Friday, 22 March 2013

Venezuela: Busting Some Media Myths

“In the war of ideas, it's often more effective to destroy their brand than build up ours.”- James K. Glassman, Under-secretary for Public Diplomacy, US State Dept.

Welcome to political mythbusters! I'm a PhD student studying media and Venezuela. Following the death of Hugo Chavez, it has saddened me to see so many ignorant comments left on the internet. It is also clear that Venezuela is one of the most misunderstood countries in the world. I'm going to do my best to clear up some myths about the country.

Criticisms of the Chavez administration fall into three categories: false and hypocritical, real but hypocritical, and real and moral. What I've found is that, with astonishing consistency, the accusations hurled at the government fall into the first two categories. 

I don't want you to just believe me. I have given you links so you can scrutinize my argument fully. Check up on me. Am I making this stuff up or exaggerating? Every effort has been made to use unimpeachable sources of primary data, such as the World Bank, the United Nations and highly reputable polling organizations like Pew and Latinobarmetro, which is a Chilean polling organization whose work features regularly in the Economist, Wall Street Journal and New York Times. I'm simply going to compare the reports from these organizations with the media's reporting on the country. 

Let's get myth-busting!



The Accusation: Chavez led a coup. 



It is often remarked that Chavez led a coup in 1992. Two examples are this New York Times article and this Washington Post article. Conveniently, the context of the coup is left out. Here is it.

Despite producing more the $300 billion of oil wealth between 1958-1998, the equivalent of 20 Marshall Plans, the majority of Venezuelans were living in shocking slums.(McCaughan, The battle of Venezuela, pp.29-32) By the 1990s, quality of life indicators for ordinary Caracas residents were below Port-Au-Prince, Haiti. Between 1970 and 1997, workers' incomes declined by 50%, while poverty doubled between 1984 and 1991. President Carlos Andres Perez, on orders from the IMF, increased oil prices for Venezuelans. This led to increases in transport costs, to the point where Caracas residents were spending, on average, 25% of their entire wages on bus fares (Jones, B. Hugo!, p.116). Food riots broke out and Perez sent the army in. 3 days of terror ensued. The LA Times' Bart Jones speaks of Red Cross workers being gunned down in the street, “mass graves” being filled with “mutilated corpses”, “tied up corpses” with “bullets in the back of their heads” and children being gunned down as the armies fired indiscriminately into shanty towns (Jones, Hugo! pp. 121-124). Much of the army leadership was deeply shocked at this. They began to gather around a young Colonel called Hugo Chavez and conspired to rebel against the President. The rebellion of 1992 failed, and Chavez was sentenced to what amounted to a life sentence, yet, the rebellion was so popular with the public that the new president, Rafael Caldera was pressured into releasing Chavez just 2 years later. After getting out he immediately began to organize for a Presidential election.

Myth: Partially confirmed



Myth: The Venezuelan economy is a shambles.



In this Guardian article, the author wonder how long the Venezuelan economy can totter on. Figures from the World Bank, hardly a Chavez ally, show a different story. Venezuela's GDP has more than tripled under Chavez.



Net national income has also nearly tripled.



Meanwhile, both the United Nations Development Project and the World Bank agree that unemployment has dropped from over 11% to under 8%.







When asked themselves, Venezuelans have the highest confidence in their economy of any Latin American country in 2007 and it remains high today, despite the pro-cyclical economic measures taken by the government during the financial crisis. 




 And Venezuela's external debt has dropped precipitously.



Meanwhile, Venezuela's stock market is the best-performing  in the world. You may have heard stupid Chavez is causing massive inflation, but the data shows something different. One year before Chavez took office, inflation was an eye-watering 103%. It is now in the teens. In fact, the high-point inflation under Chavez was lower than the lowest inflation under the previous 2 presidents, Caldera and Perez.




Myth Busted



 Myth: Chavez is a dictator



 This one is so ubiquitous I won't give examples. Voter turnout in Venezuela in the October 2012 election was above 80%, higher than any election in US history. Under Chavez, voter turnout in Venezuelan elections has increased by 135% (1998 turnout: 6.3million, 2012 turnout: 14.8 million). That means almost two and a half times as many people vote nowadays than in the 1990s. The number of registered voters has risen by over 70% under Chavez. Jimmy Carter and the Nobel Peace Prize-Winning Carter Center recently stated “the election process in Venezuela is the best in the world.” The European Union Election Observation Mission agreed, saying “the system developed in Venezuela is probably the most advanced in the world .” Canadian NGO, the Foundation for Democratic Change, gave the2012 Venezuelan election 78/100 (very satisfactory). It gave the 2012 US election 54.5/100 (unsatisfactory). The number of polling stations has increased by 38% in 10 years. In 1997, one year pre-Chavez, only 11% of Venezuelans believed elections were clean. By 2006, 2/3 believed they were.




