Venezuela's tragedy: Enrichment has been for the few, not the many

Venezuela's tragedy: Enrichment has been for the few, not the many

by Jamie Nugent
article from Wednesday 10, April, 2019

THERE IS A MYTH that as president the late Hugo Chavez reduced poverty in Venezuela. That he helped the poorest at the expense of the rich. It is untrue. Venezuela has, under his and his successor Nicolas Maduro’s policies now become the most unequal society in the Americas, with income inequality even worse than Haiti’s. Ninety-one per cent of Venezuelans live in poverty, with sixty-one per cent living in extreme poverty (less than $1.9 per day). 

A tiny Chavista elite, who have made fortunes from rampant corruption, dominate the rest of the population, ninety per cent of whom don’t have enough money to meet their nutritional needs. A recent survey on poverty carried out by UCAB University showed that more than eight million Venezuelans don’t get enough to eat. Meanwhile, Venezuela is seventh in the world in numbers of quantity of private jets, just behind the UK, with the Chavista elite jet setting around the world to visit their various luxury homes. 

Against the fact of Venezuela’s failed economy today, some claim that when he was President Hugo Chavez made advances against poverty. But this is not true. Although there was a splurge of state spending in the early years of Chavez’s rule, no sustainable reduction in poverty ever occurred.

In itself, reducing poverty was never an objective for Chavez.  His aim was to use state spending to secure loyalty to his regime.

Direct cash transfers and subsidies were used to buy short-term political support from the poor and middle class.  No effort was made to address the structural conditions that were actually causing poverty. When the cash transfers and the subsidies ceased, the situation of the poor became much worse as the surrounding economy had been destroyed by Chavista economic policies.

Most of Chavez’s public spending initiatives took the form of so-called “missions,” programmes that were quite separate from public sector institutions such as state schools or public hospitals. The funding of these institutions took second place to “missions” and “campaigns.” As many of these missions were largely staffed by Cubans they could not build the capacity of Venezuelan public sector staff. The missions gave Chavez a rationale to transfer huge sums to the Cuban regime in return for what he truly desired – their military and intelligence support.

The health programme, Barrio Adentro, was delivered by imported Cuban staff in separate facilities that were built wastefully, with billions lost to corruption.  It went into immediate decline, from reaching 11.7 million people in 2005 to 6.7 million in 2011, to virtually zero today. Throughout this period, Venezuela’s public hospitals (pictured) were neglected and today they have so little equipment and available medicines that they can barely function at all. Even when it was operating, over ninety per cent of the people who received support from the Cuban-run Barrio Adentro health programme were not poor.  Loyalty to the regime dictated whether you would be treated or not.

The picture regarding the educational missions, such as Mission Robinson, is similar. Even back in 2013 traditional education covered 99.4 per cent of students, with missions benefiting only 0.6 per cent of students.  According to a 2011 Central Bank study, traditional Venezuelan poverty reduction programmes that were put into place long before Chavez came to power – such as subsidised school meals and transport, scholarships and vaccinations – were much more effective than Chavez’s missions, which have now collapsed.

The missions were supplemented by programmes which directly transferred goods and cash to government supporters, with recipients were selected by regime officials with the intention of securing their loyalty. Such spending increased in election years with, for example, a 74 per cent increase in these transfers prior to the 2012 election. Now that the economy has collapsed and there are shortages of food and essentials, it is easier for the regime to buy loyalty, even though it has fewer resources available.  While Chavez used to hand out flat-screen TVs to supporters, the regime has since 2016 been handing out toilet paper to loyal soldiers.

It is simply a fact that Chavez’s so-called ‘efforts’ to reduce poverty ended up hugely increasing poverty. Chavez instead enriched a tiny elite. State spending in Chavez and Maduro’s Venezuela was always designed to buy support for a corrupt, dictatorial and ineffective regime, one that has that has created more poverty more quickly than any other country in Latin American history. The short termism and corruption of the Chavistas should never be praised or considered as any type of model for lifting nations out of poverty.

More information on the Venezuela Campaign can be found on its website

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