Fausta's Blog

American and Latin American Politics, Society, and Culture

May 2, 2005 By Fausta

Venezuela’s oily path to communism
continues, as Chávez Vows to Fund Companies That Empower Workers (emphasis mine):

Venezuela’s legislature, controlled by governing coalition parties, will soon consider a bill that would mandate joint management of all state and non-state companies.
. . .
Chavez didn’t specify how he would fund the investments. His government boosted spending 61 percent last year to help finance social programs, such as education, and is increasing funding again this year.

Venezuela is the world’s fifth-largest oil exporter.

“You have to respect economic laws, but you don’t have to be a slave to them, especially when you’re making a revolution,” Chavez said.

Expropriation

Chavez also said his government will take over the assets of companies that close and say they don’t have money to pay workers severance. The government expropriated the assets paper company Venepal SACA in January, after it declared bankruptcy and said it had no money to pay workers.

Chávez has created a new “loyal reserve” of 20,000 troops, which he plans to increase to 2 million (n a country of 24 million people), probably because, as A. M. Mora y Leon explains, Chávez has reason not trust the existing Venezuelan army:

But although shoveling money is Chavez’s principal means of buying loyalty, there is reason to wonder whether, even armed to the teeth with the latest weapons, whether Venezuela’s troops will remain loyal. The broader picture suggests they won’t. It was explained in a masterly way by Herbert Meyer in his essay ‘A Revolutionary Change’ showing why troops in revolutionary situations are less likely to fire on demonstrators than in the past. Given the depth of popular opposition that exists in Venezuela today, against the example of the huge people-power demonstrations seen in Ecuador, Mexico and Bolivia, there is no reason to think that day won’t come in Venezuela. With that reluctance to shoot, with the discontent in the military amid political churning, with the indiscipline of the troops, there is ample reason to wonder whether or not the Venezuelan military will come again to Chavez’s rescue. You can see why he was afraid of their exposure to U.S. troops. He may have lost their loyalty already

Barring something stupid from the USA, such as an invasion, which I trust Dr. Rice won’t be doing, Chávez’s propaganda is not being bought by the Venezuelan military.

Chávez is flush with money because of the rise in oil prices. Hence, he’s financing his Bolivarian revolution in Venezuela and in Cuba with this money, including,

  • a $414 million contract, financed by the Venezuelan government, where Cuba will buy from Venezuela everything from food to automobile tires.
  • PDVSA’s new headquarters in Havana
  • an increase in the 80,000 oil barrels per day Venezuela sends Cuba
  • 30,000 Cuban medics and other personnel will be employed in Venezuela, for which Cuba bills Venezuela $2,500 per person. In turn, Cuba pays each of them a $200/month salary. Venezuela’s unemployment rate is over 11%, and people in Venezuela question the qualifications of the Cuban personnel.

Pablo Alfonso’s op-ed in yesterday’s El Herald says (my translation),

Durante décadas fueron los soviéticos quienes financiaron con recursos de todo tipo el llamado socialismo cubano, que a la larga no ha logrado generar sus propias riquezas. Por eso cuando se derrumbó la URSS y se acabaron los rublos, Cuba tuvo que recurrir a sus riquezas naturales y a su idiosincracia para sobrevivir: sol, playas, ron, rumba y todo lo que trae aparejado el turismo internacional.

¡Ojalá que ahora -por lo menos-,los petrodólares venezolanos puedan servir para algo más que para derrocharlos! A fin de cuentas, el barril no siempre va a estar tan lleno.
For decades, the Soviets financed with all sorts of resources the so-called Cuban socialism, which, in the long term has never been able to generate its own riches. Therefore, when the USSR collapsed and the rubles came to an end, Cuba had to resort to its natural resources and ingenuity to survive: sun, beaches, rhum, rumba, and everything else that comes with international tourism.
Let’s hope that now – at least – the Venezuelan petrodollars will serve for something else than to be wasted! After all, the barrell won’t always be as full.

Steve Forbes, for one, believes the oil bubble’s about to burst. Chávez is up for reelection next year. We’ll see if the oil bubble continues to float his grandiose dreams.

Update: The Devil’s Excrement and Venezuela News and Views don’t mince words:

. No, Caracas is just not safe enough to hide all the plundering made by the revolution of the oil money that indeed belongs to ALL Venezuelans and not only those who embrace Chavez. Thus the need to set up offices in Havana where the hand of justice cannot reach and all sorts of shady deals can be made under the benevolent eye of Castro, the biggest capo de mafia of them all.

Or, as the saying goes, más claro, agua (clear as water).

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