Monday, November 10, 2003

Reasons for a Recall Election on Chavez
I- Venezuela compared to other countries
Monday 10, November 2003

November 28, if all goes well, Venezuelans that oppose the Chavez rule will get a chance to register their signature for a recall election on the president. In a series of posts I will try to highlight in as simple way as possible a few of the reasons that people have to sign for such an initiative. This is the first installment of what is, in fact an update of the writings through this year.

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Tal Cual [1] published some interesting numbers today where the growth rate of the 5 most important economies in Latin America is compared since 2001.

The first table replicates the Tal Cual table. One can read the economic performance of these countries.

Growth rate of the main Latin American economies (e: estimated; p: predicted)
YearArgentinaBrasilChileMexicoVenezuela
2001-4.43.13.1-0.32.8
2002-10.92.12.10.9-8.9
2003e6.60.53.21.5-11.6
2004p4.5 3.14.44.55.8


However, these numbers themselves are not as expressive as to what has happened to the pocket book of the people. I did rework them assuming a 100 base for each country in 2000. That is, imagine that you are comparing workers in the 5 countries that are earning 100 US dollars a week in 2000. If the 2004 numbers are verified then how much money will they be making in 2004? Of course in this very simplistic approach I assume that every country as the same population growth rate. To highlight the growing income gap between Venezuela and the other countries, I have subtracted the 2004 projected income of Venezuela from the income of the other countries, this made easy by the fact that Venezuela fared the worse of the lot. These numbers appear in the last row labeled PCIV: Product per Capita Increase against Venezuela.

Comparison on base 100 in 2004
(e: estimated; p: predicted; PCIV: Product per Capita Increase against Venezuela {Country2004 - Venezuela 2004})
YearArgentinaBrazil ChileMexicoVenezuela
2000100100100100100
200195.6103.1103.199.7102.8
200285.2105.3105.3100.693.7
2003e90.8105.8108.6102.182.8
2004p94.9109.1113.4106.787.6
PCIV7.321.525.819.1NA

The results are clear. The worker affected by the Argentinean crisis that has the whole world talking about is still doing better than the Venezuelan worker! The Venezuelan crisis permanent since 1999, with more or less intensity is wiping out the purchasing power of the Venezuelan worker, in spite of a recovery of sorts speculated for next year [2].

And there is of course inflation where Venezuela is the worse of them. But this is another story.

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[1] Tal Cual is a paying site and the numbers that are reported come from “Analytical Research”. I have not verified the source but Tal Cual is usually careful and at any rate the numbers are in the ball park of other numbers published elsewhere. For the point that I wanted to make today, the numbers are certainly good enough.
[2] Actually some economist are claiming that we are getting back to our 1950 levels.

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