Venezuela, Equality, and Oil
September 9, 2015 Leave a comment
Recently I was invited to post blogs focusing on Latin America on the Tikkun Daily Blog. My first post is HERE, a slightly revised version of my “Ten Things I Learned from Hugo Chávez.” (NOTE: If you do a quick read of the ten headings, you may be able to spot one “tone-it-down” revision in the Tikkun version as compared to my original, here.)
I was happy to see interest in the post; there were a number of comments last week. Just now I added a comment there that I want to share on this blog too. Here is the comment:
I am adding this comment to my Tikkun Daily blog in order to provide information that gets very little attention, despite the fact that it could be a source of hope for us, given that economic inequality is growing in the United States. I looked for a source that is not likely to be biased toward Venezuela, and found this link and excerpt from the World Bank, http://www.worldbank.org/en/country/venezuela/overview
Among the most important programs that oil resources have helped to finance are the broad-based social programs called Misiones. Economic growth and the redistribution of resources associated with these missions have led to an important decline in moderate poverty, from 50% in 1998 to approximately 30% in 2012. Likewise, inequality has decreased, reducing the Gini Index from 0.49 in 1998 to 0.39 in 2012, which is among the lowest in the region.
Nevertheless, Venezuela’s development continues to face important challenges, especially at a time when a contraction was recorded in international oil prices. Its economy is highly vulnerable to fluctuations in oil prices since it represents over 96% of the country’s exports and generates nearly half of fiscal income.
Yes, Venezuela should not be so dependent on oil exports, and they are trying to diversify. Still, it’s a good question to ask, “Why have oil prices plummeted?” It’s primarily because of “fracking” in the U.S. Fracking uses a lot of a truly precious resource, water. It might make sense as a last resort, after we’ve done everything we can to decrease our use of non-renewable energy such as oil, and to increase our use of renewable energy. Meanwhile fracking has adversely affected not only Venezuela but many other aspects of the world economy.