Venezuela after Hugo Chavez?

BrainGlutton · July 2, 2011, 2:17pm

:dubious: Uribe? Even Chavez himself is a far better man than Uribe.

Anyway, if Venezuela remains a democracy, the election of any non-socialist president, let alone anti-socialist, remains politically unlikely if not impossible for at least the next decade, I should think.

BrainGlutton · July 2, 2011, 2:25pm

[shrug] There’s something in the results that the majority of the public seems to like. A lot.

Qin_Shi_Huangdi · July 2, 2011, 3:33pm

What makes you say that? Uribe has even increased spending on social services. Venezuela’s economy is shrinking while Colombia is growing at 4 percent,

BrainGlutton · July 3, 2011, 7:20pm

I’ve seen a lot of stories over the years suggesting Uribe might be a leetle too friendly with his country’s RW paramilitary, and if the rest of LA’s history is anything to go by that’s some bad shit right there, even worse than the LW paramilitaries. Also, you might call Chavez a power pig, but Uribe made his own bid to abolish presidential term limits a couple of years ago.

Qin_Shi_Huangdi · July 4, 2011, 1:40am

[QUOTE]

On the contrary, the right-wing militias have succedeed in reestablishing order, something that is badly needeed.

And so? FDR ran for four terms, so was he a would-be tyrant?

GIGObuster · July 4, 2011, 1:58am

Depends on who you ask, that is how many Republicans saw him back in the day, considering that some in the opposition called him “the devil” and worse; it was also the Republicans, that because of the resentment they had with Roosevelt, that proposed (and got) the 22nd amendment that limited the presidency to 2 terms.

http://www.cantonrep.com/life/x1705414398/Bruces-History-Lessons-The-22nd-Amendment

BrainGlutton · July 4, 2011, 4:34pm

:dubious: Was that supposed to be funny?

[shrug] It is certainly a stick many have used to be Chavez. And even Manuel Zelaya of Honduras, when under the circumstances even the idea that he might be conspiring to win a second term was utterly preposterous.

BrainGlutton · July 4, 2011, 4:50pm

Chavez returns to Venezuela.

Hugo Chavez made a surprise return to Venezuela from Cuba, saying he is feeling better as he
recovers from surgery that removed a cancerous tumour.

The Venezuelan president arrived at Maiquetia airport outside Caracas on Monday to be greeted by government ministers, Venezuelan state television showed.

Chavez’s return changes the political dynamics once again in Venezuela, where politicians on all sides had been bracing for a protracted months-long absence of the man who has dominated the nation for the last 12 years.

In a classic piece of Chavez theatre, the president jetted in just in time for two days of celebrations of Venezuela’s 200th anniversary of independence from Spain.

“It took all of us by surprise,” Al Jazeera’s Monica Villamizar reported from Caracas about Chavez’s return.

“We spoke to his supporters yesterday and they were quite confident that he would recover from his health issues, but it was still pretty much an unknown if he was going to preside over the military parade, and everybody [was] obviously preparing for months for this independence day celebration.”

“This is a date that is important for the Venezuelan people, but it is also an important date for Chavez himself who has compared his rule here in Venezuela, his leadership, to that of Simon Bolivar, the liberator of Venezuela,” our correspondent said.

Dick_Dastardly · July 4, 2011, 5:19pm

Hugo ‘SuperHugo’ Chavez, peace be upon him, has changed the face of Venezuelan politics and society. Venezuela used to be a kleptocracy effectively run by a handful of elite families. A tiny number of them owned almost all the wealth of the country. SuperHugo smashed the existing power structure and created an economy where the Venezuelan people as a whole were able to benefit from. The opposition to Chavez now have to run to the left of him, to promise Venezuelans an even bigger share of national wealth, to have any chance of ever beating Chavez’ party in an election.

BrainGlutton · July 4, 2011, 6:09pm

It might not be a kleptocracy any more, but it’s still pretty damned corrupt. And in every Third-World country, RW government or LW government, public corruption is the elephant in the living room. With a bad bout of diarrhea coming on. Isn’t anybody running on an anti-corruption platform?!

BrainGlutton · July 4, 2011, 6:17pm

On that note, see this world map illustrating countries’ relative rankings on Transparency International’s Corruption Perceptions Index.

Now compare that to this world map of the Democracy Index of the Economist Intelligence Unit.

And this one of countries by GDP per capita.

One sees a pattern?

Qin_Shi_Huangdi · July 4, 2011, 10:50pm

And thus Venezuela is well on the road to economic disaster. Venezuela’s economy declined while neighbouring Colombia grew faster than the US and many other countries last year.

BrainGlutton · July 5, 2011, 6:32am

Could be better, but going by Wiki, by no means “on the road to economic disaster.”

