Venezuela’s Human Development Index: A Lesson in the Malleability of Statistics

The UN Development Program recently released its 2004 Human Development. As usual, the opposition tries to use it as another argument against Chavez. However, the report leaves out more than it says.

By Jonah Gindin - Venezuelanalysis.com
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Contradiction reigned in the Venezuelan mainstream media, as responses to the United Nations Development Program’s 2004 Human Development Report seemed unsure of whether Venezuela’s development ranking had increased or decreased.  One of the leading mouthpieces of the Venezuelan opposition, the daily El Nacional, reported “Venezuela Went Down one Point in Human Development Report,” while El Universal, another opposition-paper, reported the opposite: “Due to Advances in Life-Expectancy and Literacy, the Country Climbs from 69th to 68th.”[1]

Limited Measures

Even without such sloppy handling of the report’s findings, there is a fundamental problem with the figures themselves.  According to the report, the Human Development Index is based on a combination of life-expectancy; adult literacy and combined gross enrollment in primary, secondary, and tertiary schools; and per capita Gross Domestic Product (GDP).  Yet this last measure does not address the chronic and desperate level of income inequality in developing countries, and particularly in Venezuela.

That shortcoming aside, numbers alone give at best a fraction of the picture in Venezuela; and they lend themselves to further manipulation by politically motivated members of the mainstream media.  At root is the hardly surprising fact that the Human Development Report is an incomplete document.

A common form opposition critique has taken is the suggestion that from 2001 to 2002 per capita GDP has decreased from $5.670 to $5.380.[2]  This is commonly attributed to Chávez’ ‘Castro-communist’ ways, or more specifically, to his disregard for, and mismanagement of the economy.  Not surprisingly, this perspective relies completely on the post hoc ergo propter hoc assumption that because GDP per capita has decreased while Chávez has been in office, it must be his fault.  But, of course, there is more to it than that.

Upon Chávez’ succession to the Presidency in 1998, the Venezuelan opposition—at core the old elite whose profitable, incestuous rule of the country was so rudely interrupted—took what money it had in Venezuela and immediately sent it to safety in Miami.  This caused a significant contraction in the economy.  More recently, certain events occurred during 2001 and 2002 that had a negative effect on the country’s economic growth.  Most devastating were a series of general strikes organized by the chamber of commerce with the active support of what was then the main labour federation (CTV), and the mainstream television and print media.  And, of course, there was the coup d’État in April 2002—orchestrated by this same odd-couple of business and labour, chaperoned by the mainstream media.

As Venezuela’s Finance Minister Tobias Nobrega noted recently,

"With Chavez’ arrival to the presidency, a 20-year continuous decline in revenues is reversed (1978-1998), purchasing power increased, and a progressive decline in inflation begins…If neither the coup nor the oil industry shut-down had occurred, by the end of 2003 Venezuela would have recuperated one third of its per capita income that it had lost during the previous two decades."[3]

Since the oil shutdown (December 2002-February 2003) was only barely reflected in the 2004 HDR, next year’s report will likely feed opposition fires of diverted blame.  It goes without saying that Chávez’ social investments are not mentioned by the opposition, nor are they adequately reflected in the HDR’s statistics.  However, by comparing Venezuela’s Life Expectancy, Education, and GDP Indices it is possible to get a partial picture.  Despite GDP per capita decreasing particularly between 2001 and 2002, Venezuela’s Human Development Index increased due to an increase in the Education Index.

 Year  (Report Year)

HDI Rank

GDP Rank

GDP per capita

Life Expectancy Index

Education Index

GDP Index

Real GDP per capita rank minus HDI rank

HDI

1997 (1999)

48

n/a

8,860

0.79

0.84

0.75

-2

0.792

(1998) 2000

65

n/a

5,808

0.79

0.84

0.68

3

0.77

1999 (2001)

61

n/a

5,495

0.79

0.83

0.67

10

0.765

2000 (2002)

69

n/a

5,794

0.8

0.83

0.68

10

0.77

2001 (2003)

69

n/a

5,670

0.81

0.84

0.67

15

0.775

2002 (2004)

68

89

5,380

0.81

0.86

0.67

21

0.778

Table: Human Development Statistics for Venezuela, 1997-2002, taken from HDRs 1999-2004.

