(Friend of the blog Daniel Raguá sends us this corollary to Dorothy’s latest post)
Never mind inflation, scarcity, and all the rest. Here are some hidden nuggest in Venezuela’s recent economic history:
- The latest Doing Business Report ranks Venezuela 181 out of 189 countries in terms of ease of doing business.
- In the third quarter of 2013, loans to the manufacturing sector increased by 51%. But in the same quarter, manufacturing GDP shrunk by 0.3%.
- Between the third quarter of 2008 and the third quarter of 2013, manufacturing GDP shrunk by 4.1%.
- You know what else shrunk in the third quarter of 2013? Construction GDP, which decreased by 3.2%. Misión Vivienda is running on fumes.
- What little growth we had in 2013 was driven by the following sectors: financial institutions, communications, and public sector services. If you take out the financial sector, growth slows to a halt.
- Banking GDP rose by an amazing 19.5% in the third quarter of GDP. The strange thing is that the number of banking employees rose by a paltry 3%, the number of banks did not increase, and the number of bank branches only rose by 1%. The growth can be explained by an astonishing 64% growth in liquidity, i.e., the money in the economy.
- While oil exports grew by 459% between 1999 and 2012, actual physical number of barrels of oil exported shrunk by 16% in the same period.
- Between 2013 and 2019 alone, Venezuela will have to pay $42 billion just to service its foreign debt. This does not include debt to China.
Caracas Chronicles 
This is really very important, and scary, information. But how can we get it to the pueblo and explain in terms that all can understand?
LikeLike
You can’t. Hell, most people don’t know what GDP means, and most of those that do would have a hard time explaining it.
But you can (I hope) make a significant number of them understand that the problems they experience every day, the shortages, inflation, increased corruption, and rampant crime. are the direct result of policies pursued by Hugo Chavez and his heirs. That basic connection has to be made in some manner for those whom do not understand or admit it already.
The way that message is crafted, who delivers it, and how they deliver it, will decide whether there is any hope in the short to medium term.
LikeLike
Essential economy is about understanding how a set of not-particularly-difficult rules affect our access and use of resources. Do not underestimate people. The average juan bimba can understand very complex sets of rules and how they work and integrate that knowledge in their everyday lives without a problem… I.e: baseball, addresses in Caracas, local beureaucracy, and so on…
I agree with you Charlie, there MUST be some effort by economists and jounalists as well as businessmen to promote a basic understanding of economy among the population, hopefully in the future a reasonable government should join.
LikeLike
As a corollary to this post, I give you Exhibit A:
Esteban Gerbasi @estebangerbasi
¿Existe algún bolsa que piensa que @NicolasMaduro salvara la economía del país?
LikeLike
The only one that comes to mind is Mark Weisbrot……
LikeLike
I find that “They stole your money and now there is nothing!” Is readily understandable….
LikeLike
I don’t see how any of these numbers are hidden, I also don’t see anything in here that has not been happening on a global scale.
LikeLike
Also, 42B? that’s nothing compared to the top ten countries in debt, and a piece of pie compared to the debt of the US that stands at over 17,000,000,000,000
LikeLike
Did you really compared the US economy with ours? Seriously?
Let’s suppose you are right, the US economy is screwed and they are broke for the next 300 years. Will that really justify the hole we are right now? “Mal de muchos consuelo de tontos” my father use to say.
The US went to war, gave money to entire world including Laureano Marquez and Los Estudiantes (CIA agents as mentioned by Chavismo), collapsed their own economy, and many other things but that’s their prerogative. It is like comparing Donald Trumps debts with yours, you just cant.
The $42B WITHOUT THE CHINESE DEBT!!!!! should not have happened, Chavismo managed the country the same way Chavez managed the military base Cantina and that is the main reason why we are here.
By the way, esto es culpa de todos. Bien sea por accion o por omision.
