Haters gonna hate: Rory Carroll’s Venezuela on NPR

The idea that an increase in oil prices automatically reduces poverty and raises everyone’s living standards is not true.

After the Chavez government got control over the oil industry, poverty was reduced by about half and extreme poverty by 70 percent [Reuters]

NPR interviewed Guardianreporter Rory Carroll on Wednesday about Venezuela, producing an extremely one-sided, misleading report. First, Carroll tells NPR that “Venezuela is a country of extremes – and extreme inequality”. He might have noted that Venezuela has the least unequal distribution of income in Latin America; and that this is because of the sharp decline in inequality during the Chávez presidency (the Gini coefficient fell from 0.50 in 1999 to 0.40 in 2011).

But it gets much worse. NPR’s Steve Inskeep asks Carroll if Chavez improved the lives of poor Venezuelans and he answers:

“Yes and no. Venezuelans have more money in their pockets than when he first came to power, which is unsurprising, because he coincided with an incredible oil boom, and billions of dollars rained into the treasury every week. … He basically rained petrodollars over the country, certainly in his first seven years in power. And in that sense the poor did benefit, but the problem is that his management style was so chaotic and he was always prioritizing politics over governance and basic economic management, that dysfunction and atrophy kicked in. And we can see this, for example, in the fact that the currency has lost 90 percent of its value, that inflation is among the highest in the Western Hemisphere, and that insecurity, violent crime, kidnappings, murders, spiraled out of control. And the biggest victims of all of that are the poor.”

First, in the past decade, after the Chavez government got control over the oil industry, poverty was reducedby about half and extreme poverty by 70 percent. And this measures only cash income. It does not count that millions of people got access to free health care for the first time, or greatly expanded access to education. 

Note that instead of reporting the most important statisticsthat any economist or sociologist would look at – the ones that measure the real income and opportunities for the poor or for the majority of Venezuelans – Carroll mentions only those that he identifies with failure. Inflation does not measure living standards – it is real income, adjusted for inflation, that measures living standards. 

Poverty reduced because the income of the poor grew faster than inflation; and also because unemployment sharply reduced, from 14.5 percent when Chavez took office to 8 percent in 2012. Real, inflation-adjusted income per person grew by 2.5 percent annually from 2004 (after recovery from the opposition oil strike) to 2012; while as noted above inequality fell sharply. So not only the poor, but the vast majority of Venezuelans had considerable increases in their living standards. 

The value of the domestic currency against the dollar is also not a measure of what has happened to Venezuelans’ living standards. Tell the people of China that they are worse off because their currency was worth four times as much in dollars in the early 1980s than it is today. In Venezuela, as in most countries, most people earn and spend their money in domestic currency.

Also, the idea that an increase in oil prices automatically reduces poverty and raises everyone’s living standards in Venezuela is not true. Oil prices were very high from 1974-85, but most Venezuelans did not see much benefit from this vastly expanded oil revenue. 

It is clear from this interview that Carroll is going quite a bit out of his way to deny some of the most basic realities of Venezuela during the past decade in order to portray a one-sided, negative picture of the country, and of course of Chavez himself. According to this picture, Chavez was repeatedly re-elected only because of his “showmanship” and his connection with the people, and not because the country was transformed in any ways that benefitted the vast majority of Venezuelans.

Carroll’s book, Comandante: Hugo Chavez’s Venezuela, was reviewed last Sunday in the New York Times by Jonathan Tepperman, the managing editor of Foreign Affairs. This piece was even more one-sided and exaggerated than the NPR report. It was perhaps most remarkable in that it’s almost fact-free in its argument, relying overwhelmingly on the power of rhetoric and insult. Tepperman concludes:

“Finally, after years of riding the sugar binge of Chavez’s populist politics, which left the country ‘flabby, enfeebled and import-­addicted’, much of the public lost enthusiasm for their latter-day caudillo. Though Chavez managed to win election to a third term in October, the margin of victory was slimmer than in the past, and Chavez faced an uncertain future – until cancer resolved the issue.”

Venezuela’s real GDP grew by 5.6 percent in 2012. Chavez was re-elected by a vote margin of 11 percent (55 to 44). In news reporting on most countries, that would be a pretty solid margin of victory. In the US it would be called a landslide.

Unfortunately these fact-free, exaggerated, and one-sided reports on Venezuela are not exceptional in the United States and most of the biggest Western media outlets. Rather, they are the norm. They reflect the fact that the Venezuelan government is Washington’s most important target for removal, perhaps with the exception of Iran, in the world. Although the media does not always co-operate with the foreign policy priorities of the US government, Venezuela is one case, perhaps because there is such unanimity within the US foreign policy establishment, where there is practically no daylight between the media and the government. 

Mark Weisbrot is co-director of the Center for Economic and Policy Research, in Washington, DC. He is also president of Just Foreign Policy.