Media, Propaganda and Venezuela

It is sometimes asserted that Venezuela under President Hugo Chavez Frias (1999 to the present) has been an economic failure, as compared with the past. For example, a recent news article in the Washington Post referred to Hugo Chavez, the populist Venezuelan president whose giveaways to the poor have slowed economic progress. Such claims are not supported by the evidence. From 1970-1998 per capita income in Venezuela fell by 35 percent. This is the worst economic decline in the region and one of the worst in the world—much worse even than what happened to Africa during this period.

Since the present government took office, per capita income growth is about flat, and will likely be positive at year’s end. So the Chavez government can at least claim credit for reversing the terrible long-term economic decline in Venezuela, according to the standard reference sources on economic growth.

But there are other considerations. First, it would not be fair to hold the government accountable for the loss of output due to opposition actions aimed at toppling the government. The oil strike of 2002-2003 caused enormous damage; one might also include the military coup and other de-stabilizing actions. If not for these efforts, economic growth would almost certainly have been substantially higher and well above the average for the region. But the first point, about reversing the country’s long economic decline, holds true even if one ignores the effect of opposition actions on the economy.

Also there has been a significant improvement in the lives of the poor—the majority of Venezuelans—in terms of access to health care and other services, as well as subsidized food.

It is therefore very difficult to construct an economic argument that the majority of Venezuelans are worse off as a result of the present government.

… the cumulative results [of Washington Concensus economic policies for over a quarter of a century] have been an economic disaster, and so it is not surprising that presidential candidates who campaigned explicitly against neoliberalism have in recent years won elections in Argentina, Bolivia, Brazil, Ecuador, Uruguay, and Venezuela. … it should be clear that what we are now witnessing is a response to this epoch-making economic failure, and—following a series of revolts at the ballot box, and some in the streets—a number of governments looking for more practical and effective ways to make capitalism work.

… What really defines this as a new era is that the influence of the United States in a region that was until very recently its backyard has plummeted so rapidly, drastically, and probably irreversibly, that the current situation is truly unprecedented in the modern history of the hemisphere.

This is a dramatic change, especially if we consider that Washington in the 1980s spent billions of dollars, and supported the murder of tens of thousands of innocents, just to keep control over a few small, economically insignificant countries in Central America. President Clinton issued a rare public apology for the United States’ role in what the United Nations determined to be genocide in Guatemala, and Washington’s participation in the mass slaughter of El Salvador and the destruction of Nicaragua was even greater and more direct. Yet in the last few years these same people—literally in the case of such current and recent administration personnel as Elliot Abrams, Otto Reich, and John Negroponte—have watched almost helplessly as the bulk of the region, in population and economic terms, has slipped out of their grasp.

The [International Monetary] Fund has lost its influence in middle-income countries, and that includes almost all of Latin America. Although it has received little attention in most of the media, the collapse of the IMF-led creditors’ cartel is by itself probably the most important change in the international financial system since the end of the Bretton Woods system of fixed exchange rates in 1973. This is especially true for developing countries.

In Latin America this has coincided with a major and unanticipated change that, combined with the IMF’s loss of influence, has helped usher in the new era of independence. A new international lender has emerged: Venezuela. When Argentina decided last December to say its final goodbye to the IMF by paying off its remaining debt of $9.8 billion (5.4 percent of GDP) at once, Venezuela committed $2.5 billion to the cause. If additional help is needed to help Argentina finally free itself from the claws of the International Monetary Fund, Argentina can count on us, Chávez announced on December 15. Kirchner’s statement announcing the decision was even harsher: [the IMF has] acted towards our country as a promoter and a vehicle of policies that caused poverty and pain among the Argentine people, he said. Last year Venezuela also committed to buying $300 million of Ecuador’s bonds; in December, it turned out that Ecuador had sufficient demand for its bonds that it only needed to sell $25 million to Venezuela, but the latter’s commitment was there as a lender of last resort. Chávez has proposed to formalize this new relationship by establishing a Bank of the South, to finance development in the region, and offered to start it off with a $5 billion contribution. In the meantime, Venezuela is also providing discounted oil financing for the Caribbean countries under its PetroCaribe program.

… Venezuela has more than $30 billion in foreign exchange reserves; whatever Bolivia might need will be pretty small relative to Venezuela’s capacity for lending and aid. In just the last month (May), Venezuela has announced a $100 million loan to Bolivia and a similar amount to support the proposed land reform, as well as numerous other forms of aid. And Venezuela’s lending and aid programs, unlike that of the international financial institutions or the G-7 governments, do not have economic policy conditions attached to them. This makes all the difference in the world.

Viewed through the Cold War lens of official Washington and the foreign policy establishment, these disbursements and initiatives are either as part of an attempt to build an anti-American axis, or, as Chávez simply buying friends in the region. Chávez himself, who has named his revolution after the 18th century liberator Simon Bolivar, sees it as freeing South America from the grip of the U.S. empire. But regardless of how it is seen in ideological terms, the impact of this alternative source of financing has already had an enormous impact on the ability of governments to ignore pressures from Washington. This trend is likely to continue unless there is a sudden and very severe collapse of oil prices.

There are two other important economic changes that will reinforce Latin America’s drift away from the United States in the coming years. One is that the United States will no longer provide a rapidly growing market for the region’s exports, as it has in the past.

… At the same time, just as the growth of the U.S. import market will be slowing to a standstill, another market to which Latin American countries can export is expected to grow by about $1 trillion Euros over the next decade: China. This will reinforce the decline in the United States’ relative economic importance to Latin America. Perhaps even more importantly, China has the potential to be an enormous alternative source of financing for investment in Latin America.