In 2005, Latin Americans were asked to rate their country's democracy from 1-10. Venezuelans rated their democracy the best in Latin America. By 2010, thanks to the democratic wave that swept the continent, much to the chagrin of the United States government, it had been caught up by a few countries, but still posted a good score of 7.1- among the highest in the region.







 Venezuela has by far the most political parties in Latin America, and confidence in them is the joint-highest in the region.





 In 2002, 80% of Venezuelans believe their vote influences policy- one of the highest in the continent.




In 2009, Venezuelans were asked to rate their democracy from 1-10. By far the highest answer was 10.






So how does Chavez do it? It must be because...



 Myth: Chavez Controls the Media




 There appears to be an authoritarian dictator crushing freedom of the press in Venezuela. We read about it all the time. How many free outlets can be left? None, according to Congressman Connie Mack. But, as Mark Weisbrot has shown in an extensive study, the Venezuelan state owns only about 5% of all media outlets. Both  Le MondeDiplo and the virulently anti-Chavez BBC agree on the 5% figure. For comparison, state-owned media accounts for 40 and 37% of British and French TV. 9 out of the top 10 selling newspapers in Venezuela are strongly anti-Chavez. J.M.H. Salas reports that they regularly assault him with words like “sambo", "thick-lipped", "monkey” and “ape” (Chavez is the first-non white President). In contrast to what we read, Venezuelans believe there's about as much freedom of speech as there is in Spain. The private media organized, publicized and participated in the coup attempt of 2002, but were not sanctioned afterwards. They continue their all out attack to this day.  





 It is agreed by all serious commentators (eg. Greg Wilpert, Tariq Ali and Bart Jones) that there are no political prisoners in Venezuela. In fact, Jones goes further, stating that the Venezuelan media is “arguably the freest in the world” (Jones, Hugo! P425). Professor Margarita Lopez Maya, fellow of Columbia and Oxford Univiersity, states that "I don't think in any part of the world you could hear the things the media says about the President, his cabinet, his minister, the governors, the policies...it's obscene."

This was not always the case in Venezuela. 

President Carlos Andres Perez (1989-93) imposed martial law in Venezuela and ordered the terrible "Caracazo" massacre, killing perhaps 3000. Perez put official state censors in every newsroom in the country. (Jones, Hugo! p163).

Rafael Caldera (1993-1999), the President before Chavez, suspended the constitutional rights of Venezuelans, such as safeguards on arrests, and suspended the law. Caldera arrested 150 political prisoners and continued state censorship. Things reached an absurd level when an astrologer was arrested for predicting the octogenarian's death on an occult television show. 

During the coup of 2002, which ousted Chavez, Pedro Carmona reigned for 47 hours. He suspended the consitution, fired state representatives, liquidated the judiciary, and claimed he could rule by decree. He even changed the name of the country. He told Venezuelans to prepare lists of Chavez supporters and hand them into police. 

Pro-Chavez community channels were raided. Radio CatiaLibre 93.5FM was raided and destroyed by the police. The DJ was arrested at gunpoint while on air and tortured. (McCaughan, M. The Battle of Venezuela, p.102).

TV Caricuao was raided by police while the private TV station Venevision gleefully filmed Caricuao's staff being beaten with clubs. Radio Perola was searched. As no one was there, the police went to the staff's houses. Its director, Nicolas Rivero, was arrested and "brutally tortured", in his words (McCaughan, p103). On that day, more than 100 Chavez supporters were arrested and more than 100 murdered. 

Interestingly, that year, the Inter-American Press Society gave its highest honour to the press of Venezuela, for "not caving into government harrassment...for fulfilling its duty to inform in times of crisis...journalists risking their lives, facing danger and intimidation from the government". You might assume they were giving it to Nicolas Rivero, but, in fact, in this Orwellian world, they were giving it to Venevision, who aided the torture of journalists. 

