Fourteen years on

chavez capriles
Que bolas esta foto…

Oh geez, has it really been fourteen years already? Who knew?! Time flies when your country is going down the toilet.

Dígalo ahí, Santos,

Cuando empezó la revolución, las exportaciones petroleras de Venezuela equivalían a 522 dólares por persona. Catorce años después, al cierre de 2012, esa misma cifra alcanza los 3.095 dólares per cápita. Es una cifra colosal, aun si ajustamos por inflación en Estados Unidos el aumento es de 324%. Decir eso es decir que cada uno de los 14 años nuestras exportaciones petroleras reales per cápita crecieron 11%. Pero esta lluvia de recursos no fue suficiente. En 1998 la deuda de externa de toda la República era de 28.455 millones de dólares (1.220 dólares por persona). Al tercer trimestre de 2012, la deuda externa consolidada de la República totalizó 102.357 millones de dólares (2.454 dólares por persona). Aun ajustado por inflación, cada uno de nosotros debe 101% más que hace 14 años.

¿Qué hicimos con todo ese dinero? Muy poco, la verdad. El PIB per cápita, en una época de bonanza extraordinaria, ha crecido 13% en 14 años (0,9% anual). En ese período, pasamos de importar 838 dólares por persona al año a nada menos que 1.350 dólares. A falta de producción e inversión nacional, las importaciones hicieron posible un enorme boom de consumo: un venezolano promedio consume en volumen 53% más que en 1998. Así, la renta petrolera entera se nos escapó en importaciones (428.083 millones de dólares o 62% de las exportaciones petroleras) y salidas de capital (169.378 o 25%). Allí tenemos ya el 87% de los ingresos provenientes del petróleo. ¿Y los de la deuda? Esa historia es más triste aún. Todo el crecimiento de la deuda pública externa y buena parte de nuestras reservas internacionales fueron a las arcas del Fonden. Desde su fundación, el fondo ha recibido más de 105.000 millones de dólares, sin que tengamos hasta la fecha ninguna idea de qué hicimos con ese dinero.

It’s ironic. All these years later, the only defense left for chavismo is that it has “reduced poverty” – a reduction that, when you look at it closely, amounts to rerouting a portion – but only a portion – of an enormous oil windfall to imports of final consumption goods, all the while massively expanding debt and turning an enormous portion of our public finances into an accountability black hole.

That “achievement” is all chavismo has on hand to justify the rise of an autocratic state alongside the wholesale dismantling of law-based government.

But development as freedom?  Development as deepening people’s capabilities?  The one capability chavismo has allowed people to develop is the capability to shop for foreign-made goodies.

Happy 2 de febrero, everyone. I’m going back to bed.

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    • Si esa fuera la situación, no habría problema. El asunto es que sí llegará el momento en que se sientan estafados, y más tarde el momento en que intuyan cuánto. Puede ser que llegue demasiado tarde, pero llegará.

  1. Very, very, very sad indeed. Even the more so when you consider that most left-wingers in Venezuela would cry with that chapter of Galeano’s “Las Venas Abiertas de América Latina” in which he describes how all the silver and gold that arrived in Andalucia, would not even last a week there. The reason? Spain had to pay for all the consumption goods it had to import from the British and the Dutch; a side effect of high inflation and overvalued currency that killed local manufacturing, the aearliest version of the Dutch desease fuelled by precious metals instead of oil
    The Spaniards ended up financing and propping up both the British and Dutch Empires
    Does the monk Giordani ever heard about these black history tales???

  2. Also, if “poverty reduction” really was that, poverty reduction, then why do we live in a country with a higher crime rate than Mexico or Colombia, countries with you know, the biggest drug cartels in the world and in the case of Colombia, fighting against guerrillas that have no qualms about kidnapping and killing innocent people. Una formalidad? US/Israel sabotage? Capitalismo?

