Mark Weisbrot, co-director of DC based Center for Economic and Policy Research (CEPR), says mainstream reporting on Venezuela’s economy is way off the mark. He blames Venezuelan rightwing media opposition to Chavez, and a United States public relations campaign designed to denigrate Venezuela’s achievements. He says: “If you want a perfect illustration of media toeing the official line, look no further than the forecasts of Venezuela’s economic doom.”
According to Weisbrot, the “all bad news, all the time” reporting was overwhelmingly dominant even during Venezuela’s record economic expansion, from 2003 to 2008. Here are some of the achievements during that time that were ignored by U.S. and international media.
- Venezuela’s economy grew more than it ever had before.
- Poverty was cut by more than half.
- There were large gains in employment.
- Real social spending per person more than tripled,
- Free healthcare was expanded to millions of people.
The international media has yet to report on these accomplishments. Yet, if they want proof, economists at international organizations corroborate the figures. For example, the UN Commission on Latin America (ECLAC) found that Venezuela had reduced income inequality more than any other country in Latin America from 2002 to 2008.
In 2009 Venezuela went into recession, but it appears to have emerged from its recession in the second quarter of this year. On a seasonally adjusted annualized basis, the economy grew by 5.2% in the second quarter of 2010. Reporting by Morgan Stanley projected Venezuela’s economy would shrink by 6.2%.
Weisbrot says the International Monetary Fund (IMF) is projecting negative per capita GDP growth for Venezuela over the next five years. He notes that the IMF was repeatedly and wildly off the mark on its underestimates of the Venezuelan economy during the expansion between 2003 and 2008. Right now, Venezuela has a sluggish economy as does the United States, Canada and Europe. But the IMF may again be ignoring Venezuela’s strengths:
[Venezuela] has adequate foreign exchange reserves, is running a trade and current account surplus, has low levels of foreign public debt, and quite a bit of foreign borrowing capacity, if needed. This was demonstrated most recently in April with a $20bn (about 6% of Venezuela’s GDP) credit from China. As such, it is extremely unlikely to run up against a foreign exchange shortage. It can therefore use public spending and investment as much as necessary to make sure that the economy grows sufficiently to increase employment and living standards, as it did before the 2009 recession. (Our government in the United States could do the same, even more easily – but that does not appear to be in the cards right now.) This can go on for many years.
Weisbrot advises that:
…whatever happens, we can expect complete coverage of one side of the story from the media. So keep it in mind: even when you are reading the New York Times or listening to NPR on Venezuela, you are getting Fox News. If you want something more balanced, you will have to look for it on the web.
A recent update by CEPR on Venezuela’s economy can be downloaded here.