LikeLike
People like you are as bad as “los chavistas”
1. The whole world is on brink an economic collapse, the only thing holding the world together is the USA, which if you knew anything about what’s going on in the US, you would know things are not looking very bright, some countries have realized this, and have tried to isolate themselves, things aren’t looking very bright for those countries either.
2. If you seriously think the CIA(or for that matter, any US) is not involved in opposition movements in venezuela, then you are delusional as the chavistas.
3. Yes I compared to US economy with yours, just to make a solid point, but if you want to compare other countries here you go:
https://www.cia.gov/library/publications/the-world-factbook/fields/2079.html
venezuela might have a large amount of debt, but using your logic, its all about ratio, and vnzl is def not as high as some other countries, yes even small ones.
but guess what? Just as the USA can use the USD(united states dollar) as it’s bargaining chip, vnzla can use it’s oil as its bargaining chip. please also remember that every country is in debt with one another.
I also have another question, is democracy really a good system?
I hear many venezuelans saying they want democracy.
the fact is we have as an remember the usa does not have democracy, at least not like the one many people think it does
the founders of the USA did not believe in democracy, and set the current system up where our democracy was a minimal as possible, i feel many Venezuelans do not understand the concept that in the USA the people do not elect their president.
LikeLike
Isn’t there an occupy encampment that is missing you or a WTO meeting that needs more people to picket?
The whole world is on brink an economic collapse Sources please.
the only thing holding the world together is the USA, by virtue of being the largest economy. And even then, I think you overstate its role, largely because the relative size of the economy compared to the rest of the world has diminished in the last 50 years or so. Laws of large numbers being what they are.
which if you knew anything about what’s going on in the US, you would know things are not looking very bright, I know plenty on this subject. It is part and parcel with the work I do. Please cite sources to “educate” everyone else. Impartial sources, if you please.
If you seriously think the CIA(or for that matter, any US) is not involved in opposition movements in Venezuela I find it funny how people either pillory the CIA for being inept or claim that it is all powerful. In the first case, if it is involved, what does it matter, for it will come to naught. In the latter, if they were really trying to topple Maduro, don’t you think they would have done it by now? He isn’t Chavez, and certainly they could flip El Busetero if that was what they wanted if they were as omnipotent and powerful as people try to claim they are. It is one or the other. However, without proof….I remain highly skeptical.
I’ve come to think of the people who constantly rant against the CIA as simple-minded as pagans from 2000 years ago. A drought? Ra is mad. A blizzard? Hades is furious. Rainstorms and floods? Someone angered Thor! A hurricane strikes? WTF Poseidon! Seriously, sometimes weather is weather.
Yes I compared to US economy with yours, just to make a solid point, but if you want to compare other countries here you go Apples and oranges. Developed economy versus a resource extractive one. Good job….
venezuela might have a large amount of debt, but using your logic, its all about ratio, and vnzl is def not as high as some other countries, yes even small ones No, its not about the ratio. As I argued elsewhere, its about the ability to service the debt and the trend. Moreover, while debt ratios have been declining in South America, Venezuela’s has been increasing in leaps and bounds. It is 3/12 in SA via the ratio . But…they also pay a higher interest rate than anyone else. Tell me, who is in more trouble: The dude who is in debt to the tune of 50% of his income paying 5% interest, or the dude who is in debt to 50% of his income paying 10% interest?
vnzla can use it’s oil as its bargaining chip. I get the dollar leveraging since it is the reserve currency, but how is Venezuela going to leverage oil with which it has a) largely mortgaged b) has had stagnating production over the last several years and c) relies on others to refine? Not the bargaining chip you might think it is.
I also have another question, is democracy really a good system? A representative republic is not exactly a democracy, no, but its worked for a couple of hundred years. Perhaps better than, shall we say, authoritarian regimes have worked out by and large. Show me a reasonably successful one of those that’s survived more than a few generations. And no, North Korea isn’t what I’m thinking here. Although they have lasted 3 generations….
