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Socialism Vs. Capitalism: What's Next for Venezuela?

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  • Strongly Liberal Democrat
    Democrat
    Portland, OR
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    After Nicolas Madura's surprisingly narrow election victory in Venezuela, cracks are beginning to show in the once dominant United Socialist Party of Venezuela. Mr. Madura lacks the charisma of the late Hugo Chavez and his razor thin victory may foretell a bumpy ride for the country in the months and years to come.

    The oil rich nation of Venezuela is at a crossroads, to say the least. The socialist policies of the late President are vastly popular among the poor in the country, who benefited greatly from Mr. Chavez's social and public works projects throughout his tenure. Mr. Chavez's tenure ushered in a massive reduction in poverty, helping reduce the rate from 54 percent to 26 percent in just five years. Not everyone in the country was on board with Mr. Chavez's policies, as Mr. Madura's razor thin margin of victory can attest. Many of the well off in the country have felt that they had to pay the heaviest burden this past decade and would be more than happy to return to the more free enterprise economic policies of the pre-Chavez era.

    The problem with this line of thinking, in my opinion, is that numbers don't lie. During Mr. Chavez's tenure, GDP grew at well over twice the rate as it did under his predecessor; public vs private growth hovered around the same level, with private edging out public growth by .19 percent; inflation went from an unsustainable 100 percent to averaging under 20 percent for his entire tenure; the unemployment and poverty rates dropped by an astounding 50 percent; post secondary graduation rates quadrupled in numbers; and child malnutrition dropped from 7.7 to 2.9 percent.

    Say what you will about free enterprise and capitalism, but it is hard to fight these numbers. I do understand that Venezuela's economy is mainly dependent on a finite natural resource and they have more than a few problems economically that they need to sort out, but I'm also a firm believer in helping the weakest among us not just with money, but with investments that help lift them out of deep poverty. And if it takes the government to make those investments, then so be it.

    Thoughts on the Socialism vs. Capitalism debate and which one would be a better economic model for Venezuela as they move forward under Mr. Madura's leadership?
  • Democrat
    Lawrence, MA
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    Jared, Thanks for your thoughtful and informative post.
  • Other Party
    Nebraska
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    Not all is wine and roses in Venezuela... A few notes from the story from the Associated Press about the election results:

    "Venezueleans are afflicted by chronic power failures, crumbling infastructure, unfinished public works projects, double-digit inflation, food and medicine shortages, and rampant crime. Venezuela has one of the world's highest homicide and kidnapping rates."

    "Under Chavez homicides almost quadrupled, jumping to 16,030 in 2012 from 4,550 in 1998, the year before he took office, according to data published by the government and the United Nations."

    One woman "who works in a government soup kitchen that feeds 200 people, said she was voting for Chavez's man "because that is what my comandante ordered." "

    "Many factories operate at half capacity because strict currency controls make it hard for them to pay for imported parts and materials. Business leaders say some companies verge on bankruptcy because they cannot extend lines of credit with foreign suppliers.. Chavez imposed currency controls a decade ago... Now, dollars sell on the black market at three times the official exchange rate and Maduro has had to devalue Venezuela's currency, the bolivar, twice this year."

    "Venezuela's economy is expected to contract 0.6 percent this year. Consumers grumble that stores are short of milk, butter, corn flour, and other staples."

    Maybe good times are right around the corner, but I wouldn't bet on it.
  • Strongly Liberal Democrat
    Democrat
    Portland, OR
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    jamesn Wrote: Not all is wine and roses in Venezuela... A few notes from the story from the Associated Press about the election results:

    "Venezueleans are afflicted by chronic power failures, crumbling infastructure, unfinished public works projects, double-digit inflation, food and medicine shortages, and rampant crime. Venezuela has one of the world's highest homicide and kidnapping rates."

    "Under Chavez homicides almost quadrupled, jumping to 16,030 in 2012 from 4,550 in 1998, the year before he took office, according to data published by the government and the United Nations."

    One woman "who works in a government soup kitchen that feeds 200 people, said she was voting for Chavez's man "because that is what my comandante ordered." "

    "Many factories operate at half capacity because strict currency controls make it hard for them to pay for imported parts and materials. Business leaders say some companies verge on bankruptcy because they cannot extend lines of credit with foreign suppliers.. Chavez imposed currency controls a decade ago... Now, dollars sell on the black market at three times the official exchange rate and Maduro has had to devalue Venezuela's currency, the bolivar, twice this year."

    "Venezuela's economy is expected to contract 0.6 percent this year. Consumers grumble that stores are short of milk, butter, corn flour, and other staples."

    Maybe good times are right around the corner, but I wouldn't bet on it.
    I by no means meant to insinuate that everything is peaches and cream in Venezuela. I am also aware of their murder problem, but I don't think anyone coming from the United States can EVER talk about another countries murder problem when we have a rather large one of our own. I'd venture to guess that most of those guns that they are using were made right here in the U.S.A.