    • I don’t think our crime rates are very much linked to poverty reduction. I mean, it has more to do with rule of law , governance and empowering than with poverty reduction per se. I just woke up , so not a very thoughtful comment 🙂

      • Well, I think “poverty” is very defined very poorly in general. Someone can correct me if I’m wrong on this, but a person making under $2-per-day is considered living under the poverty-line. But if he now makes $3-per-day, then technically he’s no longer poor by definition. Which is bullshit if you really think about it.

        • I don’t think is poorly defined. It’s just that it’s an economic definition, which also depends on which country we are talking about. Poverty is measured in Purchasing Power Parity (PPP). Think about it, you have a poor person that gets US$ 2 in Venezuela, where such currency is undervalued compare to BsF, of course, if you have access to subsidized dollars, which is what Chavismo does with food imports. So, in theory, those who receive that subsidy in Venezuela, and are standardised on US$ 2 per day, are really getting like 5 or 6 dollars per day, which is far up when comparing to other countries. This is why I think the debate about poverty reduction in Venezuela is so mislead abroad. In any case that’s a topic very recurrent in this blog, as you might know.
          Now, whether the concept of poverty line is economistic or not, you are right when pointing out that in absolute terms, it might suck to live with US$ 2 per day, whether in Venezuela or in Congo.

        • Critical Poverty in Venezuela, as in many places, is defined as the amount of income necessary to cover the cost of a minimally balanced local diet. Non critical poverty, or what is normally referred to as the poverty line, is simply double the critical poverty value. This latter value just happens to be close to 2USD per person per day in many places.

  3. I happened to be standing waiting for a long time (as happens here all the time) watching the people go by, and you have to just marvel once in a while at what a beautiful country it is and how good natured people are with each other. In spite of it all. 14 years later, but they haven’t wrecked that yet.

    • It depends. There’s enough psychos running around and enough impunity that you might have to fear getting killed over bumping into someone, having a traffic mishap or crossing looks the wrong way. I live in a place where people won’t automatically say hello to you on meeting you the second or third time, here, when you bump into someone, you can expect them to say “excuse me” even if it’s not their fault, and you do the same. I think I will pass on the risk of getting shot.

      • To put it in perspective, probably while I was writing that comment, i was being robbed: some folks at Simon Bolivar Airport were removing from my suitcase presents I’d bought kids I am seeing on this trip. They’re coming for your M&Ms now! Sheesh.

  4. This post neatly summarizes the hogwash of chavismo. Thank you, Toro and Santos. To the cutline chosen for the photograph, I’d add the same for Chávez’ 1999 inaugural speech: Qué b***s! Moreover for his repeated mantra: «dichoso el ciudadano que bajo el escudo de las armas de su mando, convoca la soberanía nacional para que ejerza su voluntad absoluta». Soberanía, my behind.

    With Chávez out of the picture, with no camouflage from bombastic rhetoric, the promotional efforts from Weisbrot are transparent. Curious is the date of his article’s publication in Al Jazeera: January 30th, 2013. So too, is the article’s subtitle: “Although Chavez isn’t perfect, his villainisation in Western media is perplexing.”

    Hello? Present tense? Reality check!

    Someone’s being paid to keep a certain memory alive.

  5. Toro, count yourself lucky that the government isn’t investing a larger portion of oil windfalls. At least you can still dream of edging an election here and there.

  6. I cant help but wonder how those 14 years would have been like if Chavez hadnt happened , evidently we would be in much better situation than now but would we have made any real progress in addressing the very basic problems of extreme poverty and the challenge posed by the warped attitude and mentality that brought Chavez to Power. For example would the political system have allowed education , health care , job security to advance much further that where it was 14 years ago , would gasoline prices been allowed to rise to a rational level , would our government institutions have rise beyond their very low standard of corruption and incompetence to produce the semblance of a well run government . Would we have fallen again on the trap of bribing the common people with populist policies and give away foibles and lots of imported goodies . If anything these 14 years should teach us that the nighmare we now live through could perhaps have been avoided , but how ?? and if fate ever gives us or another generation a chance at running back the clock and beginning afresh with a new way of building the country , what would we have to do to make a better success of the effort . Evidently going back to the status quo ante is now impossible, but then what is it that must be done to make Venezuela a place fit to live for everyone !! How much maturity have we gained from experiencing the disasters of these last 14 years ??

