Venezuela prioritizes 'happiness' in its national budget

President Chávez's administration announced its budget last week, allocating nearly 40 percent of funds for 'supreme happiness.' The budget's ambiguous nature, however, has made some distinctly unhappy.

By , Contributor

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    Venezuelan President Hugo Chavez takes an oath with new cabinet ministers at Miraflores Palace in Caracas October 13, 2012.
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Happiness is serious business in Venezuela.

At 38 percent of the current budget, spending on what the government refers to as "supreme happiness" has taken precedence over everything including military and energy spending for Hugo Chávez's fourth term as president.

It seems that Venezuela is just as wrapped up in attaining this elusive emotional state as the rest of the Western world, which dedicates billions of dollars to everything from self-help books to vitamin supplements to serious research on happiness. There have been a number of recent studies ranking countries by happiness level – with one called the Happy Planet Index placing Venezuela 9th in terms of happiness out of 151 countries. (Nearby Central America was ranked one of the happiest regions on earth.)

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But Chavez’s focus on national bliss hasn’t necessarily made a lot of people “happy.”

The new $92 billion budget, announced by Finance Minister Jorge Giordani last week, has drawn widespread criticism for its vague language and alarmingly low estimates of inflation and oil prices. Meanwhile, expenditure on "happiness" has increased since last year and continues to be the budgetary centerpiece.

But what brings about happiness in Venezuela? 

"I understand [happiness] to be associated with social spending," says Francisco Ibarra, a director of the Venezuelan think tank Econométrica, on his interpretation of the government’s definition.

This spending includes some of President Chávez's signature social programs like the Bolivarian Missions, which provide Venezuelans with everything from free housing and medical services to government-subsidized food stores. After his victory in the early October presidential election, Chávez announced such programs would be increased in his upcoming term.

Overshadowing the budget’s central pursuit of happiness, however, is the fact that the budget itself remains opaque.

"Since 2006, the government has stopped announcing the budget like it had done historically, which showed the total cost of programs in [the] public sector,” says Mr. Ibarra. “[N]ow we see much of [the] budget in parallel funds, like Fonden."

Fonden, or the National Development Fund Inc., is the largest of various such funds over which the president has discretion.

Thanks to legislation passed in recent years, oil revenue exceeding the finance minister's new estimate of $55 per barrel can be funneled into the president's development funds.

Currently, oil prices are averaging more than $100 dollars per barrel, but because the budget estimates oil to cost a low $55 per barrel, most of the surplus – in this case $45 per barrel – in oil revenue could be used for programs as the government sees fit.  Use of the funds does not require congress's approval.

Despite the disparity in oil prices, other discrepancies exist within the budget as well.

"The minister is assigning a budget that is less than what the government has spent this year," says Mercedes de Freitas, director of the anticorruption NGO Transparencia Venezuela. This could be attributed to a lack of planning for things like public-sector wage increases and infrastructure improvements, according to Transparencia Venezuela’s website.

While the government's budget on paper was $92 billion, it has already spent more than $97 billion this year.

In Venezuela, a country that boasts one of the world's highest inflation rates, this has led some to joke that, when the Chávez administration says it seeks a nation of “happiness,” it really means a nation of “blissful ignorance.”

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