Venezuela: Confusing Terms
21.07.05 | Vladimir Villegas is a regular columnist in El Nacional newspaper. His article in today's edition contains the following excerpt:
Crecimiento. Veremos qué vuelta le darán los “analistas” a las cifras dadas a conocer en el reciente informe del Banco Mundial según el cual Venezuela se ha colocado como la cuarta economía de América Latina, detrás de México, Brasil y Argentina, y por encima de otros países como Colombia, Chile y Ecuador. En un solo año, tal y como lo refleja la página Aporrea, citando el Informe del Banco Mundial, la economía venezolana experimentó una rápida recuperación, pasando de la drástica contracción de –9,4% del Producto Interno Bruto en diciembre de 2003 a un crecimiento de l8 puntos, para ubicarse en 9% en 2004. Hoy, digan lo que digan, la economía venezolana es una de las más sólidas de la región y la que ha mostrado mayores avances en materia de control de la inflación y reducción del desempleo.
In English, this would be:
Growth. Let's see what spin will be given by "analysts" to the data that was included in the World Bank's latest report according to which Venezuela is the fourth economy of Latin America, behind Mexico, Brazil and Argentina and above countries such as Colombia, Chile and Ecuador. In only one year, as referenced in the Aporrea web page, the economy went from a 9.4% reduction in 2003 to an 18% growth for an absolute gain of 9% in 2004. Say as they might, nowadays the Venezuelan economy is one of the most solid ones in the region and one that has shown major advances in inflation control and in reduction of the unemployment rate.
Growth: This is a good example of somebody showing some data and saying that it proves something else. It is no mystery to anybody in this planet that the Venezuelan economy is based on oil extraction and that as of late, the oil prices have hit record highs (not adjusting for inflation). If you look at the GDP data from the Venezuelan Central Bank (BCV), you will learn that oil production itself accounts for 17% of Venezuela's GDP. If you look at the exports data you will learn that oil accounts for roughly 80% of the country's total. Given that the oil price has more than tripled (in inflation-adjusted terms) since Chávez took office and increased 32% from 2003 to 2004, you may see where the "solid" growth is coming from. No, depending on the price of one commodity does not a "solid" economy make. Additionally, there is no point in talking about an absolute gain of 9% when the BCV data shows that Venezuela's economy (at 1997 prices) was 0.07% smaller in 2004 than in 1998, when Chávez took possession (i.e. no growth).
Inflation: Mr. Villegas later talks about "major advances" in inflation control (among others in the region). Honestly, it's hard to figure out what he means. Venezuela still has the highest inflation among Latin America's largest economies. Even singing the praises of the reduction from 2003 to 2004 (-30%) is senseless as it pales in comparison to Argentina's (-67%), Brazil's (-55%) and Chile's (-61%).
Unemployment: He also boasts about Venezuela's advances in reducing unemployment. Yes, unemployment dropped (source: BCV) from 16.8% at the end of 2003 to 13.9% at the end of 2004. What Mr. Villegas doesn't mention is that unemployment was at 11% at the end of 1998, so there is no progress (actually, it's worse) from this government. Gloating about one-year results is like a fat person celebrating a 5 kg. weight loss when he gained 10 kg. last year.
There's a adage here in Venezuela that says: "las mentiras tienen patas cortas" (lies have short legs). I guess that half-truths have slightly longer legs but still don't travel very far.
Silver Lining: Mr. Villegas writes in a respectful tone when referring to the opposition and he even has some kind words for the Mayor of Baruta, Henrique Capriles Radonski, who opposes calls to abstain from voting in the August municipality elections.
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