Recently, the newspaper, Ultimas Noticias (for the record, a neutral newspaper) did a study of media bias in the 2012 elections. They found that private stations such as Globovision gave more than 10 times as much positive press to Chavez's opponent, Capriles, than to Chavez, while Televen gave 90% of its coverage to Capriles. (Figures including Chavez's Cadenas, where he interrupts normal scheduling to address the nation). The only TV channel which had a pro-Chavez bias was the only state-owned TV station, VTV, which gave about 2.5 times as much coverage to Chavez than Capriles. In total, there was a 60/40 bias in favour of Capriles. However, this small study did not include the vast array of private TV stations, only four, including the only government one. 

 Myth: Busted


Myth: There are Terrible Human Rights Violations in Venezuela



One trip to Human Rights Watch will convince you that Venezuela is a dictatorship where human rights are constantly curtailed. With reports entitled "A Decade Under Chavez: Political Intolerance and Lost Opportunities for Advancing Human Rights in Venezuela", it would be hard to come to any other conclusion. The trouble is that the reports "do not meet even the minimal standards of scholarship, impartiality, accuracy or credibility", according to more than 100 Latin American professors and experts from prestigious institutions such as Harvard, MIT, Vanderbilt, Stanford, Duke, California, UConn, London School of Economics, NYU and 100 others. They call the reports "grossly flawed" and "undermine the credibility of an important human rights organization". The evidence in these reports is almost laughably weak. For instance, in the HRW report, it claims Chavez is denying healthcare to non-Chavista Venezuelans. What is the source for this? One woman's account that her 98 year old grandmother was denied medical treatment because she was anti-Chavez. This is then extrapolated across the entire country as if this hearsay proves anything. 

Missing in the West's portrayal of human rights in Venezuela is discussion of United Nations recognized human rights such as the Right to Health, the Right to an Adequate Standard of Living, the Right to Education and the Rights to Food and Water, that were being denied to literally tens of millions of Venezuelans before Chavez. Why? Because the Rand-loving free-marketeers of the US elite reject these rights as "a letter to Santa Claus". If you're poor, you don't deserve food or water. 

Myth: Busted


 Myth: There are big food/power shortages in Venezuela


 Type "Venezuela food shortage" into the New York Times database search and you are greeted by literally hundreds of sombre articles detailing the "food shortage". A similar story is told if you try "Venezuela blackouts". But actually, Venezuela has doubled the amount of cereals it produces in just a few years, with yields per acre rising by 1/3, while Fedeagro and the United Nations Food and Agriculture Organization agree that there have been sharp rises in production of milk, eggs and pork.







At the same time, the United Nations Development Programme shows that child malnutrition has dropped by 2/3 in ten years and that Venezuelans eat about 25% more food than they did under the old regime.







It's a strange food shortage indeed where, across the board, people are eating more. So what are the food shortages? We can find out a lot from this anti-Chavez blogger's post. As you can see, he shows that the "food shortages" mean the two most popular brands of mayonnaise are gone, but there are visibly dozens of other jars of mayonnaise left. Likewise, there is no white sugar, only brown and panela sugar. And only one brand of powdered milk, too!

Similarly, the rabidly anti-Chavez World Bank shows that electricity production has increased a remarkable 50% in 14 years.





   The reason for this is the government instituted price-controls and gave people jobs, increasing their purchasing power. This meant for the first time in their lives, ordinary people can afford things like electricity and dairy produce. I'd like to invite you to think about the mindset behind a media that thinks there is no shortage of electricity when the poor majority have none at all but they and their friends in gated communities had all they wanted. We can find few examples of hang-wringing articles from journalists before Chavez was elected. Because of price controls, Venezuelans can afford food and electricity, leading to occasional brown outs or blackouts or shortages at peak times. Rich Venezuelans having to settle for a local brand of mayo because an average Jose has bought the last jar of Kraft constitutes a "food shortage", but not when literally millions of children were chronically malnourished. 

The ideology behind this is monstrous. Evidently, poor people aren't human beings and therefore don't deserve food or energy. Clutching copies of Rand and Friedman, they insist the market should determine who gets basic services, not the representatives of the people, and even setting up soup kitchens for the homeless is trapping them in a "dependency culture". It's not that there are no food shortages, but the problem has gone from “I am starving to death” to “out of milk, again?!”.

