VENEZUELA'S ELUSIVE POVERTY FIGURES
The Center for Economic and Policy Research, a Washington D.C. think tank that often defends Venezuelan President Hugo Chavez’s policies, has written a letter complaining about a side-remark on Venezuela’s poverty rates I made in a March 9th column. The CEPR objects the fact that “Mr. Oppenheimer has repeatedly claimed that poverty has risen in Venezuela,” which it says is not true. I have looked into this, and you can find my preliminary conclusions in the comments section. I will write a column on this closer to Venezuela’s December elections.
posted by Andres Oppenheimer at 10:58 AM
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I will divide my findings in three sections: 1) The CEPR’s demand that I “correct” my assertion that poverty has risen in Venezuela;
2) Venezuela’s Universidad Andres Bello Poverty Studies Project’s figures on poverty under the Chavez government; 3) My conclusions.
1) Leaving aside the fact that it’s odd that a U.S. think tank would make several calls and write a letter demanding a “correction” of a story on Venezuela in which it is not even mentioned, CEPR objects to my remark March 9 remark that “oil-rich Venezuela has seen poverty grow by more than 10 percent since Chavez took office, according to official Venezuelan government figures that were recently revised after Chavez denounced them as unfair.” I was referring to the fact that, after it became known that Venezuela’s own National Statistics Institute (INE) had reported a 10 percent increase of poverty between 1999 and 2004, Chavez denounced the INE for following a “capitalist” methodology for counting poverty, and the INE reported lower poverty rates shortly thereafter. Not surprisingly, many Venezuelans saw the new figures with great suspicion, despite the fact that the country is benefitting from ist biggest oil boom in recent decades.
CEPR says that “there is no factual evidence that poverty had increased as of October 2005, and readily available statistics showed the opposite.” CEPR quotes Venezuela’s National Statistics Institute (INE) Figures as showing that, while poverty in Venezuela did indeed rise by 10 percent between 1999 and 2004 (from 50 percent of the population in 1999 to 60 percent in 2004,) the most recent figures show poverty has declined to 49 percent in the first half of 2005, and to 44 percent in the second half of 2005 (most likely as a result of the oil boom,) which would mean it is nowadays below what it was when Chavez took office in 1999.
2) In a telephone interview from Venezuela earlier this week, Venezuela’s best-known poverty expert, Universidad Andres Bello Poverty Studies Project director Luis Pedro Espana told me that his own institute’s figures show that poverty rates have remained flat at 60 percent of Venezuela’s population between 1999 and the first semester of 2005. His institute will release updated figures for the second half of 2005 in September, he said. Asked why there is such a difference between his group’s figures and the INE figures, Espana said that it’s because his group is calculating poverty based on the same Central Bank basket of products it used in 1998, while the INE has changed the composition of its basket of products in 1999. “Poverty is more or less the same than it was in 1999, despite the oil boom. When Venezuelan poverty rates decline at the rate of Chile’s, we’ll be the first to celebrate it,” Espana said.
3) My conclusion: I will write a column on Venezuela’s poverty rates in the near future, closer to Venezuela’s December presidential elections. Theoretically, despite Chavez's disastrous management, the country's biggest oil boom in recent decades should have a short-term impact on poverty rates. But we will have to wait and compare the latest INE figures with the Andres Bello University figures for the second semester of 2005 before drawing any conclusions.
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NO ES NECESARIO QUE PUBLIQUE ESTE COMENTARIO SI NO LO DESEA.
Un mes atrás leyendo el Informe Oppeheimer y sus comentarios me quedé impresionado por un absurdo y estúpido debate provocado por los comentaristas del weblog sobre que Idioma debía prevalecer en los mismos.
Insultaban a Oppenheimer por permitir que la gente escribiera en español. Argumentaban que esto era una nueva manera de ceder ante la Invasión Hispana y etc., etc. Tan ridículos argumentos me llevaron a buscar el motivo por el cual la gente entraba en este debate siendo que Oppenheimer escribe sobre temas de América Latina y no solo para el Miami Herald, el Nuevo Herald y la Nación de Argentina.
