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February 28, 2008 |  5 comments |  Print | E-Mail Your Research  

MA Thesis: Hugo Chávez's Oiled Revolution

Member deleted Does Chávez succeed in breaking the resource-curse for Venezuela? Can he keep his promise to spark off a revolution on behalf of Venezuela’s poor? And what are the long-term consequences of an oil-based policy for the freedom and security in a country such as Venezuela?

Abstract

Countries blessed with a luscious endowment of natural resources should, at least in theory be able to engage in rapid economic development. However, the reality is often very different. As many countries appear to be cursed by their natural resource. This is somewhat paradoxical, as resource revenue should enable these countries to prosper. Of many of these countries, Venezuela has historically been a case example of the Resource Curse. However, its current president Hugo Chávez promised a break with its country's curse ever since he first got elected in 1998.

But, what is the situation in Venezuela now, writing 9 years later? Has Chávez been able to live up to his electoral promises? The main question that this article tries to solve is: does Chávez succeed in breaking the resource-curse for Venezuela? Moreover, as Venezuela is one of the largest oil exporting countries in the world, one essentially has to wonder what the role of oil in the policy of Chávez is.

The method employed for finding an answer to this question is a deep and thorough analysis of Chávez's policy from 1998 up to the present date. The sources used are books, reports and critical scientific and opinion articles. In retrospect it is fair to say that Chávez has not succeeded in breaking his country's curse, nor is he likely to do so in the near future. Also one should question if Chávez was ever bent on breaking Venezuela's curse from the onset. By failing to live up to his electoral promises, the conflict potential in Venezuela is growing larger by the day with possible detrimental consequences for the Venezuelan population.

This research aims to aid policy initiatives directed at safeguarding stability and promoting democracy in Latin America by pointing out the worrisome developments in Venezuela.

 
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Florian  Kuhne

March 7, 2008

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Hej Sijbren.

Your work seems very good to me as far as scientific style is concerned and very interesting as far as the topic is concerned. I know little about Venezuela and Chavezism but I think your thesis in the conclusion is very pessimistic. Why should Venezuela bog down in anti-democratic politics and are you serious about your comparison of Venezuela and Cuba?
Chavez tried to keep in force but accepted the referendum last year, so he will leave office in 2012. I really do not hope that there will be "arrangements" as seen in Russia these days.
And dont forget the benefits for Venezuelans: With these so-called Petrodollars Chavez is able to spend money for infrastructure, medical care, schools and so on. In this connection its very interesting what projects Chavez puts on furthermore. As one example, he delivers (cheap) oil to the city of London and therefore gets administrative assistance from city-planners and development help from London. This benefits the Venezolanian people.
In my opinion, Chavez is no authorian dictator and no real danger to the world community. But we need to keep in mind, that his position will strengthen as the price for oil will rise in long-term and it will be necessary to peacefully talk as long as he is willing and unable to behave like a militaristic dictator.

These were ideas I had when I read your text, which is once again really good.
Best wishes, Florian
 
Member deleted

March 13, 2008

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Dear Florian,

Thank you for your comments on my thesis. I wrote this piece last year while stuying at the University of Leuven in Belgium for an MA in Conflict & Sustainable Peace Studies. I personally think that one has to take Chávez serious, because he is very likely to be a president who will remain in office for some time, despite the referendum's outcome.

If you look at developments that occurred in Venezuela since Chávez's election in 1998, it is imperative that from the original electoral promise not much has been delivered. Corruption is soaring, crime, inflation and unemployment are on the rise and the nation's cash cow PDVSA is not well looked after as crumbling infrastructure and declining investments show. The high price of oil keeps PDVSA afloat, but let's not forget that during periods of high growth the seeds of decline are sown. PDVSA should be looked after more thoroughly, however with the laying off of 18,000 engineers this is nothing short of a pipe-dream in my opinion. PDVSA is simply being managed to the ground at the moment. With the limited amount of clients Venezuela has (due to the nature of their oil, super heavy) this is an unwise strategy for the long term.

The most worrysome aspect in my opinion is the changing of the constitution where Chávez went to a uni-cameral parliament. The Movimiento Bolivariana basically calls the shots in parliament. Also many mayors and governors aligned to opposition parties have been removed from the various provinces. There is as such little opposition left. This also has to do with the poor strategies that the opposition emoplyed, duly noted. However, the possible influence that any opposition has is being curtailed. This was well shown by the closure of the television station for example. The amount of military personell appointed to senior positions in the administration is what really worries me. I have a hard time believing a democratic message when it is put forward by a democrattic yet practically military government.

Regarding the allocation of funds this is also somewhat doubtful. Surely Chávez spends lavishly on his social programs and if I were to be a poor Venezuelan I would for sure appreciate this. There is nothing wrong with spending your petro dollars on your people. I wish more governments did so. However, in order to judge the impact one has to assess the full picture. The medical programme is run by Cuban doctors, not by Venezuelan doctors. Why? Cuba receives some 100,000 barrels of subsidised oil per day in exchange for medical services that Caracas can easily supply themselves. Regarding the education projects, it is very good that people can go to school paid for by the government. But what if you go to med school and find out that Cuban doctors are doing the services you studied for? Also, as Chávez nationalised many industries, there is hardly any private sector. In addition many Small and Medium Sized Enterprises were forced to close as the buildings are now used to house the "Cooperatives". For a young person in Venezuela graduated from a state university there are little to no job opportunities.

