Oil Crisis? It’s Socialism, Stupid #Venezuela

Blaming Economic Woes on External Forces Lets Failed Model off the Hook

ft-socialismo-latinoamerica

We appear to be in for a rough year in 2015, and this will be especially true in those Latin-American countries that have adopted their own version of 21st-century socialism. Venezuela, Ecuador, Bolivia, Argentina, Nicaragua, and even Brazil are all experiencing some kind of economic crisis, or social and political unrest in varying degrees.

The unavoidable conclusion here is that the political and economic model being followed is unsustainable. It does not allow for wealth creation, and neither does it solve social or institutional problems. Its not simply the fault of the people who currently hold power either, but rather the ideas that these rulers have tried to force into reality. The current debate, however, has wrongly centered on attempting to explain each country’s crisis separately, attributing them to external factors.

For example, there is much talk about Nicolás Maduro’s inept administration in Venezuela, or the mismanagement in Argentina and Brazil at the hands of Cristina Kirchner and Dilma Rousseff, respectively. In each case, there is a tendency to blame their problems on the oil market and the drop in prices.

The reluctance to call things as they are — to admit the socialist model is a failure — has allowed these leaders the room to invent magical solutions and remain in power just a little longer. For them, it’s no longer about the pursuit of lofty goals, like wealth creation or improving the general welfare. Their only goal is to stay in power.

If they truly cared about the future of those individuals who voted them into office, they would never have chosen such a destructive model and stolen their freedom. And if they chose this path out of sheer ignorance or sincere error, they would have given it up long ago or stepped down.

However, since the notion persists that their problems rest not with their political model but in the circumstances internationally or the current administration, everyone has —unsurprisingly — placed their hopes in China’s increasing role as a superpower.

Both Maduro and President Correa of Ecuador have traveled to China to seek financial aid.Nicaragua has of course kicked off its new interoceanic canal with Chinese backing, and Bolivia has consolidated most of its debt in the Asian state. In other words, socialist leaders, while obsessed with demonizing US “imperialism,” are eager to promote China’s.

This goes to show how simplistic the idea is that every advancement or setback in Latin America can be attributed to external forces. Now it turns out the Chinese government must come to the rescue and save these crumbling socialist regimes.

China’s pragmatic stance has been interesting to observe. Beyond the rhetoric, it’s clear that Chinese officials will only bet on those countries they can get some sort of economic gain from. That’s why Venezuela, faced with eminent collapse, could not get anything more than promises during Maduro’s visit to Beijing. The same goes for Ecuadorian President Rafael Correa.

CountrCountries that have adopted 21st-century socialism run to China when the heat is on.

This strategy could go on for a few more years. Latin-American leaders who have made damaging poor decisions will continue to wait for China to come to the rescue, postponing the necessary reforms to solve the problems they created for themselves.

We can definitely expect a larger role for China in Latin America, but it won’t bring about many changes. As I have previously said, US tutelage will be replaced by Chinese; the only difference is the latter cares nothing for the the liberal values the former has shown, even if only symbolically.

Indeed, a tough year lies ahead for 21st-century socialists. Crisis will deepen in most of these countries. It’s possible that we see changes in leadership, perhaps even violent overthrows. Unfortunately, however, there seems to be no foreseeable change in the collective belief that foreign actors — be it the United States or China — should solve our problems, nor in the insistence on failed economic models. As difficult as things will likely get in Latin America in 2015, they’re poised to remain exactly the same.

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Stephen Hicks: Populism Succeeds Where Education Fails

Canadian Philosopher Advocates Passion Born out of Reason

The Canadian-American philosopher, Stephen Hicks, visited downtown Buenos Aires on Thursday, November 5, to participate in the launching of his recently translated book,Explaining Postmodernism.

Over the course of an hour and a half, the Rockford University professor provided an overview of the various issues raised in the book, and addressed the differences between Continental and Anglo-American philosophy.

For Hicks, these schools of thought are in constant conflict. On one side, you find the idols of Latin America’s education system: Rousseau, Marx, Hegel, Heidegger, Foucault, Sartre, Kant, Nietzsche, and Derrida. On the other, we have Bacon, Locke, Newton, Smith, Hume, and Stuart Mill.

