The Centre for Policy Studies welcomes the debate on the current instability in Venezuela, held yesterday in Westminster Hall.
Jeremy Corbyn has described Venezuela as "a better way of doing things" - pointing to the fall in poverty rates under Hugo Chavez - but "Venezuela - No Room for Apologists", published by the Centre for Policy Studies on 6 September 2017, shows that Chavez's reform agenda was always doomed to disaster.
Daniel Mahoney, Head of Economic Research at the Centre for Policy Studies, said:
“The roots of Venezuela’s crisis come squarely from Chavez’s economic reforms.
Apologists for the Chavez regime argue his reforms - that destroyed economic freedom - were justified because poverty fell. But this was completely cosmetic. It was paid for by exponential increases in global oil prices and concealed disastrous structural problems that were emerging.
Price controls were causing food shortages as early as 2006, nationalisation was associated with collapsing productivity and President Chavez’s unrestrained spending was simply astonishing. Venezuela went from a budget surplus in 1999 to a deficit of over 14% of GDP when Chavez left office – despite oil export revenue increasing by 600% over his term in office.
Venezuela’s over-reliance on oil is not the only cause of this crisis. Price controls, mass nationalisation, profligate fiscal policy and ever-growing corruption under the Chavez era – followed on by Maduro – have sown the seeds of the current major economic and political calamity. Jeremy Corbyn’s comment that President Chavez ‘showed us a better way of doing things’ is therefore deeply troubling.”
Read the full report here.