Originally written for Caracas Chronicles November 2016 https://www.caracaschronicles.com/2016/11/11/failure-misiones-poverty-reduction/

Social policy planners in Venezuela today are like field doctors in a war zone: if they actually stopped to register emotionally the devastation all around them, they’d never be able to get any work done. Today, Venezuela is undergoing the most brutally painful economic and social calamities probably since the Federal War. Sitting around feeling horrible about it, though, is not a luxury policy planners can afford.

As the government pathetically tries to hide the scale of the crisis, researchers at UCAB, UCV and USB, through the ENCOVI survey, have gone to work doing the government’s job: quantifying poverty, pinpointing its location, understanding where the gaps are in the government’s safety net and laying the groundwork for what comes next.

With this data, UCAB’s Luis Pedro España, probably Venezuela’s leading poverty scholar, teamed up with sometime Caracas Chronicles contributor José Ramón Morales and Douglas Barrios from Harvard´s Center for International Development, to write a paper to bring some insights into poverty and the main governmental strategy to address it: the Misiones.

Poverty-reduction policies ought to be targeted to those who need them most and focus on building capabilities or social infrastructure to make efforts sustainable. But as you read read this paper you realize that Misiones are not just regressive and inefficient they’re targeted at all the wrong people.

As España, Morales and Barrios point out,

“…according to data from ENCOVI, the beneficiaries of the social programs are mostly non-poor. Only 40% of the beneficiaries would belong to homes living in poverty measured by unsatisfied basic needs”. In the case of the state’s subsidized food provision program, Mercal, the authors noted that “ the current administration excludes 73% of those in structural poverty (unsatisfied basic needs), meaning that at least 7 out of every 10 poor declare that they are not beneficiaries from Mercal.”

On capacity building, what started out as programs seeking to tackle structural causes of poverty such as education and work through Misión Robinson, Ribas, Sucre and Saber y Trabajo quickly morphed, as the government went crazy and started handing out money to their political base in any way they could.

As the paper puts it,

“…Between 2014 and 2015 there is an increase in programs that offer health services and food, while those aimed to provide tools for structural change of the social situation of their beneficiaries (work and education) represent the biggest fall. Education Misiones (Ribas, Sucre and Robinson) show decreases between 70% and 45% while the formative (Saber y Trabajo) the reduction reaches 80%”

the current administration excludes 73% of those in structural poverty (unsatisfied basic needs), meaning that at least 7 out of every 10 poor declare that they are not beneficiaries from Mercal

During the same time, populist programs that addressed the consequences of poverty increased. A very clear and tragic example is provided again by España, Morales and Barrios when analyzing Mercal and Bicentenario. They highlight that the increase from 2014 to 2015 in beneficiaries for MERCAL is 5 million – Or 17% of the population – in one year! Misiones currently are like paying food with your credit card and forgetting how to make more income to pay it back.

Ok we know that Misiones were a partial success at best…but how deep in trouble are we?

There are two dimensions to it. The first is the current situation of poverty. As of 2015, slightly more than 3 out of every 4 people in the country were living below the income poverty line.

This measure reacts quickly to shifting economic conditions, so it’s not surprising the measure shot up from 55% in 2014 to 76% in 2015. I can’t even imagine the figures for 2016. Forecasting 2017 with the current situation feels like going to a talk after your girlfriend has told you “tenemos que hablar”, nothing good can come out of it.

The second dimension is how well is the State prepared to make significant changes in the short and medium run. Recall that, more and more over the span of the oil boom, the Chávez and Maduro administrations created a totally discretional parallel system that made people more dependent on oil rent distribution Why go to the trouble to set up a sustainable, planned pension provision when you can just hand out petrodollars to viejitos through Misión en Amor Mayor? And housing policy? Who needs BANAVIH when you can have Gran Misión Vivienda Venezuela and straight-up give out apartments (but not titles, obvio) to your political clients?

The country has no social protection program. The Misiones Sociales weren’t conceived as such.

Misiones were of questionable efficiency as policy tools, but they were highly efficient politically. They gave general subsidies to the population, simply to anyone who wanted to join. It is basically just giving money while doing nothing to increase people’s capabilities to allow people to escape poverty by their own means.

Misiones are not sustainable, they create dependency and do not even properly focus on those who really need them. Inversion Social has been undertaken for political benefits. Substituting the private sector in the provision of food with subsidies, for example, can only work in the short term with high oil prices.

So, how to address poverty and Misiones?

The authors give some hints in their conclusions:

The country has no social protection program. The Misiones Sociales weren’t conceived as such and therefore can hardly be the starting point of a social protection program. (…) limited reach (30%) leads to us to think that it will be necessary to develop a new, massive direct transference program complemented with a much more reduced indirect subsidies scheme.

Lastly, we believe that direct transfers should have to be complemented and form part of a structural reform of social programs. The strengthening of social and educational services, feeding plans focused on the most vulnerable, third age social assistance not covered by current services as well as all referred to access and cost of medicines can not be ignored in a short term social plan.

In any case, brace yourselves, hard times are coming.