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domingo, junio 05, 2005

Weisbrot on Venezuela's economic performance

A brief analysis of trends in income and poverty in Venezuela under Chavez (and previously).

It is sometimes asserted that Venezuela under President Hugo Chavez Frias (1999 to the present) has been an economic failure, as compared with the past. For example, a recent news article in the Washington Post referred to "Hugo Chavez, the populist Venezuelan president whose giveaways to the poor have slowed economic progress."[1] These claims have no basis in fact. From 1970-1998 per capita income in Venezuela fell by 35 percent.[2] This is the worst economic decline in the region and one of the worst in the world -- much worse even than what happened to Africa during this period.

Since the present government took office, per capita income growth is about flat,[3] and will be positive at year's end. So the Chavez government can at least claim credit for reversing the terrible long-term economic decline in Venezuela, according to the undisputed data measuring economic growth.

. . .

There have been a number of articles recently (e.g. Christian Science Monitor,[4] Andres Oppenheimer in the Miami Herald[5]) claiming that poverty has actually increased under President Chavez, based on government statistics. This is also wrong. . .

YearPercent of households in poverty

As can be seen in the table, almost all of the increase in poverty during this period is in one year: 2002 (first quarter) to 2003 (first quarter). Not surprisingly, this is the worst of the recent economic recession, which was caused by the oil strike of December 2002-February 2003. . . .

Read the full article here.

Weisbrot is a major manipulator of data, and has quite a selective memory. This is not the first time he writes this type of twisted comment, I am afraid to say so.

The basic failure of his article is that he conveniently "forgets" to mention the devaluation of FEBRUARY 2002, a devalaution that happened BEFORE any of the political troubles happened. For example the coup is in April 2002 and I could even make a case that part of the motivation of the marchers that went to Miraflores on April 11 2002 was their anger at having been robbed of their savings due to devalaution of the currency.

In other words, it is the devaluation that started the decline of income in poorer sectors, a decline that might have been aggravated by the political unrest but NOT CAUSED by it!!!!

It would have been much better to see that reflected in the article.
So, are you predicting another 10-15% increase in poverty this year, due to the currency devaluation in the first quarter?
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