crystalline tranquility of the cosmos; but the light of the Bolivarian Revolution that he ignited on this lower plane of existence will endure – and continue shining hope into the hearts of men all over the world unto the ages of ages.

PS. For more statistics and objective assessments of Chavez’ achievements, consult Mark Weisbrot’s classic, “The Chávez Administration at 10 Years: The Economy and Social Indicators.

A Quick Note On Venezuelan Elections

Chavez won. The comprador candidate got sent packing.

As, indeed, 80% of the pre-elections polls predicted.

I fully expect the usual democratist presstitutes to cry foul in the coming days. Not because the Venezuelan elections were unfair – though they will doubtless be claimed to be so by the organs of imperialist propaganda like the WSJ – but because their real wish is to dissolve the Venezuelan people and elect another.

PS. Must-read: Why the US demonises Venezuela’s democracy by Mark Weisbrot.

A Short History of Venezuela, c.1800-1950

Caracas, Venezuela.

January 2019: I have just reread an essay I wrote – a short history of Venezuela from c.1800-1950 – for an economic development class during my Berkeley days. It’s not entirely irrelevant given current events, so I am posting it for perusal.


The beginning of Venezuela’s integration into the world economy can be dated to 1522, the start of Spanish colonization. It did not produce gold or silver, so colonial control was lax; local and municipal officials enjoyed a degree of leeway unusual for the rest of Spain’s American possessions. Apart from grain grown for subsistence, the 16th century economy was dominated by ranching, with the livestock raised by Indian herders, using Spanish-introduced horses, for their Spanish landlords on the llanos grasslands. By the 17th century, the cash economy came to be dominated by cocoa, cultivated by imported African slaves. This ushered in the basic format of Venezuela’s subsequent integration with the world economy: Primary commodities exports to the North Atlantic markets filtered through the Caracas-based bureaucracy. It allowed the capital to develop as an economic and cultural center; the Universidad Central de Venezuela was founded in 1721, and – thanks in part to the lack of censorship, which provided Venezuelan luminaries access to Enlightenment European thinkers such as Voltaire and Rousseau – it would come to play an important role in the war for independence.

In general, however, the country remained underdeveloped, 90% rural, and almost entirely illiterate; indeed, as late as 1936, only 35% of school-aged children were enrolled and the literacy rate was at only 20%[1] (this is comparable to 17th century England, late 18th century France, or c.1900 Russia). This of itself greatly constricted possibilities for economic development, and deeply stratified Venezuelan society. The hacienda system of cocoa exports required slaves, and from the 16th century yjod would come to define Venezuelan society, hardening it into a caste system in which white Spanish peninsulares and criollos, their descendents, occupied the top of the economic chain, while mixed race pardos and African slaves filled out the bottom rungs. Although slavery was abolished in 1854, the basic structure has remained to this day, reflected in income inequality that has remained very high by global (if not Latin American) standards, even under the Chavez administration. This inequality had intellectual underpinnings, in the form of Laureano Vallenilla Lanz – a sociologist who worked under the Gomez administration – who in his Cesarismo Democrático (1920) wrote that the pardos had to be ruled by white caudillos in order to maintain order, for such was the “unconscious suggestion of the majority[2].” Under the Gomez regime, passports were issued for the first time, which identified carriers by the color of their skin; this system remained in place until the 1980’s. This served to reinforce socio-racial stratification in Venezuelan society.

To the extent that Venezuela saw industrialization before the developmentalist era it was almost entirely confined to the oil industry, which exploded in the 1920’s. This would be the latest, and by 1927 by far the most dominant, commodity to dominate Venezuelan exports; by 1929, it was the world’s single largest petroleum exporter. But even this sector’s development was constrained, as the dictator Juan Vicente Gómez, who ruled Venezuela at this time, forbade the construction of oil refineries on Venezuelan soil because of his distrust of trade unions and industrial labors. The proceeds of the oil boom were narrowly distributed: US oil corporations were allowed to write Venezuela’s early petroleum laws[3], and Gomez himself came to possess a $400 million fortune upon his death in 1936, making him the country’s richest oligarch[4]. Meanwhile, apart from a patrimonial bureaucracy that grew up alongside the oil industry, benefits from the oil boom were meager: Education and other social services were neglected, while the in-flood of oil revenue contributed to high inflation, with food prices running ahead of average incomes.