Hicks insists on the importance of education to fight dysfunctional populists regimes.

By the end of his speech, it was not difficult to understand why, for example, people in the United States look for role models in individuals like Steve Jobs, while in Argentina they’re more like Che Guevara.

Hicks offered his perspectives to the PanAm Post, and spoke on the relationships between philosophy and issues like corruption, politics, and education.

Stephen Hicks explaining the main differences between the Anglo-American and the Continental  philosophy. (PanAm Post)

Who is more responsible for the failure or success of a country: businessmen, politicians, or intellectuals?

Politicians get a huge amount of blame, and so do the businessmen who are crony and play with the politicians inappropriately. But the more important blame goes to intellectuals, definitely. Intellectuals are the ones who train the teachers, when the teachers go to university. The teachers then take charge of young people, and then raise a whole of culture of people to think a certain way.

Certainly the intellectuals who are the university professors are the ones training the future lawyers, journalists, and people from all of the professions. So, the intellectual responsibility is primarily with the professors.

You mentioned corruption during your speech, especially within Latin America. How can philosophy fight corruption?

Corruption is primarily a matter of ethics, and people learn different kinds of ethical systems. Some people come to believe, morally speaking, that it’s already a corrupt world, and that they did not make that corrupt world. It’s dog eat dog, and that if they don’t engage in the corruption, then other people will and they will be victims of it. So, they come to believe that corruption is fine.

However, I think most people who engage in corruption know that it’s possible for people to get things done politically, or in business, or any other way of life, without there being corruption.

They know that their corrupt system is wrong, but they still chose to participate in it as a shortcut, and that is an irresponsibility.

Free market and individual-rights advocates usually rely on utilitarian arguments. Is this the right way to convince people on the ideas of freedom?

Well, I think it is absolutely important that freedom leads to good consequences. One of the reasons why the free society is good is that it makes peoples’ lives better. People are more fulfilled, because they chose their own careers; they choose their own family, their own art; people become more prosperous. So, the consequences are very important.

But the important thing here is that freedom is a matter of principle. Human beings need to make their own choices in life. That is what it is to be a human being. So, even if the choices that people make are mistaken, and they lead in some cases to bad consequences, you still need to respect their freedom as a matter of principle.

Some say that postmodernism is on the way out, and it does not have the same appeal as it has in previous decades. Are we exiting the postmodernism phase?

I would really much like to think so. I came of age in a postmodernism intellectual climate, and it has been the dominant one for the last generation or so.

Probably the most accurate thing to say is that the debate against postmodernism has been engaged. Things move more slowly in the postmodern world.

Postmodernists started to dominate in the 1970s and 1980s, and by the time you get to the late 1990s you started to see some intelligent, articulate people arguing against postmodernism in literature, law, history, and so forth. I joined into that debate also in the late 1990s.

Right now, it is appropriate to say that within the academic world there is still huge amount of postmodernism, but there is also a huge amount of resistant to postmodernism and people trying to work on alternatives. Which one will prevail, nobody can say.

What makes me a little bit optimistic though, is that in the intellectual world people do like new fresh arguments and approaches. Postmodernism has been around for a generation or so now, so I’m starting to sense it to be a little stale.

But unless the arguments that the postmodernists are making are addressed at a very fundamental level, they might recede for a while and then reappear in the next generation in a slightly different form.

Given the success of populists regimes in Latin America, would you say people are driven by passion?

I think people can and should be moved by passions. We are human beings. We are rational; we are passionate. But the important thing, as a personal philosophical project for all of us, is to do our best thinking about what is important and what our lives mean and then commit passionately to achieving our goals. And also, enjoying passionately all the things we are doing in our lives.

The problem of course happens when trying to do one without the other.

The success of populism only works when you have a dysfunctional education system. If you have a system where people are poorly educated and they are not taught how to think for themselves — independently — then necessarily they turn to various forms of leadership and they follow more blindly.

Those leaders are in many cases very sophisticated at knowing which passion buttons to push to make people do what they want.

The problem of dysfunctional populism is an education problem. Obviously, what we want in a free and open democratic society is for the populace to be better informed and passionate about politics, but hopefully in a liberal direction.