  7. Querido Primo,
    yo creo que es hora de quitarte la “careta democratica” y ponerte la “careta de la realidad”.
    Los Chavistas no se van a ir por los votos, con Chavez o sin chavez. Tu no vives en Vzla.
    Mi pregunta es, realmente vale la pena que te juegues el pellejo y escribas lo que realmente hay que hacer: sacar a estos hijos de putas a tiros, o la otra opcion es seguir escribiendo la pseudo paja loca de lo que esta pasando, pero bajo un velo semidemocratico?
    Te respeto y te aprecio y tu analisis es muy bueno, pero te digo con cariño: no hace ninguna diferencia.
    Como Einstein dijo “Si buscas resultados distintos, no hagas siempre lo mismo”

  8. This post makes my job easy by proving itself wrong:

    “En ese período, pasamos de importar 838 dólares por persona al año a nada menos que 1.350 dólares. A falta de producción e inversión nacional, las importaciones hicieron posible un enorme boom de consumo: un venezolano promedio consume en volumen 53% más que en 1998. ”

    Private consumption per capita was at around $2500 in 1998. If we take the author’s numbers and say it increased by 53 percent it would put it at $3825 per capita today, or an increase in consumption of $1325 per capita. However, the author says imports per person only increased by $512 per capita. So what is accounting for the majority of increased consumption per capita??? Well, what do you know!! Good ol’ Venezuelan production is accounting for the majority of the increase in consumption!!

    Oh, but wait, the authors says… “A falta de producción e inversión nacional…” What? Of course, that’s bullshit, which should be obvious since he doesn’t provide any statistics to back up the claim.

  9. There is definitely something amiss with some of the specific numbers quoted by the article or in the way they were presented,Still BCV official statistics do point towards a definite drop of domestic production and a steady increase in imports which have reached record highs in recent years so much so that you see some signs that the regime wants to cut the dollars it uses to fund such imports ,an obvious sign that there is not enough of them to continue the rate of imports (e.g. ‘Venezuela cannot become a parking lot for vehicles ) In 2007 imports accounted for 34% of food consumption now they account for 74% of consumption , food consumption accounting for 42% of all consumption . The record on increased consumption is more peppered than I thought , roughtly there were some three years in which it dropped then in late 2011 and in 2012 it caught up again very substantially as the regime poured money (circulante) into the economy,(for obvious electoral purposes) still the increase in consumption was less than could have been predicted from the amount of money the regime poured into the economy . consumption appears to be totally dependent on government dollar and price subsidisation of imports and not on any improvement in the activities of private economy , which is widely acknowlege to be in a sorry state. By the way does GAC failure to specifically criticize the other parts of the article mean that he accepts their accuracy ??

    • “BCV official statistics do point towards a definite drop of domestic production and a steady increase in imports which have reached record highs in recent years”

      This is a false dichotomy. Imports can increase while domestic production ALSO increases, which is exactly what has happened. The opposition politicians and media have consistently lied about this, claiming that the increase in imports means domestic production has fallen. It is simply not true. You better take a closer look at the statistics.

      I assume other parts of the article are true, although I haven’t analyzed those numbers specifically. However, the most important part is what I posted above, which is the claim that all the money has gone to imports while domestic production has fallen. That’s simply more of the same opposition distortion. They’ve been trying hard to beat that lie into the Venezuelan people’s heads for a long time now.