I’m curious why you are even bothering with trolling in this regard. Your argumentation is…less…than I would have expected for someone who knows, or cares, about Venezuela. It seems gringocentric.
LikeLike
1. Seems ironic to me that you make it seem as if what the occupy movement, when they were practicing the supposed rights(bill of rights) that supposedly makes the USA a better country.
btw, I’d suggest you take a look at some of the videos of occupy movement and the amount of police brutality that happened(lol “democracy” of peace).
2. Did I ever state the CIA was in complete power? again, I don’t think you’re quite understanding what’s actually happening.
Proof? You’re right in a certain degree, there is little proof, but leaked cables(look for them in a search engine) have verified that there’s is quite an interest in venezuela.
i’m quite sure you will find the prove when those documents become unclassified 30-50 years down the line.
hell, 50 years ago when if you were one of those who said the CIA drugged(among other things such as sexual abuse) unwitting civilians, you would have told you were crazy, but guess what, in the late 1970’s those classified documents were unclassfied, showing what happened (Project MKUltra)
sauce:https://www.princeton.edu/~achaney/tmve/wiki100k/docs/Project_MKULTRA.html
also, if you’d like also read about operation northwoods.
3. About the democracy part, that was my exact point.
4. I disregarded the last paragraph as there’s really no point in answering it.
LikeLike
So you ignore the substantive stuff and go with more conspiracy fluff. Bueno.
Still waiting for the economic data I requested. The government still had more, and did less, than anyone else in the region and instead created greater problems that are just starting to unfold.
Incidentally, I was never actually against the occupy folks. I actually went down and spent an afternoon with our “local” chapter. I came away much less impressed because I had a difficult time finding anyone capable of coherently explaining why they were protesting and what their end of game expectations were. I had several people I talked to that had such a bad grasp of economics or how the world works in general, but blamed “Business” or “Government” or, probably, “Thor”. It seemed a bunch of folk that wanted something for nothing.
Note: I’m not a fan of the guarimbas either. I believe it alienates folk that are on the fence and the longer this drags on, the more it plays to the government’s advantage.
CIA as an excuse/argument is simply a distraction. Again, based on your example, either they are capable of toppling Maduro and haven’t (which would indicate they aren’t involved) or they are incapable so their involvement is irrelevant.
LikeLike
First off, the US Debt is in $$$, which they print, Venezuela doesn’t print its external debt. Second, anyone with any surplus cash opens a US Bank account, stashing a rainy-day fund. Think Russian Oligarchies, and middle class, and multiply this around the world by a few million people, this is free money for the US. Apple Microsoft etc have hundreds of billions offshore, on paper, in reality its on deposit at City Bank. NY
The power of the US is if you are in Ukrainian , or Venezuela, and have to run! you run to where your money is safe, and buys you and your family’s safety.
LikeLike
What about stats on poverty, illiteracy, infant mortality, education? You opposition goons only focus on stats affecting the poor victimized business community. poor business community lets all shed a tear for them.
LikeLike
First…poor word selection given the goings on in Venezuela.
goon
/go͞on/
noun informal
noun: goon; plural noun: goons
1.a silly, foolish, or eccentric person.
2.a bully or thug, esp. one hired to terrorize or do away with opposition.
“a squad of goons waving pistols”
Also, everything you are talking about has been discussed ad nauseum here. Several of your points, such as poverty and infant mortality, are listed in a post from three days ago. The link to the referenced article is here (with figure 7 being most relevant to your comment and the blogpost in question here
As far as illiteracy, blog commenter Kepler made this handy little chart
Please pay particular attention to the trend.
Last but not least, the majority of the opposition “goons” have little or no issue with programs that better society. However, the main source of their criticism is that chavismo has had more than most neighboring nations and has done less with its resources than should be reasonably expected.
Oh, and lest I forget: the business community. They provide jobs. Which, you know, has somethingsomething to do with keeping people out of poverty. Of course, since they are being squeezed, government reported unemployment has crept up to 9.5% in Venezuela. If you want good news, formally employed people make up about 60% of the workforce…the rest being part of the “informal” economia. Cuz the government counts them as employed, whether they sell pirated DVDs on the corner, fruit from their trucks or “entertain” at intersections.