Catholic Church losing ground in Latin America

MIAMI — In just one generation, Latin America has seen the number of people who identify themselves as Catholic plummet, with more people becoming Protestant or dropping religion altogether, a new report shows.

The shift is dramatic for a region that has long been one of the bastions of Catholicism in the world. With more than 425 million Catholics, Latin America accounts for nearly 40% of the global Catholic population. Through the 1960s, at least 90% of Latin Americans were Catholic, and 84% of people surveyed recently by the Pew Research Center said they were raised Catholic.

But the report released Thursday found that only 69% of Latin Americans still consider themselves Catholic, with more people switching to more conservative Protestant churches (19%) or describing themselves as agnostic or religiously unaffiliated (8%).

Even last year’s election of an Argentine as pope to head the Catholic Church has led to conflicting feelings in Latin America.

“While it is too soon to know whether (Pope) Francis can stop or reverse the church’s losses in the region, the new survey finds that people who are currently Catholic overwhelmingly view Francis favorably and consider his papacy a major change for the church,” the report said. “But former Catholics are more skeptical about Pope Francis. Only in Argentina and Uruguay do majorities of ex-Catholics express a favorable view of the pope.”

The diminished influence of the Catholic Church helps explain why countries in the region have been so quick to adopt laws legalizing abortion, gay marriage and the decriminalization of marijuana. A recent USA TODAY report found that more countries are adopting and debating changes on those contentious social issues, which would have been impossible in previous generations.

People gave Pew a wide variety of reasons for abandoning the Catholic Church. The most common answer was people saying they wanted a more personal connection with God. Others said they enjoyed the style of worship at their new church or that they were looking for a greater emphasis on morality.

Other findings from the report:

  • Evangelization efforts have worked. More than half of the people who switched from the Catholic Church to Protestant churches (58%) say their new church reached out to them.
  • The shift in beliefs mirrors those seen in the Hispanic population in the United States. About 22% of Hispanics in the U.S. are now members of Protestant churches, compared to 19% in Latin America.
  • Despite their affiliated religion, many in the region say they believe in some practices associated with Afro-Caribbean, Afro-Brazilian and indigenous religions. For example, at least a third of adults in every country believe in the “evil eye,” or the idea that some people can cast curses on others.

The report was prepared by conducting 30,000 face-to-face interviews in three languages in 18 countries between October 2013 and February 2014. The margin of error for each country ranges between 2.8 and 4 points.

Venezuela: World’s Least Free Economy for Three Years Running

Canada, Chile Lead the Americas while Argentina Tanks to Worst Five on the Planet

The index divides countries into quartiles of decreasing economic freedom: blue (most free), green, yellow, and red (least free).

The 2014 Economic Freedom of the World Index (EFW), published on October 7 by the Fraser Institute, ranks Canada the freest economy in the Americas, and the seventh freest in the world. Venezuela, however, has the least free economy, as has been the case now for three years.

Since 1975, the EFW has measured 152 countries with regard to how their public and institutional policies are conducive to economic freedom. To compile this index, the authors assess 42 variables divided into five major categories: size of government; security of property rights; access to sound money; international trade freedom; and regulatory environment.

According to the 282-page ranking report, based on 2012 data, the nation with the greatest economic freedom is Hong Kong, with 8.98 out of a maximum 10 points. She is followed by Singapore (2), New Zealand (3), Switzerland (4), and Mauritius (5). In the Americas, Chile is the next best after Canada in 10th place, and then the United States is 12th.

The authors contend that the effects of economic freedom are easily seen by comparing Gross Domestic Product (GDP) per capita across countries. Those in the top quartile of this index, for example, have a GDP per capita average of US$39,899 compared to US$6,253 among the bottom quartile.

Latin America Stuck in Mediocrity

Latin America’s economic freedom average has not changed significantly from the 2011 data, dropping ever so slightly from 6.72 to 6.71. Juan Carlos Hidalgo, a Latin America public policy analyst with the Center for Global Liberty and Prosperity at the Cato Institute, shared his impression of the index with the PanAm Post.

