FacebookTwitterGoogle+RedditEmail

Hugo Chavez’s Economy

by JOSHUA FRANK

It is difficult not to be fond of Hugo Chavez’s politics. There is little question that as president, Chavez is attempting to create a radical social-democracy in Venezuela. In many cases his efforts have already been successful. Chavez is seeking to empower the lowest strata of society. He is attempting to implement participatory democracy in the areas of health-care through his Mission Barrio Adentro (Inside the Neighborhood) program. However, regardless of how much we may like Chavez’s politics and his efforts to redistribute wealth in Venezuela, one has to wonder if an economy based mostly on oil is sustainable in the long run.

When Chavez was elected into office he inherited a host of problems. One of which, and perhaps the largest has been greatly ignored by the independent and left leaning media outlets–and that’s the environmental consequences of Venezuela’s reliance on oil as a source of sustenance for its economic well-being.

The lifeblood of the Venezuelan economy of is indeed its robust energy industry. Oil production accounts for almost half of the total government revenues and about one third of gross domestic product. According to the BCC News, Venezuela produces approximately three million barrels of crude oil per day, and exports almost 75% of that total production. Of the country’s $3 to $4 billion in annual foreign investment, almost all of it is channeled into the oil industry. Venezuela is currently the fifth largest oil exporter in the world and supplies about 13% of daily oil imports to the United States.

This is where Chavez can truly flex his muscle and challenge US supremacy, and in particular the Bush administration. The removal of Venezuela from the oil supply side would most definitely result in higher oil prices in the US and elsewhere. Secure oil supply is especially important at the present time, given the ongoing uncertainty surrounding energy supply from the Middle East.

Nonetheless, all this is putting enormous stress on Venezuela’s natural environment and it is causing insurmountable problems for Venezuelans in the process. In fact, it is even argued by some environmentalists in the country that pressure on Venezuela’s environment is increasing under Chavez.

“[A huge problem] is the continued issuing of gas and oil concessions, especially in the eastern part of the country, such as in the Orinoco Delta and the Gulf of Paria, which is a very important fish breeding area,” Venezuelan environmental activists Alicia Garcia and Maria Eugenia Bustamante told Jeroen Kuiper of Venezuelanalysis.com.

“The ecosystem of lake Maracaibo has suffered a lot already from the oil industry. Another oil and gas-threat comes from the plans to construct pipelines towards Colombia, Panama, Brazil, and the United States,” say Eugenia Bustamante and Kuiper. “The main problem is the difference between what is being said and what is being done. How can you say that you are in favor of sustainable development, when at the same time you allow an increase of the extraction of gold, diamonds and wood? How can you support the Kyoto Protocol, lash out at the USA for not signing the Protocol, and at the same time announce increases in oil and gas production?”

According to the Energy Information Administration (EIA), air pollution levels in Venezuela are high compared to the country’s neighbors, owing mainly to Venezuela’s oil industry. Deforestation, like many other South American counties, is also a huge problem in the country. As the EIA reports, “The United Nations Food and Agriculture Organization estimates that Venezuela lost forest cover at a rate twice as high as the average rate for tropical South America in the early and mid-1990s, and this hasn’t slowed much under Chavez.”

Venezuela is also becoming industrialized in an unsustainable fashion. The country’s “total energy consumption in 2002 was 2.9 quadrillion Btu’s (quads), accounting for 0.7% of the world’s total,” reports the EIA. “Still, Venezuela’s energy consumption that year was behind only that of Brazil (8.6 quads) and of Mexico (6.6 quads) in all of Latin America. The country’s relatively high level of energy consumption, which has increased by a hefty 83% since 1980, is due in part to government subsidies on gasoline, natural gas, and electricity that effectively encourage consumption.”

Chavez’s efforts to resolve this dilemma have been minimal at best. His government, like his predecessors, has put little resources into researching and developing non-hydro renewable energy sources: such as biomass, geothermal, or wind and solar energies. Overall, Venezuela is the third-largest CO2 emitter in Latin America, trailing only Mexico and Brazil. Venezuela’s carbon dioxide emissions over the past five years have easily surpassed those of Argentina and Colombia, the next two largest CO2 emitters in Latin America. All of this has poisoned water supplies and polluted Venezuela’s air.

