Comandante Chavez

The death of Hugo Chavez, the vanguard of what he called "21st Century Socialism", sends ripples not just through the Venezuelan people, but across Latin America and beyond. In particular, the impact of his loss will be felt most keenly in Cuba, Bolivia and Ecuador, his closest allies in the region.

I am personally sad to see a talented and committed person like Hugo Chavez die too early. However, the bottom line is he was addicted to gesture politics and plunged a resource rich nation into recession and economic contraction at the same time as other South American economies grew greatly. There is much wishful thinking on the left, he leaves no enduring legacy and Venezuela will move on quickly and probably painfully from "Comandante of the Nation" syndrome. One example of his folly was his oil deal with Ken Livingstone - A developing nation with many poverty issues subsidising London, one of the World's richest cities?

On the left he is seen as a socialist hero who broke the Venezuelan "oligarchy" and defended the country against the "American Empire." On the right he is the socialist anti-Christ who "brought Afghanistan to South America." But perhaps one of the simplest ways to judge his influence, is to remove the politics and look closely at his economic record.

Take gross domestic product, or GDP. In that case the record is certainly mixed. There was strong economic growth from 2004 to 2008 but GDP fell in 1999, 2002, 2003, 2009 and 2010. From the time Chávez took office in 1999 to 2011 Venezuela's economy grew by an average of 2.8% per year. During this same period Latin America as a whole grew by 3.3% per year and Brazil grew by 3.4% per year.

Others will argue that we must judge Chavez on his record of reducing poverty and inequality. According to the UN's Economic Commission for Latin America, the percentage of the population living under the poverty line in Venezuela fell from 49.4% in 1999 to 27.8% in 2010. That is a pretty good record but there were similar trends across Latin America. In the region as a whole poverty dropped from 43.8% in 1999 to 31.8% in 2010. A few countries, like Peru, Brazil and Panama, fared even better than Venezuela. Poverty rates in Peru dropped sharply from 54.7% in 2000 to 31.3% in 2010—all three have solidly capitalistic economies. Inequality has declined in Venezuela but it has across other parts of Latin America as well particularly in Brazil, Chile and Colombia.

I would never doubt Hugo Chavez's commitment and integrity and I'm sure his memory will be respected. I just feel his MO in trying to help the dispossessed has failed because of a basic misunderstanding of economies. "Resources" are not something fixed you can redistribute but economies are dynamic and need to grow. He ruled a commodity rich country during a commodity boom and its economy shrank while many other South American economies grew in double digit figures = fail?

If the economic pot is not growing and your economy is moribund you cannot meet your people's needs. Compare Venezuela to other similarly developed South American economies over the past decade you can see how much it fell behind. Sadly many of his initiatives will have the same enduring effect as Mao's Great Leap Forward had on Chinese economic output.

Now Mr Chavez will take on iconic status as his revolution looks for a route forward without him, the man it was designed by and constructed around. But his millions of followers in Venezuela will take some comfort from the fact that it wasn't the failed coup in 1992, nor the repeated efforts at the ballot box, but rather ill health - or for many of his devotees, the hand of God - that took Mr Chavez away from them.

My point is; Yes Chavez has changed Venezuela in the Bolivarist tradition by tackling some of the perennial problems of income disparity, living standards for the poor and the control exercised by those of Spanish descent but at the heart of what he has done is a fundamental economic failure which will ensure his legacy will not endure. 95% of Venezuela's exports are still oil and he has shrunk the oil economy and failed to widen economic opportunity and activity. His redistributionist policies and bloating of the State Sector are fundamentally no different to what the similarly populist leader, fascist Juan Peron did in Argentina and which crippled the economy for 25 years + after his death.