      • GAC. I didnt make up the BCV statistic , i’m not trying to make any point one way or the other . I dont feel threatened if statistic go somewhere uncomfortable , please check the BCV statistic for yourself . I do feel distrustful of govt produced statistics where they indicate something which the govt is interested in lying about , for example the oil production statistics are blatantly false and all the world knows it . You included !!

        • If you didn’t make them up, then post them. I have never seen any statistic showing that 74% of food consumption is imported. That’s just another opposition myth, something Capriles continuously lied to the country about during his campaign.

          • The 74% figure was reported by Datanalisis as a BCV Statistic , If its wrong please do find the original statistic and correct it , The BCV also reported a 10% drop in domestic production , if you also doubt that please use your well honed research skills to correct it , I am aware of the fact that statistics have to be interpreted and that you have a take on what these statistics mean that may differ from that of opposition writers , validating your interpretation requires looking at more data than the one mentioned above . I take it you you accept that the governements oil production statistics are false!!

          • Its not my job to go searching around to verify if some bullshit number you just made up. It is your job to validate it, but obviously you can’t do that or you would have done so by now.

          • GAC, If you think its BS its you job to correct it , I m fine with the number and the source , If your uncomfortable with what you’ll find then its strictly you problem, not mine !!

          • I can see you aren’t familiar with even the most basic standards of academia in which it the responsibility of the author to verify his claims, not the responsibility of the reader to UNverify them. Why don’t you attempt to publish something in any major publication, and when they ask for the sources for your info you can just tell them “If you think its BS its you job to correct it!” That should go over real well!

            “I m fine with the number and the source ”

            Funny thing that. Because you haven’t even provided a source. You’ve CLAIMED that the number came from the BCV, but you haven’t validated that.

            I could just as easily claim that the government has given every Venezuelan citizen a toilet bowl made of solid gold. And my source is the Venezuelan Health Ministry. If you think its BS then its [sic] you [sic] job to correct it!! Que bonito, no?

  10. Off topic but have you guys seen this:

    “Superficially, this raises many questions:

    Why would a former Iranian central banker need to physically launder money into Germany, where any deposit of a check of this magnitude, and especially in this currency, would raise more than a few eyebrows?
    Why did Venezuela, best known in the international monetary arena for being the first country to repatriate its gold several years ago, well before the Bundesbank, use a former Iranian central banker to launder money, if indeed this was mere money laundering?
    Why did Venezuela have anything in common with an Iranian to begin with?
    What would the use of funds of this check deposit have been had it gone through, and how many times in the past has Venezuela deposited massive checks of this magnitude in the past?”

  11. Great reading, but that “que hicimos” me suena a poliedro,what did Hugo Chavez the great leader did indeed, nothing but talking the paja loca for 14 years. Who are the two muchachones on the right of that picture?

    • “Hugo Chavez the great leader did indeed, nothing but talking the paja loca for 14 years.”

      I’m often amazed at how commenters here throw rocks from glass houses. Nosotros, amiga, por que la oposicion ha estado en lo mismo con pocas y leves exepciones.

      • If the opposition had simply kept the same policies as before, they would have done better than Hugo Chavez in reducing poverty and increasing GDP. Hugo Chavez actively destroyed so much through expropriation and an insane currency regime. Sustainable poverty reduction is not rocket science, the opposition need not be mother Teresa.

      • No Fausto, lo siento en el alma but regardless the opposition this that and the other, they have not been intrinsic part of the government to be part of the “que hicimos”. The legacy here is only Hugo Chavez, this is his legacy, pura paja. He could have done a lot of good, he didn’t.

  12. Chavez has been a regression for Venezuela, a socioeconomic disaster whose consequences will last more than a generation for the misfortunate venezuelan citizen. He also leaves a formidable political force driven by corruption and racketeering.

    • Yes, this is because people who take opposition claims at face value usually end up being extremely misinformed about what is happening in the country. This is a case in point.

