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Venezuelans losing vision of prosperity under President Chavez

By David Adams, Times Latin America Correspondent
In print: Monday, June 9, 2008

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CARACAS — The line for chicken began forming at four in the morning.

Within minutes of the 8 a.m. opening of the state-run food store, all the chicken was gone.

At less than 50 cents a pound, chicken is the hottest item at Mercal, a vast government network of subsidized food markets.

"I don't know what they did with all those chickens," said Marielena Morillo, 77. "They were all gone by the time I got there. It's a hopeless system."

Mercal is one of the most visible symbols of Venezuela's changing socialist economy. Poor Venezuelans see it as salvation from inflationary food prices. But others say the national chain has grown so large that it undermines domestic food production, which is why it's so hard to find chicken and other basic goods.

After nearly a decade of Hugo Chavez's brand of "21st century socialism," Venezuelans are beginning to ask if anything has changed from the old days when corrupt politicians siphoned the nation's vast wealth at the expense of the poor. With oil trading at $138 a barrel — 15 times what it was in January 1999 — critics ask what Venezuelans have to show for it.

"All this social spending has had some effect, but it's far less than it could have been," said Francisco Rodriguez, a Venezuelan-born economist at Wesleyan University in Connecticut. "At best, it's not very different from what the previous governments were able to do before Chavez came along."

The 'spending myth'

The government rejects such assertions, saying poverty has fallen 10.9 percent since 1998.

"This country has been transformed under President Chavez," said Andres Izarra, the president's spokesman.

Chavez's signature program is called Barrio Adentro (Inside the Barrio) which provides health and education services for the poor. The program depends on 30,000 Cuban doctors, nurses, dentists and physical education trainers, who staff clinics in poor communities across the country.

But critics such as Rodriguez assail the "myth of spending on the poor" and question why other major health programs have gone unfunded.

Official health data show only 28 percent of hospital beds can be used because of poor maintenance. The incidence of tropical diseases such as malaria and dengue fever is on the rise.

Price of popularity

With key elections for governors and mayors coming in November, Chavez cannot afford to let his popularity slip. He suffered a stinging defeat in a referendum in December when he sought to rewrite the constitution to allow his unlimited re-election.

"Chavez made an extraordinary diagnostic about what the country needed, but he couldn't provide the answer," said Yon Goicochea, 23, a student leader who led anti-government street protests last year. "We are not developing a productive society."

The government has announced ambitious plans to build 23 universities to train doctors, as well as construct new hospitals under a scheme dubbed Barrio Adentro 3.

But vast sums of money are being spent on Chavez's pet projects abroad, including oil shipments to Cuba valued at $2-billion a year. He has bought $3.4-billion in Russian fighter jets.

Billions more have gone to nationalizing key industries, including cement, telecommunications, electricity and steel.

Mismanagement of the economy is blamed for a slowdown in growth, estimated at 5 percent this year, after several years of double-digit growth. Inflation is running at 26 percent.

Businessmen complain of burdensome socialist bureaucracy. "There is a terrible over-control of the economy," said Jorge Redmond, president of chocolate-maker El Rey.

Exports used to require four forms, but now require 51, he said. Redmond says he hasn't been able to make an overseas shipment for three months.

Labor problems at some of the country's biggest factories, including carmakers General Motors, Mitsubishi and Toyota, have disrupted production. Demand is so great there is a half-year wait for domestic models, such as the Chevy Aveo.

Lack of investment in new exploration has cut crude oil production from 3-million barrels per day to 2.3-million, according to industry experts.

Too much talk

At the Fabricio Ojeda complex in western Caracas, oil money built a clinic, a food distribution program and a textile cooperative. But the co-op's purpose seems more political than commercial.

"Vote Chavez" posters hung on the walls next to women at sewing machines. Instead of turning out popular items for stores, the factory was making denim shirts for staff of the state oil company and red T-shirts advertising a government food program.

"Chavez talks too much. We need training and work, not handouts," said Luis Baena, 42, a bare-chested construction worker. He pointed to a half-built and long-delayed vocational training center overlooking the clinic.

Baena said he used to be pro-Chavez but has steadily lost patience with his failure to fulfill promises to the poor. "It's just turned into more of the same," he said. "Chavez is no better than all the politicians who came before."

David Adams can be reached at dadams@sptimes.com.