Venezuela Looks to Boost Social Spending

Venezuela's populist president, Hugo Chavez, is widely expected to spend more on his government's social programmes, both at home and abroad.

The opportunity comes following his party's landslide victory in parliamentary elections on December 4th, after opposition parties boycotted the elections and withdrew their candidates.

Just consider the government's recently proposed 2006 budget, where a colossal 41% of total expenditure, or $16.6bn (£9.4bn), earmarked for social programmes, is now bound to sail through parliament unopposed.

Both Anna Lucia d'Emilio, the director of the United Nations Children's Fund (Unicef) in Venezuela, and Ramon Mayorga, the representative of the Inter American Development Bank (IADB), agree that the country's social programmes are easily the biggest and most comprehensive in Latin America.

The target of the huge spending is Venezuela's huge poverty problem, afflicting more than half the population, and the profound social and economic inequalities which cause it.

It encompasses three domestic programmes, says Mr Mayorga, that "strike at the heart of exclusion and which are very successful and being done at a reasonable, sustainable cost".


One is Mision Robinson, a highly effective literacy campaign which began – along with most of the other social efforts – in 2003..

Another is Mercal, a discounted food-and- household- goods shopping project established in poor urban and rural areas where no supermarkets or general food stores existed before.

Thirdly, Mayorga says, there is Mision Barrio Adentro, which translates as "into the heart of the shanty-town" – a basic preventative medicine programme.

It was organised outside the bureacracy of the Health Ministry, and by 2005 was providing free primary health care and subsidised medicines to 60% of the population – or over 14 million people – who previously had no medical services at all.

That such a programme is popular is hardly surprising. Even surveys done by opponents of the Chavez government show almost 70% of the population considers this basic health care programme necessary, and the opposition admits it.

Critics have raised questions about the financial sustainability of Barrio Adentro, as well about the complications of integrating the country's two parallel health services.

One key difference between the two, for instance, is that instead of using Venezuelan doctors – many of whom have little experience of dealing with the poor – Barrio Adentro is staffed by 14,000 Cuban medics who have experience working in developing countries.

However, Enrique Rodriguez, a high ranking official at the Ministry of Planning and Development, says rivalry between the health practitioners can be resolved.

The government, he says, has started offering scholarships to train about 20,000 young Venezuelans in Cuba and Venezuela to replace the Cuban staff. It is also carrying out a simultaneous five-year reform of public hospital staff and services.


But a more significant problem – both of integration and of financial sustainability – may be posed by Vuelvan Caras ("Turning Lives Around"), a social programme aimed at creating jobs and reducing unemployment.

It is "not so successful", admits the IADB's Mr Mayorga.

Take a Vuelvan Caras centre built at an abandoned fuel depot in a poor western suburb of Caracas, where brightly painted murals of Venezuela's independence war heroes near the entrance contrast with the drab low-rise cinder blocks and ramshackle structures of the city's shanty town.

Here, a group of elderly people work in a vegetable co-operative; 220 unskilled women, many of them housewives who have never had a job before, work in a textile co-operative; and 139 men, many of whom have not had employment for a long time, work in a shoe co-operative.

The centre, now part of a huge network of 4,600 co-operatives of every size and activity throughout the country, is evidently providing temporary employment. But how long can the cooperatives last?

The question is an important one, critics of President Chavez say, as the government has vowed the co-operatives must not be a burden on the State.

But it has not yet made clear how the co-operatives, which have limited management and marketing skills and resources, will fit into a market economy and compete with private firms.

Off budget?

Still, the recovery of the economy following the ending of oil strikes in early 2003 means funding can come out of the traditional government budget – rather than, as was earlier the case, from the coffers of state oil firm PDVSA.

PDVSA had been the main funder during the pre-2003 recession. But even now it has contributed some $2bn in 2005 – about a quarter of its annual profits.

But for supporters of Venezuela's far-reaching programmes, where the money comes from is only a small part of what is at stake.

Rather, the key issue is what happens to the groups it serves.

"In the last analysis the sustainability of the programmes is not only about money," says Unicef's Anna Lucia D'Emilio.

"The government has resources. But it also depends on how empowered the disadvantaged groups become, how they view themselves and others."

Source: BBC