The Nation Magazine does Venezuela

The Nation Magazine, is the largest and most influential journal of the American left. Since George W. Bush's election, it has seen its circulation soar, as those who call themselves "progressives" have been energized to combat what they perceive as the rising tide of conservative political strength. Published continuously for 139 years, owned by a consortium of wealthy leftists notably including Paul Newman, its views matter to those on left flank of American politics.

The Nation recently published as a cover story an extensive article written by Christian Parenti on the Venezuelan regime led by Hugo Chavez. It offers readers a biased and sugary version of what is already a populist dictatorship in the tradition of Castro, Peron and Velasco Alvarado. I read the article feeling like the mosquito flying over an elephant and thinking: I know what I have to do, but where do I start?

The first weakness of Mr. Parenti's article is to base an evaluation of the Chavez regime principally on an interview with a Mrs. Carmen Guerrero, living in the barrio of San Agustin, in Caracas. One interview in the capital of Caracas, where almost 5 million of persons live, cannot be statistically significant. The picture Mr. Parenti derives from this single interview is one of clear social progress and almost unanimous support for the Chavez regime among the Venezuelan poor. International and domestic independent statistics tell a different story: During the six years of Mr. Chavez's rule unemployment, inflation and crime rates are all up, while competitiveness, labor productivity and industrial and agricultural activity are all down.

Mr. Parenti mentions, as a positive accomplishment, the creation of banks to help small business and minorities, as well as programs led by the military to conduct public works. In fact, the two Banks created by this regime: the People's Bank and the Women's Bank are essentially bankrupt and will have to be, once more, re—capitalized. In 2004, the People's Bank lost 3.7 billion Bolivars on revenues of Bs. 5.6 billion. Expenses, in other words, reached Bs. 9.3 billion. No less than 40% of their loans were delinquent, compared with 2% in the private banking system. The Women's Bank lost Bs. 1.47 billion with delinquent loans reaching 52%. The military—led program 'Bolivar 2000' had to be cancelled after only one year, due to extreme waste and corruption, all of which are well documented. This program wasted about $2 billion.

Mr. Parenti mentions the Caracas subway system as an accomplishment of the Chavez regime. The truth is that the system is badly delayed and no new extensions have been inaugurated during the six years of this regime.

The land reform program, also mentioned by Mr. Parenti as a great accomplishment, has not progressed beyond political propaganda. The fact is that Venezuelan agricultural production is drastically down and the regime is importing food through Cuba, to supply the subsidized markets mentioned by Mr. Parenti.

Mr. Parenti claims that the ideologists of the regime are fighting against the

'cultural pathologies bred by all resource—rich economies... in which the oil—rich state is expected to dole out services to disorganized and unproductive population.'

Reality is that the regime is undertaking a policy of handouts and is paying Venezuelans to enroll in ideological indoctrination programs designed to buy loyalties for the 'revolution.' Chavez is rapidly creating a society of beggars and not a society of self—starters.

The Venezuelan judiciary deserves commentary. According to Mr. Parenti, Chavez has conducted 'an overhaul of the corrupt judiciary.' Nothing could be further from the truth. Today, most judges are temporary and will not dare to judge against government wishes. Those who do are immediately removed from their posts. The Supreme Tribunal of Justice has been illegally and recently stacked with Chavez's followers. This new tribunal has just reversed a sentence unfavorable to Chavez taken two years ago by its previous members. What kind of justice can Venezuelans expect in the future?

Mr.Parenti asserts that the Venezuelan economy 'is booming.' To be sure, oil revenue has surged, but that is only because oil prices (but not Venezuelan oil production) have soared. The hard facts are: Venezuelan debt has doubled during the last six years, from $ 24 to $48 billion, in spite of the highest oil income ever ($120 billion during the last five years). The 2005 budget still shows a deficit of some 4% of the GDP. However, this deficit is actually much larger, since the Chavez regime in point of fact carries a parallel budget, directly managed by Chavez, which is not accountable to the nation, and which increases this deficit considerably.

A strict exchange control regime continues to be in place, strangling the private sector. The currency has just been officially devalued, although the black market rate is already almost twice the official rate. Industry is stagnant. What is growing by leaps and bounds is government current expenditure, up 47% last year. This creates an illusory sense of prosperity in a country that is collapsing.

I truly appreciate the difficulties of going to Venezuela for a few days and trying to write a balanced story about the country.  Clearly Mr. Parenti had no time to talk to anyone, except the representatives of the regime.

If he did not mean to merely propagandize in favor of brutal, failing dictatorship in this way, I can only wish him better luck next time.
  
Gustavo Coronel is a Venezuelan petroleum geologist, energy and political consultant, currently residing in the U.S.A.

