The Wealth Chavez Wasted

by Patrick Appel

Venezuela Oil

Dorothy Kronick trashes Hugo Chavez’s economic legacy using a series of charts:

Nature handed Chávez by far the biggest resource windfall in Latin America (Figure 4), yet compared with its less-lucky neighbors, Venezuela experienced slow economic growth (Figure 5) and high inflation (Figure 6). Nor did Venezuela eclipse many of its neighbors in lowering infant mortality (Figure 7), slashing poverty, reducing inequality or improving school attainment during Chávez’s tenure. Many of the countries that surpassed Venezuela in these social achievements did so in part by implementing innovative anti-poverty programs called conditional cash transfers, in which the government pays poor women who take their children to school or the doctor. While Mexico, Brazil, Peru, Colombia and other countries pursued these highly effective policies, Venezuela scaled up projects that “one will be hard-pressed to find [evidence of] in human development statistics,” in the words of a prominent Venezuelan economist who evaluated the programs.

Kronick goes on to compare Venezuela’s economic failures with Bolivia’s successes. Greg Weeks adds:

What she does not address, though, is the “why” question. Why did Evo Morales, who uses similar rhetoric, professes a similar ideological orientation, and faces a similarly elite opposition, go in such a different and more successful direction? Perhaps because it’s so uninterestingly stable at the moment, Bolivia gets no attention paid to it at all.