Myth: Busted



 Myth: Venezuela is the most dangerous place in the world



In the New York Times, we read that crime culture is so omnipresent that "not even the dead can rest in peace". Putting aside this orgy of literary necrophilia, there can be no doubt that violent crime is high in Venezuela. But it is also a fact that across Latin America, murders are common. It is also a fact that the Venezuelan murder rate is not the highest in the region. 




The United Nations has shown that homicides have been falling for the last 4 years and that the Venezuelan murder rate is less than half of Honduras'And, of course, murder is hardly a common crime in any country. Those claiming crime was the country's primary problem jumped from a negligible 0.6% of respondents to 65% by 2010. And yet, at the same time, those claiming that they or their family were actually victims of crime has dropped from 49% in 1998 to 28% in 2010. 



Even as crime is seemingly falling, people's perception of crime has skyrocketed 10750%! How to explain this? The media. The next chart shows the amount of stories appearing in the New York Times each year which include the words "Venezuela" and "crime". The lines correlate remarkably closely.  





There has been a massive, concerted, sustained, and, ultimately, successful, campaign by both Venezuelan and Western media to drive the population into hysteria about crime in the country. And yet, for all of it, Venezuelans are less concerned about crime than most South Americans. In fact, out of the 6 South American countries Pew Global asked, Venezuelans came in only 5th in their fear of crime. 




  Myth: Busted



 Myth: Hugo Chavez is anti-semitic 


You can read all about the massive anti-Semitism in Venezuela in stories with lurid titles like "Why Hugo Chavez Hates Jews". The American Spectator claims it is "standard populist hatemongering" Almost the entire case for this comes from a quote where Chavez claimed "the descendants who crucified Christ" have taken over the world. The trouble is, it is fabricated. The actual speech and its context, still not published in the US media, goes like this:


"The world has enough for everybody but it turned out that a few minorities--the descendants of those who crucified Christ, the descendants of those who expelled Bolivar from here and also those who in a certain way crucified him in Santa Marta, there in Colombia--they took possession of the riches of the world, a minority took possession of the planet's gold, the silver, the minerals, the water, the good lands, the oil, and they have concentrated all the riches in the hands of a few; less than 10 percent of the world population owns more than half of the riches of the world."



A long list of traitors. Why have they taken out the context and the Bolivar part? Duh, because you can't slander people for anti-Semitism otherwise. Unmentioned in all this is that "the people who crucified Christ" were Romans, not Jews. So Chavez gave a speech where he mentioned a load of horrible people and did not include Jews. Therefore he is anti-Semitic. It is a standard tactic of both the US and Israel to label their enemies as "anti-Semites". A New York Times search for "Nicaragua anti-Semitism" will throw up a slew of articles like "So are the Sandinistas anti-Semitic? Of course they are" from the 1980s, when the left-wing Sandinistas were in charge, but almost nothing before or after. If only the Sandinistas could be like the US-trained fascist death squads who took over the country, by being totally not anti-Semitic. What Chavez certainly is is a vocal critic of US and Israeli government policy. But seeing as he's not Jewish he can't be a self-hating Jew.

Myth: Busted



 Myth: Hugo Chavez is an Isolated, Unpopular Leader, Loved only by dictators




 Most of the reports of this come from the time when Chavez went on a whistle-stop tour of the oil-producing countries. The day after he met Saddam Hussein and Ahmadinejad  he actually met a dictator with a far worse human rights record. That person was US-favorite, the King of Saudi Arabia.




 The picture elicited almost no response in the US media whatsoever. Chavez has taken a lead in reinvigorating the OPEC cartel, and his visits were laying the groundwork for an agreed reduction in oil drilling, in order to stabilize prices. If you want to do deals with other oil producing nations, you're going to have to meet a lot of dictators. 


 Chavez was the first President of the Pink Tide, who see themselves as left-leaning, anti-imperialist politicians. Chavez's opponent in the 2012 election race claimed he wasn't a US stooge, but a follower of the popular socialist ex-President of Brazil, Lula. Lula rejected this, openly backing Chavez, saying
"A victory for Chávez is not just a victory for the people of Venezuela but also a victory for all the people of Latin America … this victory will strike another blow against imperialism." President Correa of Ecuador has called Chavez “a guiding light” (Jones, p.420), while the President of Bolivia has called him "an inspiration for all peoples who fight for their liberation...he will always be present in all regions of the world and all social sectors. He will always be with us, accompanying us." If you're wondering who is this "empire" the presidents are talking about, it is the USA. 