“The region has remained stagnant for a decade, with deteriorating economic freedom in the worst countries being compensated for by advances in other countries.”

According to Hidalgo, the region has benefited over the past decade from the boom in raw-material prices on international markets, causing many observers to overlook the urgent need for economic reforms.

“One of the parameters of economic freedom in which Latin America has missed opportunities is the improvement of labor regulations. A lot of this has to do with the state’s suffocation of entrepreneurship,” he says, “which encourages people to participate in the informal economy. This has a tangible impact on the poor areas; they remain excluded from the formal economy, because of existing barriers to entrepreneurship.”

The Pacific Alliance Better than the Rest

Chile is at the top of the heap in Latin America, at 10th freest and a score of 7.87. According to the index, the nation’s greatest economic advantage is freedom to trade in international markets, while her greatest weakness comes from opposition to private property, a hindrance shared by fellow Pacific Alliance nations Mexico (91) and Colombia (104).

The case of Peru is distinct. Since 1980, the country has consistently climbed the economic-freedom rankings. It was 41st in the 2007 release and now sits at 20th in 2014. Much like other members of the Pacific Alliance, it shares the advantage of a stable currency, while its greatest weakness is a lack of private-property protection.

“The Pacific Alliance is a bloc that aspires to represent open economies,” says Hidalgo. “According to this index, these countries are, for the time being, open economies with regard to trade, but not necessarily countries with economic freedom.”

Mixed Results in Central America

Central American rankings are split, with Costa Rica at the top (23) and Belize at the bottom (82), and Nicaragua (36) and Guatemala (48) occupy the middle. The entire region shares the strength of relatively stable currencies, particularly El Salvador (60) and Panama (66), given their adoption of the US dollar.

The report’s authors say Central America must improve its protection of private property, with Honduras (55th) noted as the country in greatest need of reform.

“Although Honduras continues to improve its performance … it is not improving at the speed necessary to overtake other countries’ advances,” says Guillermo Peña Panting, executive director of the Eleutera Foundation in San Pedro Sula. “The decision to remove the attorney general and the four Supreme Court magistrates had a negative effect on this year’s index ranking.”

Peña Panting hopes that the legislative changes that occurred during 2013 — including new energy laws, the simplification of business registration, the ZEDEs, and systemic reforms to security and justice — will help to offset the competitive edge Honduras has lost over the rest of Central America through poor fiscal management.

Mercosur out the Back Door

The rankings for the five nations within the Common Southern Market (Mercosur) are the worst on the continent. Although Uruguay manages 47th, Venezuela (152) and Argentina (149) are among the five least free economies in the world, and Paraguay (87) and Brazil (103) also struggle. The only solace for Venezuela may come from the fact that other oppressed nations such as Cuba and North Korea do not have sufficient data to be included in the ranking.

Venezuela is the least free economy in the world.

“Poverty down in Latin America and the Caribbean”

Paulina Momoni tills a field before planting December 12, 2005 in Curva, Bolivia.
The UNDP said poverty went down especially in Bolivia, South America’s poorest nation

More than 56 million people have been lifted out of poverty in Latin America and the Caribbean in recent years, according to the United Nations Development Programme (UNDP).

A new UNDP report says poverty levels in the period from 2000-2012 fell from 41.7% to 25.3% of the population.

But despite the progress, it warned that some 200m people, or 37.8% of the population, remained vulnerable.

The UNDP has called for more investment in social protection programmes.

It calculates poverty as living with less than $4 (£2.40) a day.

Uneven results

“In Latin America and the Caribbean, poverty has been reduced by almost half in the last decade, and the middle class rose from 22% of the population in 2000 to 34% in 2012,” UNDP Director for Latin America and the Caribbean Jessica Faieta said.

“Despite these achievements, a very high share of the population is living in constant uncertainty.

“They are neither classified as living in poverty, nor have they gained access to a stable middle class status,” she said.

The people living on between $4 and $10 (£2.40-£6) a day went up by 3.4% between 2000 and 2012.

