El Niño maldito

In the past two days, I have seen two interesting pieces about the possibility of an El Niño event occurring later this year. The first, from Vox, is about how the consensus is moving toward the likelihood that it may prove to be the strongest El Niño since 1997-98. The other is a short article about how Colombia is preemptively reducing its natural gas sales to Venezuela to ensure sufficient domestic availability in the event that hydro generation falls due to dryer weather. For Venezuelans, these are inauspicious pieces of news considering the near catastrophic effect the most recent El Niño had on the country’s energy production and the even more fragile state the entire country finds itself this year.

source: Wikipidea

source: Wikipidea

Though the last El Niño event in 2009-10 was fairly strong, it was weaker than the one predicted this year. Nevertheless, it led to a major drought in the northern Andes, especially in Venezuela. Water levels at the Guri Dam, which accounts for as much as a third of Venezuela’s domestic energy production fell within a few feet of the minimum threshold for generation. The near collapse of the energy generation matrix forced the government to take emergency actions. Some of these were standard, if drastic, such as instituting rolling brown and blackouts. Others were more outlandish, including exhorting the values of a three minute “communist shower” and bombing clouds to stimulate rain. This all coincided with the first time during his post-coup presidency that Chávez’s approval rating fell below 50 percent.

Although Chávez liked to claim that the crisis was solely reflective of the El Niño-affected drought, the effects in 2010 were so severe in Venezuela compared to other, similarly affected nations due to a lack of investment in the country’s generation capacity. The government had promised significant investments but little of the money ever actually was spent and capacity grew far more slowly than consumption. During the crisis, the government set a goal of installing 6GW of new capacity—more than had been installed in the entire chavista era until that point. It installed enough capacity to keep the energy matrix from collapsing, but does not appear to have met that goal. The crisis did serve as a catalyst for thawing Venezuelan-Colombian relations as Venezuela had to negotiate with Colombia to buy natural gas to power the new capacity, something that will apparently be more difficult this year.

chartIn the time since, blackouts have become common all across the country, even as the acute crisis has faded into the distance. Moreover, the government has proven, if anything, to be even less competent at coordinating mass investments than it was four years ago, even before a now-two month-old wave of protests put the government on the defensive. This makes the threat of a severe El Niño particularly salient, since they are usually associated with warmer and dryer than normal weather. The government is weak and widely viewed as incapable of handling the myriad of problems already affecting the country. A comparatively mild El Niño-driven dry spell could have the same type of effect on electricity generation that happened in 2010.

The question for Nicolás Maduro is if he can withstand yet another force pushing down the quality of life of the average Venezuelan.


Aspiring toward an Average Revolution

A Google alert popped up a few minutes ago in my work email with an article from Truth-Out entitled, “FiveThirtyEight Gets it Wrong on Venezuela.” It’s a bit of a slow day at the office, and my curiosity was piqued. “Oh yea?” I thought, “I was actually quite impressed with that FiveThirtyEight piece. Let’s see what this has to say.” As it turned out, it was a piece written by Mark Weisbrot of the CEPR, who has devoted significant ink to defending the Bolivarian Revolution’s increasingly indefensible economic policies over the years.

The main thrust of Weisbrot’s argument is that Dorothy Kronick’s comparisons are unfair (plus some indirect, guilt by association attacks on it by criticizing FiveThirtyEight’s quality). For instance, he argues that it is misleading to judge chavismo‘s economic performance with 1998 as a base year because Chavez did not control PdVSA for the first four years of his presidency and because, until 2004, the opposition was actively trying to destabilize the country and topple the government. The first point is highly dubious; he’s implicitly arguing that without the full control of the state oil company’s finances, chavismo was incapable of growing the economy. The second point is more plausible, but really is only salient in 2003 during the oil workers strike, which had a severely negative impact on the economy that year. In any case, Weisbrot compares Venezuela’s per capita growth from 2004 to 2013 to the rest of the region and finds that Venezuela is actually the 12th best performing economy out of the 20 in the region. He adds that “if we were to place a dollar value on the increases in access to health care, education, and housing, Venezuela’s rank would go up significantly.” He also criticizes Kronick’s comparisons of Venezuela and Bolivia, arguing that much of its better performance is because Bolivia’s exchange rate has been more stable and that it was able to engage in counter-cyclical spending during the Financial Crisis while Venezuela could not as though those were not themselves indicators of poor economic management.

What really stands out in the whole piece are the gymnastics necessary to just make Venezuela’s economic–and to a lesser extent–social achievements under chavismo look even average compared to other Latin American countries. The chavista project purports to be a world-changing ideology that will replace the current capitalist dogma so one would expect its results to be self-evident. Instead, its defenders are left to argue that everyone is wrong, things are great in Venezuela because it achieved the 12th best per capita GDP growth in the region since 2004. ¡Viva la revolución bolivariana!

This is not a small thing either, considering the concurrent decline in freedom and spike in violence in Venezuela during chavismo. People in much of Latin America saw their lives improve materially by the same amount or more during the first decade of the 21st Century and didn’t have to fundamentally reshape the relationship between the citizenry, the state and the governing political party in the process. Chavismo only makes sense as an alternative to the existing paradigms if it is demonstrably better–especially since most other countries don’t have the world’s largest oil reserves to help fund it–and right now, as the IMF projects Venezuela to be the only Latin American country not to grow this year, it requires a herculean task to even argue that it does as well as the average non-revolutionary country.