The Council on Latin America Presents
10 Years with President Hugo Chavez:
Debating the Progress of the Bolivarian Revolution
H.E. Diego Arria
Former Venezuelan Ambassador to the United Nations
Dr. Mark Weisbrot
Co-Director of the Center for Economic and Policy Research (CEPR)
Panel will be moderated by
Dr. Robert Pastor
Co-Director of the Center for Democracy and Electoral Management (CDEM)
Tuesday, February 24
A DEBATE ABOUT THE CHAVEZ REVOLUTION AFTER A DECADE
American University in Washington DC, February 25, 2009
Ambassador DIEGO ARRIA and Dr MARK WEISBROT, Director of the Center for Economic Policy and Research of Washington DC
(Follows notes taken of Ambassador Arria’s presentation. Do not include yet his replies during the question and answer period)
Debate and Q&A
AMBASSADOR DIEGO ARRIA
Obviously someone who did not like diplomats-or maybe knew them too well said : A diplomat, is someone who thinks twice before saying nothing. But this evening I will do my best to say a few things…..
I am encouraged and grateful for the presence of so many students We need independent and well informed emerging leaders–not only about what has taken place in my country during the Chávez decade-nothing can be done about it now -but above all what is the future and what is at stake for our people and for our region- and much can be done from now on to change the course of what I believe is the worst political , economical, social, cultural decade of the twentieth century for Venezuela.
A POINT OF INFORMATION
A debate like we are having this evening is not possible in Venezuela. The regime not only refuses to do it-but practices silence and intimidation to dishearten or quiet dissidents- to give up.
But such practice- is followed also outside Venezuela. This evening I will not be debating a Venezuelan official or citizen like it would have the normal case for any democratic government.
But I am glad and thankful to do it with Dr. Mark Weisprot who takes the time and the resources of his institution to study my country and to write about it. I look forward to an animated inter change of views –mine of course as a stakeholder of my country. Hope that the Venezuelan regime would attend and debate directly with people with different views.
At the outset I like to make three points:
1. I am proud to have served under two democratic Venezuelan Presidents of two different political parties :Rafael Caldera and Carlos Andrés Perez . What the chavistas call the Fourth Republic.
2. The theme for this debate is “The Hugo Chávez Revolution after Ten years” -which obviously is not restricted to statistics -but to the whole process of the systematic destruction of our nation. My good friend Gustavo Coronel told me that to argue today only about statistics would be the equivalent of informing a passenger in the Titanic that his good cholesterol was up.
3. The ISSUES facing us- Venezuelans -are the state of democracy and liberty, human rights , rule of law , human dignity and freedom of speech and empowerment of the poor.
Now- and before I make my case , I like to quote Arthur Schlesinger Jr. who wrote something-which I believe has played a fundamental role in deforming realities and creating half truths about my country:
"It is useful to remember that history is to the nation as memory is to the individual. As persons deprived of memory becomes disoriented and lost, not knowing where they have been and where they are going, so a nation denied a conception of the past will be disabled in dealing with its present and its future. He added: "The longer you look back," said Winston Churchill, "the farther you can look forward."
This is precisely what has been taking place in Venezuela. A costly effort to deny- to obliterate our democratic past.
To create a history that started, first in February 1992 when Lieutenant Hugo Chávez led a failed coup to overthrow the constitutional and democratic government-and in the process almost killed the President wife's and daughters who resisted morter and machine guns attack by its forces in the presidential residence.
Such attempt to create a new history takes a new turn for the regime in 1998 when Hugo Chávez was democratically elected with about 56% of the votes-making it clear that Venezuela used to have rule of law –independence of powers, and a fair and transparent electoral system, that allowed him to ascend to the Presidency
To illustrate an important point. Hugo Chávez and his family are the best example of the open society which we had since 1958 that allowed his whole family of humble origin- to study in public schools and universities- Chávez himself at the Military Academy. His brothers all professionals as well as his father and mother who are teachers. Today the Chávez family is reported to be quite prosperous.
AFTER THIS BRIEF HISTORICAL REFRESHMENT
As a Venezuelan I have been reflecting, writing and speaking on the consequences that this HORRIBILIS decade has meant for all-and without any hesitation I can affirm here that it has been tremendously successful for Hugo Chávez and his inner circle . Why?
Simply. He has entrenched himself in power by systematically eliminating all checks on his rule –he now rules on the supreme court-the national assembly-the electoral board-the comptroller office- all subordinated to his unipersonal regime-and has undermined the political parties.
