Lessons for South Africa from Chavez and His Revolution
BYLINE: Niall Reddy
Fidel Castro said of Hugo Chavez: "If you want to know what kind of man he was, look who was crying at his death and who was celebrating." The torrential hatred directed at Chavez from the metropoles of global power is hardly surprising. Perhaps more than any other, the movement he led in Venezuela was responsible for shattering the triumphalism of those who had declared that history had ended in the unfettered rule of the market.
In just more than a decade, the Bolivarian Revolution showed that one of the most unequal economies in the world could be transformed, from the bottom up, to deliver a much better life for the masses. Since the 2002 oil strike, both unemployment and poverty have halved. A massive expansion of social spending, in part funded by preventing oil wealth from being hived off in corporate coffers, has provided quality free services, education and social security to millions.
It is true that inflation in Venezuela is very high, often exceeding 20 percent over the last decade. Compare this to South Africa where inflation targeting by the Reserve Bank has brought inflation down to very "respectable" levels - consistently below 10 percent. However to achieve this, real interest rates were often double the average non-financial corporate profit rate, leading to a collapse in investment.
In Venezuela before Chavez, inflation was on a steady upward trend, peaking at 100 percent in 1996. Inflation subsequently was still high, but then so it was in South Korea during its miracle years of 7 percent per capita economic growth. But growth in post oil-strike Venezuela was a healthy 4.3 percent - three times the pre-Chavez decade. In contrast to South Africa, workers and the poor were protected from the worst effects of inflation by free services, subsidised goods and constantly rising real wages (now the highest in the region).
It's certainly true that Venezuela's massive oil wealth had a strong role in determining the character of Chavez's political-economic programme. But oil makes the achievements of the Chavez era no less remarkable, considering the history of stagnating or declining human development prior to his presidency.
Nor does it prove any exceptionalism: Venezuela is now surrounded by a "pink tide" of Latin American nations that are challenging economic orthodoxy and delivering material gains to their people. Chavez's early period in office was a far cry from the radicalism that was to mark his later years, but was nonetheless enough to prompt one of the most overt and clumsy recent acts of US imperialism, in the form of a sponsored military coup. …