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Fight Racism! Fight Imperialism! 240 August/September 2014

Massive social investment has resulted in a continued fall in structural povertyAs the Bolivarian Revolution resists the most recent wave of destabilisation, official statistics on poverty in Venezuela for 2013 are deliberately manipulated, becoming yet another stick with which to beat the socialist government. Yet despite headlines in pro-imperialist Venezuelan newspapers crowing that ‘Over 700,000 Venezuelans slipped into extreme poverty in one year’ (El Pais, 28 May) and ‘Poverty in Venezuela swells from 21.2% to 27.3% in one year’ (El Universal, 23 May), a closer look at the actual figures shows that, under the Bolivarian Revolution, structural poverty fell to a record low in 2013. 

The crucial fall in structural poverty

It is vital to distinguish between income poverty and structural poverty – something bourgeois commentators deliberately fail to do. Income poverty is a calculation of income and living costs. If a household’s income is below the cost of the daily basic food basket plus essential products and services, it is classed as in ‘poverty’. If a household’s income is less than the cost of the basic food basket alone, it is classed as in ‘extreme poverty’.

Structural poverty, on the other hand, assesses access to primary school and basic public services, housing conditions and economic dependency. As it relates to non-monetary indicators of development, it is less reactive to inflation. From a peak of 13% during the 2002 failed coup attempt and subsequent oil lock-out, extreme structural poverty has steadily declined to 5.5% at the end of 2013, the lowest on record. This drop, despite population growth and recession, reflects huge advances in the provision of services and infrastructure through the poverty-reducing ‘missions’ which have established universal free health care and education, provided subsidised food and built over half a million homes. The PSUV government has pledged to eradicate extreme poverty by 2018 and plans to construct 1,500 ‘social mission base’ community centres in deprived areas, bringing together existing social programmes in health, education, food, housing and culture.

So while the economy in Venezuela is undoubtedly under pressure, with annual inflation running at 60% and the food scarcity index standing at 28% in January 2014, the overall trend during 15 years of the Bolivarian Revolution has been massive poverty reduction. Before 1998, household income poverty stood at 42%, structural poverty at 29.3% and extreme structural poverty at 10.8%. By 2013 income poverty had dropped to 27.3%, structural poverty to 19.6% and extreme structural poverty to 5.5%. This is an inspiring achievement despite sustained ruling class destabilisation and a global economic crisis.

In an illuminating report Ewan Robertson of Venezuela Analysis exposes the deliberately misleading headlines.1 Venezuela’s National Statistics Institute (INE) records income poverty every six months. In the first half of 2012, income poverty was 27.2% a similar rate recorded every year since 2007. In the last half of 2012, income poverty dropped sharply to 21.2%, linked to a 32.5% minimum wage increase, comparatively low inflation (20.1%) and the creation programmes adding 800,000 pensioners and single parents to the welfare system. Then, in the first half of 2013, income poverty increased to 29.4% – coinciding with a currency devaluation in February and the death of Hugo Chavez in March. Inflation rose to 56%, food and goods shortages developed, and the bolivar’s value on the black market plunged. In FRFI 236 we exposed the currency fraud, speculation and hoarding at the root of inflation and scarcity, tactics of the economic war unleashed by the ruling class as they seized the opportunity for destabilisation after Chavez’s death.

Inflation and scarcity, underlined by hoarding and speculation, form a familiar pattern in Venezuela during times of high political tension and conflict. A 2013 report by the Central Bank of Venezuela (BCV)2 highlights that following the Caracazo uprising in 1989, inflation jumped from 40.3% to 81%. The monthly scarcity index spiked to 24% in the oil lock-out of 2003. As income poverty is directly affected by inflation, the eight percentage point increase following the death of Chavez, with the prolonged economic war and street violence that ensued, is no surprise. Yet income poverty again dropped to 27.3% in the last half of 2013, probably as a result of a three-tiered minimum wage increase and President Maduro’s offensive against fraud, speculation and hoarding.

The statistics the imperialists don’t publish

Unsurprisingly, while happy to circulate misleading scare-stories about Venezuelan poverty, the bourgeois media ignores any statistics which reflect the country’s social and economic development. The INE’s report Venezuela: Social and Economic Environment, published in May 2014 shows that between 1998 and 2013:

  • Social spending increased sevenfold to $623,508m. Investment in health care, education and housing in particular rose significantly.
  • Social investment as a proportion of national income increased by 27.9% and is now equivalent to 62.5% of national income.
  • The GINI coefficient, which measures income inequality, dropped from 0.498 to 0.398. The UN rates Venezuela as having the lowest income inequality in Latin America.
  • Unemployment was almost halved, from 10.6% to 5.6%;
  • Out of a total population of 27.8 million, the number of people accessing a pension increased by 427.8% from 475,000 to over 2.5 million;
  • Free school meal provision increased by 1,663.9%;
  • University matriculation tripled from 862,000 students in 2000, to over 2.6 million students;
  • The malnutrition index has been slashed from 21 in 1997 to just 2 in 2010, and
  • Debt as a proportion of national income dropped from 56.7% of GDP to 28.6% of GDP.

Advances in health care

The Cuban-run Mission Barrio Adentro, the core of the Bolivarian Revolution’s universal free health system, has meant 1.7 million deaths have been avoided3 since its creation in 2002. Infant mortality has dropped from 21.36 per 1,000 live births in 1998 to 13 in 2012, and life expectancy has increased from 72.2 years in 1999 to 74.3 years. 82% of the population receives care through the public health care system. Venezuela’s Human Development Index is 0.771, placing the country in the ‘High’ category of human development.

Empowering people with disabilities

In 2012, 120,000 Venezuelans with disabilities were incorporated into the disability and family programme which provides socio-economic benefits and specialist health treatment. Since 2007, the law requires at least 5% of employees be people with disabilities. A programme of employment fairs has begun to create an additional 1,500 jobs and 1,305 university places for people with disabilities.

Venezuela also supports poverty reduction, infrastructure development and social provision on a regional level. Alongside socialist Cuba it has initiated alliances which promote regional cooperation and mutually beneficial trade such as the Bolivarian Alliance for the Americas (ALBA) and the Community of Latin American and Caribbean states (CELAC). CELAC recently pledged to eliminate poverty and malnutrition in Latin America and the Caribbean by 2024 promoting universal access to education, healthcare and adequate nutrition.

The recent announcement by the BRICS countries (Brazil, Russia, India, China and South Africa) of plans to create their own bank is also of huge significance to Venezuela. A BRICS bank would provide a direct alternative to the dominance of the International Monetary Fund and would give countries like Venezuela, as well as Cuba, Ecuador and Bolivia access to trade, credit and investment without having to accept the dictates of US?and European Union imperialism.

Venezuela’s Bolivarian Revolution demonstrates that, despite imperialist-backed lies and destabilisation, human development remains at the centre of the fight for socialism in Latin America.

1. ‘Is poverty still falling in Venezuela?’ Ewan Robertson

2. ‘Venezuela: entorno socio y economico’, Instituto Nacional de Estadistica. Republica Bolivariana de Venezuela, May 2014.

3. ‘Barrio Adentro Health Mission has saved 1.7 million Venezuelan lives’, Embassy of the Bolivarian Republic of Venezuela, Washington DC.