Entonces, encontré lo que llamé "la razón". El Nuevo Herald tenía un link en su webiste que redireccionaba al Oppeheimer Report en Inglés. Es decir que el hispano parlante que leía el Periodico en Español iba a parar a un weblog en Inglés.
Claro está, y coincido con Oppeheimer; en que mientras más lenguas hable una Nación, mientras más culta su gente, será también más su grandeza.
Pero me parecía absurdo que la manera de enseñar a la gente Inglés fuera llevándolos por la fuerza hacia una sitio que no comparte el estílo linguistico del Diario.
Digo, que también comparto la obligación de aprender Inglés para todo aquel que desee vivir en este hermoso país con el ánimo de hacer de él su Nación.
Lo que no podía entender es que siendo el mismo contenido de los Informes en Inglés y en Español, el Miami Herald tuviera blog permitiendo la maravilla de la discusión acalorada y que el Nuevo Herald tuviera el reporte en forma de artículo pero no en blog viéndose en la obligación de producir un link al blog en Inglés.
Les envié un email a la Redacción del Nuevo Herald que es para mi quien está cometiendo el error. Máxime cuando es tan sencillo realizar el weblog en español y teniendo en cuenta que Oppeheimer no hace más de tres artículos a la semana.
Lo recibieron y no me contestaron. No por ello me hice problema, fue solo una sugerencia.
Surgió entonces mi idea de hacer una copia exacta del weblog en español. No traduciendo que podría llevar a error sino copiando y pegando el texto de Oppenheimer en español y pasándolo a formato weblog.
No solo dejé totalmente en claro que era yo quien administraba el sitio y que el autor de las notas que se veía en la pagina pertenecían a Oppenheimer, sino tambien que todos los logos, fotos, etc. pertenecían a sus dueños. El Nuevo Herald.
Además escribí posts en el mismo sitio de Andrés Oppeheimer para que lo supiera, que esto no era nada oculto sino la chance de dejar "decir" a los lectores en español en algo que no fuera una ensalada.
¿Y cual era mi motivo? Simple, dar a los lectores del Nuevo Herald la chance de dejar sus comentarios en un sitio que creára un gran debate sobre las notas de Oppenheimer, ese es el alma y sentido de la existencia del weblog.
Claro que tomaba por mi cuenta lo que debía hace el Nuevo Herald.
En ningún momento me pareció idea absurda o que atentara contra los intereses del Periódico en español y menos el redactado en Inglés. Todos los derechos fueron siempre respetados y he comprendido perfectamente lo que Suzanne Levinson del Miami Herald me mencionara en un email, "le pedimos que retire los logos y...para evitar confusión en los lectores...y que ellos tengan la seguridad que visitan un sitio ajeno al Nuevo Herald."
De buena voluntad, gratuítamente, hice el weblog para fomentar el debate entre los que seguramente tienen mucho que decir. Toda la comunidad Latinoamericana que lee el Informe Oppeheimer evitando de ese modo el dejarlos fuera de la discusión.
El Miami Herald les permite a sus lectores leer el Informe O. y ademas comentarlos en el weblog. Rídiculamente el Nuevo Herald les permite a sus lectores leer el Informe O. pero pareciera decirles: "Si desean dejar comentarios sobre el Informe O. háganlo en el weblog en Inglés aunque no comprendan lo que otros comenten. Hacemos esto para fomentar el aprendizaje del Idioma Inglés, lo lamentamos".
Particularmente no entiendo porqué el Nuevo Herald no tiene weblog del Oppenheimer en español.
No teniendo motivo alguno para continuar éste weblog, el mismo será dado de baja próximamente. La creación y modificación de un sitio web es solo un entretenimiento y un aprendizaje para mí. Gracias a los lectores que estuvieron leyendo la copia del Informe desde ésta página atento a la información recabada por Statcounter, desde España, Mexico, Canadá, Argentina, Inglaterra y a los residentes de Los Angeles, Boston, Atlanta y Miami Beach que también lo hicieron.
