When does or when has the corporate media published anything positive or encouraging about Venezuela’s economic performance? The short answer is hardly ever and currently they are having a field day pointing out all the economic troubles being suffered by the Venezuelan people and it is all suddenly down to President Maduro’s policies whereas in the last fourteen years everything was “Chavez’s fault”.
Just a quick Google search will throw up (sic) headlines heavy with words such as “crumbling”, “collapse” and “disaster” as economic gurus and corporate media editors wait for the Venezuelan economy and its political system to implode. By coincidence, it has been the same fable since 1999 and we are still waiting for the implosion to take place. We are waiting for the mobs to take to the streets demanding the resignation of the government a la “Arab Spring”.
We are still waiting for the chavista government to lose control of the political institutions since, as everything is such a total mess in Venezuela, it is obvious that the opposition must win and bring back some sanity to life here in Caracas and other major cities. I have been waiting for fourteen years for this to happen. And don’t come up with the idea that elections here are “fixed” since our elections are the most closely monitored in the world – by the EU, by Unasur, by the OAS and the Carter Center. In fact Jimmy Carter himself stated unequivocally after last year’s October 7th presidential elections when the late President Chávez won another landslide and the closely run April 14th elections this year that “Venezuela probably has the most excellent voting system that I have ever known.”
Making life difficult
Now let’s go back to the economy. What has spawned a rash of articles forecasting economic doom and gloom for Venezuela’s economy have been a series of events that make life uncomfortable for the population. Regular power outages. Shortages of basic foodstuffs and other essential household items. Soaring inflation. The frustration of not being able to find staples such as milk or corn flour in your local supermarket for weeks at a time has certainly irritated the population. This results in nervous purchases of foodstuffs in large quantities when they do suddenly appear on the shelves and everyone rushes to buy, thus causing temporary shortages almost as a self-fulfilling prophesy.
Despite the blame being placed on the government for causing such shortages many thousands of tons of essential foodstuffs have been found hoarded in warehouses indicating that there is more to these shortages than alleged government mismanagement or incompetence. For example, milk is delivered in large quantities to bakeries and coffee houses but cannot be found in the supermarket. There are no shortages of anything in the swish restaurants of Eastern Caracas but in the supermarket next door there are empty shelves. But suddenly the authorities arrive to make a spot inspection and, lo and behold, the products that were missing are on the shelves again as the supermarket had decided to leave them in the storage depot where frustrated consumers could not see them.
Lines like this one at a supermarket in Maracaibo can be seen in front of many private supermarkets across the country. They wait because opposition forces suddenly deliver truckload of corn flour, a price controlled staple in Venezuela or toilet paper and other products after hoarding and withholding them for a few weeks. The BBC featured this photo followed with "It is a pathetic sight, as they shelter under shawls waiting to buy their allotted ration of price-capped foods like rice, sugar, chicken, wheat, and corn flour – goods that have become increasingly scarce as shortages grip many regions of Venezuela."
The strategy of shortages
rivate supermarkets are also in on “creating shortages” as illustrated in the photo on the right. Other tricks are not to replenish the shelves overnight so that when customers arrive at 8am there are few products on display. Sometimes products in great demand such as canned tuna are replenished around midday. Once again this gives the impression of shortages biting. In almost all cases check-outs are only manned to a third of their capacity causing long lines to pay. It is just another way of inconveniencing the customer and all these “faults” are backed up by an aggressive corporate and private media campaign hoisting the blame on the government.
The problem is distribution, not production
Misión Agro Venezuela was created to bring food sovereignty to Venezuela by producing food domestically and reducing dependency on imports. It has been producing enormous tonnage of food, livestock and fish across the country. Thousands of small farmers have been participating in the program since it was launched in January, 2011. In a VTV interview this week, Juan Carlos Loyo. Minister of Agriculture said that more than 290,000 people have registered to participate as producers in MisiónAgro Venezuela since enrollment was opened again in February. 3,422 technicians at the national level are inspecting applicants' qualifications and their land capability in both, rural farmlands and cities. More than 20 million urban plots have been set aside and funded for food production. The inspection is intended to gather all the data supplied by the peasants who were enrolled to determine the type of support they need such as seeds, equipment and financing. Inspections of the first 41,000 of those registered began last Monday, October 7, 2013.
