Democracy Lab Weekly Brief, June 9, 2014

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In a new series of Lab Reports on Tunisia, Oussama Romdhani lauds the transition government's efforts to bring together competing political groups, while Emmanuel Martin and Dalibor Rohac argue that it must pay greater attention to economic reform.

Anna Nemtsova mourns two of her friends, journalists who were killed while reporting on the conflict in eastern Ukraine.

Min Zin questions the rationale behind Aung San Suu Kyi's campaign to reform the Burmese constitution.

Daniel Lansberg-Rodríguez and Tom Ginsburg suggest a path for stability in Thailand after a military coup.

Juan Nagel reports that poverty rates are skyrocketing in Venezuela -- disproving the government's claim that chavismo reduces poverty.

Christian Caryl asks why authoritarian leaders are so afraid of viral Internet content after six Iranians are arrested for parodying Pharrell Williams' "Happy" music video.

And now for this week's recommended reads:

A new Carnegie Endowment report investigates democracy promotion efforts emanating from non-Western countries, many of which have experiences that are relevant to today's emerging democracies.

Writing in the Wall Street Journal on the anniversary of the Tiananmen Square protests, Francis Fukuyama reflects on his 25-year-old theory that history is leading toward democracy. Melinda Liu, writing for Politico, explains how the Chinese government used nationalism to quell discontent after the Tiananmen Square crackdown.

Writing for the New York Times, Min Zin explains how the actions of radical, anti-Muslim monks are dividing Burma's Buddhists. On the Irrawaddy, Andrew D. Kaspar and Yen Snaing report on the Burmese military's use of torture against civilians during its ongoing war with separatist rebels.

On the Monkey Cage, Laurie A. Brand uncovers the hidden logic behind Arab states' controversial rules allowing overseas citizens to vote.

International Crisis Group explores the obstacles looming on Tunisia's consensus-based road to democracy.

On the Daily Show, Jon Stewart discusses the Egyptian government's decision to shut down Bassem Youssef''s satirical TV show.

Gianpaolo Baiocchi and Ana Cláudia Teixeira explain why Brazil has been rocked by protests despite its emphasis on participatory government.

Syria Deeply tells the story of a Syrian man who fought as part of various rebel brigades, then joined the Free Syria Army, and is now attempting to return to civilian life. (In the photo above, supporters of Syrian President Bashar al-Assad celebrate in Damascus after he won reelection in a vote denounced by many observers as a sham.)


Democracy Lab

Poverty Shoots Up in Venezuela

When the Venezuelan government defends itself from its critics, it usually points to declining poverty rates as proof of its success. For a while, this worked; poverty figures indeed improved during a portion of the chavista years. But the days when poverty was a winning issue for chavismo are over. Official statistics now show that poverty is rising rapidly.

Venezuela's official statistics office (INE) mostly spends its time producing reports charged with political language -- but it still manages to report actual data once in a while. A few weeks ago, the statisticians published proof that one in three Venezuelans are poor, when twelve months ago the figure stood at one in four. Since an important part of the argument against the opposition is the government's claim that they, and only they, ensure decreasing poverty, this is a significant development.

In order to calculate the poverty rate, the INE estimates the cost of a representative basket of goods, which includes things such as food, dress, housing, transportation, health, communications, and education. The basket is intended as a representative sample of the type of things an average Venezuelan family consumes during a year. If per capita income falls below the cost of this basic basket of goods, the person is considered poor.

According to this measure, the number of Venezuelans classified as poor shot up in the last year by 1.8 million people. Roughly 6 percent of all Venezuela's 30 million people became poor in the last year alone. The situation is even direr when one looks at extreme poverty, i.e., the number of people whose income cannot even buy a representative basket of food and drink. In the last year alone, the number of extremely poor Venezuelans rose by 730,000. They now reach close to three million people, or roughly 10 percent of the population.

The chavista revolution indeed helped the poor between 2003 and 2007, but since 2007, the number of poor Venezuelans has actually increased. All of the government's successes in reducing poverty happened more than six years ago.

The reason for the increase has to do with the nature of chavista economic policy. When the price of oil shot up roughly 10 years ago, it sent an enormous inflow of revenue into the coffers of the Venezuelan state. The government used the windfall to create an extensive web of subsidies and price controls. At the same time, the government quickly spent its oil gains on subsidies and lavish social programs to bolster its support among the less privileged.

Poverty in Chávez's Venezuela in the mid-2000s was indeed falling, and the government kept prices artificially low thanks to an overvalued currency and massive amounts of subsidized imports. People benefitting from the government's generous social programs found plenty to buy, since the government made sure imports kept flowing and prices were low.

Needless to say, this couldn't last. The 2012 campaign to re-elect a mortally ill Hugo Chávez meant government spending went into overdrive. Suddenly the oil boom was not enough to sustain ever increasing social needs. That year, the budget deficit soared past 10 percent of GDP. The price of oil had stopped rising by then, and foreign funding began to dry up. While the government continued to enjoy good fortune at the ballot box, the bubble was close to bursting for Venezuela's poor.

Since taking office early last year, President Nicolás Maduro has seen the local currency go from BsF 4.3 per dollar to BsF 50, depending on which exchange rate you use. This means that the prices of most of what Venezuelans consume have shot up as well. Annual inflation is running north of 60 percent, and it is only increasing: The inflation figures for April have yet to be published, but unofficially, it was 5.7 percent for the month alone.

The sharp fall in the standard of living is what brought protesters to Venezuela's streets. Many of the people demonstrating are what we could call "the emerging poor": people who were middle class during the boom, but have found that their economic situation has deteriorated sharply since then.

Ultimately, chavismo's "victory" against poverty is just rhetoric. What little gains there were in terms of poverty were due to a government that turned an oil boom into a transient consumption boom. That phase is now over, and poverty is reverting to its long-run trend.

The day of reckoning for the populist chavista model is approaching fast. The speed at which it arrives will depend on the price of oil. If oil holds steady, the government will muddle through. But if the price of oil dips -- watch out. Poverty will continue shooting up, and the new poor will remain in the streets.

Juan Nagel is the Venezuela blogger for Transitions, editor of Caracas Chronicles, and author of Blogging the Revolution. Read the rest of his posts here.

George CASTELLANO/AFP/Getty Images