Regarding Chávez's foreign policy, I have serious doubts about this. Purchasing arms from Rosoboronexport from Russia does not benefit the Venezuelan population in my eyes. Subsidising Cuba neither. Supporting Iran dito. Buying arms in Belarus does neither. Picking a fight with Colombia of all places can hardly be called benign leadership. In addition, his support for poor communities in New York and London is noble, but Venezuela has a vast array of poor housholds within their own state borders. He should worry more about them. Chávez by the way offered to pay bus tickets for Londonders. The assistance he receives from London is new to me, I will look into this. I cannot imagine London doing this, but I will check it.

The outcome of the referencum did not surprise me much, as Chávez has been pushing the line a bit. As you can read in my thesis, the constituency of Chávey is highly divided. It was "interesting" to see how easily he accepted his "defeat" though. I am curious as to how organised this all was.

You are right in pointing out that dialogue with Chávez must prevail, after all he is the president of a country that was elected democratically regardless of how democratic or undemocratic his policy afterwards has been. I support a dialogue with Chávez, however I am wary to cater to much to his needs for reasons mentioned above.

Let me know what you think of this, I am interested in carrying this discussion forward.

Kind regards,

Sijbren de Jong



Tags: | Venezuela | energy | petrodollars |
 
Dino Paoli De La Hoya

March 13, 2008

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Accepting the referendum may make it easier for him to take more power in 2012. Doing so has given him the look of a democratic leader (seems a bit similar to Russia´s recent transfer of power).
 
Florian  Kuhne

March 14, 2008

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Hej Sijbren,

you are very deep into this and I am very interested in developments in Venezuela, so I am glad to learn more about this "strange" president and the politics in Venezuela. And you are right as far as I can tell in almost everything you say and I like your argumentation.
Of course it is wrong, and I really do not understand it, that Chavez suggests himself as a friend of Ahmadinedschad and Lukaschenko, buys weapons there and delivers cheap oil to partners, which are more "strange" than him. But otherwise, it is clear that Chavez tries to keep up contacts to those countries which are friendly and possible partners in international boards. And Cuba is a case of its own. Chavez needs to hold on to his Bolivarian Revolution and because of this leans on the "Guevarian Revolution". And, furthermore, Cuban doctors are the best educated in Latin America and this deal seems to help both countries. But Venezuelan students og medicine could move to Cuba for some time and learn there, after a while Venezuela would not need more Cuban doctors.
Another thing inside Latin America are informal ways of communication. I guess very much is going on "behind the curtain", deals like "oil for doctors" or the almost-war last week in Colombia. Of course they overreacted, but I really understand Correa in Ecuador and his strongest ally in that region is Hugo Chavez. Probably Correa made one phonecall to Caracas and asked Chavez what to do and then Chavez told him "move your troops, I will move mine".
Do you know what I mean? I do not want to speak of banana republics, but I think in Latin America things work out different than in Europe or the United States.

See, I am not into this as you are, but I have been to Ecuador in 2006 and can tell a little how they handle important decisions too.
Bye, Florian
 
Member deleted

March 25, 2008

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Dear Florian,

Apologise for the late reply. I had been away to my own country over Easter holidays. Thank you for your comment. As for your arguments, I agree that there is nothing wrong with forging ties with befriended nations. Every country does this and it is obviously in the country's interest to do so. Same goes for Venezuela. However, I do have problems with forging ties with countries with such a dubious nature as the ones mentioned above. Especially if arms are being purchased.

As for the oil for doctors trade, I really do not see this being of any use. Venezuela is more than capable of providing health care themselves. The only thing Chávez needs to do is utilise his oil revenue at home and upgrade the health sector. There is ample qualified staff, so there is no need for getting doctors from elsewhere. The only thing you accomplish is making it impossible for Venezuelan doctors to have a praxis in their own country as competition with subsidised cuban doctors is impossible. A moving to Cuba of Venezuelan doctors would be the same thing. Why? Just simply, why? There is no need.

Another nasty effect of the continuous oil support for Cuba is for example that Castro and Chávez embark on politicised debates surround alternative fuels. Not so long ago, Castro released an article in the Cuban national newspaper in which he blamed biofuel for the premature deaths of millions of people. Inferring a link between food production that will be used for energy and equating that to the deaths of millions is somewhat far fetched. The real reason in my opinion is that Castro knows very well that an increased export from Brazil to to the US in the form of biofuel means a cutback on oil used from Venezuela. Indirectly that means a cutback in the amount of subsidised barrels going to Cuba. This is how concerned Fidel is in my opinion.

The almost war was no almost war as far as I could tell. This was a very well orchestrated move between Correa and Chávez and there was no intent of going to war from the onset. It can hardly be surprising that one day after the so-called ''truce", a whole range of festivities on the Venezuelan-Colombian border were already planned with artists from Latin America and Spain. I am sure that your knowledge on Ecuador gives you a good insight into how they manage public affairs in the country and how they give direction to their foreign policy.

But fact is that Chávez and Correa know very well they would not have stand a chance agains the Colombian army. Chávez and Correa want to show that they stand up against the "big bad" USA and their stooge Colombia. This is simply good PR, but void of content.

After all, the funny thing is that Chávez knows that his biggest client and (financial) life-giver is the USA (see the part of my thesis on the refining aspects of Venezuelan oil). Chávez knows better than to mess with Colombia. He never intended to. The other Latin American countries, most notably the bigger ones such as Brazil and Argentina then also did not take this situation very seriously. Neither did I.

Greets,

Sijbren
 

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