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CEPR Responds to Debate About Venezuelan Economy

CEPR Responds to Debate About Venezuelan Economy


For Immediate Release: April 17, 2008
Contact: Dan Beeton, 202-293-5380 x104

WASHINGTON, D.C. -- The Center for Economic and Policy Research responded to a debate about the Venezuelan economy that started with a Foreign Affairs article in the March/April 2008 issue which had alleged “a close look at the evidence reveals just how much Chávez's 'revolution' has hurt Venezuela's economy -- and that the poor are hurting most of all.”

In a paper published last month, CEPR had shown these allegations to be contradicted by the available data.

The current paper, “How Not to Attack an Economist (or an Economy): Getting the Numbers Right” by CEPR economist and co-Director Mark Weisbrot, responds to a Working Paper at Wesleyan University by economist Francisco Rodriguez which defended his original analysis in Foreign Affairs.

"The Venezuelan economy has been booming for five consecutive years now, with the poverty rate cut by more than half and real (inflation-adjusted) GDP increasing by more than 87 percent, with very little of that in oil," said Weisbrot.

"Real social spending per person has also tripled, with increased access to subsidized food, health care, and education for the poor. There really shouldn't be any question about these basic issues, and this debate should make that clear."

The paper also shows that the amount of poverty reduction accomplished in Venezuela during the current economic expansion, relative to the growth that has occurred, compares quite favorably to other countries – contrary to one of the main allegations in the Foreign Affairs article.

Weisbrot also noted that because of the current political climate and bad relations between the Bush Administration and the Venezuelan government, allegations about Venezuela – whether it is regarding the economy, the war on drugs, or terrorism – are often accepted without proper scrutiny.

"It is important to maintain some objectivity about what the data show," he added.

Prior to publication of a previous CEPR paper, “Poverty Rates in Venezuela: Getting the Numbers Right,” the U.S. and international media, and magazines including Foreign Affairs and Foreign Policy, had widely disseminated the false assertion that poverty had worsened under the Chávez government. After CEPR's paper was published, several major newspapers ran retractions or corrections, and the vast majority of the media stopped repeating this particular falsehood.

The Center for Economic and Policy Research is an independent, nonpartisan think tank that was established to promote democratic debate on the most important economic and social issues that affect people's lives. CEPR's Advisory Board of Economists includes Nobel Laureate economists Robert Solow and Joseph Stiglitz; Richard Freeman, Professor of Economics at Harvard University; and Eileen Appelbaum, Professor and Director of the Center for Women and Work at Rutgers University. CEPR does not receive any funding from corporations, unions, or foreign governments.
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