Tuesday, August 29, 2006

How does he do it? - Part III 

It has been well documented over the past couple of years that Chavez is doing an excellenent job of making sure that government revenues, through oil sales and increased taxes, are finally reaching those who most need them and boosting their income significantly. As was pointed out here the poorest segment of Venezuelan society (social class E which is 58% of the population - for those needing a refresher on the social classes see here) had seen its REAL income go up by 50% in the past two years.

That is a stunning accomplishment which shows that Chavez's social programs are doing exactly what they are intended to do - boost the income and standard of living of those who most need a boost.

Today we get even better news, that the income growth of the poorest is continueing unabated and possibly even accelerating. The Datos polling firm which tracks the income growth recently updated its numbers for the first quarter of 2006 (hat tip to John):

From this chart we see that social class E has seen its income go up 18% in nominal terms during the first 3 months of this year. Inflation was running around 4 or 5% for that period so the REAL income growth was at least 13% for only the first quarter!!!! Compare this to the 16% growth for ALL of 2005 and we see real income growth for the poor went up almost as much in the first quarter of 2006 as it went up in all of 2005!! If this trend continues it could even beet the 30% income growth of 2004.
Looking at this chart sure clearifies one thing about the opposition's presidential campaign. When the Missions (Chavez's social programs) were first intraduced they fought them tooth and nail. Now in their presidential campaign they swear they'll keep them. Given this stunning success in boosting peoples income we can see why they no longer dare to challenge them.

On a final note we still see that the income growth for social class D is still lagging and barely growing at all in real terms. I really hope someone in the government is paying attention to that and is working on plans to address it.


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