Eduardo Vera
Abogado recibido en la Universidad Nacional de Mar del Plata (Argentina)
Website Designer diplomado por Penn Foster School of Pennsylvania
Profesor de Inglés Americano titulado por la Asc. Cultural Argentino-Norteaméricana.
Might be interesting to see unemployment rates, and average salaries.
The traditional problem of Venezuela has been the fact that the oil industry does not create much jobs.
Historically, Venezuela has failed to diversify its economy, relying on oil. In the 70's 90 percent of exports and 80 percent of revenue were from oil Given the political and economic crisis that followed the fall of oil prices in the 80's, I doubt that much has changed.
There probably are real gains in the private sector, through the service economy and certain areas such as construction.
How about direct employment? Venezuela has been a classic rentier economy. The state funnels cash to create clientilistic constituencies. Past Venezuelan governments tried "industrializing", by subsidizing manufacturing - creating jobs for the poor and pumping cash to the rich.
The questions to ask are what Chavez is doing directly to create jobs, and what kind of salaries are being paid. And, outside of direct jobs, what kind of programs that offer direct payment to the poor are out there?
Even if there are extremely well- funded "make work" schemes or government programs, Venezuelan history is also instructive. At one point, they spent more on health and education than any other Latin American country, yet the results did not show according to the IDB. If Chavez is indeed mis-managing his administration, there is little to be optimistic about.
* All statistics are from: Thorp, Rosemary, Progress, Poverty And Exlusion, An Economic History of Latin America In the 20th Century, 1998 IDB Publications.
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The "best known poverty expert" Mr. Espana, is actually most known for his work with the opposition. He does work for the US-Venezuela Chamber of Commerce and other "economic liberty" groups. He has spent the last 7 years bashing every Chavez policy he can. He has called the quite substantial social programs (Missions) in place nothing more than "social theatre." So he is surely not an unbiased poverty expert as anyone would understand it. (and why leave the Catholic part out of Universidad Catolica Andres Bello (UCAB??)
Still, one can find in his own work that poverty has decreased since the lock-out contraction (by 5%). But while his numbers have been consistently more gloomy than the Government's, it is not until post-2003 that his numbers go WAY off line. For him to blame that on changes INE made in 1999 doesn't hold water.
But since INE is (unjustifiably)assumed to be lying, here again, are 2 other sources on poverty related info:
The Economist says “There was a 43% rise in income for social class E [the poorest] in 2005, and 18% for class C,” says Luis Vicente León, of Datanálisis, a polling firm. Since Mr Chávez came to power, class E “has practically doubled its consumption,” adds Armando Barrios, an economist at IESA, a business school. Unemployment has fallen from around 20% in 2003 to around 10% today."
Shame that the blog administrator decided to remove my previous comment. In this business of character assassinations borne out of political simpathies it's always useful to point out where self-appointed experts shop for information. In any case, as previously written Mr Weisbrot is not an authoritative source on anything related to Venezuela. He is however the main advocate of a new economic hypothesis that seeks to include 'feel good factor' in poverty measurement methodologies. As such if recipients of hand outs in Venezuela feel good about it, that is a measurable, quantitative factor that must be included at the time of measuring poverty. The fact that now some Venezuelans receive a pack of subsidised food or are able to purchase with monetary hand outs received from government mission subsidised stuff in MERCAL, when they didn't in the past, points, in Weisbrot's view, at an increase in income that translates into poverty reduction. No mention is made to the fact that the hand outs are not a constant source of income upon which poor people can plan their lives but rather a politicised policy that comes into gear especially in election times.
There are of course more serious analysts who have spent a lifetime studying poverty in Venezuela, such as Luis Pedro España, that conduct their research with utmost professionalism or whose methods are not dependant on the policy du jour. Others, empirically, have taken the trouble to analyse the data published by the Chavez regime and have arrived at the same conclusion the INE did before Chavez ordered them to change methodology.