So as lefties and others in the US embrace Chavez’s efforts to alleviate poverty and provide health care to all citizens of Venezuela–they must also be aware and cautious as to the sustainability of the Venezuelan economy, not to mention the country’s natural environment. All this must raise questions as to the Chavez government’s long-term health and vitality.

JOSHUA FRANK is the author of the forthcoming book, Left Out! How Liberals Helped Reelect George W. Bush, to be published by Common Courage Press. You can pre-order a copy at discounted rate at www.BrickBurner.org. Josh can be reached at: Joshua@BrickBurner.org.

 

JOSHUA FRANK is managing editor of CounterPunch. His most recent book is Hopeless: Barack Obama and the Politics of Illusion, co-edited with Jeffrey St. Clair and published by AK Press. He can be reached at joshua@counterpunch.org. You can follow him on Twitter @joshua__frank

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

March 27, 2017
Robert Hunziker
A Record-Setting Climate Going Bonkers
Frank Stricker
Why $15 an Hour Should be the Absolute Minimum Minimum Wage
Melvin Goodman
The Disappearance of Bipartisanship on the Intelligence Committees
Patrick Cockburn
ISIS’s Losses in Syria and Iraq Will Make It Difficult to Recruit
Russell Mokhiber
Single-Payer Bernie Morphs Into Public Option Dean
Gregory Barrett
Can Democracy Save Us?
Dave Lindorff
Budget Goes Military
John Heid
Disappeared on the Border: “Chase and Scatter” — to Death
Mark Weisbrot
The Troubling Financial Activities of an Ecuadorian Presidential Candidate
Robert Fisk
As ISIS’s Caliphate Shrinks, Syrian Anger Grows
Michael J. Sainato
Democratic Party Continues Shunning Popular Sanders Surrogates
Paul Bentley
Nazi Heritage: the Strange Saga of Chrystia Freeland’s Ukrainian Grandfather
Christopher Ketcham
Buddhism in the Storm
Thomas Barker
Platitudes in the Wake of London’s Terror Attack
Mike Hastie
Insane Truths: a Vietnam Vet on “Apocalypse Now, Redux”
Binoy Kampmark
Cyclone Watch in Australia
Weekend Edition
March 24, 2017
Friday - Sunday
Michael Hudson
Trump is Obama’s Legacy: Will this Break up the Democratic Party?
Eric Draitser
Donald Trump and the Triumph of White Identity Politics
Jeffrey St. Clair
Roaming Charges: Nothing Was Delivered
Andrew Levine
Ryan’s Choice
Joshua Frank
Global Coal in Freefall, Tar Sands Development Drying Up (Bad News for Keystone XL)
Anthony DiMaggio
Ditching the “Deep State”: The Rise of a New Conspiracy Theory in American Politics
Rob Urie
Boris and Natasha Visit Fantasy Island
John Wight
London and the Dreary Ritual of Terrorist Attacks
Paul Buhle
The CIA and the Intellectuals…Again
David Rosen
Why Did Trump Target Transgender Youth?
Vijay Prashad
Inventing Enemies
Ben Debney
Outrage From the Imperial Playbook
M. Shadee Malaklou
An Open Letter to Duke University’s Class of 2007, About Your Open Letter to Stephen Miller
Michael J. Sainato
Bernie Sanders’ Economic Advisor Shreds Trumponomics
Lawrence Davidson
Moral Failure at the UN
Pete Dolack
World Bank Declares Itself Above the Law
Nicola Perugini - Neve Gordon
Israel’s Human Rights Spies
Patrick Cockburn
From Paris to London: Another City, Another Attack
Ralph Nader
Reason and Justice Address Realities
Ramzy Baroud
‘Decolonizing the Mind’: Using Hollywood Celebrities to Validate Islam
Colin Todhunter
Monsanto in India: The Sacred and the Profane
Louisa Willcox
Grizzlies Under the Endangered Species Act: How Have They Fared?
Norman Pollack
Militarization of American Fascism: Trump the Usurper
Pepe Escobar
North Korea: The Real Serious Options on the Table
Brian Cloughley
“These Things Are Done”: Eavesdropping on Trump
Sheldon Richman
You Can’t Blame Trump’s Military Budget on NATO
Carol Wolman
Trump vs the People: a Psychiatrist’s Analysis
Stanley L. Cohen
The White House . . . Denial and Cover-ups
Kollibri terre Sonnenblume
Marines to Kill Desert Tortoises
FacebookTwitterGoogle+RedditEmail