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Venezuela: Economic Freedom of the World 2004 Report

By Aleksander Boyd

London 15 July 2004 - Whilst those infatuated with Hugo Chavez continue with their senseless spiel, the Economic Freedom Report 2004 provides serious concerns vis-a-vis the shape in which Venezuela's economy's encounters itself at this point in time. I know, I know they will argue that such pauperous state was brought about by the elites that paralyzed the oil industry. However, as Francisco Toro rightly stresses, facts that clash with ideological concepts are not worth of Chavez' enamoured consideration. Thus the fact that Hugo Chavez himself admitted in front of the diplomatic corps that the oil strike was of his making is nothing but a fallacy, under no circumstances can he be held accountable for the present situation, it’s all a US confabulation!!

Some excerpts of the report

Most of the lowest-ranking nations are African, Latin American, or former communist states. Botswana’s ranking of 18 is by far the best among continental sub-Saharan African nations. Chile, with the best record in Latin America, was tied with four other nations at 22. The bottom five nations were Venezuela, Central African Republic, the Democratic Republic of Congo, Zimbabwe, and Myanmar. Astoundingly, Venezuela’s rating in the chain-linked index has declined by over two full points since 1980!

The chain-link EFW index (exhibit 1.4) makes it possible to identify the countries that have moved substantially toward economic liberalization and to pinpoint the time period during which the changes occur. The following countries have registered substantial gains in economic freedom during the last couple of decades: Australia, Botswana, Chile, China, El Salvador, Ghana, Iceland, India, Ireland, Mauritius, New Zealand, Trinidad and Tobago, Uganda, and the United Kingdom. In addition a number of former centrally planned economies have registered large recent improvements. Estonia, Hungary, Czech Republic, Latvia, and Lithuania were all in the top 45 in 2002. In contrast, the ratings of Venezuela, Zimbabwe, Indonesia, Argentina, and Malaysia have declined significantly in recent years.

Nations in the top fifth of economic freedom have an average per capita income of $26,100, compared to $2,800 for nations in the bottom fifth. The report finds that economic freedom benefits the lives of all people, but most importantly, the poor. In nations in the top fifth of economic freedom, the average income of the poorest 10 percent of the population was $6,877, compared to just $823 in the least free nations.

New research in the report finds that economically free nations attract nearly $11,000 of investment per worker, 12 times more than the $845 investment per worker in restricted economies. "Moreover, the productivity of investment is 70 percent greater in economically free nations than in unfree nations," add the authors of the report, James Gwartney, professor of economics at Florida State University, and Robert Lawson, professor of economics at Capital University, Ohio.

… Venezuela, Central African Republic, the Democratic Republic of Congo, Zimbabwe, and Myanmar… That’s how grave our situation is folks and one thing is certain; Hugo Chavez and his team of utterly incompetent people will not take the nation out of the hole.

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