Gloomy predictions for Venezuela are just political spin



For a country that is repeatedly accused of being anti-democratic, it’s ironic that Venezuela is going through its third presidential election in seven years, not to mention the three national referendums that took place in 2004, 2007 and 2009.

And, as it has now become a tradition in the last 10 years, the international media is once again flooded with commentary on the weakness of the economy and the so-called ‘over-reliance’ on the oil bonanza.

As in Europe, critics and business leaders also target what they call “massive public spending” by the Venezuelan government, perhaps arguing that public education for all and that better social protection coverage is not good for the economy.

However, not one of these arguments is based on solid economic data.

One of the myths, for example, is that in the last 14 years, Venezuela’s growth was sluggish which set the country apart from other booming Latin American nations.

Strangely enough, this is not substantiated even by the International Monetary Fund (IMF), who in its latest data has ranked Venezuela 15th in GDP growth for 1999-2012 in Latin America, ahead of Brazil and Mexico.

A study by US think-tank, the Center for Economic and Policy Research, shows that the economy in Venezuela is strong in every possible way one could think of: GDP growth, high public vs private growth, low inflation, reduced unemployment, extreme reduction in poverty rates, high spending on education, thousands more receiving pensions, among other frightening details for orthodox neo-liberal analysts.

A high public spending and reduced inequality translated into massive support for the Chavez government. This is the exact opposite of what is going on in most European countries that opted to go down the austerity path.

Of course, Venezuela still has serious issues to deal with – ranging from criminality and urban violence to kick-starting a comprehensive social dialogue with trade unions – but economic woes and inequality are certainly not on top of the list.

On the contrary, it seems that the “lean times” that some Venezuelan business leaders always wish for have never materialized; instead equal times are closer in the horizon.