Created an apartheid society-we against them. Now we are enemies like during our independence wars, when Bolivar declared: “Spaniards and Canarians –count that we will kill you even if your are indiferent”…..it has not reached this point-but the poisonous seed has been planted by Chávez among his followers.
Subordinated the weakest and the poorest of our people to his political needs-humiliating them in the process by forcing them to wear red shirts attend public demonstrations and of course to vote for him. Turned Venezuela into a PINATA that only those with red shirts can hit it-and get its candies.
Such “success” has been possible thanks to the support of the armed forces –that one day will be share the responsibility with Hugo Chávez- and of course thanks to the uncontrolled use of public funds to fuel the rampant and extended corruption of our military regime
Also turned our country in a sort of a giant barrel of oil for almost all the countries of the region –mainly Cuba, Nicaragua, Bolivia, Ecuador and Argentina.
Has proven that even bad ideas could be sustained when oil was at $140 per barrel-but times are changing and those policies are unsustainable
HAVING SAID ALL THAT- I believe important to recall that the poverty indexes poverty increased from 20% to 50% between 1979-1989 -a period of massive impoverishment –that created the conditions for a political change-which Chávez had the talent to capitalize generating an unprecedented political hope in his presidency.
It is also important to acknowledge that Chávez put the poverty issue at the front and center of the public debate. He gave to many a voice and a sense of representation which they lacked- creating in this way a powerful emotional connection with him-reinforced with the economic hand outs –that linked them even closer to him.
This is the truth –but it is also true and tragic- that he failed to empower them with programs to overcome poverty like Chile and Brazil for example. The amount of sudden wealth combined with the regime ineptitude moved him to alleviate poverty –not to resolve the structural problems of poverty. Plus he needed to have the people subordinated to him-and that is why he turned the national treasury into a gigantic house of charity-without controls that have been one of the greatest sources of corruption. Amazingly he parades the “ Government budget hostages” as an accomplishment of progress.
Not a single president of Venezuela- before Chávez had such exceptional opportunity to lead the country to a superior level of progress and prosperity. A man whose popularity and support reached years ago 70% with oil prices at $130 represented an exceptional and unbeatable combination.
For most Venezuelans the decade has been a monumental tragedy- a once in a lifetime wasted opportunity in the midst of the biggest bonanza 850 billion dollars–squandered inside and outside the country buying the silence and complicity of many nations. At a cost of about $40 billions
While Venezuela has 80% of its population under $400 monthly the regimes subsides heating oil for the wealthiest nations like the US and the UK.
Building houses in Cuba Bolivia Nicaragua Honduras-while millions of Venezuela live in slums. Buying $10billion in armaments (to be used against Venezuelans). Such amount could have allowed to provide scholarships to about half a million of Venezuelan to study in the best universities and technical schools of the world. In previous governments the Ayacucho Scholarships were awarded to 40 thousand students.
The highest inflation ration in the world after Zimbabwe.
Importing 75% of the food we consume-at the expense of our agricultural and industrial sectors
The Inter-American Commission on Human Rights, and organizations such as Human Rights Watch, Amnesty International, Freedom House and Reporters without Borders have all issued scathing reports on the regime
Caracas is today the most violent city of the region. 100 thousand people were killed in this decade in Venezuela-
Bottom ranking in all sort of indexes: transparency, corruption, competitiveness, freedom of expression and today the Misery Index prepared by Arthur Okun puts Venezuela in the last place among 60 countries with a misery index of 39,8%.
Venezuela and its head of State has been denounced before the International Criminal Court, the Inter American Court-the local judicial system is closed to protect the regime .
The brain drain forced of so many Venezuelans forced by the local political climate is the greatest exodus of our people ever. Human capital that cost fortunes to our country and most probably would not return
Develop a communications system designed to promote hate and violence and awakening and promoting resentment as a political instrument that has affected the social fabric of our country. Chávez himself is the premier evangelist of such incendiary campaign. I have warned him and his regime that in the Criminal Tribunal of Rwanda the most severe sentences were given to those people that used a TV and Radio Station Mil Collines to incite violence that triggered the horrible massacres.
Dr. Weisprot has provided you with his web page to look into more detail about the presentation he just made to us
I would also ask you to look at Dr. Francisco Rodriguez paper in the June 2008 issue of Foreign Affairs “An Empty Revolution . The Unfulfilled Promises of Hugo Chávez”http://www.foreignaffairs.org/20080301faessay87205/francisco-rodriguez/an-empty-revolution.html that addresses the main points of Dr. Weisbrot and his colleagues at the Center for Economic and Public Research in Washington DC. That been the case I will limit myself to the most salient points of his intervention and of his paper , "The Chávez Administration at 10 Years:The Economy and Social Indicators”
http://www.cepr.net/index.php/press-releases/press-releases/report-examines-economy-and-social-indicators-during-the-chavez-decade-in-venezuela/ Published February 5, 2009.
