June 4, 2015 Print

Centrally planned economies have always been characterized by chronic shortages, spiraling prices, extensive black markets, government corruption, and political suppression. These kinds of ongoing failure have been increasingly evident in Venezuela both during and following the regime of the autocratic former president, Hugo Chávez. Many on the left have excused the deteriorating economy and ideological crackdowns by arguing that at least the nation’s oil revenue has brought free health care, education, and other social services to the nation’s poor.

Even this purported social progress in Venezuela has been an illusion, though, points out Diego Zuluaga, international outreach officer for Atlas Network partner the Institute of Economic Affairs, in a recent commentary for CapX. Zuluaga summarizes the work of a thorough study from Venezuela-based Atlas Network partner Centro de Divulgacion del Conocimiento Economico para la Libertad (CEDICE), which shows that “the government’s social spending has failed to improve the health of Venezuelans, their ability to obtain an adequate education, or even their nutrition.”

The study notes that infant and neonatal mortality in Venezuela have escalated in the past decade, cases of infectious disease like malaria rose sharply in the first decade of the Chávez regime until “authorities stopped publishing annual epidemiological statistics,” institutions of higher education don’t have resources to adequately train the influx of students, and food subsidies combined with inflation have crippled domestic food producers in international markets. Although the incompetence and inefficiency inherent in central planning are a large part of the reason for Venezuela’s crumbling economy, CEDICE’s work notes an added dimension to the nation’s downfall.

“However, there is more at play in Venezuela, according to the CEDICE authors,” Zuluaga writes. “The socialist regime may have set out to improve the health, educational and nutritional outcomes of Venezuelans when it came to power in 1998. But those good intentions quickly took second place to darker political ambitions, namely to establish a comprehensive infrastructure of state dominance of economic and social life, to make the population dependent on the whim of the ruling class. This went hand-in-hand with a comprehensive hollowing out of the existing safety net, which had succeeded in gradually tackling the plight of poor Venezuelans since the 1950s. Thus, the private sector has been driven to the margins of food provision, while a majority of citizens are forced to endure queues and shortages on a daily basis.”

Released in April, CEDICE’s study came not long before another vivid illustration of the Venezuelan regime’s political oppression. Political prisoner Leopoldo López, national coordinator of the opposition party Voluntad Popular, announced in late May that he was beginning a hunger strike to protest the authoritarian government, demand a release of all political prisoners, and insist that forthcoming elections be subject to transparent international observation. López’ statement was issued via a widely viewed YouTube video recorded in his prison cell (link in Spanish), now seen nearly 1 million times.

Read the full CapX article, “The mirage of social progress in Chávez’ Venezuela.”

Read the full CEDICE study, “La paradoja entre un gasto social creciente y la destrucción de patrimonion social de los venezolanos (2003–2014).” (Link in Spanish.)

Watch Venezuelan political prisoner Leopoldo López’ protest statement.

Read “Leopoldo López desafía al régimen y desde su celda graba mensaje al pueblo venezolano.” (Link in Spanish.)