«Social Expenditure» of the Chavez regime funded by PDVSA:
in blue, funds that have gone through Venezuela’s Treasury;
in red, as per Hugo Chavez’s orders, funds spent directly by
PDVSA. Source Caracas Chronicles.
London 2.5.12 | A recent post by Francisco Toro at Caracas Chronicles reminded me of a previous conversation: “But you can’t deny that Chavez is an extremely popular politician, can you?” questioned the former UK Ambassador to Venezuela. “Of course he’s popular! You give me that kind of money Chavez has, with no oversight, and I could also be Venezuela’s most popular politician— even a mentally retarded bloke would become popular with those funds!” I responded.
Using PDVSA’s numbers, Francisco calculated how much money Chavez spent the ‘normal’ way, meaning funds transferred from PDVSA to Venezuela’s Treasury via taxes, royalties, and dividends (Zanahoria Contribution in the graph), compared to how much he spent at his own discretion, or funds PDVSA uses directly upon Chávez’s orders. It’s important to quote Francisco:
You won’t find PDVSA’s right to spend money this way in Venezuela’s 1999 constitution. In the carefully crafted ideas of Bolivarian constitutional doctrine, Venezuela runs on the “Unified Treasury” principle – all state-paid funds are supposed to go into one collective fund. Once there, reps in the National Assembly must give explicit permission, through a budget law, for the government to use any of it.
That obviously can’t happen if PDVSA bypasses parliamentary fuss and spends money on whatever the president wants that day. Increasingly, that’s exactly what occurs.
But it gets worse: more and more «social spending» is being done Chavez-style— bypassing any constitutionally required oversight, to the point that, according to Francisco’s calculations based on PDVSA own numbers, «for every petrodollar spent under legislative oversight», $2.08 are spent outside the approved budget, as per Chavez’s direct and total discretionary orders.
Source: Caracas Chronicles.
Better to borrow again from Francisco:
As recently as 2009, only 24 petrocents were spent without legislative approval for every petrodollar spent under legislative oversight. By last year, that rate had jumped to 2.08 to 1.
That’s why I can confidently say that today we are 8.7 times more Petrocaudillistic than we were three years ago.
Source: Caracas Chronicles.
And it gets even worse: since 2001, Hugo Chavez has spent a staggering $123.1 billion without any oversight or accountability. No, that’s not a typo. If you add up the numbers in the graph on the left, voilà, $123.1 billion. This is aside from regular spending such as official freebies, known as misiones, which are basically programs for buying votes and ensuring political loyalty, designed by Chavez to maintain his ‘popularity levels’. Given all this money, the scale of failure of the Chavez administration is painfully huge: whether it’s housing, inflation (the highest in Latin America), poverty, unemployment, or crime rates, his ‘revolution’ only has disasters to show.
Therefore, I challenge any of the analysts commenting on Chavez’s ‘popularity’ to provide just one(n) example of another politician in Venezuela’s modern history, or anywhere else for that matter, who has had the spending power that the Venezuelan dictator has wielded in the past decade. I hear names like Gaddafi, Saudi autocrats, Putin… all truly ‘popular’ petrodictators and no need for democractic leaders. That’s precisely why Venezuela’s opposition struggles to mount a coherent platform against Chavez: the brutal thug has too much cash at hand and has managed to co-opt nearly everyone. In politics, whether in Venezuela or the US, money talks and bull walks.
Fortunately, this disgrace of a caudillo will eventually meet his end under communist medicine, and then… then things are likely to get even worse, hopefully just for a brief period, though how long is entirely a guess.