    I'm hesitant to discuss the factories and what the business leaders say that they need. Keep in mind there was a revolution there when Chavez took over because big business was basically running a puppet government (sound familiar?), so I'd take pretty much anything that they said with a big grain of salt. I definitely believe that they have major currency issues that they need to get worked out, but the point of my post was that Chavez helped lift millions upon millions out of deep poverty.

    Economies expand and contract quite often, so a .6 percent decline wouldn't be the end of the world. However, we have to ask ourselves why there is supposed to be a .6 percent decline. Is it governmental policies or business leaders trying to flex their muscles because they are smelling blood after Chavez's death and want to capitalize on it?
  • Other Party
    Nebraska
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    jared you make valid points and I will not disagree with them. Your original post gave some pretty positive news and the AP story in my newspaper gave some pretty negative news, both may be equally true. I will let the Associated Press stand behind their info that I quoted.

    I also heard on the radio that Chavez died with 11 billion dollars in his bank accounts, don't know how true that is, if so he took care of himself and his cronies very well. Venezuela is now considered one of the most corrupt countries in the world, in the top ten or so of 178 countries rated. Apparently the oil business has been milked of profits and ignored for maintenance and upkeep and is in bad shape, too. And there is serious protesting of the vote tally. Two weeks before the vote the newly elected president led in the polls by double digits and he won by one percent. HMMMMM?

    No doubt that Chavez lifted many out of poverty and is to be comended for that but at what cost? The country is certainly facing serious problems.
  • Independent
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    I've lived in Venezuela for 45 years now, and I watched with disgust how the two parties, previous to Chavez, passed the power back and forth, each lining their pockets liberally along the way.

    There were many things I have applauded and defended about Hugo Chavez' vision for the country and for South America. Never will the less fortunate people of Venezuela feel as dis-empowered, having learned the power of their vote, and of organizing to improve their neighborhoods, schools, etc. It is also healthy that South American countries unite to the mutual benefit of their countries, without depending quite so much on the "Big Brother" to the North.

    However, believing the statistics, the 'numbers' as you say, of Venezuela today is, sadly, to be totally hood-winked. The numbers are not at all reflective of the truth. Go there and live under a single party regime where no dissenting voice is tolerated, especially if you have a job worth keeping; walk the streets choked with garbage, let alone crime; wander the empty aisles in the supermarkets, (shortages of cooking gas? electricity? sugar? toilet paper? the list is long, and pathetic at best). Any investigation, even superficial, into the incredible wealth acquired by the Chavez family, and the political and military big-wigs, is enough to turn your stomach, or mine at least, when for years you hear about the wonders done for the poor and the evils of the 'capitalists'. I also know of many who have left the country for fear of the prevalent kidnappings, not only of landowners, but of their children.

    I do not for a minute believe that the last two elections have been honest or fair. I know personally that there are many dead people who vote, and of various other tricks applied. I don't believe the voting machines are reliable, in Venezuela or even in the USA for that matter. And I have seen now dozens of photos of the Venezuelan national guard burning hundreds of boxes of the 'paper vote'.

    Also, the truth, from my point of view at least, is that whatever the statistics, the economy of Venezuela is in a state of collapse. I have Chavista friends who can't express their dismay with what's going on without risking their non-political jobs. I personally think that, in one way, perhaps the best thing would be for Maduro to run the country, so that all Venezuelans, even the most devote Chavistas, (yes, it is close to being a religion) and the world at large would see the truth...but the people of Venezuela have been too patient, and are so good at core, to have to continue to bear the stifling injustice of what has happened to their country, and under Maduro, is swiftly getting much worse.

    Don't believe everything you read...especially official party line in a country with no system of checks and balances. In Venezuela, at least, they are not to be trusted. Venezuela is a very rich country, everybody knows that. But you wouldn't believe it if you lived there.
  • Independent
    Texas
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    VENEZUELA IN NUMBERS

