The Social Policies of Hugo Chavez: a fraud that has to be denounced

After my talk in the British Parliament, last September 10, one of the members in attendance wanted to know my opinion about the social policies of Hugo Chavez, which he seemed to consider quite positive. In this article I expand on the answer I gave him that day.

The social programs of Hugo Chavez were based on direct transfers of cash and strong subsidies to the Venezuelan poor, in exchange for their political loyalty. As such they were exclusive and designed to obtain maximum political benefits. Poverty, however, is a structural condition that calls for structural solutions. Cash transfers and subsidies represent a fish a day, as compared to the need for empowering the poor to learn how to fish. When the transfers diminish or, even, disappear, the poor revert rapidly to their original condition, this time more despondent than ever. I have also used the metaphor of the diabetes and insulin in trying to explain the difference. As long as a person receives insulin diabetes is “cured”. When insulin is not accessible diabetes reappear. Insulin is the money given to the poor on a daily basis.

The social policies of Hugo Chavez were executed through the so-called “Missions”, programs to "help" the poor. These programs were not conceptually wrong, but represented only a temporary alleviation of poverty and were never complemented with structural programs of education and health that effectively could allow the poor to escape poverty. A study by the Venezuelan Central Bank, 2011, was candid enough to report on the progressive contraction of these programs and their loss of effectiveness in the period 2005-2011 (see IV Encuesta Nacional de Presupuestos Familiares).

The study included some of the following conclusions:

1) The best known Missions were Mercal, subsidized food distribution, and Barrio Adentro, primary medical assistance in the poor neighborhoods, done mainly by imported Cuban medical staff. Other programs, such as Robinson (Literacy), Ribas (shortened secondary education), Sucre (to allow 400,000 high-school graduates to enter universities) and Negra Hipolita (help to homeless) were known only to less than 5 percent of the population.

2) Mercal has suffered a 60% contraction since its peak of 11.5 million beneficiaries in 2005; in 2011 only 4.6 million people benefited from it. Food distribution declined 23% between 2005 and 2009 and number of homes receiving its benefits declined 42% during the same period.

3) Barrio Adentro went from reaching 11.7 million people in 2005 to 6.7 million people in 2009, this is 49.5% of total population in 2005 to 28.8% of total population in 2009.

4) More than 90% of the people receiving medical attention in Barrio Adentro are not poor, as defined by the Venezuelan Institute for Statistics.

5) The education-oriented Missions have had minimal impact. Traditional education still account for 99,4% of all students, while education-oriented Missions only benefit 0,6% of the student population. Higher education Missions have had greater impact, since 16% of the student population are in the so-called "Bolivarian universities" and other special institutes of “express” education, such as the Community doctor program run by Cubans, whereby a student can graduate as a medical doctor with very limited knowledge of the profession, according to the Venezuelan Federation of Medical Doctors. Venezuelans are reluctant to place themselves in their hands.

6) According to existing data the public expenditure in education goes, indiscriminately, to poor and rich like. Contrary to government claims, there is no special emphasis in reaching the poor.

7) Real subsidies are more modest than what the government claims. In Mercal, for example, the government contributes only 4% of total costs to the public. In health only 14%. In education is a significant 64%, but this subsidy benefits rich and poor alike.

8) The issue of gasoline is not addressed in the report by the Bank. Gasoline in Venezuela is given to gas stations FREE of charge, to be sold to the public at very low prices, a few U.S. cents per gallon. The state oil company finds it cheaper to give it away for free than the cost of billing and collecting. This represents a gigantic loss to the nation, some $12 billion per year and, also, an immoral act since gasoline is a non-renewable resource.

9) To the surprise of many the traditional government programs that provide help/subsidies, instituted long before Chavez came into power, are still much more effective than the Missions. According to the Central Bank school dining rooms, subsidized student transport, scholarships and massive vaccinations reach almost 8% of the total population, while the new programs or Missions only reach 4% of the total population.

10) What has really exploded is the magnitude of the direct transference of cash to the poor. In 2012, election year, this transfer grew 74%, money given to pregnant women, disabled, the elder and other special groups. Of course, with the quid pro quo that beneficiaries vote for Mr. Chavez. Which they did.

Luis Pedro España, at the Catholic University Andres Bello in Caracas calls the Missions a well marketed fraud. In a newspaper article ("La estafa mejor vendida" El Nacional, January 12, 2012), España say: “Técnicamente [las misiones] no se acogen a principios de justicia social, redistribución progresiva o consideran indicadores de eficiencia y eficacia. Están disponibles para aquellos ciudadanos que merezcan los favores del Estado según el juicio de los militantes de base del Gobierno, además de contar con todo un rosario de ineficiencias caracterizadas por una lógica de operativo, plan de emergencia o jornada especial, que resta la continuidad y constancia que requiere toda política social que pretenda tener impacto y generar haberes humanos y productivos en sus destinatarios. Desde el punto de vista moral son un chantaje político que sólo la falta de escrúpulos de sus propugnadores, comenzando por el mismísimo jefe, es capaz de permitir y avalar sin el menor cargo de conciencia o vergüenza política”.

Translated: “Technically Missions do not adhere to principles of social justice or progressive redistribution, nor do they take into account efficiency and efficacy indicators. They exist only for those citizens looking for State favors and its recipients are selected by grass-root government supporters, and are handicapped by inefficiency, improvisation, emergency measures, all of which detract from the continuity and persistence that social policies pretending to impact and generate productive results have to have. From a moral viewpoint [the Missions] represent political blackmail that only these people, starting with their leader, are capable of promoting and defending without political shame or guilty conscience”.

What Professor España says summarizes quite well the crime involved in the social policies of Hugo Chavez. After his death, the Venezuelan people are poorer and more dependent on the paternalistic state than ever before. This fraud has to be denounced to the world and international public opinion has to be informed of what really took place in Venezuela during the 14-year Hugo Chavez regime. Otherwise they might see with approval the emergence of another demagogue selling miraculous snake oil in our country.