December 12, 2012
The Washington Post editorial board has long been one of the most shrill voices in the U.S. against the left governments of Latin America, and of course most apoplectic about Venezuela. I have often suspected that they write these editorials for the right-wing press in Latin America, which often picks them up, and especially since most of the Post’s readers could care less about Venezuela or the other governments that they hate so much, such as Bolivia, Ecuador, Argentina, etc. This is a nice favor for their friends down South, because there are still many people who don’t know that the Post’s editorial board has been taken over by neocons, and so “Fox on 15th Street” still has a reputation in some quarters as a “liberal” voice.
To win the election, the government spent wildly, running up a budget deficit of 20 percent of gross domestic product. The next president consequently will be forced to devalue the currency, giving a boost to inflation that is already in double digits and worsening already-severe shortages of consumer goods.
According to the October estimate of the International Monetary Fund (IMF) – no fan of Chávez – the government budget deficit for 2012 is forecast at 7.4 percent of GDP. The Post doesn’t give a source for it’s 20 percent number, but a recent Wall Street Journal article attributed the number to Barclays. This is the big investment bank that embarrassed itself and cost some of its investors a lot of money by telling them just two days before Venezuela’s October 7 election than “an opposition victory looks likely.” Chavez won by 11 percentage points, which was just about the average of pre-election polling.
Also it is not clear why a budget deficit, as the Post argues, would force the government to devalue the currency. After all, the government is mostly borrowing and spending in domestic currency, not dollars. As for inflation, it is true that it has picked up in the two months since the election (October and November), but inflation over the past year has been 17.9 percent, as compared with 26.1 percent for 2011 and 28.2 percent for 2010. So the trend over the past two years has been downward, despite the fact that the economy was recovering from a recession.
The Post Editorial Board also argues that if Chávez were to become incapacitated, it “could tip Venezuela, one of the largest U.S. oil suppliers, toward a prolonged period of turmoil or even violence.” It’s not clear why this would be the case; Chávez has already asked his followers to vote for his Vice President, Nicolás Maduro, if he can no longer serve – indicating his desire to follow the constitution, which would mandate an election within 30 days of his leaving office. It’s possible that it could take more than 30 days to get things prepared, depending on events – but there’s no indication of potential turmoil or violence. There were similar predictions in much of the press regarding the October presidential election, but instead there was a record voter turnout, a clean election, and a peaceful acceptance of the results.