Blog

The Left’s enthusiasm for Venezuela has waned significantly of late. As the country is gripped by galloping inflationmassive shortages of food and other essentials, and a steep decline in public revenue compounded byplummeting oil prices, the case that the late Hugo Chávez’ model of ‘21stcentury socialism’ can bring prosperity to the many looks increasingly implausible. On top of that, state repression and violence have become too widespread to ignore. Yet, despite growing signs of impending catastrophe, a favourite claim of chavista apologists remains that the regime’s 15-year rule has ushered in unprecedented social progress for the poorest Venezuelans. Only last year, just when the country witnessed nationwide opposition protests that were brutally suppressed by the socialist government and loyalist gangs, Owen Jones touted Chávez’ “key strategy [of using] oil riches to fund social programmes.” And even among less partisan international observers, the dominant narrative is still that, despite severe economic mismanagement, the Bolivarian administration has brought healthcare, education and better nutrition to the most vulnerable.

Well, it turns out even that was a mirage, as a ground-breaking report from Caracas-based think tank CEDICE shows. Using a wealth of data – which is ever more difficult to obtain due to the government’s obscene manipulation and firm grip on the media – the authors dispel the myth of progress under the socialist administration. Instead, they show that the government’s social spending has failed to improve the health of Venezuelans, their ability to obtain an adequate education, or even their nutrition. The report’s verdict is scathing: Far from pursuing its stated goals, the “goal of spending and social policy was to create a clientelist infrastructure for electoral gain, making the ruling party politically invincible.” No wonder, then, that objective indicators show little improvement.

Consider healthcare. The conventional wisdom holds that the Chávez government’s programme of “missions” to Venezuela’s most deprived neighbourhoods, staffed in large part by Cuban medical personnel under a quaint oil-for-healthcare deal between the two regimes, has made important inroads to improve the health of Venezuelans. But conventional measures of health, such as those used by the UN to monitor achievement of its Millennium Development Goals, give quite a different picture. Infant mortality, after declining sharply in the first part of Chávez’ term, has climbed back up since 2006, reaching 15.2 deaths per 1,000 live births in 2010. Neonatal mortality, i.e. death within 30 days of birth, has seen the same U-turn and is now on track to reach pre-Chávez levels. The picture for maternal mortality is even bleaker, with a steady increase since 1998 which has put the rate (of maternal deaths per 100,000 live births) at 69.7 – a level not seen since the mid-1970s.

Morbidity, the relative incidence of disease, has also performed very differently from popular perception. Taking the example of malaria, the CEDICE report shows an upward trend in prevalence since 1999, from 90.8 cases per 100,000 to 151.9 in 2007 – when, the authors point out, the authorities stopped publishing annual epidemiological statistics. So, instead of the remarkable declines in mortality and morbidity which we might expect given the prevailing narrative, the reality is one of deteriorating health indicators. And this, one should stress, despite consistent improvements in he decades before the socialist government came to power, and in the context of an oil bonanza that allowed a massive expansion of the healthcare budget.

Let’s turn to education. Again, the story we hear from sympathisers and independent observers alike is that chavista policies have improved access to higher education, opening up the country’s universities to hundreds of thousands of poor Venezuelans. Yet, the massive influx of new students into Venezuela’s public university system in a short span of time means that most new entrants lack adequate training to successfully complete their studies. And sharp budget cuts as the country’s economic crisis deepens have left universities – which are rarely granted more than 30 per cent of what they ask for – ill-prepared to cope with the masses of new students. In other words, socialist policies may have improved Venezuelans’ access to higher education, but with little chance to meaningfully benefit from it.

How about nutrition, arguably (to some) the most fundamental, most basic accomplishment of the Bolivarian regime? Through the state-owned Mercal network of supermarkets, the government claims to offer citizens essential foods at subsidised prices, supplanting markets and private exchange. Oil, rice, sugar, butter and chicken are some of the products sold in this way. And the state has drastically expanded its role in this sphere, catering (as of 2013) to 12.5 million Venezuelans, in a country with an adult population of 20 million. Here again, a look at outcomes rather than inputs is sobering: Obesity has increased in the course of chavista rule, with only modest improvements in Venezuelans’ average caloric intake. What’s more, food subsidies and currency appreciation in the oil boom years have critically deepened the country’s trade deficit and rendered domestic food producers and exporters uncompetitive.

How could this happen? How is it possible that the country with the world’s largest proven oil reserves could witness such profound deterioration in key human progress indicators, even as high oil prices allowed an enormous expansion of the public budget? Incompetence and inefficiency have played a role, of course. As has been proven time and time again, attempts to manage centrally such complex processes as the distribution of foodstuffs, the allocation of university places and the treatment of myriad medical conditions are bound to fail. Similarly, replacing market forces with government fiat will inevitably lead to waste and injustice, with long-standing consequences for the many lacking political connections.

However, there is more at play in Venezuela, according to the CEDICE authors. The socialist regime may have set out to improve the health, educational and nutritional outcomes of Venezuelans when it came to power in 1998. But those good intentions quickly took second place to darker political ambitions, namely to establish a comprehensive infrastructure of state dominance of economic and social life, to make the population dependent on the whim of the ruling class. This went hand-in-hand with a comprehensive hollowing out of the existing safety net, which had succeeded in gradually tackling the plight of poor Venezuelans since the 1950s. Thus, the private sector has been driven to the margins of food provision, while a majority of citizens are forced to endure queues and shortages on a daily basis. A well-developed network of universities, many of them enjoying independence charters, has been starved of funds, which have been diverted to the government’s own pet projects where political indoctrination is the order of the day. And healthcare resources have been devoted to the government’s ideologically tainted “missions,” leaving hospitals with a shortage of money, medical supplies, pharmaceuticals, and staff. According to the Venezuelan Medical Federation, 57 per cent of trained physicians have left the country, fleeing economic hardship and insecurity.