My comments to the paper
1) The current expansion began when oil prices turned up -- from $22 in 2002 to $26 in 2003 to 86.81 in 2008. As oil revenues increased, Chávez could spend more on social programs etc. creating a consumption led boom which produced dramatic year to year GDP "growth" but it is "growth" that will vanish in 2009 and 2010, now that the government. No longer has the revenues to support it.
The fact that the government got control of the industry had nothing to do with it. In fact, government control has "cost" the nation in terms of some 1.5 million barrels per day of lost production capacity. Firing 22,ooo of its best employees-thus collapsing the technical capacities of the entity.
And, not to belabour the point, there has been near-zero private investment during these years. Production capacity has stagnated. Job growth has lagged population growth. Etc.
2) That the "growth" has been in the non-oil economy makes sense...government spends and the private sector consumes...
3) Government's poverty figures are not reliable. By rough estimate, actual poverty figures should be around double what the government says they should be...
4)Yes, what the government calls "social spending" is up. But if you separate out real social spending from hand-outs, it is probably down. If social spending were really up, measures of health and education would have improved.
5) Taking that in reverse: despite its flaws, the fourth republic's health programs reached most Venezuelans, including barrio dwellers who had access to the ambulatories. So to claim that millions of Venezuelans who did hot have it before now have access to health care is false.
Then there's the question of the quality of those services. Barrio Adentro program is in deep trouble, the ambulatories have been abandoned and the hospitals are severely deteriorated. I invite Mr. Weisbrot to visit one of them like I have done
Every doctor I have talked to says infant mortality is up, not down. Add to that the large scale reintroduction of diseases once thought eradicated such as malaria, tuberculosis, mal de Chagas and mumps (of all things) and you have an idea of just how bad the situation is.
6) As with everything else government says, the figures on employment are not what they seem. There are several gimmicks here. For one, if you are on a "misión", you are not included in the work force and hence you are not unemployed.
7) Debt figures are also misleading. Bolivar debt is up twelve fold since 1998 and dollar debt is up 25% not including some $13-15 billion owed by PDVSA. When that is factored in, total debt has nearly doubled...and that does not include government and PDVSA'S backlog of unpaid current expense totaling perhaps another $12-15 billion.
8) Inflation figures can also be confusing. Take out price controls and you're looking at something like 40% last year...most analysts expect 45-50% in 2009.
The above realities confirms what I have been saying that Hugo Chávez has condemned to death the future of Venezuela. Why?
Because he has already started to execute the weakest and poorest of our people-turning them into a quasi parasite dependency creating the false illusion of permanence-and entrenching them even more in poverty.
. The health report (http://www.derechos.org.ve/Informe_derecho_Salud_2007_.pdf) contains some observations that serve to put the real Venezuelan health situation in a true perspective. Some of its findings include:
Dismantled the national public health system turning it into a government health system. Since 199 onwards the expenditure for health in Venezuela “is one of the lowest in the world”, at $122 per person for the year 2006. Public investment in health should be between 7-10 percent of the GDP but in Venezuela is around 3 percent. Three fourths of the investment in health in the country is made by the private sector.
The Barrio Adentro Mission currently has several problems: there is a withdrawal of Cuban doctors that are retuning home. Work hours are not being followed and home visits have stopped. The provision of medical materials, cleaning products and medicines has become irregular. Patients are asked to bring their own materials and/or medicines.
Due to lack of trained nurses the doctors in Barrio Adentro have had to rely on volunteers to help them. Volunteers do not last long due to the intense routine and doctors have little help.
Since public hospitals do not receive enough financial resources from the government they request patients to pay for medicines, services or the like. The hospitals that do this include those of the Social Security system (Seguro Social).
The gratuity of medical attention in public hospitals is largely mythical. This represents a clear violation of the constitution that stipulates that medical service will be free
The deficit of hospital beds is significant. The WHO establishes a standard of 40 beds per 10,000 people and Venezuela has 17 beds per 10,000 people
What we question is his cooperation with the narco terrorist forces of FARC-and to have allowed our country to become a Bermuda triangle for international unsavory characters, as well as the most important center of drugs distribution in the region.
To have created a climate of impunity and hate responsible for the unprecedented violence-which will take time to heal
To have brought the issue of racism-anti Zionism which never existed in our country
A HISTORICAL CONTEXT
It does not do any harm to know a bit of Venezuelan history to put into context what has taken place during this decade- to be able to judge the country and its people.
