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Venezuela: The ranks of the poor grow daily

By Veneconomy

According to the latest report from the Central Bank of Venezuela, the wages of Venezuelan workers rose by 14% in the first semester of 2004, but this was still 12.4% below inflation for the same period. This increase is considerably better than the raises obtained in the first half of 2003, when wages improved by only 2.9%, on average. Nevertheless, even though the minimum wage went up to Bs.321,235 on August 1, it is still insufficient for the head of a household to cover the cost of the food basket, which came to Bs.505,062 in July.

The purchasing power of the population has continued to decline. Between January 1999 and June 2004, inflation has gone up, on average, by 191%, while the wages and salaries index has risen by 127%. In other words, workers would need a 64% increase to keep pace with the prices of goods and services. People seem to think that receiving free medical attention under the Barrio Adentro program constitutes a saving and, therefore, improves the purchasing power of the poorest sectors of the population. A manual worker who earns Bs.321,235 a month may possibly improve his quality of life because he can now consult a doctor, something he was unable to do before, but his wage continues to be insufficient to cover even the most basic needs, such as food.

The recently created “missions” or campaigns have turned out to be a palliative for those who have insufficient means, but they are not the answer to a structural problem such as poverty. The huge amounts being spent by the government, even if they are going on social programs, are not finding their way to the productive sector, which means that they are not a source for generating jobs.

In other words, the government is creating the illusion among the most disadvantaged that they are being taught to fish, yet it is doing nothing to improve the conditions of the fishing industry so that it becomes efficient and productive.

The saddest thing is that many Venezuelans –victims of false expectations- believe that the missions are all they need to leave poverty behind. The truth of the matter is that, despite the missions, the levels of poverty have increased, which proves that, although these programs generate benefits, there will be no true improvement in the quality of life of Venezuelans unless productive industry is stimulated with the right kind of policies that promote investment and the creation of jobs.

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