    STATISTICS about VENEZUELA are chilling. These are actual figures that all Venezuelans and residents in the country know. I respect liberal's POV (the world needs change and free thinkers!) Hopefully this helps shed light to forming an informed opinion.
    When Chavez came in 1999 there were 16 Government Departments; today (2013) there are 36, a 125% increase
    In 1999, the state had 900,000 PUBLIC EMPLOYEES; today 2,300.00. Increase by 155%.
    Foreign Currency Exchange control in 1999 without the bolivar EXCHANGE RATE of the above (“weak”) was Bs. / USD 573.86, today exchange control CADIVI price of Bs. / USD 6300 (VEB of the above), a devaluation of 997.83%. Excluding the auction price, the parallel dollar or black market rate.
    In 1999 the OIL PRICE 10.57 USD / barrel; today, 109.45 dollars / barrel, the price is 935.48% higher.
    In 1999 OIL PRODUCTION in million barrels per day was 3,480; today is in MMB/d 2,357 which represents 32.27% less
    In 1999, OIL EXPORT was MMB/d 3,000; in recent years it was MMB/d 2,200 representing 26.67% less
    In 1999 THE state-owned oil company PDVSA PAYROLL had 40,000 employees, now has 120,000 payroll; it increased by 300%
    In 1999 PDVSA each worker produced 87,000 barrels a day, now each of PDVSA workers produce barrels 19,641.67. This indicates that the PRODUCTIVITY of PDVSA workers decreased by 342.94%
    In 1999, PDVSA DEBT was $ 6,000 Million US$; today it is MU$S 40,026; increased by 567.10%
    In 1999 the DOMESTIC DEBT was Million BBs 2,534; today, Million BBs 216 018, increased by 8424.78%
    DEBT in 1999 was US$39,911Million; today it is US $104,481 Million, increased by 161.78%
    In 1999 the country had 4,500 HOMICIDES; the figure reached 21,692 by 2012, it has increased by 382%
    22,500 properties have been invaded nationwide from 1999 to September 2012
    The government has invaded more than 600 farms (2.5 million hectares).
    The government has spent more than 14 billion dollars on purchasing war WEAPONS. Venezuela went from being #46 importer in the world to #15, which according to the Stockholm International Peace Research Institute (SIPRI) is an increase in imports of 555%, thanks in part to agreements with Russia.
    The "strong" bolivar has lost 46.5% of its purchasing power only so far in 2013.
    Cumulative inflation over the 14 Chavez years is of 933%.
    The government has a media oligopoly of 731 media.
    9 million Venezuelans are living in poverty, and of those, in revolutionary Venezuela, 3 million go to bed with an empty stomach.
    The Ministry of Education has 150,000 teachers on payroll.
    From 1999-2012, 7,000 Venezuelan doctors fled the country, totaling 60,000 professionals of all kinds.
    80% of our oil exports go to the U.S., a favorite destination, the so-called “Empire”: they pay cash.
    In Venezuela 300 animal species are in threat of extinction.
    For every $100 entering the country, $94 are from oil exports.
    CTV reported that there are over 400 collective bargaining agreements up for renewal.
    There are 1,000,000 people infected with Chagas disease; malaria, measles and other vaccine-controlled diseases have returned.
    According to DATA, real income for strata D and E reflects a fall of 14% and 13%, respectively.
    The funds given away to other countries exceed 60 billion dollars.
    97% of crimes go unpunished in the country.
    The attempted assassination allegations against Chavez are more than 50 AND THERE IS NO EVIDENCE OF PROOF
    The government owes about 12 billion dollars to nationalized companies; only paid off the 7% of total nationalized companies, without the likelihood to pay, to their rightful owners, the rest.
    In Venezuela, 70% of young people in public education do not graduate from high school and do not see subjects such as chemistry, physics, mathematics or English due to a teacher deficit.
    In 1999, Venezuela imported 1% of meat consumption, and now we import 59%.
    In 1999 national cattle herd was at 112.81 million heads; in 2012 national herd was at 12 million, or 89.36% lower.
    In 2006 coffee production peaked at 1.57 million quintals; in 2009 it fell to 850 million pounds.
    From a country with a 230-year history of coffee exports: In 1998, Venezuela exported 388,000 quintals of coffee, and in 2009 we reached 0 exports. We went from being exporters to importers of coffee with 80% of demand coming from Nicaragua, Brazil and El Salvador. The total food imports reached 70%, the “port economy”.
    In the case of coffee, the INE said that 366,110 quintals were purchased abroad, equal to bags of 46 kilos each. Imports in the industry in the first half cost more than 84.05 million dollars, an increase of 18.35% compared to 71.01 million dollars paid in the first half of 2011 for 371,884.64 quintals.
    The National Statistics Institute said sugar imports increased 110.60% from 56.93 million dollars in the first half of 2011 to $ 119.9 million in foreign purchases between January and June 2012.
    Scheduled blackouts and power outages cover 60% of the national territory. Since January 2009 the country declared an energy crisis, it's been 4 years and it still in crisis.
    The Military occupy 2,200 senior public administration positions; 3,000 more occupy low and middle positions.
    In the country there are 15 million guns circulating without any control.
    In the country's prisons (34 prisons) there are 12,000 beds and 45,000 inmates. Penalties are run by inmates called “pranes”, they control the weapons of war, food, water, liquor and drugs. 560 deaths and 1,457 injuries were reported in the 34 prisons in 2011. Of the 45,000 inmates, those 560 dead people represent 124.4% per 10,000 inmates.
    The 34 prisons in the country are home to 45,000 prisoners but were built for no more than 12,000 people. This represents an overcrowding of 275%. 80% are in the process of waiting for a guilty or innocent judgment and 20% are punishable by a final judgment.
    4 million children are currently outside of the education system.
    98% of the financing for the agricultural sector comes from the private sector; the public sector serves only 2%.
    This is information that everyone opining on the Venezuelan reality should know... I am a Venezuelan, I grew up there and now I go back and I see the reality of the country I love. I have no respect for a totalitarian, autocratic Castro-Communism regime in our beautiful country. Please help bring light to the facts.