| Chavez: "based on a lie" |
| Written by Hannah Stone | |
| Tuesday, 27 February 2007 | |
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According to Foreign Policy magazine, Chavez’s appeal to Venezuela’s poor is "based on a lie." His popularity, still high domestically if not internationally, rests on his promise to carry out large-scale redistribution of Venezuela’s oil wealth. Even his critics have tended not to question this commitment to the poor, criticizing him for excessive spending on social programmes at the expense of investing in the country’s long-term competitiveness. But even Chavez’s place as self-proclaimed ‘champion of the poor’ is dubious. Foreign Policy have analysed the government’s official statistics, and have revealed the failure of ‘21st Century Socialism’ to improve the lives of the poor. The government claims to have reduced illiteracy by 1.5 million people, but Foreign Policy’s analysis of the data shows a reduction closer to 100,000, most of which is attributable to demographic changes. They also found that the average proportion of the budget which went on social spending targeted at the poor actually decreased during Chavez’s first five years in power. While the percentage of Venezuelans living in poverty has fallen from 43% to 33% during his time in power, the surprise is that it has decreased so little given the five-fold increase in oil prices over the same period. Venezuela is dependent on oil revenue, which accounts for almost half of the government’s income. The current oil boom has so far concealed the dire nature of Chavez’s economic policies, which is beginning to manifest itself in high inflation and shortages of certain foods. His price controls on food and petrol mean that the official price of some items is now capped at less than they cost to produce. Meanwhile the government deficit for 2006 is projected at 2.3% - spending at this level will not be sustainable if oil prices fall from their current high. The New York Times quotes Jose Guerra, formerly of Venezuela’s central bank, as warning that they are "in danger of squandering a major oil boom." The tragedy for the poor of Venezuela is that despite Chavez’s socialist rhetoric, money from the fortuitous oil boom is being used to cushion the impact of his disastrous economic policies rather than to propel the country into long-term growth. Comments (0)
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