Here's a glimpse of their findings, perhaps this time round the blog administrator allows for my comment to be discussed on the merits of the facts reported:
Hugo Chavez's effect on Venezuela's poverty
Venezuelan data
Very simply I will say, if you doubt the level of poverty has risen in Venezuela, come and see...visit Venezuela. You can visit the wealthiest parts of the city as well as the poorest areas and view the decline in the level of living.
There are areas of improvement, the new International terminal at Maiquetia Airport, and the amazing new Brazilian built metro line addition in Caracas, but for the most part the money circulating doesn't reach much more than small handouts to the poor. No infrastruture and little potable water in most non-urban areas.
Statistics are fine, but until people can see with their eyes, that the "oil boom" income does not reach the majority of the people.
Weisbrot says:
For now, suffice it to say that they have no evidence that the INE has changed its methodology for measuring poverty, or that the drop in the measured poverty rate since 2004 is anything other than what it appears to be, a result of a rapid economic recovery from the deep recession caused by the oil strike of 2002-2003.
WOW! So the bottom line here, is Weisbrot gets all worked up, demanding corrections, because Oppenheimer said that poverty levels had gone up 10 percent during Chavez ' government. From 99 to 2004 that is a fact. Lets actually look at the numbers the government gave, to see what happened before 99 too.
1997 48.1%
1998 43.9%
1999 42.0%
2000 40.4%
2001 39.0%
2002 48.6%
2003 55.1%
2004 47.0%
So basically, what you see is that prior to Chavez the poverty rate was going down, after Chavez the rate of this reduction went down, and was then reversed.
So lets look at three key years, one prior to Chavez, 2001, and 2004.
1998
2001
2004
GDP (trillions of 97 Bs.)
42.1
42.4
42.0
Poverty Rate
43.9%
39.0%
47.0%
Government Spending
$19.0 billion
$29.3 billion
$28.7 billion
Spending as % of GDP
21.4%
25.1%
26.5%
Government Oil Income
$5.1 billion
$11.0 billion
$12.4 billion
Oil Income as % of GDP
5.8%
9.4%
11.4%
Total Debt
$27.5 billion
$36.4 billion
$42.6 billion
Total Debt (as % of GDP)
29.6%
30.4%
39.0%
http://www.vcrisis.com/?content=letters/200601180629
So even before the 2005 oil boom, the Venezuelan Goverment, from 98 to 2004 had almost doubled its income from oil. Its government spending went up by 9 billion dollars, increasing also in terms of percentage of GDP.
But even with all that the poverty level went up????
Oh, I forgot, blame the strike and coup attempt for all that. I guess Weisbrot doesn't like these striking workers!!!
Regardless, if there was a reduction in oil production within PVDSA, how much of that was based on Chavez own policies??? After all, since coming to power all he did was try to milk, more and more money out of the company, to the point where he arguably was cutting into their operating capital. Or, a policy of replacing long-time skilled managers and workers with cronies????
I have actually not written much about Chavez’ policies or Venezuela’s policies. The vast bulk of what I have written or said about Venezuela has actually been about U.S. policy towards Venezuela.
Hmmm. defending the Chavez regime's funny business with the electoral rolls seems more like something a Chavez apologist would do, rather than a critic of US policies. Seem to remember you making the exact same argument back in your Latin America Solidarity Committee days - you were a critic of U.S. policy, and never a Sandinista apologist, that is until someone confronted you with facts and it was clear where you stood.
Weisbrot's ridiculous claim about being nonpartisan is total baloney.
It's a denial so preposterous, it sounds Soviet.
Mark Weisbrot, Venezuela and the Venezuela Information Office, Part II
Andres, I’m glad to see that, several months later, you now agree with us, noting that “Since 2004, poverty has decreased to 34 percent” (See "On one Indian campus, Chávez a big hit", January 14, 2007,). I’m also glad to see that you cited the latest statistics from Venezuela’s National Statistics Institute for this new column.
-Dan Beeton, CEPR
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