To start with, the characteristic of the Venezuelan democratic process DURING 40 YEARS was its commitment to social investment-of course there was much more less resources in the past that in the last decade when 850 billion of dollars rained on the Venezuelan territory-
The Almighty has always been generous providing wealth for us –who have not had to work as hard as other countries to get it. Like mana from heavens. All Venezuelan governments like to take credit for this economic wealth-for which they have really not much to claim for. This one is not alone..but The Chávez regime has taken this to the limit. They speak of spectacular economic growth when we all know that the current economic expansion began with the commodity boom that started in 2003 that impacted all of commodity driven emerging market economies including Venezuela. It was the oil boom and the oil revenues that came with it that allow Venezuela to grow at double digits since 2003.( escalated from $31 per barrel in 2003 to $99 year average in 2008)
It must be stressed that during these years the regime polices ruined our industrial and agricultural capacities .Half of the industries closed and 70% of our food needs are now imported. Today with much less resources such level of imports cannot be sustained-and the local agricultural sector is no capacity to respond to cover the gap in the demand –this will mean scarcity.
A comment : Had the oil production not fallen in almost one million barrels of oil a day-the country would have gained at least 40 billions more during the last five years. And if you recall that PDVSA. could have been producing 5 million of barrels instead of 2.4 million –the regime policies of destroying for political reasons PDVSA. has cost billions of dollars to the Venezuelans which will never be able to recover. Only in 2008 the oil income would have been 180 billion dollars.. Think of this to realize the magnitude of the crime committed against the Venezuelan people.
It has been said-(by Dr. Mark Weisprot) that the current economic expansion began when the government got control over the national oil company in the first quarter of 2003. The opposite is true -By firing 22,ooo of the most skilled personnel the regime brought down a corporation that was before among the premier world companies.
It is true that the Social Programs increased As oil revenues increased, Chávez could spend more on social programs. But with the exception of Cuban doctors etc nothing new was created.
Barrio Adentro was a good program, The Ambulatories before were good. But neither system could replace the hospitals which are now in shambles
In 2008 Venezuela's oil exports amounted to 92.7 billion of dollars-and even with that significant and unprecedented amount in the history of Venezuela it registered a fiscal deficit of about 18 billion dollars. The 2009 national budget is based on 60 dollars per barrel –even at that price level the oil income would be of only 35.9 billion dollars-or 62 per cent less that in 2008- the deficit then- could reach 30 billion dollars. More realistically at $50 per barrel x 1.4 million barrels a day- would amount to $26 billion income-so in the best scenario the 2009 fiscal deficit could easily reach a minimum of $30 billions.
This is the only revolution the world has known where the students, the journalists, the intellectuals, the unions are against it.
The emerging reality of thousand of young Venezuelans-who were 9 to 10 years old when Chávez started are concerned that their
Future is at stake are energizing the people and challenging the old
Leaders-this is a major gain. That is why they were the first to react. Today having met many of them I am sure the regime will not be able to steal their future from them.
Yesterday Bloomberg published its annual Misery Index prepared by the renown US economist Arthur Okun that places Venezuela last among 60 countries –assigning it a level of misery of %36,8. The year before Venezuela occupied the 59th place.
The rate of inflation which really was about 40 to 50% during 2008 is undermining all the social programs and of course taking back any advance in the reduction of poverty rates. Venezuela follows Zimbabwe as registering the highest rate of inflation in the world.
The AGENDA for The Future
We cannot consider that this was a lost decade. On the contrary it has served for all of us to know today how terrible it is to lose rights, freedom, peace and tranquility. And not to be able to be optimistic about our future
And how important was to live under democracy and without fear. But above all how ESSENTIAL is the social and economic inclusion of all the Venezuelans in our future.
The opposition forces have to really unite-Chávez permanency will not only be determined by the collapse of the economy and our public institutions –but by the united action of the opposition with an alternative inclusive project
Chávez incompetent government-has proven to be incapable of solving the main problems: jobs, inflation, insecurity and violence and even scarcity.
I believe we are entering the
VENEZUELA POST CHAVEZ
THE TIPPING POINT: I AM CONVINCED THAT THE NON ALIGNED VOTERS WILL DECIDE THE FUTURE OF OUR DEMOCRACY-TO REGAIN OUR LIBERTIES
Would like to close my words quoting Joaquin Villalobos..former FMNL guerrilla leader of El Salvador
"Poverty will not be solved by saviors such as Chávez believes he is-but by strong democratic institutions, productive economies, efficient governments and tolerant societies"