Nov 1 2006

Wrong Numbers

Distorting Venezuela’s record on poverty

One charge that U.S. media have hurled at Venezuelan President Hugo Chávez—that poverty has worsened under his administration—seems tailored to alienate the populist leader from his natural supporters. Isn’t Chávez a leftist? Aren’t his policies pro-poor? progressives may wonder. What about all that oil wealth? Is this really true?

No, it’s not. But that doesn’t stop the media from printing misinformation about poverty in Venezuela.

It isn’t that opinion writers and editorial editors used false statistics or made errors in their calculations—in most cases, they used the Venezuelan government’s own statistics, as many editorials pointed out. Instead, they used old numbers, even when more recent data was readily available.

“In Chávez’s Venezuela, the [poverty] rate has risen from 43 percent in 1999, the year he took office, to 53 percent last year, according to government statistics,” wrote Washington Post deputy editorial editor Jackson Diehl in 2005 (9/26/05). “Even while $100 million in oil money pours into Venezuela every day ($60 million of that from those terrible gringos north of the Rio Grande), the poverty rate has risen above 50 percent,” New York Times columnist John Tierney claimed that same year (11/8/05). “In Venezuela, poverty rose from 43 to 53 percent during Mr. Chávez’s first six years in office,” the Washington Post reported in an editorial in January 2006.

As the Center for Economic and Policy Research has described, in its paper “Poverty Rates in Venezuela: Getting the Numbers Right” (5/06) by Mark Weisbrot, Luis Sandoval and David Rosnick, the statistic these writers cited is from the first quarter of 2004 (roughly five years, not six, after Chávez took office). Due to the economic collapse brought on by efforts to undermine and topple the Chávez administration—including the U.S.-backed coup of April 2002 and the oil strike of 2002-03—the household poverty rate was indeed 53.1 percent, considerably higher than in 1999, shortly after Chávez took office.

But by the time the above critics were writing, the Venezuelan economy had achieved a rapid recovery, boosted by petro-dollars and enjoying a period of relative peace after political upheaval, and the Venezuelan government had released new statistics. The economy grew 18 percent in 2004, and there was a corresponding poverty-rate drop of 13.5 points from the first half of 2004 to the second half of 2005, down to 39.5 percent. (It should be noted that this measurement of poverty does not include non-cash benefits, such as the government programs that provide free healthcare to poor Venezuelans.)

Some commentators and journalists attempted to explain their reluctance to use new data by suggesting that the Venezuelan government body that measures poverty, the National Statistics Institute (INE), had changed its methodology for political reasons, and that its data were no longer reliable. Writing in the Financial Times (5/10/06), for example, reporter Andy Webb-Vidal wrote:

Early last year, Venezuela’s National Statistics Institute said 53 percent of the population lived in poverty at the end of 2004, 9.2 points higher than in early 1999, at the start of the Chávez government. Irked by the numbers, the president ordered a change in INE’s “methodology.” Shortly after, it announced that, in mid-2005, only 39.5 percent of people lived in poverty—a 14.5 point “improvement” in a few months.

But there was no such change in the INE’s methodology. This claim seems to have first appeared in the columns of the Miami Herald’s Andres Oppenheimer. In an October 9, 2005 piece, Oppenheimer wrote, “Chávez lashed out against the INE, saying that it reflected the international ‘neoliberal’ standards of measuring poverty, which according to him were not suitable for a ‘socialist’ country such as Venezuela.” Oppenheimer hammered on this theme in subsequent columns over the next several months (10/27/05, 3/9/06).

Writers at other papers pointed to Oppenheimer’s columns as evidence of the alleged change in the INE’s methodology when asked by CEPR about their own reports on Venezuela’s poverty. But questioned by CEPR, Oppenheimer conceded that he had no evidence that the methodology had changed.

Shortly after publishing our paper, CEPR contacted each of the major newspapers that had misreported the state of poverty in Venezuela, and the Los Angeles Times (6/16/06), New York Times (8/8/06) and Chicago Tribune (8/17/06) all issued corrections. The Financial Times sent a letter apologizing for the error.

Misreporting on Venezuela’s economy continues. For example, Fox News Channel’s Bill O’Reilly claimed on his September 21 program that Venezuelan unemployment is a preposterous 85 percent. (The real number is 10 percent.) But the myth of growing Venezuelan poverty has largely ceased in the mainstream print media. Only the least credible voices of Venezuela’s opposition—and right-wing ideologues in the United States—continue to assert that Venezuela’s poverty has not improved under Chávez’s tenure.

Dan Beeton is international communications coordinator for the Center for Economic and Policy Research in Washington, D.C.