(photo: Axis of Logic)
We interviewed these 5 women at 7:30 one morning. They proudly showed the pimenton (peppers) they picked in the first half hour of the day in this Maya Sombra in Sabaneta. They told us that they collect the peppers at this rate all day long, 6 days a week. Hundreds of tons of vegetables are hauled out of Misión Agro-Venezuela in tractor-trailiers from locations like this one throughout the day for distribution in the markets across the country. The opposition constantly spreads rumors that these Maya Sombra's are a waste of money with only "monte" (weeds) growing inside. When President Chavez nationalized land from the big corporate sugar cane plantations the opposition claimed that vegetables could not be grown in soil where only sugar cane had been grown for hundreds of years. With the government's careful soil preparation, their claims proved to be false.
(Axis of Logic Photo)
As the months have gone by it has become increasingly clear that the initial problems were distribution. Misión Agro and private farms were producing and processing food but the products never arrived at the supermarkets and those that did arrive were 20% – 30% more expensive thus ramping up inflation. At the same time the speculative attack on the local currency, the bolivar has devalued it on the so-called “parallel market” by 500% in a year. It does not take a genius to imagine the impact this has had on the price of imported goods.
As a result inflation will reach around 45% this year overall according to reliable data from the Central Bank of Venezuela. This is very high compared to the inflation rate of the last decade and is signaled as a disaster for the country by the crowing capitalist corporate media and their steel-clawed analysts. However, short term minded analysts seem to conveniently forget that the inflation rate in Venezuela in the 1990’s was over 100% in some years and looking at the average inflation rate comparing the 1990’s with the 2000’s, the inflation rate under existing government economic policies has more than halved (see the chart later in this article). To make matters worse in the 1990’s wages were frozen so it was no surprise that there was widespread malnutrition especially in children of the poorer classes.
The current circumstances may not be ideal but compared to 20 years ago Venezuela is a relative paradise for the mass of the population.
The success of government economic policy in combating hunger in Venezuela since 1999 has been spectacular. In July the Food & Agriculture Organization of the United Nations (FAO) recognized Venezuela’s progress in defeating hunger with now 94% of all families eating three or more times a day. In fact the FAO held up Venezuela as the example to follow in the fight against hunger. The policy of offering subsidized food since “food is a human right and not a commodity” according to the Venezuelan Constitution, has now swung the pendulum the other way with obesity threatening to become a national health issue in Venezuela.
The engineered shortages are difficult to spot since the people participating in it are almost invisible unless they are caught red handed. As in the coup against Salvador Allende in Chile from 1970 – 1973 there are glaring similarities. Factories paid off so as to reduce production. Distributors are delivering goods to secret warehouses and a fraction into the supply chain of the supermarkets creating shortages. There is strong evidence that the factories and distribution companies are being paid, as they were in Chile, to cause artificial shortages. No business can do this for almost a year without losing money so the shortfall is being made up with US taxpayers’ dollars. Following a 2 month investigation 3 US functionaries enjoying diplomatic immunity were sent packing back to Washington when the government presented video-taped evidence they were involved with sabotage of Venezuela's food supply and electrical system. There's no telling what was in their protected diplomatic bags as they visited opposition mayors and Corpolec, the national electric company.
These funds come from the US State Dept. which is financing the political opposition, desperate to oust President Maduro’s legally and constitutionally elected government. It does not matter what damage is done to the country – the opposition will just pick up the pieces as an ouster will give them access to Venezuela’s huge oil revenues……….and more ominously the US access to the largest oil reserves in the world just a five day tanker ride away from the refineries on the Gulf Coast.
The Big Picture
Since the complete disaster of the 1990’s when oil prices fell to around US$7/barrel, wages were frozen and inflation was over 100%, the economy has improved dramatically since 1999. Have a look at these figures which are from the Economic Commission for Latin America and the Caribbean (ECLAC);
Venezuelan GDP increased from US$90 billion in 1999 to US$385 billion in 2012 – +330%.
Inflation has declined from an annual average of 61% in the 1990’s to an average of 24% under the current economic policies. This FACT belies the superficial corporate analyses of the current inflation rate of around 45% as being somehow a complete disaster for the government and the population.
Consumer spending rose from US$65 billion in 1999 to US$272 billion in 2012 – +320%
Venezuela’s current external debt is around US$106 billion according to the Central Bank. According toWikipedia the external debt-GDP ratio for Venezuela is just 19%. Compare this to the countries that are the spiritual homes of the Venezuelan opposition such as the US, Spain and Italy whose debt-GDP ratio are 106%, 167% and 108% respectively.
