This paper looks at allegations against the government of Venezuela in Foreign Affairs' recently published article, "An Empty Revolution: The Unfulfilled Promises of Hugo Chávez," (March/April 2008), in light of available data. It shows that some of the allegations are altogether wrong, and others grossly exaggerated and/or misleading.
The article argues that "a close look at the evidence reveals just how much Chávez's 'revolution' has hurt Venezuela's economy -- and that the poor are hurting most of all." As the article notes, this is contrary to widespread belief.
The Foreign Affairs article alleges - among other things - that under the Chávez administration inequality has increased in Venezuela, that poverty reduction has been slow relative to economic growth, that social spending has been a low priority for the Venezuelan government, that the poor have suffered declines in their health and living standards, and that Venezuela's current account surplus faces elimination due to import growth.
The CEPR paper shows that all of these allegations are wrong.
In the five years since the government of President Chávez got control over the country's national oil industry there has been a substantial decline in inequality, the poverty rate has been cut in half, and unemployment by more than half. Real (inflation-adjusted) social spending per capita in Venezuela increased by 314 percent from 1998-2006. The current account surplus is still very large, at more than 8 percent of GDP. The paper also shows that the article does not present evidence to suggest literacy has not improved in Venezuela.
It would be remarkable if this macroeconomic and spending picture were compatible with the dire picture of Venezuela that the Foreign Affairs article paints; the CEPR paper shows that it is not.