If you are familiar with Venezuela and in particular its smaller bergs, most businesses, aside from the obvious conglomerates such as Polar, are mom and pop-style family-run enterprises. Those are the enemy? Srsly?
LikeLike
Great Odin’s raven! I’ve been moderatoreded!
LikeLike
Are you joking? We have discussed all of those figures. Poverty decreased between 2002 and 2007 in spite of Chavismo and exclusively based on an unprecedented increase in world oil prices.
Literacy is in reality worse now than in 1998. Official numbers indicate literacy has increased about 2% since the military were elected in 1999 until 2011 but that improvement can be more than explained by the life expectation: more than half of the people who were illiterate in 1998 were 60 years old or older. In spite of that, the regime spent about 1000 dollars for each apparent new “literate” person, about 50 times more than anywhere else in Latin America. It’s a whole farce!
As for child mortality: same thing, the “improvement”, if you plot it in a chart (I hope you know what a chart is) is nothing but the continuation of what was happening for decades.
LikeLike
In fact, if you plot a chart of the last decade, and put Colombia and Venezuela side to side, the trend in infant mortality reduction is the same, with a slight advantage to Colombia.
You can see that in http://www.indexmundi.com/
So far the figures for the revolution come in 3 forms:
– Indicators that are exactly the same as the ugly oligarch ruled capitalist hellholes where the people are oppresed, like infant mortality.
– Indicators that are way worse than the neighbourghs, and you can trace to goverment policies. Inflation, for example
– Indicators that are better than the neighbourghs, like the inequality reduction, but given the previous set of indicators, it is clear they are not sustainable changes and just the product of the income increase, and can disappear with an oil price crash, or even without it, get eaten by the others (oh yes now we are more equally poor and with 50% inflation, wonderful)
LikeLike
What about stats on poverty, illiteracy, infant mortality, education? You opposition goons only focus on stats affecting the poor victimized business community….
Others have posted regarding illiteracy. I will post on infant mortality.If you had been following Caracas Chronicle, you would realize that infant mortality has already been dealt with, numerous times. For example, I posted numerous comments about infant mortality reduction and life expectancy increase, including this one at The other side of Communicational Hegemony. My conclusion: Chaivsta progress in Public Health, as measured by progress in Life Expectancy and Infant Mortality was “not exceptional by Latin American standards.”
Go to the link at the top of this page: Dorothy’s latest post at Caracas Chronicles, which takes you to “The Chávez Legacy, Pulverized in 13 Simple Charts.”
Follow the link at
.At the link you will find that Dorothy and I came to similar conclusions:
Infant mortality reduction: not exceptional, mediocre, “nothing to write home about.”
¿Me entendés? You unnerstan’ ?
LikeLike
So any decent improvement in quality of life during Chavez is irrelevant now?
The poor people still voted for Chavez and Maduro. And they will continue to do so.
LikeLike
Jeff vs. Reading Comprehension -> http://fivethirtyeight.com/features/why-venezeulas-middle-class-is-taking-to-the-streets/
LikeLike
Progress is still progress Mr. Toro.
A decrease in poverty is a decrease in poverty and a decrease in infant mortality is still a decrease.
LikeLike
So, you admit infant mortality decreased during Chavismo just as it decreased when Venezuela had 1/10 of resources and literacy decreased less rapidly during the same Chavismo time as in the previous 14 years?
LikeLike
No my point is the opposition is always going to belittle Chavez’s accomplishments using numbers, graphs, etc. But overall, the quality of life of Venezuelans got better. That’s why the protests are dying out. :) :) :)
LikeLike
A decrease in poverty is a decrease in poverty and a decrease in infant mortality is still a decrease
Yes, but at what cost? If I give every dollar I have away to the poor, they are, temporarily, less poor, but is it a sustainable way of solving poverty?
