It appears that in the light of day, South America’s version of Wreck-It Ralph and Sean Penn soul-mate, Hugo “Sulphur” Chavez, was no different than most socialist turants, an economic illiterate. From my alma mater, the Institute for Management Development in Switzerland:
Some would argue that it is too early to evaluate his lasting impact on Venezuela and in promoting regional integration in Latin America. With respect to regional integration many of the institutional innovations that he championed are still embryonic (e.g., the bank of the South and the Community of Latin American and Caribbean States), even though his most ardent supporters believe that it is just a question of time for them to have substantive impact.Time will tell, although I would not expect any of these innovations to make much of a difference in economic terms.
Chávez’s track record in terms of Venezuela’s economic performance since 1999, however, provides an easier point of reference to evaluate the impact of his policies.Venezuela experienced positive growth during the Chávez era, despite two deep recessions (one associated with an oil strike and political uncertainty in 2002-03 and another in 2009-10 reflecting the impact of the global recession on oil prices and a pro-cyclical fiscal policy).Average annual growth jumped from 1.6% in the 1990s to roughly 4.5% in the 2000-12 period, unemployment declined from 14.5% (1999) to 8% by 2012, and the proportion of the population living below the national poverty line fell from 50.4% (1998) to 31.9% (2011).These numbers seem impressive at first sight, but if one takes into account the positive impact of soaring oil prices on the Venezuelan economy over the period in question, then the results are less compelling.
So how about that successful socialism, huh? Karl will be along any minute to tell us that Venezuela wasn’t really a true socialist state and Chavez wasn’t really a communist.
As I have pointed out before – where do you suppose every “socialist” economy gets its mojo?
The Chávez administration was characterized by inward-looking policies coupled with state interventionism and growing reliance on the rents associated with the oil windfall (fuels and mining products currently account for 91% of Venezuela’s exports). As a consequence, Venezuela is now at the very bottom of the rankings of world competitiveness as calculated by IMD and is the worst performer among middle-income countries in terms of ease of doing business (ranking 180th among the 185 economies surveyed). Ironically, oil production has declined almost 20% over the Chávez years owing to ageing fields, low levels of investment, and the mismanagement of PDVSA (the state-owned oil company) which has become an all-purpose cash-cow to finance the “Bolivarian Revolution.”
Why, it has to be a remora like parasite on the back of capitalism. That’s why I’ve always said that the so called “progressives” want just enough of our capitalism to pay for their socialism.
Wassup with that, Komrade Karl?