A view of the marketplace and homes of Gosen City, a slum in the Villa Maria del Triunfo municipality on the outskirts of Lima, March 17, 2014.
The report said more than a third of people in the region remained vulnerable, like these living in a slum in Peru
A child plays amidst tin shacks in the Cite Soleil district of Port-au-Prince, Haiti on Saturday, March 13, 2004.
The UNDP has called for more investment in social protection programmes in the region

“Clearly, if countries of the region do not reduce their vulnerabilities and strengthen their resilience to financial crises and natural disasters, we won’t able to guarantee, let alone expand, progress in the social, economic and environmental realms,” Ms Faieta warned.

She also pointed out that the pace of social and economic progress is slower now than it has been in the past decade, not just in Latin America and the Caribbean but in every other region of the world.

The UNDP singled out Bolivia and Peru for achieving some of the greatest poverty reduction, by 32.2% and 26.3% respectively, and also praised progress in Chile and Argentina.

But it added that poverty levels went up by 6.8% in Guatemala and remained roughly unchanged in Uruguay, Honduras and the Dominican Republic.

The report, which assessed 18 countries in the region, was launched in El Salvador to complement global analysis on vulnerability and resilience that was presented in Tokyo.

Venezuelans Feel Less Safe than Any Population on Earth

Residents Rate “Law and Order” Worse than War-Torn Syria

Venezuelans feel less safe than citizens of any other county in the world, according to Gallup’s 2013 Law and order Index. Latin America, for its part, ranks the worst in the world in terms of public confidence in law enforcement, sense of public safety, and burglary rates.

The Gallup poll scores countries on a scale from 0 to 100, with 0 being the lowest level of perceived security. Venezuela scored a 41, the lowest security score in the world, while Latin America earned a score of 56. These scores demonstrate the dramatic level of insecurity that persists in this region of the world.

The study, however, did show a slight improvement for the region since 2009, when Latin America scored 2 points lower on the scale at 54. Nevertheless, eight of the 10 countries in the world with the highest homicide rates (murders per 100,000 people) are located in Latin America and the Caribbean.

Based on UN figures from 2012, 36 percent of all homicides worldwide occur in Latin America, replacing Africa as the most murderous region on the planet. The increase has been attributed to the growth in organized crime.

The study was conducted by telephone phone or in person, with the participant providing “yes” or “no” responses to following three questions:

  1. In the city or area where you live, do you have confidence in the local police force?
  2. Do you feel safe walking alone at night in the city or area where you live?
  3. Within the last 12 months, have you had money or property stolen from you or another household member?

“Venezuela’s score of 41 is the worst, not only in the region, but in the world. In 2013, only 19 percent of Venezuelans said they felt safe walking alone on the streets in the city where they live,” the study reports.

Only 26 percent of Venezuelans expressed confidence in law enforcement, and 22 percent said that in the last 12 months they, or someone in their home, had been the victim of a robbery.

According the United Nations Office on Drugs and Crime (UNODC), the reason for the rise in perceived insecurity in Venezuela, and the corresponding increases in the homicide and burglary rates, rests with the country’s faltering economy and political crisis.

“In 2012, Venezuela had the second highest homicide rate in the world after Honduras, with 53.7 murders per 100,000 inhabitants,” according to Gallup, based on UN figures.

 

Another despicable crime! 25 year-old doctor murdered for a cell phone #23M Center Plaza, Caracas.

However, Roberto Briceño León, director of the Venezuelan Observatory of Violence, believes these figures are actually understated.

“We believe they are, in reality, much higher. Our estimates, and the data we have — and even based on official sources — tell us that [in 2012] Venezuela had a homicide rate of 67 murders per 100,000 residents”, Briceño told Nuevo Herald.

Government Fails to Curb Crime

Since former president Hugo Chávez came to power in Venezuela in 1999, a number of unique measures have been put in place to combat crime.

The latest plan, called Patria Segura, was implemented by President Nicolás Maduro in an effort to reduce crime rates through a civil-military partnership.

The homicide rate in Venezuela has steadily increased.

In 1998, the homicide rate in Venezuela was 18 per 100,000 people. In 2001, that figure jumped to 32 per 100,000. Twelve years later, the homicide rate climbed to 79, according to areport by the Venezuelan Observatory of Violence (OVV).

