How the middle class disappeared in Venezuela | International

The Venezuelan Democracy, born in 1958, had as one of its main objectives the expansion of the incipient middle class that had been brewing in Venezuela during the first decades of the 20th century.

According to the political scientist Guillermo Tell Aveledo, researcher and Dean of the Faculty of Legal and Political Studies of the Metropolitan University of Caracas, “Venezuelan democracy in the second half of the 20th century was determined to create a balanced middle-class society.”

“For this reason, he promoted in an extraordinary way health, education and housing programs. Although they did not fully achieve their goals, they significantly expanded the Venezuelan middle class,” he added.

Abrupt reduction of the middle class in Venezuela

In the last decades, Venezuela not only has he been losing his democracy but also his middle class.

Recent studies show that today, the Venezuelan middle class is barely a tenth of the size it was a decade ago, being the poorest in the region.

This is what the studio talks about. “The middle class in Venezuela”, published by the Inter-American Development Bank (BID) in the year 2021.

It is pointed out that regardless of the definition of middle class that is used, in recent years there has been a abrupt reduction in the size of the Venezuelan middle class. This, in addition to a sustained erosion of their income.

If the absolute definition of “economic security”, In Venezuela, the middle class went from being the 62% of the population, in 2010, to represent only the 15,5% in 2020.

It was decided to measure the middle class as that strip that is among the non-rich (less than 50 dollars per capita per day) and the non-poor (above the country’s official moderate poverty line).

The study by the consulting firm Anova published by the IDB indicates that the Venezuelan middle class would have gone from 72% of the population, in 2010, to constitute only 5.3%, in 2020.


Broad process of expansion of poverty in Venezuela

Regarding the middle class income the Anova study says that between 2010 and 2020, everyone else saw their real income drop sharply. The above, below the average drop in the economy:

“A Venezuelan family belonging to this income bracket (middle class) went from earning approximately 830 USD per month, in 2012, to win 195 USD per month, in 2020. This implies a drop of about 77% in their per capita family income.”

In Venezuela, there is a clear correspondence between the decline of the middle class and a broad process of the expansion of poverty.

Among the most dramatic and illustrative examples of the vulnerability and fall of the Venezuelan middle class towards the lower strata There is the case of university professors.

According to data from the Enobu Survey 2021, of Universities Observatory, “In 2001, in Venezuela, a full professor earned around $2,400. In 2021, that same teacher gets 11 dollars a month for his work… While, in Mexico and even in Nicaragua, salaries in the highest echelon vary between 1,000 and 2,000 dollars.”

Why is the Venezuelan middle class disappearing?

The disappearance of the Venezuelan middle class is fundamentally linked with an economic model that produced a fall in the income of Venezuelans, by the high inflation rates, and the destruction of the sources of employment, due to company closures.

In 2017, the National Council of Commerce and Services (Consecomercio) accounted for the closure of around 500,000 companies out of the 850,000 that existed in 2002.

Another decisive factor has been the lack of interest in the so-called 21st Century Socialism in protecting and promoting the existence of the Venezuelan middle class.

In fact, the relationship between the former president Hugo Chavez and the current president Nicolás Maduro with the middle class has always been tense and, at various times, even openly confrontational.

According to Professor Aveledo, “Chavismo has been characterized by have a negative view of the middle class, by virtue of what he understands to be his bourgeois values ​​and political positions.”

An example that illustrates very well the perception refusal of chavismo against the middle class of the country is the warning that, in 2014, made by the then Minister of Education Hector Rodriguez, today governor of the Miranda state.

“It is not that we are going to take people out of poverty to take them to the middle class and then pretend to become emaciated (opposition)”, He said.

His position explains, at least in part, the claim to favor a certain level of material advancement in the lower strata, through various subsidies, but without this meaning that the beneficiaries of this aid can develop the levels of autonomy and freedom against the government that characterize the middle classes.


What happened to the disappearance of its middle class?

One of the characteristics of the middle class is its multidimensional character.

“The content of the middle class is associated with multiple factors that include their consumption habits, education levels, types of housing, access to services, work experience, types of employment, professions, cultural preferences, among others,” he explains. Omar Zambrano, chief economist the consultant Anova.

Therefore, he concludes, “Venezuela has lost one of the most dynamic factors of your economy with the decline of its middle class. The middle class is the bastion of consumption. Their consumption patterns, their demand for sophisticated goods and services, housing, vehicles, travel, culture, etc., together with their propensity to save and invest, they drive economic growth.”

On the other hand, the reduction of the middle class has contributed to the crisis of the state enterprises and of the public services In Venezuela.

In these areas there has been a decline in managerial and technical skills. This, as a result of the departure of a large number of professionals, who have been forced to emigrate o change jobs in order to survive.

This situation has become particularly evident in the cases of the health and education systems.

Finally, Venezuela has lost a factor of political stability, defense and promotion of democracy. The foregoing, since the middle classes help to curb the Polarization and are in favor of establishing political regimes with free enterprise, rule of law and a government accountable to its citizens.

How to recover the middle class in Venezuela?

Looking ahead, the Anova report concludes that “Venezuela will need a middle class income rehabilitation and reconstruction program as a cornerstone of future economic development.”

“Public policies for the benefit of the middle class should include, but not be limited to, aspects such as reactivation of the formal labor market. Added improvements in productivity, los real wages and the specific housing policies”, said.

The promotion of a large and vigorous middle class is a urgent need for Venezuela.

It is not possible to speak of a true fight against poverty if it is not guaranteed that those who come out of it are not exposed to falling back into misery. Only a stable middle class, as the Greek philosopher said, is a guarantee of freedom.

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