The full paper is available in pdf format at www.cepr.net
    Has Poverty in Venezuela Fallen or Risen Under President Hugo Chavez?
    By Mark Weisbrot
    t r u t h o u t | Press Release
    Thursday 25 May 2006

New paper looks at data, corrects misreporting.
Over the past year, the statement that poverty in Venezuela has increased under the government of President Hugo Chávez has appeared in scores of major newspapers, on major television and radio programs, and even journals such as Foreign Affairs and Foreign Policy. These statements have only rarely been contested or corrected. [See Appendix to the paper] for samples of this misreporting on poverty in Venezuela].
    An Issue Brief released by the Center for Economic and Policy Research looks at the numbers and concludes:

• The household poverty rate was thus reduced by nearly 5 percentage points, or 12.9 percent, from 42.8 percent in the first half of 1999 (when President Chavez took office) to 37.9 percent in the second half of 2005. Since the economy has continued to grow rapidly this year (first quarter growth came in at 9.4 percent), the poverty rate is almost certainly significantly lower today.
  
  
• There is no evidence that the Venezuelan National Institute of Statistics has changed its methodology, so these numbers are directly comparable. The most recent figures are about what would be expected as a result of the rapid economic recovery.
  
  
• Most of the erroneous reporting on this issue results from using numbers gathered in the first quarter of 2004. These numbers reflect sharp increase in the poverty rate caused by the severe economic downturn of 2002-2003.
  
  
• Since the preliminary poverty numbers for 2005 were released in September 2005, it is not clear why the out-of-date, early 2004 numbers have continued to be widely used. The early 2004 numbers quickly became out of date because of the rapid growth of the Venezuelan economy in 2004 (17.9 percent) and 2005 (9.4 percent), which pulled millions of people out of poverty.
  
  
• The reduction in poverty noted above, since 1999, measures only cash income. This, however, does not really capture the changes in the living standards of the poor in Venezuela, since there have been major changes in non-cash benefits and services in the last few years - for example health care is now provided to an estimated 54 percent of the population. The paper looks briefly at the impact of these changes.
      --------
      Sources:
      Castañeda, Jorge G., "Latin America's Left Turn," Foreign Affairs, May/June 2006.
      Corrales, Javier, "Hugo Boss," Foreign Policy, January/February 2006.
      The Center for Economic and Policy Research is an independent, nonpartisan think tank that was established to promote democratic debate on the most important economic and social issues that affect people's lives. CEPR's Advisory Board of Economists includes Nobel Laureate economists Robert Solow and Joseph Stiglitz; Richard Freeman, Professor of Economics at Harvard University; and Eileen Appelbaum, Professor and Director of the Center for Women and Work at Rutgers University.

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30th May 2006

The Center for Economic and Policy Research (CEPR) this week released a new report on Venezuela's poverty rates. The research team found a marked decrease in poverty over the course of President Chavez' term. While in 1998, the year Chavez was first elected, more than 55% of the Venezuelan public lived below the poverty line, today less than 44% do. And that's just an analysis of cash income. When you take into account that the poorest Venezuelans spend far less money on health care, nutrition and education today because of the social missions, the number drops to 35%. In all, a 20% drop in poverty can be calculated in recent years.

Yet many newspaper accounts still claim the opposite. As CEPR discovered, reporters continue to use figures from the first half of 2004, when Venezuela's economy was reeling from the petroleum industry shutdown, led by oil executives in a failed attempt to drive Chavez from office. In other words, reporters are using two year old data from the worst economic period of Chavez' term in order to make the case that the economy remains in bad shape. CEPR presents a number of recent examples, including:

* A January 2006 Editorial in the Washington Post, which reads, "In Venezuela, poverty rose from 43 to 53 percent during Mr. Chavez's first six [sic] years in office."
* A report in Foreign Affairs magazine that states, "Venezuela's poverty figures and human development indices have deteriorated since 1999, when Chávez took office;" and
* A similar story in Foreign Policy last January, claiming that "Chavez has failed to improve any meaningful measure of poverty, education, or equity."

Each of these pieces were written long after the 2005 numbers were available.

Please take the time to read the CEPR report, either in HTML or PDF format, and be sure use it to respond to future press stories on Venezuela's economy.