Venezuela's Oil Wealth Funds Gusher of Anti-Poverty Projects

A decent piece on the largest anti-poverty effort in the developing world. There is no secret to what Venezuela is doing. It just requires the political will to give true power to the people.

Robert Collier, Chronicle Staff Writer
Monday, October 2, 2006

Hugo Chavez's revolution came to the hillside slum of San Juan one recent night in the glare of a solitary lightbulb and with puddles from a recent thunderstorm still underfoot.

Two dozen people clustered on a rooftop to debate the money and power that suddenly seemed within their grasp -- everything from home construction to bank loans, street repairs, and after-school and vacation recreation programs for children.

It was the first meeting of San Juan's communal council, an example of a new grassroots governing structure that is spreading across Venezuela. Like thousands of other such newly elected councils, the San Juan group will soon be given previously unheard of sums of money by the central government in what Chavez calls "a revolution within the revolution."

While the Venezuelan president has caused international controversy with his angry denunciations of the Bush administration, this is where the rubber meets the road for Chavez's radical rhetoric. He is spending billions of dollars on anti-poverty programs, in what experts say may amount to the largest such effort in a developing nation.

And in a gamble that turns part of his own government's power structure on its head, he is handing a large degree of authority over these spending programs to thousands of these elected local councils.

"The issues in these neighborhoods are very old fights -- water, land, decent housing," said Andres Antillano, a professor of social psychology and criminology at the Central University of Venezuela in Caracas who has been an adviser to many neighborhood groups.

"For many years, the only relationship with the state was the police. They came here and put everyone against the wall," Antillano said. "Chavez has chosen to gamble on legitimizing these issues. The communal councils are a very serious attempt at grassroots organizing."
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The government initially budgeted $857 million for social spending in 2006. But as oil money floods in, officials keep increasing the amount. It now stands at $7 billion, although many experts view that figure as a guesstimate of money being spent on the fly.

Public works projects are everywhere, ranging from subway lines in Caracas and Valencia to bridges over the Orinoco River. New medical clinics -- mostly staffed by Cuban doctors provided under Chavez's oil aid program to Fidel Castro -- are within reach of almost everyone in this nation of 25 million people. Illiteracy, formerly at 10 percent of the population, has been completely eliminated, and infant mortality has been cut from 21 deaths per 1,000 births to 16 per 1,000.

Another initiative that could change the lives of millions of poor Venezuelans is a new program aimed at increasing land ownership.
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Over the past year, 57 cooperatives of land surveyors have been formed to scour Caracas' hillside slums, measuring the sprawling neighborhoods that previously were merely blank spaces on official maps.

Ivan Martinez, director of the Urban Land Committee titling office for Caracas, said that more than 200,000 titles had been given out, involving about 1 million people.

"People now can get basic services," he said. "We can hook them up to water, electricity. We can help rebuild their houses. It's a huge change."
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The result of all this spending has contributed to a red-hot economic boom, with gross domestic product growing at 9.3 percent last year and 9.6 percent for the first half of this year. And there's plenty more money to spend -- central bank reserves are at $36 billion, and other government rainy-day funds hold an estimated $15 billion. Inflation is 14 percent, a relatively moderate rate by traditional Venezuelan standards, and is held in check by subsidized prices at state-owned stores and by government price controls.
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