Stuart Munckton

Venezuela’s poverty rate is expected to drop from 47% in 2004 to 35% by the end of 2005, according to figures from Venezuela’s National Institute of Statistics (INE). The figure was calculated to be at 38.5% half-way through this year. Venezuelanalysis.com reported on October 14 that the INE revealed “critical poverty, the level at which people can’t afford to cover the basic needs, dropped to 10.1% in the first half of 2005, down from 18% the previous year”.

Statistics reveal that unemployment also dropped from 12.1% to 11.5% between August and September this year. Unemployment was above 14% in September 2004.

The significant reduction in poverty is due to a combination of 17% economic growth during 2004, and the economic policies pursued by the government of socialist President Hugo Chavez. On October 18, the government presented a 2006 budget of US$40.5 billion, 27% higher than the previous year, with 41% committed to social programs. Public spending has more than tripled since Chavez was elected in 1998.

The government has rejected the US-backed policies of neoliberalism and instead focused on redistributing the nation’s oil wealth to the poor via a series of government-funded social missions. These missions have brought education, health care, heavily subsidised food and other benefits to the poor. The government has also launched a crackdown on corporate tax avoidance, using the increased revenue to raise the minimum wage. As a result of the crackdown, for the first tome in almost a century the majority of state revenue has come from taxation rather than oil.

From Green Left Weekly, October 26, 2005.
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