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Socialism Cut Venezuelan GDP, So Chavez Rejected GDP



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Source of graph: online version of the WSJ article quoted and cited below.



(p. A15) President Hugo Chávez wasn't pleased with data . . . that showed the Venezuelan economy tumbling into a recession. So the populist leader came up with a solution: Forget traditional measures of economic growth, and find a new, "Socialist-friendly" gauge.

"We simply can't permit that they continue calculating GDP with the old capitalist method," President Chávez said in a televised speech before members of his Socialist party . . . . "It's harmful."

Mr. Chávez's comments came shortly after data showed Venezuela's gross domestic product -- a broad measure of annual economic output -- fell 4.5% in the third quarter from the year-earlier period. It was the second consecutive quarterly decline, and observers have questioned how Mr. Chávez will be able to generate growth without high oil prices.


. . .


"It's hard to say if [Mr. Chávez] is serious or not," said Robert Bottome of publisher VenEconomía. "They've already tampered with the way they compute unemployment and how they determine how much oil [state oil company] PdVSA exports. So why not tamper with the economy figures as well."



For the full story, see:

DAN MOLINSKI and DAVID LUHNOW. "Chávez Discounts Accuracy of GDP." The Wall Street Journal (Fri., NOVEMBER 20, 2009): A15.

(Note: ellipses added.)





Comments

Sounds like Chavez is practicing a new style of "creative destruction," in which the destruction of Venezuela's economy is done creatively. Very different than Schumpeterian "creative destruction."

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