thepeel
Joined: 08 Aug 2004
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 Posted: Tue Jan 29, 2008 8:50 am Post subject: Venezuela is marching toward penury |
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From a purely selfish standpoint, Canadians should be sending love letters to Venezuelan president Hugo Chavez. As his Soviet-style economic regime approaches a catastrophic implosion, one with unforeseeable consequences for Venezuela�s oil assets and the professional class that keeps the black stuff flowing, Canada�s oil looks more and more attractive as a reliable alternative in the U.S. energy market. Just last week ConocoPhillips completed arrangements to pay for 50% of the future Keystone pipeline from Hardisty, Alta., to Oklahoma. That means cash flowing back into all three of the westernmost provinces, and pipeline builder TransCanada Corp. was not slow to hint that problems in Venezuela helped make the project imperative. Meanwhile, Chavez�s unpredictability is allowing Newfoundland to drive hard bargains with big oil on the opposite side of the country.
Perhaps none of us who benefit from the hemispheric situation will sleep any less soundly for knowing what Chavez is putting Venezuela through. The people, as the pro-Chavez intellectuals and Hollywood suckups are fond of reminding us, voted for his �Bolivarian Revolution.� It is a little late in history for any nation to have been na�ve about an anti-capitalist popularity cult led by a bad-tempered coca-chewing paratrooper.
But it is the most innocent who will suffer most from the effects. Consumer prices rose more than 22% in Venezuela in 2007. In response, Chavez is threatening to nationalize banks that refuse to loan at government-mandated rates to farmers and small businessmen, and is starting his own bank to fund �grand national projects� in Venezuela and its close regional allies Cuba, Nicaragua and Bolivia. The President promises that the ALBA Bank will fund activities �aimed at benefiting the peoples instead of seeking profits� and will have a �non-hegemonic� governance structure.
How many billions of dollars worth of wealth are likely to end up being shredded or skimmed in such a machine? Perhaps not as many as Venezuela is already destroying by means of its bizarre yet politically untouchable gasoline subsidies, which have made the country a beehive of SUVs and keep the cost of fuel at the pump just above two cents per litre. These subsidies overwhelmingly benefit the vehicle-owning upper classes � a situation even the egalitarian Chavez says he doesn�t like. But he is so busy giving away free fuel and petrodollars to neighbouring countries that he can�t very well deny it to his own people.
Chavez is acting to address his country�s worsening food crisis (whatever else one may say about him, he is certainly a man of brisk action) by lifting ceilings on some essential goods. But he has also instructed the state petroleum producer PDVSA to create a new food-wholesaling arm, which will no doubt take more eggs from the golden goose, and has threatened retailers with expropriation. The top private food producer now says that the army, official vanguard of the �Bolivarian Revolution,� has been hijacking dozens of its trucks in a Robin Hood gesture against �smuggling� and �hoarding.�
Historians of socialism will recognize this sort of thing as a danger sign for the immediate future of Venezuela. Equally frightening are new cross-border tensions with Colombia, fueled by accusations that Chavez is providing a haven for FARC and other leftist groups at war with the Colombian government. Canadians trying to keep up with the dizzying developments can hardly know whether to laugh, because it all redounds to our benefit, or cry, because Venezuela�s march toward penury and chaos is a preventable tragedy on a continent that already suffers more than its share. |
http://network.nationalpost.com
The country will implode, much of the political left will blame America or "capitalism" and move on to the next naive dream (and naive poor people to preform leftist experiments on). |
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