Tuesday, May 28, 2024
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HomeInsightsVenezuela to launch China-backed anti-poverty program

Venezuela to launch China-backed anti-poverty program

By Andreína Chávez Alava

CARACAS, (venezuelanalysis.com) – The Venezuelan government has announced a new social program focused on fighting poverty and inequality, which will be supported by China’s International Poverty Reduction Center.

On Monday, during his weekly TV program, president Nicolás Maduro said that the “Social Equality and Happiness Mission” was “almost ready” to be launched and its main purpose is to “optimize the fight against inequality, against poverty and to build a more harmonious country.”

Although Maduro did not give details, he stressed that the social program will work alongside the Chinese anti-poverty center. The government led by the Chinese Communist Party (CCP) has been responsible for lifting over 850 million people out of poverty in the Asian giant since 1980.

“In 1981, almost 90 percent of the Chinese population was below the absolute poverty line as measured by the World Bank,” the Venezuelan leader went on to explain in his national broadcast “but in 2019 the figure did not reach 1 percent and by the end of 2020 the Chinese government announced poverty eradication in the country.”

China’s success story in reducing poverty has been recognized worldwide as it has gone hand in hand with sustained economic growth and rapid industrialization. Beijing has also created alliances with countries from the Global South to help advance socioeconomic cooperation.

Venezuela’s new social program follows president Maduro’s recent trip to China, where he met with president Xi Jinping to establish an “all-weather strategic partnership” and signed 31 cooperation agreements. The main ones include China’s support for Venezuela’s special economic zones (SEZs), poverty reduction efforts and boosting the country’s national electric grid and public healthcare system.

Maduro clarified that the Chinese experience will be adapted to the Caribbean country’s reality, its culture and people’s most important necessities.

Currently, Venezuela does not have official data regarding poverty and inequality rates. In 2014, the government stopped publishing numbers as the country entered an economic crisis after oil prices plunged globally and hyperinflation crushed working-class people’s purchasing power. The situation was aggravated by the imposition of unilateral coercive measures by Washington and its allies as part of a regime change strategy.

The sanctions levied against the Caribbean nation have targeted every key sector of the economy, especially the oil industry, the country’s main source of foreign revenue. In 2017, the US Treasury imposed sanctions against state oil company PDVSA followed by an oil embargo in 2019. Washington likewise banned diluent and fuel imports exacerbating fuel shortages affecting electricity generation and agricultural production.

In response to the US-led blockade, the Venezuelan government implemented a hybrid economic liberalization program and a nationwide de facto dollarization while advancing efforts to diversify the economy and increase non-oil revenues. As a result, the economy began to grow again in 2021 after seven years of contraction. Inflation receded to the lowest levels in nearly a decade and small-scale private enterprises expanded.

However, some analysts have pointed out that the economic reforms have contributed to a significant increase in inequalities due to growing private sector benefits, the de-regularization of labor and stagnated public sector workers’ wages. Venezuela’s minimum salary currently stands at 130 bolívares (around US $5).

President Maduro has not directly addressed complaints about low wages and the loss of social benefits from public sector workers, particularly in the education sector, who have staged several protests alongside workers from the industrial sector. The administration is likewise engaged in dialogue with trade unions regarding salary adjustments with mediation from the International Labor Organization (ILO).

Recently, the Venezuelan government has been primarily focused on resolving quality-of-life issues by remodeling deteriorated schools and hospitals and attending to public service problems through the so-called “1×10 System.” The initiative allows people to denounce issues within their communities using a digital app, breaking away from the bureaucratic processes to receive a rapid response.

According to the latest report, almost 1.5 million cases have been attended through the app-based program since its launch. The issues mostly relate to water, electricity, roads, internet connection and cooking gas supply.

During the Hugo Chávez government (1999-2012), Venezuela’s household income poverty reduced from 42 percent in 1999 to 27.3 percent in 2013. Meanwhile, structural poverty fell from 29.3 percent in 1999 to 19.6 percent in 2013. The achievement responded to a series of social programs, some of them in cooperation with Cuba.

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