Just How Are Those Venezuelan Commies Doing?

Bloomberg:

Venezuela's economy grew more than 10 percent for a sixth straight quarter in the July-through- September period as the government used record oil revenue to swell state payrolls and build roads, bridges and housing for the poor.

Gross domestic product, the broadest measure of a country's production of goods and services, expanded 10.2 percent in the third quarter from a year earlier after growing 10.2 percent in the second quarter and 10.1 percent in the first, the central bank said. Oil exports soared 15 percent in the quarter to $15.9 billion, the bank said.

Venezuela has become the fastest-growing economy in Latin America as President Hugo Chavez, who seeks re-election, boosted government spending 56 percent in the first eight months of the year, fueling a surge in consumer spending...

The pace of growth comes at a cost: Inflation is quickening as companies struggle to boost output enough to meet the increase in consumer demand. Venezuela's annual inflation rate jumped to a one-year high of 15.5 percent in October from 10.4 percent in May. Alejandro Puente, an analyst with Banco Provincial SA in Caracas, said inflation will keep accelerating and end the year at 17 percent.

And if you say, "well, it's all oil," then,

Oil industry production, refining and marketing in the third quarter declined 1.8 percent in Venezuela, the world's fifth-largest crude exporter. Non-oil GDP grew 11.7 percent, the central bank said.

Furthermore,

According to Venezuela's most recent census, the number of households living in poverty has dropped from 42.8 percent in 1999, when Chávez took office, to 33.9 percent in early 2006. Households living in extreme poverty dropped from 17.1 percent to 10.6 percent during the same period. The poorest quintile of the population has seen its consumption power more than double. Official unemployment has been cut by more than half, to around 10 percent, although most jobs are either in the public sector or in the "informal" sector.

Mark Weisbrot, co-director of the Center for Economic and Policy Research, in Washington, says that while poverty statistics tend to follow overall economic growth (and Venezuela's economy has been growing at record rates as global energy prices have soared), the improvements are nonetheless remarkable. "The Chávez government has only had three years of stability and control over the oil industry," he says. "In that time they have dramatically increased access to healthcare and education.... I don't know of anywhere else in the hemisphere that has made these kinds of gains."...

And today, the success of Chávez's antipoverty missions is such that even his strongest opponent, Governor Manuel Rosales, promises not to do away with them if elected--a hard-to-imagine scenario, given Rosales's commitment to orthodox, pro-business economic policies and his insistence that these policies will insure that "capital returns" to Venezuela. But Rosales's campaign promise to keep the missions is itself a clear example of how far to the left the past eight years of Chavismo have shifted the Venezuelan political spectrum.

How about the wealthy elite, allegedly worried about state takeovers of their wealth?

Billions of US dollars have been spent on improving healthcare and education for the country's poor, and in the countryside a small minority of sugar plantations and ranches have been turned into socialist cooperatives.

But property rights and the structure of the economy remain intact, largely because the government does not want to impede its revenue, prompting relief from the elite and grumbles from the radical left who want greater redistribution of resources.

"If you look at what it has accomplished, it is a neoliberal government," Douglas Bravo, a former Marxist guerrilla who was once close to Chavez, said to the daily paper El Nacional.

How about your revolution?

There is a paradox that the more Chavez denounces the US, which he calls an empire run by a devil, the closer the countries' two economies become.

Bilateral trade soared by over a third to US$40 billion last year. Most was oil but it also included car production and financial services from the likes of Halliburton, a company linked to US Vice President Dick Cheney.

The fruits were on display at a Caracas expo of luxury vehicles and speedboats. Staff at six stands all said business had never been so good.

"It's ironic, this revolution. The rich are even richer now," said Rene Diaz, who was selling Humvee-type vehicles costing up to US$150,000.

The most popular drink at the bar was the most expensive -- an 18-year-old whisky.

"They don't want the cheaper stuff," shrugged a barman.