Chavez is certainly a polarizing figure in Latin America. So while Chile's public doesn't like him, Argentina's have a more positive opinion.  However, when asked which country they admired the most, Latin Americans chose Venezuela by a considerable margin.






 You may have heard that Chavez drew laughs at the UN after comparing Bush to the devil. What you probably don't know is that Chavez received one of the longest standing ovations in United Nations history for his speech. His speech laid out the problems the world was facing, what his government was doing to stop them, and proposing that oil producers and consumers come together to combat climate change. A US diplomat claimed that the applause was for the “sheer entertainment factor”. I'll leave it to you to judge whether seasoned diplomats give standing ovations to comedians. Chavez's biographer, Tariq Ali, tells the story that senior African and Asian diplomats came to Chavez thanking him for “saying the things we can't."



Myth: Busted




 Myth: Chavez is militaristic and threatening the USA



 This myth comes from the fact that the Venezuelan military was buying new AK 103 and 104 rifles, a modern variant of the AK-47, from Russia. To this day, the Venezuelan army's main rifle is an obsolete weapon from the late 1940's, a gun which was replaced in the late 1980's by European armies. Clearly it has to be replaced. There's no chance the Americans would supply it so where else would they get it? What does it matter that it's from Russia? Because the US did not ok it, that is the point. Missing from all this is the fact that Venezuela was also buying planes from Brazil, guns from Belgium and ships from Spain, countries that the US isn't trying to demonize. The use of the incorrect term “AK-47” is meant to connote images of terrorism or Soviet militaristic authoritarianism. But actually, Venezuelan military spending fell under Chavez.




As you can see, Venezuela spends less than half the money Colombia does on defence and has had a 40% decrease in military spending, compared with GDP. For a sane look at the Venezuelan military, try Wilpert, G. Changing Venezuela by Taking Power, ch. 5

Myth: Busted



Bonus Myth: The People are worse off under Chavez




 Chavez instituted a national healthcare system which had performed 225 million consultations by 2007 alone. (Cannon, B. Hugo Chavez and the Bolivarian Revolution, p. 93) The number of public doctors has increased by 1200%, from 1628 to 19571 by 2007. 50,000 Venezuelans were given free operations to restore their sight. Between 1 and 1.5 million were taught to read for the first time (Jones, p. 8). Health expenditure per person has tripled.





Accorrding to the Gini coefficient, Venezuela went from the most unequal country in Latin America to the most equal.





The numbers corroborated by this BBC article. Foreign Affairs, the flagship US political science journal, reports that, according to a DataAnalysis report, the Venezuelan poorer classes enjoyed a 445% income increase and a 194% income increase for the upper classes, due to the huge economic boom driven by the state. According to the Pew Global Attitudes Project, between 2002 and 2007, there was a 65% increase in the numbers of Venezuelans agreeing that the government has a positive effect on their lives, one of the highest increases in the world. 

Myth: Busted 

So there you have it. Either there is a huge conspiracy involving the United Nations, World Bank, the majority of Latin American studies professors, heads of state all over the world and polling organizations, or the media is lying to you, like they lied to you about Iraq and Afghanistan and the economy, and the elections, and everything else. Pretty juicy, either way. As a student of Latin America, I think Venezuela is one of the most vibrant democracies on Earth, yet the media is representing it as a hellhole. Why is this? Many have asked. Below is a small selection of media critiques on Venezuela. 


http://www.aljazeera.com/indepth/opinion/2013/01/201312912275351687.html

http://www.independent.co.uk/voices/comment/hugo-chavez-proves-you-can-lead-a-progressive-popular-government-that-says-no-to-neoliberalism-8202738.html

http://fair.org/extra-online-articles/fear-of-a-venezuelan-example/

http://www.cepr.net/index.php/publications/reports/an-empty-research-agenda-the-creation-of-myths-about-contemporary-venezuela

http://www.newstatesman.com/blogs/world-affairs/2012/10/media-misunderstanding-venezuela

http://southoftheborderdoc.com/media-distortions-in-latin-america/

 Some say it can be explained with Chomsky and Hermann's Propaganda ModelRemember the hysteria when Obama might have been introducing a state-run option for healthcare? “He is a Kenyan-Islamofascist-Antichrist-Commie!” Well, imagine what the media would be like if he'd done all the things mentioned here. Venezuela is certainly not an ideal society by any means, but it saddens me to see so many derogatory remarks made about someone who spearheaded change which the majority wanted. It also clouds real debate over his failings, as people like me are forced to spend their time correcting and replying to nonsense accusations. The media did not hate and fear Chavez because of his failings, of which there were many, but because of his achievements in bringing about progressive change.



