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Home Publications Blogs Beat the Press Economic Problems in Venezuela Did Not Begin With Chavez

Economic Problems in Venezuela Did Not Begin With Chavez

Saturday, 21 April 2012 17:06

A NYT piece on shortages in Venezuela told readers:

"Venezuela was long one of the most prosperous countries in the region, with sophisticated manufacturing, vibrant agriculture and strong businesses, making it hard for many residents to accept such widespread scarcities."

This may give the impression that Venezuela's economy was strong before Hugo Chavez came to power in 1998. This is not true. According to the I.M.F., per capita income was actually 11.8 percent lower in 1998 than it had been 18 years earlier in 1980. Since Chavez came to power per capita income has risen by 4.9 percent. While this is hardly robust growth, since it was accompanied by greater equality in the distribution of income there can be little doubt that most Venezuelans have fared better under Chavez than under his predecessors.


Source: International Monetary Fund.

Comments (4)Add Comment
written by bmz, April 22, 2012 10:05
For those opinions, you are suspended for the next five games.
written by Calgacus, April 23, 2012 3:20
Since Chavez came to power per capita income has risen by 4.9 percent.

And this is in the context of incessant economic warfare and subversion, to the level of fomenting a coup, from the worlds most likable rogue terrorist state, the good ol USA. If the USA were led by a Chavez, an FDR, the world would be a paradise.

It takes hard work from our kleptocrats to make the USA as poor as it is and still manage to impose so much misery round the world. The few nations that have achieved stagnation in the context of the Washington consensus of imperial pillage are run by the moral & intellectual equivalents of the USA's founding fathers.
written by LatAm Communiqué, April 23, 2012 11:22
The fundamental issue that the NYT was reporting on was the fact that fixing prices on food has led to scarcity and long lines at stores. That point stands. Additionally, per capita income growth of 4.9 percent is hardly enough to keep up with inflation -- especially inflation of the sort that exists in Venezuela.

Yes, there has been growth in Venezuela and for now the average person may have seen a boost in their standard of living -- only in some respects thought, definitely not in crime, freedom of expression, or quality of university education. However, with the Chinese driven commodity boom, it would be astonishing if there wasn't a boost in economic well being.

Once that boom ends, will people look back at the Chavez regime well? With the main industry of the country (oil) in shambles and many of the nation's most productive firms in stagnation because of artificially low prices and/or government harassment, I do not so. Center left leaders like Lula, Dilma, Bachelet, and Vasquez have figured out that the best way to get people out of poverty in a sustainable manner is to work with the market and private industry -- not seek to exorcise them. There is a difference between regulation and smart social policy on the one hand and destroying the economy on the other.
per capita increase plus subsidized food,housing, medicine
written by quidproms, April 26, 2012 8:50
From my limited perspective, in Venezuela health care is more or less universal without financial burden on recipients, government subsidized food has vanquished hunger, and decent housing is more available for the poor. These items contribut to the standard of living increase for the poor that is not reflected in the per capita income statistic.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.