The Booming Venezuelan Economy

[Joanne98]

April 9th 2008, by Steve Brouwer - Venezuelanotes
The major media in the United States and Venezuela are overflowing with misinformation about Venezuela and its social and economic indicators, so it was relief to see a reliable appraisal of Venezuela’s economic growth appear recently: “The Venezuelan Economy in the Chávez Years,” by Mark Weisbrot and Luis Sandoval at CEPR, the Center for Economic and Policy Research in Washington, DC, February 2008. ( For those of you who are not familiar with CEPR, you should visit their website at http://www.cepr.org/, since they are primarily engaged in producing reliable information, analysis, and prognostication concerning the U.S. economy – they predicted the dangers of the stock market bubble in the late 1990s, and the housing bubble of the 2000s, when most economists were ignoring the problems because they were giddy with the joys of short-term profit-taking; likewise, they are one of the best, non-hysterical guides to understanding the current state of the U.S. Social Security system.)

In their report, which reviews solid statistics gathered through 2007, they note that Venezuela’s economy has been one of the fastest growing in Latin America and the world over the past five years: “since the first quarter of 2003, Venezuela's real (after adjusting for inflation) GDP has grown by 87.3 percent.”

“…employment in the formal sector has increased to 6.17 million (2007 first half), from 4.40 million in the first half of 1998 and 4.53 million in the first half of 2003. As a percentage of the labor force, formal employment has increased significantly since 1998, from 45.4 to 50.6 percent (2007).”

The figures above indicate, according to my handy calculator, that total employment, including both the formal and informal sectors, was 12.19 million in the first half of 2007, versus 9.69 million in 1998. This is an increase of 26% in nine years, a remarkable achievement for any country.

Such numbers are enough to drive Bush, Cheney, and their gang wild with envy, and makes them determined to destroy Venezuela’s experiment in developing “21st century socialism.” Too bad they only read opposition newspapers and bogus CIA and State Department reports instead of real information from CEPR, where they could find out that one major effect of Chavez’s “dangerous,” “destabilizing,” and “dictatorial” tendencies (the U.S. government’s words) has been to bolster the private sector.

The United States, given its paltry economic growth over the past eight years and its current economic downturn, should be coming to Venezuela for lessons in how to create jobs. Republicans and Democrats alike could re-learn the strategies that were once implemented in the United States through Franklin Roosevelt’s New Deal: government policies that redistribute income, democratize and support public education, and invest in broad systems of public works will also stimulate the private sector. Most job growth in Venezuela has taken place in the private, not the public sector. In fact, the private sector is growing faster than the public sector. “Private employment was a larger percentage of the labor force (75.0 percent) in the first half of 2007 as compared to the first half of 1999 (71.6 percent).”

http://www.venezuelanalysis.com/analysis/3336

[bemildred]

1. $111 a barrel oil will do that.

And all thanks to Bush/Cheney's failed wars in the Middle East too.

[Gepetto]

4. Not with a good president

If Chavez weren't president, a corrupt right-winger would have again unevenly spread Venezuelan resources to the rich.

[smiley_glad_hands]

2. I'm not fond of Chavez, but good for the Venezuelans. eom

[samsingh]

3. ironically oil prices are a big factor here

[Nietz1950]

8. Oil may be a factor, but it's mostly other things...

As the economic report points out, Venezuela's oil growth is slower than the rest of the economy.

All of these jobs and consumption are primarily coming from the poor inside Venezuela having money and buying property and food. I don't see how this is a terrible model, given that Asian economies tend to have even stronger government control and rely on foreign consumption, rather than domestic.

The greatest criticism levelled at Venezuela is the inflation caused by the stronger demand. How awful - the poor have tripled their consumption in the last few years and this is driving up prices in the middle of world-wide inflation. Rather than take away food from the poor as critics want, Venezuela is boosting output.

[WTyler]

5. Thanks for posting this

It's so hard to find unbiased information on Venezuela. I've gotten to the point that if our media reports it I assume it isn't true. At the same time Chavez isn't exactly the best source for information either.

[judasdisney]

6. Recommended: Venezuela is the canary in the coalmine

U.S. media treatment of Venezuela has become a measure of the deception -- and even complete reversal of facts -- that U.S. media are apparently willing to openly display.

Venezuela is our canary in the coalmine. When the next Democratic president is elected, their administration will be overthrown in a coup d'etat that will look exactly like "The Revolution Will Not Be Televised."

[judasdisney]

7. Too late to recommend, sorry

I tried. Wish I had seen this earlier.