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Thursday, May 17, 2007

Land Reform in Venezuela

My personal thought is that it's about time. This article is interesting but I think it is slanted against the land reform which is described as "brutal and legal" because

The violence has gone both ways in the struggle, with more than 160 peasants killed by hired gunmen in Venezuela, including several here in northwestern Yaracuy State, an epicenter of the land reform project, in recent years. Eight landowners have also been killed here.

Sounds to me that the resistance to land reform is roughly 20 times as brutal as the land reform effort. The disproportion between quotes of supporters and opponents is much less extreme.

The part that irritated me (and makes an alternative title "why do people hate economists") is that "economists" appear to be all opposed to land reform.
"Economists say the land reform may have the opposite effect of what Mr. Chavez intends, and make the country more dependent on imported food than before." "agricultural economists say the government bureaucracy, which runs a chain of food stores, is also rife with inefficiencies" Finally economists get a name

Carlos Machado Allison, an agricultural economist at the Institute for Higher Administrative Studies in Caracas [snip]

“The double talk from the highest levels is absurd,” Mr. Machado said. “By enhancing the state’s power, the reforms we’re witnessing now are a mechanism to perpetuate poverty in the countryside.”

SIMON ROMERO notes, in his own voice, that "Top-down land redistribution projects have a troubled history in Latin America" which is true. However, Latin America is not the whole world. Consider some countries which have had massive Top-down land redistribution projects : Japan, Taiwan, South Korea and Italy. Italy might seem to be l'uomo dispari fuori (odd man out) but experienced an economic miracolo from the year of the reform 1953 through 1962.

Key feature of successful land reforms include enough compensation of landowners that they don't fight (the Italian land reform was designed by Count Antonio Segni) and clear rules. The Venezuelan approach based on the initiative of squatters does not work (in fact the Italian boom could also be timed as following the end of the occupations of land organized by the Communists successfully trying to force the Government to approve a land reform). More generally, each of the four miracle preceding land reforms I mention were implemented by anti-leftists who wanted to get it over with.

I do fear that Venezuela will follow the path of Peru, Mexico or Zimbabwe exactly because the struggle is politically useful to Chavez. However, the facts about the ground make it possible that a land reform has great potential to cause increased GDP both because

But Venezuela, unlike many of its neighbors, has long imported most of its food, and uses less than 30 percent of its arable land to its full potential, according to the United Nations.

A good part of the reason is the havoc that its oil wealth plays on the economy, with a strong currency during times of high oil prices making it cheaper to import food than to produce it at home. Meanwhile, vast cattle ranches take up large areas of arable land.

This suggests that agriculture less integrated into world markets will suffer less from exchange rate havoc and, more importantly, that production is kept low because landlords have less fear that cattle will get uppity than that tenants will become squatters. The pattern of low productivity land use reminds me of what I heard from an extremely elderly Italian once.

But why oh why did Simon Romero have to make these obvious arguments in his own voice. Has no economist in Venezuela noticed the costs of the current pattern of ownership ?


Anonymous said...

Though I always appreciate the New York Times, I try to know the slants well and South American reporting has long been slanted to the right so I read gratefully for the coverage but remembering this.


Anonymous said...

Mexican and Central American coverage is generally better balanced. Localized Latin American reporting by the Times, by the way, can be superb.


Anonymous said...

Notice this typical slant on South America, all suspician but actually a telling and important article when attention is paid all through the grudging reporting....

December 15, 2005

Who Will Bring Water to the Bolivian Poor?

COCHABAMBA, Bolivia - The people of this high Andean city were ecstatic when they won the "water war."

After days of protests and martial law, Bechtel - the American multinational that had increased rates when it began running the waterworks - was forced out. As its executives fled the city, protest leaders pledged to improve service and a surging leftist political movement in Latin America celebrated the ouster as a major victory, to be repeated in country after country.

Today, five years later, water is again as cheap as ever, and a group of community leaders runs the water utility, Semapa.

But half of Cochabamba's 600,000 people remain without water, and those who do have service have it only intermittently - for some, as little as two hours a day, for the fortunate, no more than 14.

"I would have to say we were not ready to build new alternatives," said Oscar Olivera, who led the movement that forced Bechtel out.

Bolivia is just days away from an election that could put one of Latin America's most strident antiglobalization leaders in the presidency. The water war experience shows that while a potent left has won many battles in Latin America in recent years, it still struggles to come up with practical, realistic solutions to resolve the deep discontent that gave the movement force in the first place....


Anonymous said...

"Land reform" or land use equity reminds me that this was a sorely important issue from the beginning of the occupation of Iraq that was immediately and issue lost to what I understand as Iraqi tradition. What was essential in occupation was capitalizing Iraq, which was essentially socialist when working at all properly.

[Of course, I reject and have always rejected any occupation of Iraq.]


Anonymous said...

Land reform or equitable use is a development key from Venezuela to Bolovia to Brazil to Mexico to South Africa to Nigeria. Now, I know this, but what about China and India?


Anonymous said...

No; this article is remarkably not translated to English, which tells us much....

February, 1999

El Enigma de los Dos Chávez
En Primera Persona
Gabriel García Márquez

Carlos Andrés Pérez descendió al atardecer del avión que lo llevó de Davos, Suiza, y se sorprendió de ver en la plataforma al general Fernando Ochoa Antich, su ministro de Defensa. "¿Qué pasa?", le preguntó intrigado. El ministro lo tranquilizó, con razones tan confiables, que el Presidente no fue al Palacio de Miraflores sino a la residencia presidencial de La Casona. Empezaba a dormirse cuando el mismo ministro de Defensa lo despertó por teléfono para informarle de un levantamientio militar en Maracay. Había entrado apenas en Miraflores cuando estallaron las primeras cargas de artillería....


Anonymous said...

Robert, I bet Carlos Machado made a lot of those arguments at the end, and Romero just paraphrased him. As for the idea of a small-property conservative reform, you're spot on, but I don't think it would have been the first thing out of the mouths of an IESA faculty member right now. But I do think there are plenty of economists there and at U Simon Bolivar who know what you mean. It's just an idea that doesn't seem to have many powerful friends in most Latin American countries. It's a shame.