There can be little question that, only a few years from now, the experiment of 21st century socialism will be regarded as an utter economic failure, leading to the impoverishment, suffering and displacement of millions of people. Like other attempts at central planning, the chavistamodel will be discredited, with even former proponents conceding that it may have worked “in theory, but not in practice.” However, defenders of the free economy also need to point out the social catastrophe that has accompanied economic decline, with a steady depletion of the social and human capital that had been built in the decades prior to 1998. Thanks to the commendable work of CEDICE on the ground, we now have definitive proof. But the rest of the world must know about it. Otherwise the socialist regime will be given credit it clearly doesn’t deserve.

 

This article first appeared on CapX.

Comments (0)

Post new comment

The content of this field is kept private and will not be shown publicly.
Type the characters you see in this picture. (verify using audio)
Type the characters you see in the picture above; if you can't read them, submit the form and a new image will be generated. Not case sensitive.

As in all IEA publications, the views expressed in this blog are those of the authors and not those of the Institute (which has no corporate view), its managing trustees, Academic Advisory Council or senior staff.

Previous blog posts

Search

Philip Booth
26 May 2015
2 comments

There is no shortage of commentators who blame Mrs Thatcher’s supposed deregulation of the City for the crash of 2008. From senior politicians to the leading left-leaning blogs, many have put...
Charles B. Blankart
22 May 2015
comments

The euro was a mistake, and Greece has been hit hardest. If European politicians could travel back in time to 1990, they would hardly decide to introduce the euro again. Before the euro, there were...
Mikko Arevuo
21 May 2015
3 comments

It has become increasingly difficult to make a case for the morality of markets even though free market capitalism has been unequalled in reducing poverty and discrimination, and in creating...
Christopher Snowdon
20 May 2015
1 comment

Do you remember the great booze scare of 2004-05? Think back, you must recall it. The prophecies of doom about ‘24 hour drinking’ were everywhere. Shortly before the Licensing Act came...
Ryan Bourne
19 May 2015
1 comment

I once asked one of Margaret Thatcher’s senior advisers whether her governments had been “too obsessed with economics”. “Economics,” he replied, “is not the most...
Charles B. Blankart
18 May 2015
comments

Tax competition among Swiss cantons and municipalities puts downward pressure on taxation, but it does not lead towards a policy of low taxes at any price. Cantons are usually not prepared to...
Kristian Niemietz
14 May 2015
2 comments

The Economist, 11 April 2020 - Continued from part 1 (healthcare) - Up until 2016, the UK was one of the most centralised countries in the world. What was strange about this arrangement was that...
Diego Zuluaga Laguna
13 May 2015
comments

Last Friday, a colleague and I attended a conference on the plans for a Capital Markets Union in Brussels. I decided to order an Uber to take us to the airport afterwards, because it cost only about...
Mikko Arevuo
12 May 2015
1 comment

The economic impact of higher top tax rates was one of the more contentious themes of the recent general election. The advocates of higher marginal tax rates for top earners dismissed the idea that...
Kristian Niemietz
11 May 2015
comments

The Economist, 11 April 2020 With the 2020 General Election less than four weeks away, this special edition and the next two will provide some in-depth analysis of what we think this government got...
David Starkie
8 May 2015
1 comment

The 2015 election campaign offered the electorate a choice of policies on HS2: The two major parties, plus the Lib Dems supported the project, the Green Party and UKIP opposed it. But it was a case...
Diego Zuluaga Laguna
7 May 2015
comments

In the ongoing negotiations for a free trade pact between the EU and the US, the question of investment protection, and in particular the infamous investor-state dispute settlement (ISDS) clause,...
Serena Sileoni
6 May 2015
1 comment

In his book The Antitrust Paradox, Robert H. Bork recalls a lawyer’s quip which compared antitrust authorities to the sheriff of a rowdy Western frontier town: The sheriff does not always have...
Christopher Snowdon
5 May 2015
2 comments

It is around about this time in the electoral cycle that free market economists and libertarians start talking about their rational decision not to vote. Sam Bowman of the Adam Smith Institute set...
Philip Booth and Alberto Mingardi
1 May 2015
comments

The anti-trust authorities are continuing to try to police the high tech markets. But are they up to the job? The new investigation opened by the European Commission into Google’s market...
Philip Booth
30 April 2015
13 comments

What is striking about Paul Krugman’s recent article in the Guardian criticising the British ‘austerity culture’ is the complete lack of curiosity about the varied and very distinct...
Kristian Niemietz
29 April 2015
comments

When the action movie ‘Thor’ and its sequel were shown in cinemas, the media often referred to its protagonist as a ‘Viking God’ or an ‘ancient Scandinavian God’....
Ryan Bourne
28 April 2015
1 comment

Which school of economic thought has been vindicated by the macroeconomic performance of the UK over the past five years? Given that economists, historians and politicians are still busy analysing...
Victor Chukwuemeka
27 April 2015
2 comments

In the run up to the election, the Labour Party has addressed the most critical problem facing the ‘lost generation’, i.e. Britain’s young cohorts. Milliband has reaffirmed that...