In between calling the President of the United States a "donkey" and Spain's former Prime Minister a "fascist," Venezuela's abrasive President Hugo Chávez still finds time to continue his assault on private business in his oil-rich nation. After being re-elected last year, Chávez turned his attention to advancing his program of nationalization. Having announced his intentions for a takeover of the telecommunications and energy sectors, Mr. Chávez moved on to strong-arm the last remaining U.S. oil companies operating in Venezuela, ordering a reworking of their contracts that would give the state-controlled oil company, Petróleos de Venezuela (PDVSA), a majority stake in and effective control over these multinationals' investments. Fortunately, there are some companies willing to stand up to Chávez. For almost a year he has been embroiled in a dispute with Exxon-Mobil over the nationalization of the Texas-based oil giant's Venezuelan assets.
Last month, the courts wrote a new chapter of the conflict when they granted Exxon interim court injunctions in several western nations, freezing millions in PDVSA assets to ensure eventual payment of adequate compensation for Exxon-s seized investments. It is hoped that this will send a message to Mr. Chávez that he must play by international rules. Chávez, however, had a message of his own in response, threatening to cut off oil exports to the U.S. Everyone, presumably even the president himself, knows that this is simply empty rhetoric. Oil exports to America account for around three quarters of Venezuela's export earnings and a complete cut-off would hurt his own country much more than his "imperialist" enemy.
Unfortunately for Venezuelans, their leader's actions affect more than just multi-billion dollar American corporations. Venezuela's oil industry will continue to decline now that the bloated, inefficient PDVSA is at the helm and truly in control. Already, a wealth of talent and capital has fled this unpredictable environment, much of it for Alberta. According to The Economist, the country has seen a decline in oil output for 10 consecutive quarters and PDVSA's financial troubles are becoming more and more obvious. The nationalization of the energy industry, a crucial step in Mr. Chávez's introduction of "21st-Century Socialism", is an example of how Latin America's most infamous demagogue is robbing his nation of a prosperous future and betraying those whose support swept him into power.
No one doubts that President Chávez has the best interests of Venezuela's destitute in mind or that he truly cares for the poorest of the poor. Yet, evidently intentions aren't enough. Former Chief Economist of the Venezuelan National Assembly writes in the latest edition of Foreign Affairs that the statistics show that Mr. Chávez's government has done little to reduce poverty in Venezuela and that his famed social programs, designed to help the poor, have had little effect. His system of fighting poverty involves no more than vote-buying handouts, stunting the growth of a well-rounded economy and increasing dependence on a state flush with oil money. This is not the way to fight poverty. If and when the boom in oil prices subsides, it will become apparent that he has pursued unsustainable policies and has inadequately utilized the country's natural wealth and it will be Venezuela's poorest who suffer.
It is an encouraging sign that opposition to Mr. Chávez is on the rise. Venezuelans seem to be losing patience. His popularity is declining and he suffered arguably his worst-ever setback when voters rejected proposals for constitutional changes in December, avoiding a greater concentration of power in the president's hands. For the sake of all those he has deceived, Mr. Chávez should re-evaluate his approach. If not, the people of Venezuela should declare that they've had enough, before it's too late.
James Gilman is a U0 Arts student, a Tribune news writer, and this week's guest columnist. He likes long walks on the beach. If you want to contribute a guest column, e-mail
opinion@mcgilltribune.com.
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Viewing Comments 1 - 3 of 3
Anthony Garoufalis
posted 3/18/08 @ 11:23 AM EST
The argument should not be that Chavez is ruining his country, but that the United States is doing everything it can to make it harder for Chavez to help the impoverished in his nation. (Continued…)
tony
posted 3/18/08 @ 5:09 PM EST
Would the poor of venezuela be any better off if he hadn't nationalized the oil industry? It's becoming harder than ever to spread misinformation in the age of the internet. (Continued…)
Pete
posted 3/21/08 @ 10:56 AM EST
While the title of the article really has nothing much to do with the body of the arguments presented here, the writer is generally right. Hundreds of billions of dollars wasted; much of it as hand outs to con men in charge of other Latin Countries will never come back to aid the poor. (Continued…)
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