Beyond Measurement

Towards the end of the Report, the UNDP notes that “many gaps and problems remain” in the data for measuring human development.  “A vital part of the solution to the enormous gaps and deficiencies in statistical information,” continues the report, “is building sustainable statistical capacity in countries, an effort requiring financial and political commitment at both national and international levels.”[4]

The Human Development Report represents an alternative to the ‘shock-therapy’ neoliberal path to development long promoted by international financial institutions like the International Monetary Fund (IMF) and the World Bank Group (WB).  Building on the arguments of reformed neoliberals like Joseph Stiglitz and Jeffrey Sachs, and reformist economists like Amartya Sen, the HDR critiques the inadequacies of neoliberal theory from within.  It is the UNDP’s attempt at addressing the shortcomings of neoliberalism without fundamentally reevaluating its foundation in market-oriented economics.  Thus, whatever failings they may see in the HDR’s capacity to comprehensively measure development, they see no inherent limits in concept itself.

Certainly these statistics are useful—even necessary—for the administration of a country (and for development) but they are also problematic.  By reducing an entire world to 300 pages of statistics, ranked according to admittedly imperfect measurements, the HDR not only misses the humanity suggested in the report’s title, it misleads people into thinking that more general assumptions can be extrapolated from these numbers.  Yet the reality is that often they cannot.

The Human Poverty Index for developing countries provides a striking example; for, it does not take into consideration educational or healthcare opportunities.  Nor can it measure the Bolívarian revolution’s ambitious scheme of participatory democracy that decentralizes many important decisions to the community level.  Yet the advent of free and universal access to all levels of education, to primary healthcare, and to the decision-making process as a result of development missions and community organizations has certainly changed the experience of Venezuela’s poor.  If development is about “…allowing people to lead the kind of life they choose—and providing them with the tools and opportunities to make those choices…as much a question of politics as economics,” than the HDR provides a limited measure indeed.[5]

Assuring the reader that the UNDP is aware of these limitations, the report notes, “[HDI] does not include important aspects of human development, notably the ability to participate in the decisions that affect one’s life and to enjoy the respect of others in the community.”[6]  Yet such a qualification is hardly enough when made simply as an addendum since it does not effectively discourage journalists or others from using HDI as an accurate measure by which to compare countries, or by which to compare a country against its own earlier statistics.

In Venezuela, at least, this information is being used to the familiar end of maintaining the status quo.  Terrified of the changes suggested by Chávez’ process of social, economic, and political transformation, Venezuela’s opposition seeks to convince Venezuelans (and an international audience too) of the dangers of ‘chavismo’ to Venezuelan development.

In their attempt at diverting blame for economic contraction onto Chávez, the opposition takes a particularly hypocritical position, for, predictably, they also refuse him credit for good things that happen while he’s in office.  Referring to Venezuela’s recent entry into the South-American Common Market, Mercosur, opposition pundit Teodor Petkoff remarked, “Chávez suffers from ‘Adam Syndrome’: he thinks everything began with him.”[7]  Petkoff failed to notice that the entire opposition seems to be afflicted with a form of the same illness, a type of ‘Bad Adam Syndrome’: they think everything bad began with Chávez.



[1] “Venezuela está entre el desarrollo y la inequidad,” El Universal, 14 de Julio de 2004, www.eluniversal.com/2004/07/15/eco_art_15152A.shtml.

[2] These figures are calculated using Purchasing Power Parity.  Figures for 2001 can be found in the UNDP’s 2003 Human Development Report, which can be downloaded at: hdr.undp.org/reports/global/2003/; figures for 2002 can be found in the 2004 report, which can be downloaded at: hdr.undp.org/reports/global/2004/.

[3] Tobias Nobrega, “Numbers don’t Lie, Part I,” Ministerio de Finances, www.venezuelanalysis.com/media/mf-los-numeros-no-mienten-1e.ppt.

[4] “The Need for Better Human Development Statistics,” Human Development Report 2004, 253-54.

[5] “Forward,” Human Development Report 2004: Cultural Liberty in Today’s Diverse World, hdr.undp.org/reports/global/2004/, v.

[6] “The Human Development Index: Going Beyond Income,” HDR 2004 Country Fact Sheets: Venezuela, hdr.undp.org/statistics/data/country_fact_sheets/cty_fs_VEN.html.

[7] “Petkoff: Ingreso al Mercosur no es un logro de este gobierno,” Últimas Noticias, Viernes, 16 de Julio de 2004, p.14.