March/April 2008

Saying ‘No’ to the Venezuelan Model

That Hugo Chávez has celebrity admirers like Sean Penn and Naomi Campbell is a troubling, if mostly harmless phenomenon. But when Chávez can count fellow Latin American leaders as allies, there is a serious problem.

Welcome to the world of Gabriela Calderón, editor of ElCato.org, Cato's Spanish language website. In 1998, when ElCato.org was born, Gabriela Calderón was still in middle school. Today, at the age of 24, she is on the frontline of the struggle against Hugo Chávez's "21st century socialism," which is threatening to engulf all of Latin America.

Shortly after finishing her master's degree in International Commerce and Policy at George Mason University, Calderón left Cato's Washington, D.C., headquarters for Ecuador, the latest nation to fall sway to a populist president in the mold of Hugo Chávez. Only a year after Evo Morales was named president of Bolivia, promising a "Bolivarian revolution," on January 15, 2007, Rafael Correa assumed the presidency of Ecuador promising a "civilian revolution." Both are close Chávez allies — "three sides of the same coin," quips Calderón.

But there was also a personal reason for the move. Calderón is a native of Guayaquil — Ecuador's largest and most prosperous city.

Since taking office, Rafael Correa has kept very busy. In addition to the usual array of populist nostrums — ratcheting up government spending on education, health, and welfare — Correa has launched a "microcredit" program in which $350 grants are distributed to "needy recipients" among the public at the government's discretion. He has upped the "windfall profits" tax on the oil industry to 99 percent, effectively nationalizing the industry.

Calderón has been keeping busy too. In an October op-ed published in El Universo, Ecuador's largest newspaper, Calderón pointed out that Correa was following the Chávez formula to a T — "only three times as fast." The facts were on Calderón's side, as Correa's political maneuverings — whereby he sacked half of Congress, shifted power to a smaller assembly of loyalists, and is slated to rewrite the nation's constitution — follow the Chávez (and Evo Morales) script precisely. But Calderón's larger point was that poverty is solved not by government handouts but by robust economic growth. She warned against efforts to reduce inequality — which would make everyone poor. She made her case again on Ecuavisa, a channel that is rebroadcast throughout the Spanish-speaking world all the way to Miami.

Her article also earned her the ire of some powerful Ecuadorians. Both the minister of education and the minister of social welfare responded in letters to the editor, and one of her fellow television panelists accused her, and the Cato Institute, of being well-funded members of the reactionary right.

Calderón responded that if anyone is on "the reactionary right," it is the person pushing for greater state control over the economy and people's lives. By contrast, she — and ElCato.org — advocates for individual freedom.

Today, Calderón has more avenues through which to make her case, but the battle over the future of Ecuador — and much of Latin America — remains a difficult one. In her now-weekly column at El Universo, Calderón remains unwavering critic of the Correa administration. In early January, Calderón spoke to members of the Constituent Assembly of Ecuador, a body that is writing the nation's new Constitution. Though trying to fight poverty in Ecuador was a laudable — and indeed, necessary, goal — their past actions risked making the nation far poorer than it already is. She urged them to think twice before further weakening property rights and stability of contract, the foundations of a market economy and future economic growth.

Calderón's latest project is a weekly political roundtable television program on Cable Noticias — "Spanish-speaking CSPAN," says Calderón. Now five months running, it is introducing a generation of Ecuadorians to the economic way of analyzing problems — "a point of view missing from the political debate here."

But Calderón's favorite outlet remains ElCato.org. In her capacity as editor, she ensures that the site is constantly stocked with the freshest Cato scholarship with application to Latin American policy problems. ElCato.org, which celebrates its 10th anniversary this year, offers not only the classics of Hayek and Mises, but also translated analysis from current Cato scholars. ElCato.org's newest effort is Libremente, a blog in which Calderón takes on bad policy proposals as they are advanced. There she is joined by distinguished co-bloggers such as Cato senior fellow José Piñera, the architect of Chile's successful social security privatization.

Latin Americans are paying attention. Last month, ElCato.org brought in 122,441 unique visitors — or, about 4,000 visitors per day. After Mexico, the second greatest source of visitors to ElCato.org is Venezuela. Ecuador comes in at number five.