      • I can only conclude two things:

        1) that GAC has no data to contradict the 60-70% food imports. He tries to compensate by issuing a blanket statement on the rise of milk production, adding no specific figures, or targetted URL, other than a general link to a rudimentary website to Fedeagro.

        2) that PSFs in general are intellectually lazy.

        • Yes, and since the burden of proof must lie on the person MAKING the claim, your conclusions are very relevant for John Barnard.

          • Did I miss something? As in, the rule which stipulates that “the burden of proof must lie on the person making the claim”. Really? Where is this written? Please educate me and provide a specific link. Thanks in advance.

            In my world, the burden of proof for a claim that’s made during a political debate lies on the presenter of that claim, or on the person disputing same. Either way, the statement needs proof. Clearly you are not up to the task. That’s why you resort to winging it, and to obfuscating your ignorance by providing a general link with no specifics on a somewhat unrelated topic. Way to go, GAC. As I said .. PSFs are intellectually lazy. Maybe that’s why they resort to obtuse ad hominems — a great cover for ignorance.

          • I already proved it wrong down below, but nice try anyway genius.

            The laziest thing one can do is simply attack the person making the argument…. i.e. what you typically do.

          • GAC wants his cake and eat it too.
            He proves “it” below, by contradicting his interpretation of the philosophy on ‘burden of proof’, and by providing a general link, in lieu of specific statistics, or a targetted URL.
            Am I supposed to respect this?

          • The link contains data from the BCV. What exactly have you provided to support your case? Oh, I forgot, you don’t have a case…

          • GAC: Since you have not agreed to reasoned discourse, one of the tenets of the philosophy you promote, then all bets are off on requiring burden of proof in claims or counter-claims. That means we can expect more wing-iness from you, with little if any substance, let alone credibility.

          • I don’t promote this philosophy, it is simply general knowledge since somewhere around the 17th century. What is amazing is that you’d never even heard of the idea. Remove head from ass please.

        • Syd : there is in fact a UCV Facultad de Agronomia study which details milk production until 2007 and its no where as ‘generous’ as the MAT stats. The import and production data he questions was given by Datanalisis Leon sourcing it to BCV, as part of a press article which I read some days ago . The data suggests that imports have risen to substitute for declining local production hit by controlled prices and generally hostile treatment of local producers and businesses.,Im not certain this tells the whole story . Although production i is known to have declined in several areas there may have been an increase in some others to the extent consumption has risen given the huge disordered largesse let loose by the Regime for electoral purposes . Consumerism is Venezuelan’s second religion whatever the social origins of the consumer, have money will buy seems to be our national motto.or as used to be said ‘ta barato dame dos’ .Some businesses can thrive even in a daunting enviroment if there is enough of a market for what it sells . Of course its not always possible for local production to compete with imported goods and the regime is more interested in keeping consumers happy than in making local industry viable so that makes for use of its dollar resources in heavy imports . ..

          • Once again, Bill answers with stories, fluff, and zero evidence. Funny thing is he only reveals how little he knows about Venezuelan political economy. The government only approves dollars for food items which local demand cannot supply. In other words, the last bit about not being able to compete with imports is just another example of something he has pulled straight from his ass.

          • It is necessary to mention asses when you are dealing with multiple people who have their heads stuck in them.

  13. John, the answer is that yes, presumably the data is there that contradicts such assumption , but nowhere is it offered . the best data of course is in the small stories that crop up from. the grapevine , for instance , In the bad old days of the 4th Republic a few optimist set up a Powder milk making plant to take advantage of the large volumes of milk being produced in a region full of dairy farmers , for years it operated fine , then more recently fresh milk started getting scarcer and scarcer as these dairy farmer were shut down , at one point the plant no longer could supply its needs with locally produced milk and had to import most of the powdered milk from abroad to keep going . Of course being ‘blood thirsty capitalist’ they could not import it directly , only through a government monopoly .This monopoly had been operating a couple of years when the plant was told that if wanted continued access to the imported milk they would need to buy it though a company set up by a group of former military men , so that they had to pay this company first ( including their nice mark up) and the latter paid the monopoly .About a year later the monopoly cut off their supply for failure to pay their bills, The intermediate company with the glorious former members of Venezuelan bolivarian army had stopped paying the monopoly the milk they “resold” to the Plant but only the plant was getting blamed by the monopoly . Now who would believe such story ?? no true revolutionary could !! still if it were true it would help explain why we import so much more powdered milk than we used to . “there are other stories like this ….from the twightlight zone”.