9 comments:

  1. I spent literally hours a day every day debunking disinformation, fear mongering, and propaganda by the Continental Right about Chavez after his death. Both the rich conservatives in VZ and their Fox News puppet masters here in the US went into overdrive with the spin machine. They literally would have danced on his grave if they could have. They have that much disrespect for someone who died of cancer.

    Epic article. Bookmarked for repeated future reference anytime some conservative tries to spread more lies about Hugo Chavez. Here are some other citations I accumulated:

    Venezuelan Economic and Social Performance Under Hugo Chávez, in Graphs
    http://www.cepr.net/index.php/blogs/the-americas-blog/venezuelan-economic-and-social-performance-under-hugo-chavez-in-graphs

    The Achievements of Hugo Chavez http://truth-out.org/news/item/13453-the-achievements-of-hugo-chavez

    Venezuelans mourn the loss of Chavez http://blogs.aljazeera.com/liveblog/topic/hugo-chavez-17756

    On the Legacy of Hugo Chávez http://www.thenation.com/article/173212/legacy-hugo-chavez

    Hugo Chavez (1954-2013) http://news.firedoglake.com/2013/03/06/hugo-chavez-1954-2013/

    Quotes of Hugo Chavez on G+ https://plus.google.com/111051039748078110427/posts/ZuuRhiLbCaF

    Chavez Quotes: http://en.wikiquote.org/wiki/Hugo_Ch%C3%A1vez

    Conolences by world leaders http://edition.cnn.com/2013/03/05/world/americas/hugo-chavez-reaction/

    Venezuela Donates Free Heating Oil to 100k Needy US Households http://readersupportednews.org/news-section2/324-100/15947-venezuela-donates-free-heating-oil-to-100k-needy-us-households

    Full documentary on 2002 Venezuelan coup attempt
    http://www.youtube.com/watch?&v=Id--ZFtjR5c

    How did Venezuela change under Hugo Chávez? (Guardian chart) http://www.guardian.co.uk/news/datablog/2012/oct/04/venezuela-hugo-chavez-election-data

    GDP skyrocked under Chavez, four times what it was in 2000 http://data.worldbank.org/indicator/NY.GNP.PCAP.CD/countries/VE-XJ-XT?display=graph

    Number of people living below povery line cut in half http://data.worldbank.org/indicator/SI.POV.NAHC/countries/VE?display=graph

    VZ inflation by year http://www.indexmundi.com/venezuela/inflation_rate_(consumer_prices).html

    ReplyDelete
  2. Excellent article, 1 small thing. 40% of media in the UK is not state owned, there is no state owned media in the UK. The BBC is independent, not state owned. The state can authorise a requested rise in the liscence fee, but has no control whatsoever over BBC policy. That's why we love it so much. The BBC is not such a nice place to go for many government politicians, as The Mayor of London found out yesterday on the Andrew Marr show. Please correct.

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    Replies
    1. Hi. I should have said "state-controlled" as the Prime Minister tells the Queen who to appoint to the BBC's board. Furthermore, they're funded by the TV license, which is essentially a tax imposed by the government.

      I certainly would disagree that the BBC is anti-government. Many of its journalists openly admit that "we are a mouthpiece for the government".

      You may remember the hoo-ha in the 1980s where Margaret Thatcher purged the BBC of its left-wing journalists. Another example is the whole "sexing up the dossier" affair. The Director General of the BBC was removed for having the temerity to question whether one part of a transparently false (like one google search) dossier was exaggerated. Almost no journalist picked up the story. Yet, the one on trial was Dyke, not Blair.

      Medialens (http://www.medialens.org/) covered this issue very well. Auntie Beeb is not as cuddly as you may think.