**Economic indicators

Economic Growth and Production**

Since the government increased public control over the national oil company in the first quarter of 2003, real GDP has nearly doubled, growing by 94.7% in 5.25 years (average of 13.5% annually).[6] GDP growth rates were 18% in 2004,[66] 9% in 2005,[67] and 9.6% in the first half of 2006, with the private sector growing at 10.3%.[68] From 2004 to the first half of 2006, non-petroleum sectors of the economy showed growth rates greater than 10%.[69]

Some economists argue that this subsidized growth could stop if oil prices decline,[70] but the government argues its budget is dependent only on oil being above US$29 a barrel, whilst its 60 billion dollars in reserves can be deployed as a cushion against any sudden and sustained drop in oil revenues.[71]

Income and Poverty

During the past decade under Chavez, the income poverty rate in Venezuela has dropped by more than half, from 54% of households below poverty level in the first half of 2003, down to 26% at the end of 2008. “Extreme poverty” has fallen even more - by 72%. Further, “these poverty rates measure only cash income, and doesn’t take into account increased access to health care or education.”[6][72]

Datos reports real income grew by 137% between 2003 and Q1 2006.[73] Official poverty figures dropped by 10%.[74] The World Bank calculated a 10% drop in poverty.[75][76]

Some social scientists and economists claim that the government’s reported income poverty figures have not fallen in proportion to the country’s vast petroleum revenues in the last two years, much of which has been directed to social spending to decrease the cost of living.[66]

Venezuela’s infant mortality rate fell by 18.2% between 1998 and 2006.[77][78]

Consumer prices and inflation

According to the Banco Central de Venezuela, inflation dropped from 29.9% in 1998 to 14.4% in 2005.[67][79] During 2005, imported goods were cheaper than commodities made in Venezuela; variability in the price of goods was linked to import performance and exchange stability.[67] In the second quarter of 2006, gross fixed investment was the highest ever recorded by the Banco Central de Venezuela since it started tracking the statistic in 1997.[68]

In June 2007, the Bank for International Settlements forecast an economic growth of 7% and a 18.9% inflation rate for Venezuela.[80]

For 2009 the Venezuelan government set a targeted annual inflation rate of 15%[81] but the year ended with an annual rate of 27.1%.[82]

In July 2010 it was reported that the annual Venezuelan inflation rate was “the highest in the region and one of the highest in the world.” The annual rate stood at 30% through July and the rate for the first seven months of the year was 18% reflecting a “trend toward slower inflation”.[83]

Food and agriculture

By 2008, Venezuela was self-sufficient in its two most important grains, corn and rice, with production increases of 132% for corn and between 71-94% for rice since 1998. The country also achieved self-sufficiency in pork, representing an increase in production of nearly 77% since 1998. Furthermore, Venezuela is on its way to reaching self-sufficiency in a number of other important staple foods, including beef, chicken, and eggs, for which domestic production currently meets 70%, 85%, and 80% of national demand, respectively. Milk production has increased by 900% to 1.96 million tons, fulfilling 55 percent of national demand. Many other crops have seen significant increases over the past decade, including black beans (143%), root vegetables (115%), and sunflowers for cooking oil production (125 percent). This suggests a prioritization of culturally important crops and a focus on matching domestic agricultural production with national consumer demands.[30][84]

Per capita food consumption in Venezuela grew from 370 pounds per year in 1998 to 415 pounds per year in 2009. The recommended amount of food that each person should consume per year is about 440 pounds per year.[20] Average caloric intake has risen from 91.0% of the recommended levels in 1998 to 101.6% in 2007. Malnutrition related mortality fell by more than 50% – from 4.9 to 2.3 deaths per 100,000 in population between 1998 and 2006.[85]

Since the main agricultural measures of the Chávez administration took effect, however, food imports have risen dramatically, and such agricultural mainstays as beef, rice, and milk have seen drops in production.[31] With declining oil revenues, food shortages have become more widespread.[86]

Government spending

Most areas of social spending have increased dramatically since Chávez was first elected in 1998.[87]

Spending on education as a percentage of GDP (which has grown dramatically since 1998) stood at 5.1% in 2006, as opposed to 3.4% in the last year of the Caldera government.[87] Spending on health has increased from 1.6% of GDP in 2000 to 7.71% in 2006.[87] Spending on housing “receives low public support”, increasing only “from 1% in GDP to 1.6% in 2006”.[87] Housing has become the “top priority” of the Chavez administration following the torrential rains of 2010 that swept the country and exacerbated the housing issue through destruction of property. The shortage of housing is estimated at 1.5 million, with the administration working with its foreign partners such as China, Iran and Belarus to construct “low-cost, high quality homes for those in need”.[88]