The whole point of the numbers is that Venezuela did less with more than virtually and of its neighbors. Why is it that $10,000 in Venezuela reduces poverty by the same amount as $10 in Honduras? Is that truly progress?
Likewise, when it comes to infant mortality, if you are a medical professional as you state, then you should clearly understand a triage scenario: Country A has a car accident and four people are wheeled into an emergency room with a single doctor. All of them are critically injured and in the process of making assessments, the doctor realizes that he/she can save maybe three out of four and has to let someone die to save the others. A horrible choice, no?
Now imagine Venezuela: four people are injured in the same scenario, but instead of one doctor, there’s ten: one running a mop bucket, another answer phones, a third patching a hole in the wall, a fourth doing the billings/AP, etc. The tenth doctor is actually taking care of the patients, and since he’s the only one doing so, because the others are “busy” with their responsibilities, the same thing happens: the lone doctor can handle three out of four, but because of the severity of injuries, one will die.
The outcomes are the same for the two countries: three out of four accident victims survived! However, you might think that the outcome in Venezuela should be different given the allocation of resources, right?
At this point, given the massive amount of dollars dumped into the system over the last 15 with marginal (at best) returns, it could almost be argued that the amount of dollars, when compared to the neighboring countries, was statistically insignificant to the outcome. That is, that the same result was achieved with more money as countries accomplished with less.
Are you familiar with the term opportunity cost? How many other things could the have done with the funds and still had the same net results?
LikeLike
If you pour an extra 80 billion dollars a year into an economy, overt poverty statistic are automatically going to improve , if thanks to general progress in medical diagnostic and treatment tools and in pharmaceuticals ordinary diseases can be better treated then almost automatically there is going to be a decrease child mortality and a rise in average life statistics , this is nothing to do with an improved management or performance of govt activities or services . Even if they are lousy these stats are going to improve. What one one should expect is that if govt management of its resources hadnt been so disastrous these stats should have been much better which clearly wasnt the case !!
Claiming that these improved stats are the result of marvelous govt management of public resources amounts to what we in Venezuela call ‘ganar indulgencia con escapulario ajeno’ .
Also if we update the numbers to march 2014 I wonder how much poverty has risen in this last year and is bound to rise even more in the future !! In any event I have many doubts as to the validity of the criteria used to measure falls in poverty stats and the quality of the cereal box education that we are supposed to be achieving , (1000 fake doctors titles arent the equal of 1000 fully trained medical professionals) .
LikeLike
Yeah, yeah, just cheat on measuring the poverty and problem solved.
That couldn’t be more ridiculous.
LikeLike
this kind of people generally have not enough education to know what happens in the country,and looking for be parasites of the state and not work for improve their situation,in usa ,is the same
LikeLike
That guy is a troll, the same douchebag that when presented to irrefutable proof of something, their answer is just screaming “so what?” at the top of his lungs while flipping you the bird.
LikeLike
Jeff:
Of the 17 countries that Dorothy used in her comparison with Infant Mortality [Romance language speaking countries of South and Central America, plus Haiti.], we can compare progress in reducing Infant Mortality during the last years of the Fourth Republic compared to Chavismo’s record. Source: World Development Indicators Databank (World Bank)
% Reduction in Infant Mortality
For 1986-1998, Venezuela ranked 13th of 17 countries.
For 1999-2012, Venezuela ranked 14th out of 17 countries.
By your logic, this progress in reducing Infant Mortality will cause poor people to vote for Chavismo. But when the Fourth Republic had a better comparative record in reducing Infant Mortality, that would not be a reason for the poor to vote for Chavismo. After all, it’s the Fourth Republic.
The point is that for all the brouhaha about “improved” health programs under Chavismo, improvement in public health under Chavismo is no better than under the Fourth Republic- and this with a LOT more oil money to play with: $23 billion in 1998 versus over billion per year in recent years. Venezuela’s record is also unimpressive when compared with other countries in Latin America that had a lot less money to play with.