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  3. Well, I am venezuelan. Many things that you say are right. But most of it is easy to see that is wrong. The Economical information is not so far from the truth (50% I would say), but the social is totally wrong. I know it is very difficult to get the accurate info and mostly when it comes to south american countries where it is mostly managed by the people in charge, but Venezuela is a very special case, all the institutions without any exception are completely subordinated to the government which makes it much harder to get information that is not manipulated. In addition, the corruption levels are veeeery high, and I dont mean only in high positions in the government, something so common as the regulation of prices on the meat is constantly violated by the sellers which pay some kind of a "vaccine" to avoid being closed for high prices. This makes it almost impossible to trust what you read.

    Anyway I find very nice that someone that is not Venezuelan feels interested in studying its situation, after all it is the place where I've been born and raised. I know it might be not so easy for you, but if you have the chance go and visit it. You'll find very beautiful places and nice people, and maybe you can get some information with your own eyes and contrast it with the statistics.

    Regards :)

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  4. Hey. Very good analysis. I don't know if I agree with you that all there is out there about Chavez is negative though. I think mainly in western media outlets that's how he was portrayed. One of the most common accusations I read and heard from people was that he was a dictator; it seems most people seem to ignore that he was actually elected. And although I'm sure there's criticisms that can be hurled at Venezuela's democracy, I ask people who say to show me a country where this is not true.

    South American media outlets were more balanced I found (in general, not all of course). For example, they pointed to his efforts in uniting the region or the significant reduction in inequality in the country. Look at, for example, this article from Politica LatAm:

    http://politicalatam.com/es/2013/03/the-country-maduro-inherits-from-chavez/

    or this one:

    http://politicalatam.com/2012/12/chavez-as-modern-day-bolivar/

    Anyways, great analysis nonetheless!

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  5. I want to say this as respectfully as possible, but the selection of statistics in your economics section do not adequately address the current state of the economy. The statistics you have chosen to cite are completely accurate, they are just the incorrect statistics to cite. First of all GDP growth statistics are useful in measuring the direction of most economies, but with single resource economies they do not give the whole picture. Basically during a commodity boom, whether you are Zambia, Chile or even Mongolia you can experience record growth with anyone as the President as long as the resource contract is reasonable, and royalties above certain investment targets. One only has to look at the Central Asian dictators to see how GDP growth does not reflect an adequate analysis of their economies. Second, measuring the stock market and the growth of the stock market does not necessarily reflect a good economy, what you need to look at are investment levels and what the private sector is willing to invest. The stock market in an economy with high inflation (and Venezuela has high inflation even if it is not 100% like it was earlier in the century)often times just a hedge against inflation, for instance, in the early 1980s when inflation was really high, most American investors turned to equities because the bond market was rubbish (why get a return of 7% when the inflation rate is 8%, you are losing 1% a year), so investors turned to the stock market. Moreover, in an economy flush with cash (as I am sure the Venezuelan economy is, as so much money has entered in the country in the last 10 years - guests on the BBC World Service were saying $1 trillion while Chavez was in power) needs investment opportunities, and stocks are often the best bet (look at the NADSDAQ right now, partly thanks to two rounds of QE). Third, your inflation statistics, though officially accurate, still do not reflect the true numbers. Unfortunately, Chavez has been accused rigging inflation rates, which is extremely dangerous because you have the emergence of a black market for currencies, and often times government officials who have access to foreign currency will exploit the differences between the official exchange rate and the unofficial exchange rate, which has been pushed up by inflation. That is why the government recently devalued the currency by 30%, to try and bring those two numbers together. The problem with the emergence of a black market is that trade changes and people start to hoard assets, this is something we have seen in government shops, as shortages are exacerbated, inflation increases, and you run into the slippery slope of hyper inflation. Moreover, as a resource dependent economy, who imports a lot of goods (more on that later), Venezuela like other countries (South Africa is a good example) imports a certain amount of inflation, and needs to balance exchange rates (to a certain extent) to deal with that problem.

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  6. Now the correct way for you to have analyzed the economy, would have been to look at labour productivity, overall economic investment rates (partly using the savings rates), foreign direct investment, infrastructure investment and then you should have analyzed investment and productivity in the oil and gas sector and then finally looked at import rates relative to the beginning of the oil boom, and obviously compensate a bit for population growth. I will explain why each of these are important (I am not going to give you the numbers namely because I do not have them handy and I already think I know picture they will paint).