Venezuela shook off Spanish rule in the Venezuelan War of Independence, a brutal struggle that killed off a third to half the population. However, the subsequent state was weak and riven by constant internal infighting: From 1829 to 1899, Venezuela had no fewer than 41 Presidents and 30 insurrections. This was in large part a function of Venezuela’s social structure. White landowners controlled most of the land, many with a few hundred or thousand pardos tenants on it. Due to the profound weakness of the state, all it frequently took was for a local caudillo in the central and eastern llamas to make an inspiring speech, march to Caracas with a ragtag militia, and proclaim himself President.

Furthermore, while Venezuela was formally independent, in practice the post-Bolivar elites almost exclusively looked to Europe. Legislation was progressive – Venezuela became the first major state to abolish capital punishment, and – in theory if not in practice – free and compulsory education was prescribed in 1880-81. But the state remained a plaything for the elites rather than a motor of development. For instance, the late 19th century President Guzman Blanco divided his time between Caracas and Paris; during this period, he amassed massive loans, from which he happened to make a small personal fortune. When a coup was organized, his response was to just stay in Paris. The European powers intervened with gunboats in 1902-03 under Cipriano Castro when Venezuela, for a time, refused to honor the loans amassed under Blanco.

This caudillo system came to an end with the ascendancy of the Andean elites from 1899, of whom Gomez was the most prominent representative. A national army and telegraph system united the country, so caudillo insurrections became a thing of the past. However, the coups and political instability that plagued Venezuela would continue well beyond; indeed, Gomez himself took power in a coup against Castro in 1908, and would himself experience a crisis of authority in 1928 from student insurrectionists taking a cue from the experiences of the Mexican and Russian Revolutions, and the new thinking challenging colonialist relations with the developed world. From the time of Castro’s death in 1935, López ruled as a modernizing dictator; a partial (and unsustained) transition to democracy was made in 1945-46. It is around this time that the colonial period of Venezuelan can be said to have truly come to an end, as consequent regimes until the 1990’s would be dominated by interventionist developmentalists implementing import substitution policies.

In conclusion, Venezuela suffered from a number of features common to other Latin American countries under their conditions of integration into the pre-World War Two global economy. The most important of these, though they are interrelated, are export dependencies on primary products – from cacao to coffee to oil – which made budgets cyclical and encouraged the growth of “comprador elites” dependent on rents and culturally beholden to Europe; and the development of a caste system centered around race. This fostered an unstable form of government, i.e. the caudillismo that resulted in arbitrary authoritarian power structures at the local levels, despite the formally liberal and federal political macro-structure. These factors retarded progress, to the extent that despite its formidable resource wealth and forty years of substantial oil revenues, Venezuela in 1960 was still a very undeveloped country; its total fertility rate was at 6.62, a pre-industrial rate, and literacy was at a still modest 74% (about equivalent to India today).

[1] Sanchez, George I. (1963), The Development of Education in Venezuela, Office of Education (DHEW), Washington, DC., page v.

[2] Executive Power in Venezuela, Leo B. Lott, The American Political Science Review 50, #2 (June 1956), pp. 422–441.

[3] Yergin, Daniel. The Prize: The Epic Quest for Oil, Money, and Power. New York: Simon and Schuster. 1990. pp 233-36; 432.

[4] Bart Jones. Hugo!: The Hugo Chavez Story from Mud Hut to Perpetual Revolution. Steerforth. 2007. Pp 31.

In Which I Opine On Various Matters Of Great Importance

A collection of news stories and my take on them from the past month or so.

1. Bribes are growing quickly in Russia. Their average sizes, that is. It was reported by the MVD that they increased by 5x from a year earlier to $10,000. The usual Russophobe suspects wasted no time declaring this to be further evidence of the uncontrolled, unstoppable Blob-like growth of corruption in Russia. But let’s use common sense for a minute. If average bribe amounts are increasing by such huge percentages, surely it means one or both of two things: (1) Investigations are moving higher up the chain of command, where quantities are bigger; (2) Paying bribes is becoming riskier, so – as with illegal drugs – the margins providers demand also increase. Either are good developments, no?

2. Russian readers, e.g. at Inosmi, were shocked to discover Russia renting out agricultural land to Asian farmers to grow food. Talk of “colonial takeovers”, “resource appendages”, etc. What many studiously ignore is that colonialism in the true sense consists of settlers with guns taking over the lands of aborigines with spears. This is patently not the case with Russia. To the contrary, it is a relatively easy and excellent way to earn foreign currency and create development in rural places – and a practice that will become increasingly prevalent in the decades ahead as agricultural yields in the south plummet due to the advance of climate change.

