Whaddya know and whaddya think you know? Venezuela poverty edition

Posted by Joshua Holland at 11:25 AM on January 9, 2006.

When it comes to Venezuela, with it's hyper-charged polarization, sorting out the facts on the ground from the overheated rhetoric can be difficult.

And you can't look to the supposedly "liberal" media to help: when it comes to covering the Latin American left, the Washington Post's coverage is indistinguishable from that of the Washington Times, and the New York Times might as well be Murdoch's New York Post. I've caught the WaPo egregiously misinforming their readers in the past (second letter).

Which is why there's no reason to believe that a commenter in another post, below, wasn't honest in asserting: "As for delivering on the well being of the people--unemployment is up since 2000 from 13.9% to 20.0% and poverty is up since 1999 from 54% to 60%." He or she might have gotten that from rany number of recent articles in the corporate media.

Whatever the case, poverty statistics in Venezuela are very tough to analyze. According to the official numbers from the Venezuelan government, the reader's assertion is simply not true: the National Statistics Institute (INE) says that poverty is at 38.5 percent, 4.5 percent lower than when Chavez took office. What's more, in the past year, poverty has fallen by a whopping twelve percent. The official unemployment figure stood at 11.5 percent in September, a drop from the previous year's 12.1 poercent.

But wait, say Chavez' opponents, the government's fudging the numbers. Ana Julia Jatar, an economist with the Institute of Higher Administration Studies (IESA), told the Miami Herald that some of the figures in INE reports that reflected badly on the government have mysteriously disappeared from the INE website. "Venezuelan statistics are no longer credible," Jatar said. "They have become an instrument of government propaganda."

INE's president, Elias Eljuri, says otherwise. He says that the big drop in poverty isn't about cooking the books, it's a result of a dramatic increase in Venezuela's gross domestic product during the past two years as oil prices have taken off.

"Poverty levels had soared in 2002 and 2003 because of a drop in the GDP caused by the [anti-Chavez] coup d'etat and the oil workers' strike," Eljuri told the Herald. "But since then, the economy has grown by 18 percent in 2004, and will grow by near 10 percent in 2005. A recovery of such magnitude brings about a big drop in poverty rates."

He explained "there is an opposition campaign against the INE… When I reported that poverty had risen [earlier in Chavez's presidency], I was their hero. Now that the economy has grown and I'm reporting that poverty has dropped, I've suddenly become a liar."

Muddying the waters even further are the "independent poverty research centers" that have sprung up in the country. Are they supported by the small, light-skinned anti-Chavez elite that has traditionally ruled Venezuela? I have no evidence, but some of their papers seem to have a point of view. Their numbers need to be taken with a big grain of salt.

While the poverty statistics are a matter of some dispute, numbers like GDP growth are collected or audited independently by the international financial institutions, and are reliable.

So we can be confident that Venezuela has the fastest-growing economy in Latin America and was second only to China last year. It had a 17.8 percent growth rate in 2004 and the non-oil sectors grew at a faster pace than the oil sector, rising 8.7 percent and 12.1 percent in the first two quarters of 2005.

Venezuelan Ambassador Bernardo Alvarez's figures on social spending aren't in dispute either. He told the WAPo:

In the years since [Chavez took office] social expenditures have risen in net terms (despite the U.S.-backed coup and oil strike), to about $5 billion per year, increasing as part of gross domestic product from 7.8 percent to 12.3 percent. This represents a massive transfer of resources to the poor. It has wiped out illiteracy, provided 40 percent of the population with subsidized food and ensured that 18 million people have free health care.

So it's safe to say that there's more money being spent to help the poor of Venezuela than there's been before. But even that doesn't end the discussion. How much progress has Chavez made on his promise to clean up Venezuela's notoriously endemic corruption? Will the new funds be spent on poorly designed ad hoc projects? Will they have the desired effect?

And that's where I want to take a step back and look at the big picture. Chavez came to power in the midst of a long slide in Venezuelan's economic well-being. According to Gregory Wilpert, a sociologist who researches development issues in Venezuela:

Depending on which statistics and measurement methods one uses, poverty increased dramatically from 33% of the population in 1975 to 70% in 1995. While poverty more than doubled, the number of households in extreme poverty increased three-fold, from about 15% to 45%… Trends which accompanied this increase in poverty are a dramatic decline in real industrial and minimum wages, which dropped to 40% of their 1980 levels in twenty years, leaving them at a level below that of the 1950's.

The Venezuelan government is basically forging a brand new set of economic arrangements. It's not socialism - the private sector is alive and well in Venezuela -- but with its heavy emphasis on locally organized cooperatives, micro-lending and the various misiones, it's also a far cry from the neoliberal model of capitalism. He's trying to make a mixed economy work.

To expect such fundamental change to bear fruit in seven years seems unrealistic. And let's not forget that probably two of those years have been spent fighting off coups, assassination attempts, the oil managers' strike and the referendum to remove him.

Similarly, Chavez's short-term anti-poverty programs have certainly been a mixed-bag. Some have helped, others were poorly designed and some were eaten away by corruption.

But the focus of Chavez' long-term poverty relief programs has been health and education. There's plenty of data to suggest that the latter has huge economic potential, but by definition it's not a quick fix.

My take, for what it's worth, is that we should support the Venezuelan government's attempts to drag the population out of poverty not because we know it's going to work, but simply because the alternative has proven incapable of doing so.

Joshua Holland is a staff writer at Alternet and a regular contributor to The Gadflyer.