Monday, January 29, 2007

Why Chavez is so loved 

Last week the Venezuelan-American Chamber of Commerce had its annual presentation on Venezuela’s economic perspectives for 2007. VenAmCham, as it is known, is hardly a pro-Chavez forum. Despite that, they presented some information that goes a long ways to explaining why Chavez is so popular, as we clearly saw last December 4th.

The first slide is on Venezuelan consumer confidence:

It shows that the economic confidence of Venezuelan consumers is now at an all time high. With 1992 a base of 100 it is now at 115. Prior to Chavez coming to power it was generally floundering down in the 60s whereas since Chavez has come to power it has been consistently high save during the opposition led economic sabotage of 2003.

And what could be responsible for this increased confidence? Simple, consumption is way up:

This graph shows the consumption level of Venezuelans over the past 17 years. Again, Chavez’s performance is off the charts, literally. It is up over consumption in the last year prior to his coming to power, 1998, by a whopping 32%. Venezuelans are consuming almost 1/3 more than they were 8 years ago. That sure will boost consumer confidence.

But that is not all. Note that consumption is way up over any year going all the way back to 1989. In fact, given that 1989 was low and falling it wouldn’t be surprising if one had to go all the way back to the eary 80s or late 70s to find comparable consumption levels. Again, quite impressive.

Here is an interesting charg:

This chart shows that the different regions of Venezuela and what their percentage is of Venezuela’s overall population (in green) and their consumption as a percentage of total national consumption (in blue). Note that consumption is heavily tilted in favor of the greater Caracas area which is well known to be where a disproportionate share of Venezuela’s wealth is concentrated. Interestingly, Caracas’s share of consumption fell by 2% last year while that of the Zulia/Falcon area the eastern states went up by 1% each. Certainly not a radical change, but a welcome one. At the same time, the central-west states of Lara and Barinas are still lagging badly and probably need more assistance.

Then we come to the most impressive chart of all:

This is a graph we have seen a few times before. Now it has been fully updated through 2006. The chart shows how REAL income (that is adjusted for inflation) has changed for social class “E” (the poorest half of Venezuelan society, social class D, and social class C- which is the lower middle class.

Although it is going up now the real income of classes D and C- have are still down since 2003. Certainly that isn’t good.

Yet, at the same time, the income of social class E, which makes up 58% of the Venezuelan population has gone up a stunning 130%. That is right, the income of the poorest Venezuelans has more than doubled in the past few years. Chavez has always had as his primary focus helping the poorest Venezuelans and clearly he has succeeded – hugely.

Note also, these are not government statistics. They come from the private and reputable polling firm Datos. That is right, one of the same polling firms that correctly predicted Chavez would easily win re-election in last months elections. If they already had this data it would have been easy for them to guess that Chavez would win hands down. If you increase 58% of the populations income by 130% you probably will be able to win any election you want.

Of course, these independent statistics confirm what government statistics have been telling us for quite some time – that the poor are doing much better under Chavez than they were before. The opposition can twist, turn, squirm and lie all they want but they can’t escape this fact: this is a government that has helping the poor as its central mission. And clearly, it is being very, very successful.


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