Caracas Chronicles

Results of the 2016 Encuesta Sobre Condiciones de Vida en Venezuela (ENCOVI — Survey on Living Conditions in Venezuela) came out recently. The survey gathers data on poverty, nutrition, education, employment, security and health and interviewed 6,413 households between August and October 2016. Researchers from the country’s leading universities have conducted this survey for three years now, ever since the government’s official household survey stopped being publicly available.

There are two broad ways of measuring poverty: income and unmet basic needs. Neither is “right” or “wrong”, each measure has its advantages and disadvantages. ENCOVI sets out to measure both.

Measuring poverty by income in a high inflation economy with controlled prices is tricky, so these numbers have to be interpreted carefully.

Amid a dire economic downturn, poverty measured by income was expected to rise steeply, and that it did, going from 48% in 2014 to 82% in 2016. Extreme poverty measured by income rose from 24% in 2014 to 52% in 2016.

Measuring poverty by income in a high inflation economy with controlled prices is tricky, so the numbers have to be interpreted carefully. What researchers do is set a poverty line — a level of income below which you are “poor” — and count the number of households above and below that line. But when prices go haywire and data about inflation goes missing, the problem of where exactly to set the line becomes very complicated. ENCOVI researchers understand these problems and did what they could to overcome them. They set the poverty and extreme poverty lines on the basis of official inflation in 2014-2015, on an undisclosed inflation estimate for 2016, and used controlled prices in both cases (rarely seen in the marketplace). Therefore, ENCOVI’s income-based poverty statistics may misrepresent actual poverty levels.  

Poverty as measured by unmet basic needs is much less responsive to short-run economic trends. It rose from 22% in 2014 to 34% in 2016. Respondents’ basic needs are “met” if they have access to a minimum number of basic services in terms of housing, education, public infrastructure, healthcare, etc. The share of the population that is poor as measured by income and unmet basic needs rose from 16% in 2014 to 31% in 2016. This group is referred to as chronically poor.

Alarmingly, 73% of Venezuelans reported involuntarily weight loss.

The survey’s nutrition data is shocking. 78% of the population Venezuela has breakfast, and the share of the population that has two or fewer meals (33%) tripled since 2015 (11%). Purchases of meat, chicken and fats (which are relatively expensive) dropped sharply and were compensated by increased consumption of vegetables and root vegetables (less expensive) in the average Venezuelan diet in 2016. Over 90% of the survey sample self-reports not having enough income to buy food. 81% never eats out, compared to 55% in 2014.

Alarmingly, 73% of Venezuelans reported involuntarily weight loss. Among the respondents that lost weight involuntarily, the average lost 8.7kg (19 pounds). If this paragraph didn’t knock the wind out of you the first time, read it again.

The ENCOVI’s health data is limited, but it still paints a grim picture. The share of Venezuelans with no health insurance plan rose from around 50% in 2014 to 64% in 2016, and the lack of coverage disproportionately affects the poor. Around 87% of the poorest 20% of Venezuelans are not covered by health insurance, while just 30% of the richest fifth of households lack coverage. The share of the population that reports suffering from hypertension rose from 2% in 2014 to 8% in 2016. Diabetes remained broadly flat at 3% of the population between 2014 and 2016.  

Just 38% of workers contribute to the Instituto Venezolano del Seguro Social (IVSS, our social security system), and just 36% contribute to any sort severance payment scheme (prestaciones sociales).

ENCOVI’s education statistics are worrying. Just seven in ten children aged 3-5 go to school, and non-attendance in that age bracket hits the poor disproportionately. Only half of children aged 3-5 from the poorest 20% of households go to school. Of children aged 3 to 17, 12% does not attend school. Of the 88% that does attend school, 65% sometimes misses class and 29% never misses class. The top reasons for missing school included water supply (30%), power outages (22%), strikes (15%), not enough food (10%), transport (9%), and disease (4%).

The ENCOVI’s employment data is likewise troubling. Around 38% of the working population is self-employed. The remaining workers are about evenly split between the private and public sector. Roughly 44% of workers do not have contracts, 9% have verbal contracts, and 8% have temporary employment. Only 39% of workers have fixed contracts. Just 38% of workers contribute to the Instituto Venezolano del Seguro Social (IVSS, our social security system), and just 36% contribute to any sort severance payment scheme (prestaciones sociales). It’s a precarious picture.

Generally speaking, Venezuelans became more dependent on government programs in 2016. Beneficiaries of the government’s misiones rose from 8% of the population in 2014 to 28% in 2016. The share of people who say they do not need assistance from misiones dropped from 51% in 2014 to 22% in 2016. This is self-reported survey data, not administrative data, so it needs to be taken with a grain of salt. Still, just 14% of poor people say they are covered by misiones, while 91% of non-poor people are covered by a mision (own calculation). This suggests that the misiones aren’t helping folks that need them the most.

Finally, the ENCOVI’s security section indicates that crime and subjective perceptions of crime stayed constant or rose. For instance, 21% of respondents said they have been victims of crime in the last 12 months, versus 17% in 2014. In addition, 94% of respondents say crime got worse in the last year, versus 86% in 2014.

The ENCOVI survey notwithstanding, social researchers are still mostly in the dark.

The ENCOVI is important. In the absence of the official household survey, it’s the next best way of measuring what life is like for Venezuelans with some degree of statistical rigor. We hear distressing anecdotes about crime, hunger, see things on the street, at work, and on twitter. But with this data from thousands of households, the picture crystallizes a little: Venezuelans are barely hanging on.

The ENCOVI survey notwithstanding, social researchers are still mostly in the dark. There’s just very little data to work with. Venezuela’s crime statistics are badly lacking. We only have a vague sense of where crime occurs, why it occurs, how it occurs, and with what frequency. Health statistics are also scant. The Health Ministry’s epidemiological bulletin hasn’t been published in two years, and we don’t know how dengue, malaria, zika, difteria, chikungunya, and other diseases are spreading. We don’t really know what the 38% of self-employed of working Venezuelans get up to every day. Economic statistics, like inflation, GDP and even the fiscal accounts are similarly opaque.

If and when the opposition reaches power, it will have to formulate economic and social policy while mostly flying blind.