Recently some economists, diplomatic agents and political spokesmen have begun to refer to an economic recovery in Venezuela, which would seem to make sense if you look at some macro indicators or keep your eyes on the bubbles of opulence in eastern Caracas.
Three of the indicators used to claim the recovery of the economy are oil extraction, economic growth, and inflation.
Maduro’s oil minister predicted in mid-2021 that by the end of 2021, oil extraction would quadruple its historical minimum[1], which would mean going from 360 thousand barrels per day (September 2020) to 1,440,000 in December 2021. The truth is that by November 2021 the extraction was 625,000 b/d, which is barely double the historical minimum and constitutes only 18% of the oil production that the country had the year before Chávez came to power. (3,167,000 b/d). It must also be considered that between 2011 and 2014, that is, long before the imposition of sanctions on Venezuela, 655,000 b/d had already been lost[2].
Regarding economic growth, optimism is based on the International Monetary Fund projections, according to which Venezuela went from -10 in April 2021 to -5 in October, while Ecuador (the lowest growth in the region after Venezuela) was 2.5 in April and 2.8 in October. It should be remembered that, even under the effects of the pandemic, some economies in the region grew by 11 points (Chile), 10 (Peru) and 7.6 (Colombia) [3].
Finally, the fact that inflation in Venezuela was 6.8% per month in October 2021 is presented as an achievement; that is, Venezuela accumulates in one month, an inflation higher than the annual one of Colombia (5.26%), Peru (5.12% in 10 months) or Chile (6.5%). The inflation projection in Venezuela for 2021 is 2,700%, which is still above the 121.74% of 2015, although certainly well below the disastrous 65.374% of 2018[4].
What these indicators and their projections for 2022 do show is a shift by the Maduro regime, much closer to a neoliberal model than to the socialism that Chavismo falsely preached in the last 20 years. The consequence: the largest inequality gap in the history of Venezuela.
Social perspectives, based on data from the National Living Conditions Survey (ENCOVI), the UN Office for the Coordination of Humanitarian Affairs (OCHA), the Food and Agriculture Organization of the United Nations (FAO) and the Interagency Coordination Platform for Refugees and Migrants of Venezuela (R4V) show a panorama in which these favorable economic projections are not reflected in the well-being of the population.
On the one hand, the ENCOVI shows inequity with a poverty that already reaches 94.5% of the population and a loss of 4.4 million jobs, placing 60% of the population in the informal economy[5].
OCHA’s map on humanitarian needs puts Venezuela in position place worldwide by 2022, being the only country on the list to face this situation without armed conflict[6]. In addition, the most recent FAO report indicates that the countries with the highest prevalence of undernourishment in the region between 2018-2020 are Haiti (46.8%) and Venezuela (27.4%)[7].
Consequently, it is foreseeable that Venezuelan human mobility will neither stop nor reverse. On the contrary, the R4V has just projected that the Venezuelan population outside the country will exceed 8 million by the end of 2022[8].
In this context, it is not possible to speak of economic recovery, because it is not a healthy economy, neither in its macro indicators, nor in its effects on the population. This is an economy that is still sick. Perhaps it is about to get out of intensive care, but a long way from resuming a normal life.
[1] https://www.larepublica.co/globoeconomia/zar-de-petroleo-de-venezuela-dijo-que-produccion-aumentara-y-condenaran-sanciones-3188478
[2] https://datosmacro.expansion.com/energia-y-medio-ambiente/petroleo/produccion/venezuela
[3] https://www.imf.org/es/Publications/WEO/Issues/2021/10/12/world-economic-outlook-october-2021
[4] https://es.statista.com/estadisticas/1190213/tasa-de-inflacion-venezuela/
[5] https://assets.website-files.com/5d14c6a5c4ad42a4e794d0f7/6153ad6fb92e4428cada4fb7_Presentacion%20ENCOVI%202021%20V1.pdf