Teresa A. Meade, writes that Chávez’s popularity “rests squarely on the lower classes who have benefited from these health initiatives and similar policies”.[89]

Venezuela’s public debt, as a percentage of GDP, is “significantly lower” than that of the United States.[90]

Employment

In June 2010 Mark Weisbrot wrote that jobs are much less scarce now than when Chávez took office, with unemployment at 8% in 2009 compared with 15% in 1999. He also stated that the number of front line doctors have increased 10 fold in the public sector and that enrolment in higher education has doubled, noting that these statistics are backed up by the UN and the World Bank.[91]

According to government figures, unemployment has dropped by 7.7% since the start of Chávez’s presidency.[92][93] It dropped to 10% in February 2006, from the 20% high in 2003 during a two-month strike and business lockout that shut down the country’s oil industry. According to the government, an unemployed person is a citizen above the age of 15 who has been seeking employment for more than one week.[94]

Foreign Investment

In 2006, the business environment in Venezuela was listed as “risky and discouraged investment”, by the opposition newspaper El Universal. As measured by prices on local stock exchanges, foreign investors were willing to pay on average 16.3 years worth of earnings to invest in Colombian companies, 15.9 in Chile, 11.1 in Mexico, and 10.7 in Brazil, but only 5.8 in Venezuela. The World Economic Forum ranked Venezuela as 82 out of 102 countries on a measure of how favorable investment was for financial institutions. In Venezuela, a foreign investor needed an average of 119 days and had to complete 14 different applications to organize a business, while the average in OECD countries was 30 days and six applications.[95]

All in all, a much better economy than Venezuela could possibly have today without the Bolivarian Revolution. Hint: It’s the reduced poverty rate that makes all the difference; and I don’t see any other hypothetical Venezuelan government-of-the-past-decade, nor the market, taking care of that the way Chavez has.

Qin_Shi_Huangdi · July 5, 2011, 3:34pm

According to the same article:

And largely state-sponsered economic growth eventually leads to stagnation as seen in most socialist countries.

BrainGlutton · July 5, 2011, 5:05pm

Actually, there’s a lot of potential for state-sponsored economic growth. Look at China. They used Stalinism to build up their industrial economy, and (at great cost in life at some periods) it worked; then they started privatizing certain sectors, and that worked even better. But the Stalinism had to come first. That or some form of heavy state dirigisme (like Meiji-Era Japan used) is what you do when you want to industrialize your country fast. That’s why China is (for now) well ahead of India. Chavez’ approach, FWIW, is much more dirigisme than Stalinism.

And the U.S. is still benefiting from a lot of state-sponsored economic growth from the New Deal on. The Interstate Highway System sure was one hell of an economic stimulus package!

Dick_Dastardly · July 5, 2011, 5:46pm

Look, Venezuela isn’t going to change from venezuela to Switzerland overnight, but things are a hell of a lot better since SuperHugo, peace be upon hin, got elected.

Dick_Dastardly · July 5, 2011, 5:48pm

You need to look at the economy over a longer period of time than one year, as has already been pointed out to you. Anyway, produce a cite to the numbers you’re on about and put them in context.

BrainGlutton · July 5, 2011, 10:01pm

I agree, but, the important question is, what happens after SuperHugo? Has he built something larger than himself that can thrive without him or any charismatic replacement?

Damuri_Ajashi · July 6, 2011, 1:44am

I’m not a big fan of Chavez, mostly because he lets his ego get in the way of the best interests of his nation, but:

I think he would do a lot better by his nation by making a credible peace with the multinationals or be willing to pay as much as the multinationals do for expertise.

MichaelEmouse · July 6, 2011, 2:07am

“The Stalinism had to come first”
It did? Look at Taiwan, it industrialised and now has a greater GDP per capita than China yet never went through Stalinism. Hong Kong did not use dirigisme either. The Stalinism didn’t have to come first.
“That’s why China is for now) well ahead of China”
You say heavy dirigisme is why China is well ahead of India. You are therefore saying that India did not use a form of heavy dirigisme.
Please read this section: Economy of India - Wikipedia
Your contention that “it worked” seems false. It was disastrous but fortunately for the Chinese, Mao eventually died and was replaced with Deng Xiaoping who made major changes to Mao’s policies. From that point on, the Chinese economy improved.
“The Interstate Highway System sure was one hell of an economic stimulus package”
You are confusing the public provision of otherwise privately-undersupplied goods with policies which increase aggregate demand to avoid liquidity traps. They can sometimes both be found in the same projects but are distinct. The continuing benefit is not from any demand stimulus effect but from the provision-of-otherwise-privately-undersupplied-goods effect.