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Victimized Venezuela III: Myths And Reality

At the recent Summit of the Americas in Trinidad, two great leaders, Obama and Chavez, shook hands in what could be the symbolic first gesture of reconciliation. Treasonous neocons will no doubt rush to condemn this as yet another limp-wristed and unilateral concession to “America’s enemies”, reminding their listeners that Chavez closed down opposition media, nationalized American assets and welcomed Russian warships and strategic bombers to his realm.

Yet their stubborn animosity is worse than just imperialist arrogance – it is stupid. They fail to realize that in the past decade Latin America in general, and Venezuela in particular, has become too politically mature to be easily manipulated into serving US (corporate) interests by economic hitmen, CIA operatives and their local surrogates. It is to Obama’s credit that he is willing to move from willful denial to cautious acceptance of the decline of overt American power in Venezuela and elsewhere.

For that is the new reality. The Venezuelan opposition is increasingly discredited for its unconstructive hostility to the government and extra-legal attempts to overthrow Chavez, one of which nearly succeeded in 2002. This resulted in blowback against the US for its covert involvement  The government’s refusal to renew the licenses of opposition media outlets that seditiously backed the abortive coup is thus completely understandable, as is Chavez’ personal animosity towards Bush and outreach to other states in similar straits. Furthermore, it should be noted that the owners of newly nationalized companies, including American ones, were fairly compensated.

Meanwhile, within five years of taking real power in Venezuela, a corrupt, disorganized and class-ridden country, Chavez managed to a) double the GDP, b) halve the number of people living in poverty and c) drastically improve practically every indicator of social wellbeing from child mortality rates to inequality to tertiary education enrollment rates (I already covered these successes in prior posts). This does not mean that Venezuela is no longer a corrupt, disorganized and class-ridden country – it still is, to an extent – but the improvements are undeniable and Chavez enjoys high approval ratings. It is thus unseemly and dishonest of the Western MSM to excoriate Chavez as a thuggish populist strongman and economic illiterate.

Let us hope they take a clue from Obama. Or from Mark Weisbrot and his fellow authors, who in their latest paper, The Chávez Administration at 10 Years: The Economy and Social Indicators, give a glowing verdict on the achievements of the Bolivarian revolution.

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Victimized Venezuela II: Beware of Schadenfreude

Much like Putin’s Russia, Venezuela has been unfairly victimized by Washington’s foreign policy elite and savaged by the Western MSM, which have caricatured Chávez as a run of the mill Latin American populist strongman. In a previous post on this matter, I drew attention to the work of Mark Weisbrot at the CEPR, who has demolished these crude myths (The Venezuelan Economy in the Chávez Years). Under the Bolivarian regime poverty plummeted, access to high-quality healthcare, education and affordable food widened and the GDP skyrocketed by 94% from Q2 2003 to 2008.

Unable to criticize Venezuela on humanitarian grounds, the only option left open to the neoliberal ideologues was to claim that the Venezuelan economic miracle was nothing more than an ‘oil boom headed for collapse’. Unfortunately for them, the Venezuelan state kept a balanced budget, reduced its foreign debt from 47.7% of GDP in 2003 to 24.3% in 2007 and total interest on all public debt amounted to just 2.1% of GDP in 2006 – overall, a fiscal policy far more responsible than Washington’s itself. For 2008, the government assumed an oil price of 35$ per barrel; it is true that in practice the state spends beyond budgeted expenditures when oil revenue far exceeds the budgeted for price, so a fall in oil prices would trim government spending and growth. However, a budgetary crisis or economic downturn are very unlikely, since the government has more than 50bn $ of international reserves it can draw upon in a crisis.

That was the theory when Weisbrot published the paper in February 2008…but how does it stack up in the face of 50$ per barrel today?

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Victimized Venezuela

Chavez is frequently shafted in the Western media, who allege that the only reason the Venezuelan economy is doing well is because of record oil prices. This is not to mention all the invective hurled against the Chavez administration for its supposed disrespect for democracy, from refusing to renew the licenses of TV stations support foreign-sponsored coup attempts against him (while ignoring human rights violation in friendly countries in the region like Colombia, where more union workers are killed annually in than in the rest of the world combined) to the latest smear job by the Economist about crime.

But let’s focus on the economic-boom-is-because-of-oil mantra. Having disproved similar claims about Russia, I decided to investigate this further. Novel Prize winning economist Stiglitz has praised Venezuela’s economic policies. And I found this excellent paper, Update: The Venezuelan Economy in the Chávez Years by Mark Weisbrot and Luis Sandoval from 2008. I’ve quoted its main findings.

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