The Nation Magazine, is the largest and most influential journal of the American left. Since George W. Bush's election, it has seen its circulation soar, as those who call themselves "progressives" have been energized to combat what they perceive as the rising tide of conservative political strength. Published continuously for 139 years, owned by a consortium of wealthy leftists notably including Paul Newman, its views matter to those on left flank of American politics.

The Nation recently published as a cover story an extensive article written by Christian Parenti on the Venezuelan regime led by Hugo Chavez. It offers readers a biased and sugary version of what is already a populist dictatorship in the tradition of Castro, Peron and Velasco Alvarado. I read the article feeling like the mosquito flying over an elephant and thinking: I know what I have to do, but where do I start?

The first weakness of Mr. Parenti's article is to base an evaluation of the Chavez regime principally on an interview with a Mrs. Carmen Guerrero, living in the barrio of San Agustin, in Caracas. One interview in the capital of Caracas, where almost 5 million of persons live, cannot be statistically significant. The picture Mr. Parenti derives from this single interview is one of clear social progress and almost unanimous support for the Chavez regime among the Venezuelan poor. International and domestic independent statistics tell a different story: During the six years of Mr. Chavez's rule unemployment, inflation and crime rates are all up, while competitiveness, labor productivity and industrial and agricultural activity are all down.

Mr. Parenti mentions, as a positive accomplishment, the creation of banks to help small business and minorities, as well as programs led by the military to conduct public works. In fact, the two Banks created by this regime: the People's Bank and the Women's Bank are essentially bankrupt and will have to be, once more, re—capitalized. In 2004, the People's Bank lost 3.7 billion Bolivars on revenues of Bs. 5.6 billion. Expenses, in other words, reached Bs. 9.3 billion. No less than 40% of their loans were delinquent, compared with 2% in the private banking system. The Women's Bank lost Bs. 1.47 billion with delinquent loans reaching 52%. The military—led program 'Bolivar 2000' had to be cancelled after only one year, due to extreme waste and corruption, all of which are well documented. This program wasted about $2 billion.

Mr. Parenti mentions the Caracas subway system as an accomplishment of the Chavez regime. The truth is that the system is badly delayed and no new extensions have been inaugurated during the six years of this regime.

The land reform program, also mentioned by Mr. Parenti as a great accomplishment, has not progressed beyond political propaganda. The fact is that Venezuelan agricultural production is drastically down and the regime is importing food through Cuba, to supply the subsidized markets mentioned by Mr. Parenti.

Mr. Parenti claims that the ideologists of the regime are fighting against the

'cultural pathologies bred by all resource—rich economies... in which the oil—rich state is expected to dole out services to disorganized and unproductive population.'

Reality is that the regime is undertaking a policy of handouts and is paying Venezuelans to enroll in ideological indoctrination programs designed to buy loyalties for the 'revolution.' Chavez is rapidly creating a society of beggars and not a society of self—starters.

The Venezuelan judiciary deserves commentary. According to Mr. Parenti, Chavez has conducted 'an overhaul of the corrupt judiciary.' Nothing could be further from the truth. Today, most judges are temporary and will not dare to judge against government wishes. Those who do are immediately removed from their posts. The Supreme Tribunal of Justice has been illegally and recently stacked with Chavez's followers. This new tribunal has just reversed a sentence unfavorable to Chavez taken two years ago by its previous members. What kind of justice can Venezuelans expect in the future?

Mr.Parenti asserts that the Venezuelan economy 'is booming.' To be sure, oil revenue has surged, but that is only because oil prices (but not Venezuelan oil production) have soared. The hard facts are: Venezuelan debt has doubled during the last six years, from $ 24 to $48 billion, in spite of the highest oil income ever ($120 billion during the last five years). The 2005 budget still shows a deficit of some 4% of the GDP. However, this deficit is actually much larger, since the Chavez regime in point of fact carries a parallel budget, directly managed by Chavez, which is not accountable to the nation, and which increases this deficit considerably.

A strict exchange control regime continues to be in place, strangling the private sector. The currency has just been officially devalued, although the black market rate is already almost twice the official rate. Industry is stagnant. What is growing by leaps and bounds is government current expenditure, up 47% last year. This creates an illusory sense of prosperity in a country that is collapsing.

I truly appreciate the difficulties of going to Venezuela for a few days and trying to write a balanced story about the country.  Clearly Mr. Parenti had no time to talk to anyone, except the representatives of the regime.

If he did not mean to merely propagandize in favor of brutal, failing dictatorship in this way, I can only wish him better luck next time.
  
Gustavo Coronel is a Venezuelan petroleum geologist, energy and political consultant, currently residing in the U.S.A.