Smearing Venezuela

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Ben Cohen
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Chávez holds a miniature copy of the 1999 Vene...

If you want a typical case study in how left leaning leaders are smeared by right wing commentators, look no further than this article in Foreign Policy that slams Hugo Chavez for his economic record in Venezuela. Writes Jose Cardenas:

It may be that his working and lower class base won't care much that their country ranks 129 out of 129 economies in the2011 International Property Rights Indexor that it ranks 172 out of 183 countries in theWorld Bank's 2011 Doing Business Report (behind Iraq and Afghanistan).But they will care about the shortages of basic goods, the electrical blackouts, the region's highest inflation that is cutting the value of their incomes and savings, and the mortgaging of their children's future that is the result. A reinvigorated Venezuelan opposition promises to focus on those bread-and-butter issues and Chavez will no doubt try every trick in the book to avoid discussing that record.

Cardenas runs through a litany of Chavez's crimes - nationalizing various foreign companies and stripping them of 'incentives to be effective and efficient', pursuing 'anti market' policies that raise borrowing costs, and generally not doing what the business classes want him to do.

The problem is, Chavez has actually presided over a stunning transformation of the economy that has seen the doubling of GDP, poverty and income inquality rates slashed and huge increases in access to education. A major study by the Center For Economic And Policy Research (CEPR) found that:

  • The current economic expansion began when the government got control over the national oil company in the first quarter of 2003. Since then, real (inflationadjusted) GDP has nearly doubled, growing by 94.7 percent in 5.25 years, or 13.5 percent annually.

  • Most of this growth has been in the nonoil sector of the economy, and the private sector has grown faster than the public sector.

  • During the current economic expansion, the poverty rate has been cut by more than half, from 54 percent of households in the first half of 2003 to 26 percent at the end of 2008. Extreme poverty has fallen even more, by 72 percent. These poverty rates measure only cash income, and does take into account increased access to health care or education.

  • Over the entire decade, the percentage of households in poverty has been reduced by 39 percent, and extreme poverty by more than half.

  • Inequality, as measured by the Gini index, has also fallen substantially. The index has fallen to 41 in 2008, from 48.1 in 2003 and 47 in 1999. This represents a large reduction in inequality.

There is no doubt that Venezuela is a deeply impoverished country with some very serious problems, but Cardenas's article conveniently leaves out what Venezuela was like before Chavez was in power, opting to focus on issues important to the business community and structural problems that have existed for hundreds of years.

The parallels between what is happening in Venezuala and America are numerous: President Obama is being blamed for problems created by extreme Right wing policy, and much of the press dutifully proclaims that socialistic measures aimed to combat the problems are 'not working'. When results are not immediate, the Right jumps in and insists more market driven policies are needed to solve the problems.

The Right tends to shout loudest when it comes to promoting their ideology, and the best way to combat it is with facts.

Hopefully, the facts will have the final word.

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