CARACAS, Venezuela (AP) — On the streets of Caracas, vast slums blanket the hillsides while squatters hang laundry in the windows of abandoned buildings. Trash-strewn alleys are riddled with potholes and lined with broken streetlamps. The city's main waterway, the polluted Guaire River, is known more for sewage than swimming.
While oil has ushered in spectacular construction projects for glittering Middle Eastern cities, including the world's tallest building in Dubai and plans for branches of the Louvre and Guggenheim museums in Abu Dhabi, it's brought relatively meager changes to Venezuela, which holds the world's largest proven oil reserves.
Nearly 14 years after President Hugo Chavez took office, and despite the biggest oil bonanza in Venezuela's history, there's little outward sign of the nearly one trillion petrodollars that have flowed into the country.
Venezuela has undoubtedly changed during Chavez's tenure. The populist president has used the oil wealth to buttress his support through cash handouts, state-run grocery stores and a gamut of other social programs. With more money in the economy, incomes are higher and the number of people living in poverty has fallen.
Unemployment has dropped from more than 13 percent in 1999 to about 8 percent. The country has also achieved rapid improvement on the U.N. Human Development Index, which measures a range of indicators from living standards to life expectancy.
"We're applying a successful program — successful politically, successful socially, successful economically," Chavez said at a news conference. "With flaws, of course, but it's successful. We're laying the foundations of a historic project that will take our entire lifetime."
All of which makes him a tough incumbent to beat in the upcoming Oct. 7 election.
Yet some experts say Chavez could have done much more to improve the country's infrastructure, boost its economy and invest in the very oil industry that keeps Venezuela afloat.
"It's overwhelmingly clear that Venezuela has wasted the windfall," said Francisco Monaldi, an economist and director of the International Center of Energy and the Environment at Caracas' IESA business school. "You should have had much greater economic growth, much greater reduction of poverty."
Among Latin American countries, the economies of Brazil, Chile, Peru and Argentina all have expanded more rapidly than Venezuela's since Chavez took office in 1999, recording average growth between 3 and 5 percent a year.
Venezuela, by contrast, averaged a 2.8 percent annual increase of gross domestic product between 1999 and 2011, according to International Monetary Fund figures. By that measure, the country was outperformed by every other member of the Organization of Petroleum Exporting Countries except Libya. Even war-torn Iraq posted higher growth.
Some Venezuelans, such as tennis instructor Naybeth Figueroa, say Chavez has simply channeled money toward his "Chavista" supporters while neglecting deeply ingrained problems such as soaring murder rates, inflation, crumbling infrastructure and poor government services. Venezuela now ranks among the most violent and corrupt places on earth.
"The country is falling to pieces," Figueroa said. "Where is the oil money going?"
Where the money went
On a rutted unpaved road in the countryside outside Caracas, unemployed housewife Moreli Gonzalez lives in a shack with a dirt floor and walls made of rusting sheets of zinc. She is thankful to Chavez that she now receives a $280-a-month cash benefit through a program called "Mothers of the Neighborhood Mission."
"Now we have everything," said Gonzalez, who credits a government education program with helping her learn to read — and a state-run grocery down the road that has made food more affordable.
"We eat better," she said, showing off cupboards filled with bags of rice and pasta. "My children didn't used to eat snacks. Now they eat well."
The government programs for the poor are why Oil Minister Rafael Ramirez recently boasted: "This was one country before President Chavez's government, and a different one afterward."
He was referring to the more than $300 billion that the government has spent during Chavez's tenure on "social development," including health care and education.
It's been made possible by oil prices that have shot up, sending more than $981 billion in revenues to the state oil company, Petroleos de Venezuela SA, between 1999 and 2011.
Some economists say that given the boom, it's little wonder Venezuelans living below the poverty line declined from 50 percent in the first half of 1999 to about 32 percent in the second half of last year.
"There are people here who are eating meat who didn't used to eat meat. But is that due to Chavez? That's not due to Chavez. That's the result of the changes in the price of oil," said economist Angel Garcia Banchs, director of the consulting firm Econometrica.
The state oil company's contributions to the government have more than tripled, from $16.5 billion in 2004 to $58.6 billion last year.
And it's not all going to social programs. Chavez has spent billions on the military, buying up Russian-made fighter jets, helicopters and rifles.
University enrollment has also more than doubled. Low-income students now attend the tuition-free Bolivarian University, which was established on the leafy campus of a former state oil company office building.
One of the biggest expenses, though, has simply been supporting a growing bureaucracy. The number of public employees has ballooned during Chavez's presidency, from about 1.3 million to 2.4 million. And Chavez has made clear that if he's re-elected, "that's going to keep going up."
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