      • GAC , I see your inability to counter certain information publicly reported by Datanalisis as of BCV provenance is getting on your nerves , Sorry it bothers you so much . I found the information in 5 minutes flat and it should take you even less . Im sorry I wasnt aware of your exquisite academic scruples , my line of work is perhaps a bit more pesky with proof than yours is , in any event this isnt a university nor for that matter a law court , but an open forum for people to have their say with the information they consider reliable , in my case as in yours bad faith should never be assummed , if your have information thats better than what I have please post it , I mean this not as a challenge but as a civil invitation for you to enlightmen me , . Regarding the milk production stats I see their source is the MAT , talking to actual cattlemen and dairy men they give you a rather different story in terms of how difficult its become for them to maintain much less expand their activity , Your tone tells me you re more intent on offending me than on convincing me , thats kind of a turn off for me so if thats your thing please find someone else to talk to.

        • “I found the information in 5 minutes flat and it should take you even less . ”

          Yes, it does take less than that to easily prove you wrong, but I just assumed you might actually attempt to back up your nonsense claims. I was terribly wrong about that.

          This can be seen even in the most basic of news reports. Here’s one that says (using BCV numbers) that there are only TWO food items in Venezuela that exceed 70% imported: beef and milk. That obviously means it is impossible for imports of total food to exceed 70%, but, as we’ve already seen around here, common sense isn’t your strong suit.

          ” Im sorry I wasnt aware of your exquisite academic scruples , my line of work is perhaps a bit more pesky with proof than yours is , in any event this isnt a university nor for that matter a law court , but an open forum for people to have their say with the information they consider reliable”

          Yes, and unfortunately that allows people like you to spout utter nonsense without any backing.

          • GAC. thank you for your courtesy in at last giving us more precise stats from the BCV , See , that was not so difficult after all , your tone is sitll a tad aggresive but I guess thats a question of ‘dialectical manners’ and that cant be helped , it happens to best of us when we become fanatized . Your BCV stats are very interesting , regretfully we must correct your beef stats , we are not 70% dependent on imports rather the other way arround , 70% local 30% imports. (still someone I know who trades in wholesale beef distribution tells me that for close to a year now most of his meat has to be imported as there is not enough local beef to be found) . the Milk stats are awful , 80 to 90 % dependent on imports, 40% of grains are imported as are 45% of all oils , thats bad but not awful , what is awful are the figures for maize and sugar ( 70% and 61%respectively) , the figures for rice are good (80% self supporting) but I remember the days when we were 100% self supporting , I guess that what really skews Datanalisis data is the 1.5 million tons of imports of wheat which of course cannot be produced locally. Still we dont know whether the Datanalisis take on the integrated BCV agricultural import stats are based on value or volume, That data of course we still lack but Datanalisis totalized figures may still be right on a basis of value . We must all thank GAC for bringing all this to our attention . The next step will be to interpret this data to etablish what it exactly means , but thats another discussion !!

          • Ah, good catch. In other words, that makes your assertion even more nonsensical.

            As for remembering when Venezuela was 100% self-supporting, you must be nearly 100 years old then? Since the advent of the oil industry Venezuela has imported food.

  14. GAC , Still sore ?? dont be, its making you incoherent , you’re a smart guy but all that visceral crap makes you sound ….not yourself !. Also you’ve misread what I wrote , Venezuela was once self sufficient in rice , not on all food stuffs , check it out !!.


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