The Economic Commission for Latin America and the Caribbean (CEPAL), a United Nations body tasked with encouraging economic coordination, released a preliminary report today in which it reports a number of interesting findings on Venezuela.
The report, titled “Preliminary Overview of the Economies of Latin America and the Caribbean”, contains economic data for South American and Caribbean countries for the 2014 year. The report contains the following information about Venezuela:
- The country’s GDP shrank by 3.0%, more than any other country in the region.
- Export volumes “stagnated” at 0.2%, and the volume of imports shrank by 17.7%, the worst in the region.
- Manufacturing “delivered a modest performance”.
- The 12 month overall inflation rate to October 2014 was 63.4%, the highest in the region. The 12 month inflation rate for foods and beverages was 91%, also the highest in the region.
- Terms of trade (the ratio of export prices to import prices) fell by 4.6%.
- “Evidence of a foreign exchange shortage” and falling oil prices “pushed the risk premium sharply up”, negatively affecting the country’s sovereign bonds.
- Growth in domestic credit to the private sector “picked up somewhat” from 2013, “specially” in Venezuela.
- Gross international reserves fell to $20.479 billion, down approximately $1.0 billion from 2013.
- The percentage of the population that is unemployed as a percentage of the economically active population averaged 7.2%, down from 7.8% in 2013. The employment rate sat at 60.2%.
Poverty Rates Climb
The same body released another document today, this one titled Social Panorama of Latin America. This document examined poverty rates in the region, and came to the following conclusions about Venezuela:
- Between 2010 and 2013, the poverty rate climbed 6.7% (from 25.4% to 32.1%), and the indigence rate climbed 2.7%(from 7.1% to 9.8%).
- The poverty gap and poverty severity indicators both increased by the widest margin in the region.
- Income distribution had a “nil” effect on the poverty rate in the country.
- When using a different standard (which the document calls “multidimensional poverty” and takes into account housing, access to basic services, education, and social security), Venezuela saw a decrease in poverty from 32% in 2005 to 19% in 2012.
- Increased female participation in the workforce accompanied a downturn in male participation in the same in 2009.
- Venezuela spends 19.2% of its social spending on young people, the sixth highest percentage in the region.
- Real wages fell 4.1% as a result of inflation, the only fall in the region.
Latin America’s poverty reduction rate stagnated, falling only 0.1% between 2013 and 2014. At the end of 2014, 167 million Latin Americans lived in poverty, out of which 71 million live in extreme poverty. In all, 28% of people in Latin America are poor or extremely poor.
Nevertheless, several Latin American countries managed to decrease their poverty rates during the time period examined by the report. Among them were Paraguay (-8.9%), El Salvador (-4.4%), and Colombia (-2.2%).
New York Times Runs Venezuela Piece
The New York Times and ran an editorial today in which it heavily criticized Maduro’s handling of the country since coming to power, specially over the last few months.
The New York Times piece, titled “Mr. Maduro in His Labyrinth” points out that Maduro is “woefully lacking” in the two things that made Chavez a decisive leader: charisma and political instincts. The article also says that Maduro “has become increasingly erratic”, and correctly points out that Maduro has been vague at best about the economic reforms the country so desperately needs.
Maduro Returns from Saudi Arabia
Speaking at an event in Saudi Arabia, Maduro made a number of comments regarding Venezuela to his hosts. He said that Venezuela’s friendship with Saudi Arabia transcends into the humanist realm:
[Our relationship] transcends beyond an economic, strategic, energy, commercial, relations. This about humanism, a fundamental characteristic of the Bolivarian project.
Maduro continued, saying:
What makes the Bolivarian revolution different is its deep humanist roots, its deep sense of the diversity of human cultural dialogue, which is necessary to build peace.
Maduro returned to Venezuela from his trip to Saudi Arabia a few hours ago.