Washington, D.C. – The Center for Economic and Policy Research (CEPR) released a report today on the Venezuelan economy on the tenth anniversary of President Hugo Chávez’s tenure, which began in February 1999.
“Looking at the economic data and social indicators, it’s not difficult to see why Chávez remains popular and has won so many elections, despite overwhelmingly hostile media coverage,” said Mark Weisbrot, Co-Director of CEPR and lead author of the report, “The Chávez Administration at 10 Years: The Economy and Social Indicators.”
Among the highlights:
* The current economic expansion began when the government got control over the national oil company in the first quarter of 2003. Since then, real (inflation-adjusted) GDP has nearly doubled, growing by 94.7 percent in 5.25 years, or 13.5 percent annually.
* Most of this growth has been in the non-oil sector of the economy, and the private sector has grown faster than the public sector.
* During the current economic expansion, the poverty rate has been cut by more than half, from 54 percent of households in the first half of 2003 to 26 percent at the end of 2008. Extreme poverty has fallen even more, by 72 percent. These poverty rates measure only cash income, and do not take into account increased access to health care or education.
* Over the entire decade, the percentage of households in poverty has been reduced by 39 percent, and extreme poverty by more than half.
* There have been substantial gains in education, especially higher education, where gross enrollment rates more than doubled from 1999-2000 to 2007-2008.
* Over the past decade, the number of social security beneficiaries has more than doubled.
* Real (inflation-adjusted) social spending per person more than tripled from 1998-2006.
The report also examines the current economic situation and how the country will be affected by lower oil prices. It concludes that because of Venezuela’s large accumulation of foreign exchange reserves, it is unlikely to run into balance of payments problems even if oil prices remain depressed for much longer than analysts and oil futures markets are anticipating. The most important and immediate challenge for Venezuela, according to the analysis in this report, will be to implement a timely and adequate fiscal stimulus package to counteract the effects of the global recession. Over the long run, the analysis also sees a need for a more competitive exchange rate in order to diversify away from oil.
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The Center for Economic and Policy Research is an independent, nonpartisan think tank that was established to promote democratic debate on the most important economic and social issues that affect people’s lives. CEPR’s Advisory Board includes Nobel Laureate economists Robert Solow and Joseph Stiglitz; Janet Gornick, Professor at the CUNY Graduate School and Director of the Luxembourg Income Study; Richard Freeman, Professor of Economics at Harvard University; and Eileen Appelbaum, Professor and Director of the Center for Women and Work at Rutgers University.
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