It's the Economy, Stupid

Under the headline, “Chavez Blames U.S. for Economic Crisis,” Telesur ran a story yesterday with a sharp critique from the Venezuelan president about the “greed, speculation, and immorality” of the capitalist system responsible for the global economic crisis. Chavez also made highly questionable claims about Venezuela’s supposed insulation from the economic crisis so far, and justified the government’s take-over of a Cargill rice plant this week, saying the government would insure that employers abide by the Venezuelan constitution.

Chavez claimed, “The crisis hasn’t touched us yet, in Venezuela we haven’t felt it, but this continues to move on in the world, and it will ultimately effect us too if the crisis continues to deepen, because we’re interconnected with the international community.”

Considering the tumbling prices of oil which both preceded and have been accelerated by the global economic crisis, it’s hard to believe Venezuela hasn’t been touched by the downturn. Chavez assured citizens that social spending and public works projects would continue uninterrupted, and boasted that while jobs were being lost in the U.S. he had just signed a law protecting jobs in Venezuela because, “government’s responsibility is to protect workers.”

Chavez’ comments are especially interesting considering a Bloomberg story from yesterday about the Cargill rice plant situation- according to Bloomberg, Venezuela has the highest inflation in Latin America and food and beverage prices have risen 40% just since last February. “Private investment and manufacturing have slowed in Venezuela and the private sector had zero growth in 2008...Morgan Stanley predicts the Venezuelan economy will contract 1 percent in 2009.” Sounds like Venezuela has been touched by the global downturn just like the rest of the world.