    Labour productivity, investment (notably FDI and infrastructure) are two key indicators of the status of the economy because they measure the future, and are often times based on current policy. Labour productivity determines efficiency and competitiveness, and this will allow you to trade your good or service either domestically or internationally. If labour productivity is low, then it becomes cheaper to import goods, and the benefits you have from employing domestic workers is lost. Tied to labour productivity is infrastructure, you can have high cost workers (who are protected by strong unions and earn a great wage) but only if they are competitive and how you do this is to lower the overall cost of production, which includes things like transport costs, marketing etc. A government like Norway invests a lot in infrastructure, which allows their exports to be competitive despite high labour costs. Norway is a great example of how to properly exploit natural resources and invest the money in an economy. The second set of statistics that are important in evaluating Chavez is the investment in the oil and gas sector. This is because as a single resource economy, any reduction in productivity can harm budgetary planning and future planning. If Chavez has not invested properly in oil and gas infrastructure then when the price of crude oil and gas falls below a certain number government programs no longer become achievable and any slack in the system has already been exploited (say you produce 2 mbd but you could produce 2.5 mbd) This is reflective in an 8% government deficit, and the move by the government to seek out more loans from China.

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  7. Finally the last thing to look at when addressing the Venezuelans economy is whether it has suffered from the Dutch disease. That is why you need to look at import volume (share of import as a % of GDP does not make sense because oil and gas make up such a large share that you do not get an adequate measurement as their share of GDP has increased dramatically over the past 10 years) and then adjust it for population growth (obviously as the population increases import volume increases too). Dutch disease affects single resource economies as the money earned from that single commodity reduces the competitiveness of exports (as the currency appreciates as foreigners buy your commodity) and makes imports more attractive. The way to avoid this is to save some of money you have earned in a dollar/Euro/Yen denominated account or invest the money in your economy to increase productivity, usually through infrastructure or education (and to some extent health care - this worked for Botswana, but then some argue that Botswana did not experience Dutch disease, but that is beside the point).

    If you look at all of those stats when evaluating the economy, I have a sneaking suspicion you will find different results. Or I could be completely wrong, like I said, I did not look at the numbers, my inclination is based on the devaluation last month, the official complaints about the inflation rates, the institution of capital controls, the difficulty in getting USD and the reports of shortages in government stores.

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    1. Hi Andrew. Thanks for your comment.

      I'm not an economist. However, one economist who I've followed that has been consistently on point throughout the 2000s, when virtually the entire profession was continuously forecasting catastrophe for Latin America, is Mark Weisbrot.

      On the question of devalution, I think he gives a pretty succinct answer to the reasons behind it- http://www.youtube.com/watch?v=UOK-WuAbCmo

      Secondly, on the subject of efficiency, this is a very ideological term. Making sure millions of people don't freeze is extremely inefficient. So is making deals with poor countries for below market rates.

      We have to be careful when talking about all this "missed opportunity during the oil boom" nonsense that is talked about. Of course, there are many reasons why the oil price has risen, but the overarching one is the Venezuelan government;'s reinvigoration of the OPEC cartel. Pre-1998, the US used Venezuela as their chief way of undermining the Middle East, by pumping millions of barrels of extra oil. In 1999, Chavez comes to power and immediately goes around the Middle East, Mexico, Russia etc to organize a worldwide cap on oil production. The result was a huge surge in the price of oil.

      Here's a crude graph I drew for you - http://i.imgur.com/Pw1BGrH.gif

      This is completely common knowledge in the academic field- virtually every English language book on Venezuela gives pages or chapters to this topic. Yet, to my knowledge, this information has not been given in the Western press. The reason is that one would have to conclude that this was a really astute move from a clever politician. It would also shed some new light onto the reasons for the Iraq War. So the information is suppressed and the story becomes "Venezuela CAN'T produce more oil- lol nationalized companies don't work".

      Ask an economist and they'll say that not producing as much as you can is "inefficient", but the result has been a ballooning in profits from oil, even as less is pumped.

      I don't want to create the impression that Venezuela has the best economy in the world, but seeing how the attacks on it come from people in a country whose entire system collapsed 5 years ago, I can't help but conclude that people in glass houses shouldn't call the kettle black.

      Interestingly, the one area where Chavez hasn't been attacked was his austerity measures in reaction to the financial crisis. Rather than spending their way out of the recession, the government cut back and the results were terrible. Of course, this was one of the first times where Chavez did what Western economists told him to do.

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