A Benign Revolution

President Chávez has remained a responsible steward of the Venezuelan economy, implementing policies that have promoted growth while lowering inflation and unemployment. His responsible management of the economy became obvious during his first years in office, when he twice trimmed the budget and implemented measures to control inflation. Except for the negative impact of the 2002 opposition-led coup (which the United States tacitly endorsed) and the 2003 oil sabotage, the economy has remained strong since he took office. It grew by 17.9 percent in 2004 and by 9.3 percent last year, and it looks like it will continue such growth this year. More important is the fact that the non-oil sector has been growing faster than the oil sector -- by 10.6 percent in 2005 -- indicating an important diversification of the country's economy. Inflation, interest rates, and unemployment have fallen, while gross fixed investment, microcredit, construction, purchases of cars, and consumer confidence have all risen. Tax collection has increased, and Venezuela's tax revenues as a percentage of GDP now stand at close to 25 percent, higher than in any other country in the region and approaching the percentage in the United States. Venezuela also recently paid off some $4.7 billion of its international debt ahead of schedule, leading to a 15.2 percent decrease in annual payments for foreign debt. Venezuela has become the United States' second-largest trading partner in the region, second only to Mexico, and the United States' thirteenth-largest trading partner globally, doing over $39 billion in commerce in 2005. It's no surprise that Venezuela's country risk rating has fallen continually since 2003, when President Chávez began a concerted effort at economic recovery.

More important than simply promoting economic growth, though, is paying down the social debt that the government built up over four decades of neglect of Venezuela's most pressing problems. President Chávez is overseeing an ambitious program of social missions meant to correct some of Venezuela's most outstanding inequalities in education, housing, health care, food security, and job training. Government spending on social programs has risen dramatically since President Chávez took office, and it now stands at roughly 15 percent of GDP. Fifteen million Venezuelans -- roughly half the population -- have received free health care from 20,000 doctors located in Venezuela's poorest areas through Mission Barrio Adentro, and some nine million have benefited from subsidized prices on basic foodstuffs through Mission Mercal. The various educational missions -- for basic, secondary, and university education -- have benefited millions more, allowing the country to declare itself free from illiteracy last year. In fact, Venezuela's social programs will allow the country to meet the UN Millennium Development Goals in 2012, three years ahead of schedule, and the country's ranking on the UN's Human Development Index (a broad measure of economic and social welfare) continues to rise. Although some critics have called these programs clientelistic, they are simply responding to long-ignored needs and building much-needed human capital in Venezuela. The Venezuelan people are being provided with the basic tools to become productive and competitive, so much so that even members of the opposition have recognized the inherent value of the social missions.

It is no secret that relations between the United States and Venezuela remain tense. But Venezuela is simply not a threat to the United States, much less an enemy. Many in the Bush administration -- still convinced that the Cold War has not ended in Latin America -- see it as such, going so far as to try and have Venezuela listed as a state sponsor of terrorism, despite lacking evidence to prove such a claim and even while cynically refusing to extradite Luis Posada Carriles, a well-known Cuban terrorist, to Venezuela to stand trial for the 1976 killing of 73 innocent civilians. Internally, Venezuela seeks to implement the measures needed to promote growth and secure social development; externally, it seeks regional political integration with which to ensure that Latin America can spur the growth of internal markets and more fairly negotiate with other global powers, the United States included.The Bush administration continues to view changes in Venezuela as a threat and has sought to use every political means at its disposal to isolate President Chávez. The people of Venezuela and the region know better.

The changes occurring in Venezuela reflect the true spirit of the country's people, and if these changes did not happen now, they would happen eventually. President Chávez's emergence is not an accident, nor should it be taken as a surprise. The model of economic development and democratic governance imposed by the United States for decades failed to secure social progress, and the results were obvious: increased poverty, instability, and disillusionment with democratic governments. In the wake of the structural reforms instituted in 1989, the percentage of Venezuelans living in extreme poverty jumped from 43.9 percent to 66.5 percent in a single year. Consequently, the percentage of Venezuelans who demanded radical changes increased steadily from 51 percent in 1995 to 63 percent in 1998, according to Consultores 21, an independent polling firm. Because the country's two dominant political parties had become an extension of business interests and had a dismal record on promoting growth and social justice, they were peacefully and democratically replaced.

Thankfully, Venezuela's changes are occurring with the approval of its people and are having an impact on their daily lives. I wish some of Washington's policymakers and thinkers would finally realize this.