“Humbled” is never quite the word when you’re talking about Venezuelan President Hugo Chavez. But the oil boom-turned-bust has turned down the volume on his hemispheric grandstanding. Having squandered the proceeds of one of the biggest oil bonanzas in history, Chavez is having trouble keeping his promises and smiting his enemies.
A little more than a year ago, Chavez took majority control of the privately run oil operations in Venezuela’s Orinoco River basin, reducing the foreign firms that had invested there to minority partners. While some companies accepted the terms, Exxon Mobil and ConocoPhillips elected to leave.
Now that Venezuelan oil is going for $40 a barrel — down from $126 in July — Chavez is seeking Western bids to bolster the chronically underperforming industry. Venezuela doesn’t have the expertise because Chavez fired the engineers for backing a 2002 oil strike meant to drive him from office; it doesn’t have the money for improvements because Chavez spent it on military hardware to fend off imaginary attacks by the U.S., social programs to mollify the masses and huge donations to buy influence around the globe.
Just the guy you want to be president for life. But that’s what he’s pushing, again, with his latest referendum to remove term limits. A similar measure, part of a sweeping package of reforms that Venezuelans recognized as a giant power grab, failed in 2007. Chavez wants to try again, and fast, because Venezuelans are beginning to realize his 21st Century socialism isn’t getting the job done.
Government corruption, crime and poverty are up. Personal and economic freedoms have been eroded. Chavez has stifled the media, nationalized industries, imposed price controls, confiscated property and limited how much money Venezuelans can spend outside the country.
Venezuela has some of the largest oil and natural gas reserves in the world, so high fuel prices can mask a lot of sins. But oil is the government’s largest source of revenue, and that’s bad news when your domestic policy is based on keeping the masses fed and your foreign policy is based on charity.
To meet its needs, Venezuela must sell 3.5 million gallons of oil daily, but it’s producing only 2.4 million, down 16 percent since Chavez was elected 10 years ago, according to the Organization of Petroleum Exporting Countries. He’s hoping to turn things around with help from the foreign investors he chased away less than two years ago. Good luck with that. And good luck at the polls, too. Like the oil companies, Venezuela’s voters are thinking twice about a long-term relationship with Chavez.