Poverty has declined from 62% in 1999 to around 23% in 2012. Absolute poverty fell in the same period from 23% to 6%.
Social spending of US$550 billion over the last decade effectively defeated poverty in Venezuela and this meant US$550 billion less for the parasitic bourgeoisie to send offshore to their favorite US banks.
Infant mortality declined from 27 per 100,000 live births to 13 per 100,000.
22 new universities have been opened since 1999. Venezuela’s student population is now 2.5 million compared to half a million in the 1990's and all higher education is free of charge at public universities. There are no tuition fees.
The Venezuelan Stock Market (Caracas Stock) rose from around 8900 on December 31st 2002 to 1,750,000 this month (+19,563%). The stocks quoted are local companies such as banks, food industry stocks, and telecommunications and so on. This has been the best performing stock index in the world – even allowing for inflation, devaluation of the currency and ongoing political tension both inside Venezuela and with its main antagonist the US Empire. Obviously the smart money knows where to go so why, according to such “esteemed” capitalist media such as the Economist and The WSJ is Venezuela allegedly in such an economic mess? Even using the capitalists’ own criteria the country is on a long term boom cycle with little debt, falling poverty and a growing consumer sector.
Saying the same thing a thousand times whether it be true or not will have an impact on people’s perception. This was a strategy used successfully by Hitler’s propaganda minister, Josef Goebbels, and now employed with equal success by the corporate media against Venezuela as they seek to further US interests.
The major statistics quoted above speak for themselves and should make people take corporate media reports in Venezuela’s economy with a large pinch of salt. Sure inflation is a problem and has been since 1984 in Venezuela but nowadays this is offset by the remaining financial indices which must be the envy of most European nations and North America..
During the 2008 – 2009 global financial crisis that also hit Venezuela as the oil price collapsed, President Chavez stated that he was not concerned about the GDP numbers and was far more interested that poverty continue to decline and guaranteed that social spending would not be curtailed.
This is a far cry from the austerity programs being applied in Europe and is diametrically opposed to capitalist economic policies that favor the rich and the corporations.
Even before his untimely death on March 5th this year, President Chavez told now President Maduro and other members of his cabinet that an economic war was underway against Venezuela, its government and its people.
The details of how this undeclared war is being waged in society and in the media are clear to see from the first part of this article. Nevertheless, readers should also ask themselves why the local currency has fallen so sharply against the US dollar when Venezuela’s debt is highly manageable and the stock market has skyrocketed.
It is all down to external forces trying to undermine confidence in the government, the economy and the country. Millions of US dollars are being used to sabotage the economy and vital services such as the electricity grid. The aim is to capture loyal chavista voters over the short and long term and reinstall the parasitic bourgeoisie who crave for US hegemony in Venezuela and the return to the colonial status of the country until 1999.
Despite all these efforts the government and the President are steady and in the lead in all opinion polls as the opposition’s aims, together with the US Empire, become clearer day by day.
As in 2002 and 2003 the Bolivarian government is facing a real challenge in its objective of excising capitalism from the country. This is the lash of the counter-revolution and is being combated legally in the National Assembly, by a combination of the Armed Forces and Bolivarian Militias, by state institutions designed to protect the public and by the leadership of President Maduro and his guiding light, Comandante Chavez, who is still very much present in the hearts and minds of the Venezuelan people.
The opposition saboteurs are not getting away unpunished. There are 120 awaiting trial for sabotaging pylons and the electricity grid. Many people have been arrested for hoarding foodstuffs and toilet paper. The Bolivarian National Guard has been cracking down on illegal extraction of price-controlled products to Colombia and gasoline contraband.
We fully expect President Maduro to be granted an Enabling Law for one year in November so that he can legislate by decree to combat sabotage and corruption more quickly and effectively. There is a good chance that one of the major supermarket chains that continue to “play games with the public” could also be expropriated as a message to the others.
Focusing on disaster and ignoring the facts may cause some waves in society but most honest Venezuelans, who have not been brainwashed by a 14 year media campaign against the government, will continue to support the Revolution. In the nationwide mayoral elections on 8 December, the voters will not allow the country to be handed on an electoral platter to the fascist lackeys of the US waiting in the wings to loot the country once again as they did from 1958 to 1998.
See: The War on the Venezuelan Economy(photos/evidence)- Arturo Rosales
Axis of Logic