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Venezuela’s social spending spree

Dan Grech Jul 26, 2007

Venezuela’s social spending spree

Dan Grech Jul 26, 2007


Doug Krizner: High oil prices have allowed Venezuelan President Hugo Chavez do many things Washington doesn’t like.He’s bailed out Castro’s Cuba, and offered aid to the economy of Nicaragua.

Oil revenues have also helped Chavez with a high level of social spending in his country. A study this morning from the Center for Economic and Policy Research predicts this will continue. From the Americas Desk at WLRN, Dan Grech reports.

Dan Grech: President Hugo Chavez dedicates more than 20 percent of Venezuela’s GDP to social spending. The U.S., by comparison, spends a similar percentage on its entire federal budget.

Still, economist Mark Weisbrot argues in his study that Venezuela’s financials are solid.

Mark Weisbrot: Even if there were a large decline in the price of oil, which no one is anticipating, they would still be able to maintain current levels of spending.

Chavez has quadrupled per capita social spending since taking office in 1998. That’s made him a revered figure among many Venezuelans, particularly the poor.

Take the working class community of El Valle, on the outskirts of the Venezuelan capital. This near-slum is now thriving. It has a community soup kitchen, a subsidized food market and a free medical clinic run by a doctor from Cuba.

Patient Nereida Camacaro is expecting her fifth child. During her earlier pregnancies, she traveled across town for checkups and paid out of pocket for prescription drugs. Now her checkups are a short walk away, and the medicine is free.

Nereida Camacaro: “Por que por lo menos lo que ahorro con el medicamento, si tengo el dinero, puedo comprar lo que ellos me piden.” (She says with the money she saves, she can finally buy treats for her children.)

On this day, her daughters arrive at the doctor’s office munching on snacks. In theory, the clinic in El Valle is partly funded through contributions from the community.

But clinic volunteer Rosa Hernandez says in three weeks, the donation box has accumulated 1,500 Bolivares — about 70 cents.

Rosa Hernandez: “Si una persona dice que no, yo no tengo. Pero yo digo que si, tu tienes. Porque tu o tu nino pone unos zapatos de 80 mil Bolivares.” (“People say, ‘No, I don’t have any money. But I say, “Yes, you do. Because your kid’s wearing shoes worth 40 bucks.'”)

One thing’s undisputable: under Chavez, El Valle’s a place transformed. Budding rap start Miguel Angel Zapata Quintero would appear to be your classic disaffected youth — tattoos, dark clothes, a scowl.

But instead of railing against The Man, he composes raps like this one that praise the Chavez revolution.

In Caracas, I’m Dan Grech for Marketplace.

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