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21st Century Socialism or Venezuela 1957?

It really is true that this government loves the poor, because every year there are more.


How is it possible that a Venezuelan in 2007 makes the same as another one in 1957?

Happy 1957. Yes, 1957. This is not a bad joke for April Fools Day, but the sad reality of Venezuela, unfortunately.

Venezuela starts 2007 with the same per capita income as in 1957, measured in constant Bolivars, according to figures from the Venezuelan Central Bank and the prestigious economist Asdrúbal Baptista.

Real income for the population has not only stagnated, but has also decreased to the 1957 levels. How is it possible that a Venezuelan in 2007 makes the same as one did in 1957? This means half a century of lost development!

In 1957 Venezuela was a country with a promising future, where everything was possible. The economy grew quickly and the country hardly had any foreign debt, nor internal one. The public budget was balanced and inflation was so low that it sometimes was negative (deflation). A half a century later, Venezuela is a country with an uncertain future, an autistic and retrogressive government, a rentist economy in crisis, a huge foreign debt, a growing and unaccounted internal debt, a huge fiscal deficit and the highest inflation on the continent. What has happened?

The economic failure (and you can add the political and social failure, as well as the big educational fraud) has not been due to a lack of resources. In fact, the current regime has received huge quantities of oil resources, but poverty keeps growing. Where is the money? What happens with these multi-billion budgets that only create more misery? How did the prosperous Venezuela, a net recipient of immigrants, in 1957 become the poverty-stricken Venezuela, a generator of emigrants, in 2007?  

In these times of relative tranquility, it is worth reflecting over the bad way we Venezuelans are starting the new year.  For every year that passes, despite an apparent economic recovery that's not sustainable, Venezuela declines in real terms. These are average figures, obviously, but the downward tendency has been evident since the end of the 1970s.  To be fair, Hugo Chavez has not been the only bad leader, just simply the worst that Venezuela has had in a long time.

Every year we have more poor, especially during the terrible "ungovernment" we have now.  It really is true that this government loves the poor, because every year there are more.  Even though Venezuela has received the highest oil revenue in its history, the country appears to be heading backward and not forward.

Let's reflect openly on how we lost half a century so we don't also lose the 21st century. Happy 1957!

Jose Luis Cordeiro is a Venezuelan economist and author of The Great Taboo: A True Nationalization of the Venezuelan Petroleum. This column originally appeared in El Universal newspaper in Venezuela and has been translated into English by Latin Business Chronicle. Republished and translated by permission from the author.

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