Nicaragua’s Surprising Results

After Venezuela, residents of Bolivia (47 points), Peru (48 points), Paraguay (52 points), and the Dominican Republic (53 points) also perceived high levels of insecurity in their countries. Of these nations, only Bolivia and the Dominican Republic improved their citizens’ confidence in law and order since 2009.

On the other side of the index, Nicaraguans were found to have the most confidence in their country’s security, followed by the citizens of Panama, Chile, Ecuador, and Uruguay.

Michael Shifter, president of the Inter-American Dialogue, told the international news agency EFE that Chile’s success in this regard is due to the nation’s respect for its institutions: “Strong institutions and a high human development index contribute to residents’ perception of security, and confidence in government.”

Argentina improved 3 points since 2009, with a score of 56. Mexico climbed 6 points to 59, while Brazil only improved a single point to reach the same level as Honduras at 56.

As a point of reference, countries that are currently mired in armed conflicts, such as Syria and Iraq, obtained scores of 48 and 67, respectively.

Shifter explained the case of Nicaragua by saying, “Local authorities are highly respected for their ability to maintain order.” The country leading the region’s perceived security index is one of the poorest countries in the world, and according to the Heritage Foundation Index of Economic Liberty, also largely lacking in economic freedom.

Nicaragua has a GDP of US$5.9 billion, GDP per capita of $3,206, an annual inflation rate of 8.1 percent, and an unemployment rate of 8 percent – up 4.7 percent from the previous year.

Santos and the Company He Keeps: Populist Progressives Encircle Colombia

New Allies Threaten to Reverse Liberalization, Development Process

Santos cozying up to populist progressivism casts doubt on his second term as president.

On August 7, President Juan Manuel Santos was sworn in to his second term in office. Although one cannot be certain that his new term will mean a complete shift to the typical Latin-American progressive statism and populist policies, his latest proposals have shown a tendency in this direction.

During his acceptance speech, Santos announced his priorities will be education, equity, and peace — all laudable goals. However, behind these goals is Santos’s ambition to go down in history as a great president, forcing him to juggle various political forces and try to please them all.

Since it is impossible to please everyone, Santos has opted to lean toward the progressive side of Colombian politics ever since his first term in office. This is how he gained the additional supported necessary to win the presidency for the second time, while at the same time opening the door for progressives to potentially pressure his administration to implement their proposals.

Until now, the Colombian government has been a friend of greater economic liberty. This has been demonstrated through its liberalized trade policy, respect for private property rights, and the state’s withdrawal from certain economic activities, such as the move to privatize the energy company ISAGEN.

In Santos’s second term as president, the prioritization of the progressive agenda will potentially threaten this trend. For example, the peace negotiations with the Marxist-Leninist guerrilla known as FARC have pulled him away from the conservative sector of Colombian politics, represented by former president Álvaro Uribe, and brought him closer to traditionally populist leaders, such as Piedad Córdoba and Clara López.

The president has also recently emphasized the country’s urgent need to improve education, both in quality and in access. While the issue is certainly relevant, the alternatives the president proposed in his inauguration speech ignore the potential for greater competition to improve education and instead reverts to the traditional approach of the state as sole provider and guarantor.

Consequently, we’ve seen President Santos being increasingly surrounded by the worst of statist populism in Latin America. Surprisingly, standing behind Santos during the inauguration was Ernesto Samper, secretary general of UNASUR and former president of Colombia (1994 to 1994). Samper is remembered in Colombia not only for his lousy government but also for having attained the presidency with the help of resources from the Cali Cartel. Furthermore, the fact that he is now the head of UNASUR reveals his compliance with the worst statist regimes on the continent, such as Venezuela.

Representatives from all the statist governments in Latin America, beginning with Ecuadorian President Rafael Correa, attended Santos’s ceremony. While other delegations from around the world were also in attendance, Santos appears to have a desire to base his priorities on the consent of Colombian and other Latin American populists.

This budding relationship with progressives threatens to generate greater pressure and concessions for interventionist policies, and ultimately jeopardizes the progress made in terms of opening up the economy and preserving individual liberties.

This is not meant to suggest that populist progressivism has taken over the Colombian government. However, it does demonstrate how far we are as a country to establishing stable and long-lasting path to liberty.