It is common to attribute [Venezuela’s] successes [of free health care for the first time to 54% of the mostly poor population, subsidized food for 40%, and increased access to education] to high oil prices, but oil prices were even higher in the 1970s in real terms, and the country’s GDP per capita actually fell during that decade. Chávez is best known—and reviled—in the international media for his confrontation with the Bush administration, but at home his unshakable popularity derives mainly from delivering on his government’s promise to share the country’s oil wealth with the majority of Venezuelans. And even aside from distribution, it must be recalled that the Venezuela suffered one of the worst economic declines in the region (and the world)—a 35 percent drop in per capita income from 1970-1998, prior to Chávez’ election.

… Although both the Morales and Chávez governments are accused of authoritarianism by their detractors—which in Venezuela’s case includes almost everyone who has access to large media outlets—from a more objective viewpoint, what we are witnessing is a revival of democracy. This is most obvious in the sense that people are actually getting what they voted for—in terms of social and some economic policy. It is for this reason that Venezuela came in first last year when one of Latin America’s best polling firms, Latinobarómetro, asked people in each country how democratic their government was. On the question of how satisfied people were with their country’s democracy, Venezuela came in second, after Uruguay.

The foreign policy establishment also divides the elected leaders of the left into market-friendly vs. populist, or a Right Left versus Wrong Left, in the words of Jorge Castañeda in the May/June 2006 issue of Foreign Affairs. The Wrong Left is Chávez, Morales, and Kirchner—coincidentally the ones who have delivered most on their electoral promises; the Right Left is Lula, Michelle Bachelet of Chile, and Tabaré Vásquez of Uruguay.

And it is Chávez that has become Washington’s main enemy, even eclipsing Cuba as the demon to be overcome. Although it is recognized that the Bush administration has mishandled Venezuela, the Chávez government is still portrayed across most of the political spectrum, and especially in the press, as anti-democratic,authoritarian, and a threat to the region. … much [of] is simply based on ignorance and some of the worst U.S. foreign policy journalism in decades.

In fact anyone who has been to Venezuela in recent years can verify that it remains, despite the extreme political polarization and the turmoil that wracked the country until recently, one of the more open and democratic societies in the Americas. The vast majority of the media, including the largest television stations, are controlled by the opposition. It is the most anti-government media in the hemisphere, and carries on political campaigns that would not be allowed in most western democracies.…The Venezuelan state is anything but authoritarian—in fact it is more of an anarchistic state, a weak state that suffers from all the problems that plague the rest of Latin America, in terms of enforcing the rule of law. That is why the main victims of political repression in Venezuela are not opposition partisans, even those who have tried to overthrow the government, but rather the pro-government activists organizing for land reform in the countryside, who have been murdered by the landowners’ hired guns. The state cannot enforce the law even against murderers, even to protect its own supporters.

No reputable human rights organization would claim that Venezuela has deteriorated in terms of democracy, human rights, or civil liberties under the Chávez government; nor that it compares unfavorably with the rest of the region in these areas. But the Bush administration has created an image of undemocratic government in Venezuela and has managed to frame it that way for the media.

Last December, the Venezuelan opposition boycotted national elections, despite statements from the OAS and European Union observers that opposition demands had been met and they were expected to participate. Once again, Washington was tacitly supportive. This more than any other recent action—beyond the economic sanctions, the blocking of military aircraft and patrol boat sales from Brazil and Spain, and a host of other provocations—shows how firmly the Bush administration, along with its allies in the Venezuelan opposition, is committed to a strategy of destabilizing and overthrowing the Venezuelan government. The opposition could have won an estimated 30 percent of the National Assembly but—with Washington’s blessing—gave that up just to establish the pretense that Venezuela is a one-party state. And so they have constructed an Orwellian reality, with help from the media, which now reports that the [Venezuelan] Congress is completely controlled by President Chávez. The reader is not informed that this is only because the opposition deliberately and without any legitimate reason—according to OAS and European Union observers—refused to participate in a democratic and transparent electoral process.

… These details are important because they show how mired Washington remains in the strategy and tactics of the past, how divorced our leaders are from the changed reality in the hemisphere. Indeed if one looks at the report of the U.S. Senate’s Church Committee from 1975, on the CIA’s destabilization efforts leading to the overthrow of Chile’s elected government in 1973, it reads remarkably like the events of 2001-2003 in Venezuela.… In both cases, there is opposition control of the media so as to blame the government for any and all economic problems, even those caused by the opposition; and manipulation of the international press to portray an elected social democratic government as despotic and Communistic.

There was a popular coup that overthrew him [Chavez]. And what did the United States State Department do about it? Virtually nothing. And as a result, within about 48 hours that coup was broken; Chavez was back in power, but we had a chance to move in. He has destroyed the Venezuelan economy, and he’s going to make that a launching pad for communist infiltration and Muslim extremism all over the continent.

You know, I don’t know about this doctrine of assassination, but if he thinks we’re trying to assassinate him, I think that we really ought to go ahead and do it. It’s a whole lot cheaper than starting a war. And I don’t think any oil shipments will stop. But this man is a terrific danger and the United … This is in our sphere of influence, so we can’t let this happen. We have the Monroe Doctrine, we have other doctrines that we have announced. And without question, this is a dangerous enemy to our south, controlling a huge pool of oil, that could hurt us very badly. We have the ability to take him out, and I think the time has come that we exercise that ability. We don't need another $200 billion war to get rid of one, you know, strong-arm dictator. It's a whole lot easier to have some of the covert operatives do the job and then get it over with.