LikeLike
Correct $23 billion in 1998 versus over $100 billion per year in recent years.
LikeLike
Just the increase of the murder amount due to crime should be enough to bury this regime in the history’s trashcan.
Barely 4.500 murders in 1998, more than 20.000 in 2013, more than freakin four times the amount.
Poverty?
Just take the amount of people that’s unable to buy the basic basket these days, the thing is like 9 or 10 old millions by now, that’s poverty, not being able to cover every need you have for a family with the average income.
Illiteracy? There always have been government programs to reduce illiteracy, chavez’s didn’t invent that, same with public health and public education systems, they existed long before chavism could overtake the country.
Universitary education? Rubbish too, if people don’t study in hich school, they’ll get toasted in university, period, getting mediocre professionals is wasting the country’s resources. How do you get more people to enter? First, build more universities, second, IMPROVE THE EDUCATION LEVEL so people can enter better prepared and won’t waste time failing the same subjects over and over again. What else? Kick the parasites who live there, in the 5 years I spent in my career, every hooded car-burner was chavist, and everyone of them spent like 8 or 10 years in the university and wheren’t even near the half of their careers, so, yeah, parasites.
LikeLike
I don’t understand your assertion : “While oil exports grew by 459% between 1999 and 2012, actual physical number of barrels of oil exported shrunk by 16% in the same period. As far as I know oil exports have not increased since 1999 and the only way oil exports are measured is in barrels.
Could you please explain?
LikeLike
Its the $ income for the exports. Venezuelan exports, for example, went from around 26 billion $ in 2004 to 92.5 billion $ in 2011. And that is almost all due to oil prices.
LikeLike
These are the real stats. Not opposition manufactured stats according to Machado and Lopez.
http://www.theguardian.com/news/datablog/2012/oct/04/venezuela-hugo-chavez-election-data#
LikeLike
** Unemployment decrease: False, in the 4th, street vendors and anyone not being in a business’s roster were considered unemployed, nowadays if you do anything that gives you cash even two times a week, then you’re counted as an employed person.
** Murder rate: As I said before, 4.500 murders in 1998, 18.000 murders in 2013 (According to the minister that everybody knows is lying his ass off anyway)
** Inflation: 23% in 1998, 56% in 2013 (And several imported goods went over 400 and even 600% of increase)
Like the article writer herself said in a comment: “…and we are aware that unemployment figures for Venezuela are not entirely reliable but it is the only measure on unemployment to be found. ”
The regime just spits out numbers that benefit them, numbers that in most cases don’t have anything to do with the actual reality.
LikeLike
OK, in terms of value due to the oil price increases. Thank you,
Gutavo
LikeLike
Corrupt govt officials dont always have bank accounts in their own names , they form companies owned by relatives, or friends or ‘business’ associates or even by other companies registered in places where the name of the owners can be kept secret , they use proxies, unscrupulous lawyers and complex shareholding and business structures to hide their ill gotten fortunes .Frequently bribes kickbacks and compelled extortions are paid through contracts whereby ‘their’ companies recieve a percentage of the payments made under certain governamental transactions . Generally everything is done to hide the true nature of these payments to make them look legit on the surface . These shenanigans represents a big business for the banks so they are wary of killing one of the gooses that lay the golden eggs by being too inquisitive or forward in revealing the information they have on these accounts .
What whould be easier is to hire an independent auditing or lawyers firm from abroad to do financial forensics or investigate the transactions in which CADIVI or other govt agencies appear to have paid more than was reasonable or goods imported or services rendered. Sadly thats never going to happen !!
LikeLike
we need panama release bank account of venezuelan goverment leaders
LikeLike
Write more, thats all I have to say. Literally, it seems as though
you relied on the video to make your point. You definitely know what youre talking about,
why waste your intelligence on just posting videos to your site when you could be giving us something
enlightening to read?
LikeLike