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

January 16, 2017
Paul Street
How Pure is Your Hate?
Jeffrey St. Clair - Alexander Cockburn
Did the Elites Have Martin Luther King Jr. Killed?
Robert Hunziker
Global Warming Clobbers Ocean Life
Patrick Cockburn
The Terrifying Parallels Between Trump and Erdogan
Kenneth Surin
The Neoliberal Stranglehold on the American Public University
Lawrence Davidson
Is There a Future for the Democratic Party?
Douglas Valentine
Who Killed MLK Jr?
Robert Fisk
The Foreign Correspondent in the Age of Twitter and Trump
Dale Bryan
“Where Do We Go from Here?”
David Swanson
The Deep State Wants to Deep Six Us
Dan Bacher
Obama Administration Orders Speedy Completion of Delta Tunnels Plan
Mark Weisbrot
Obama Should Make Sure that Haitian Victims of UN-Caused Cholera are Compensated
Winslow Myers
The Light of the World
Bruce Mastron
My Latest Reason to Boycott the NFL: Guns
Weekend Edition
January 13, 2017
Friday - Sunday
Gregory Elich
Did the Russians Really Hack the DNC?
Jeffrey St. Clair
The President Who Wasn’t There: Barack Obama’s Legacy of Impotence
Anthony DiMaggio
Ethics Fiasco: Trump, Divestment and the Perversion of Executive Politics
Joshua Frank
Farewell Obummer, Hello Golden Showers
Paul Street
Hit the Road, Barack: Some Farewell Reflections
Vijay Prashad
After Aleppo: the State of Syria
John Wight
Russia Must be Destroyed: John McCain and the Case of the Dodgy Dossier
Rob Urie
Meet the Deplorables
Patrick Cockburn
The Russian Dossier Reminds Me of the Row Over Saddam’s WMDs
Eric Sommer
U.S.-China War: a Danger Hidden from the American People
Andrew Levine
Are Democrats Still the Lesser Evil?
Linda Pentz Gunter
What’s Really Behind the Indian Point Nuclear Deal?
Robert Fantina
Trucks, ‘Terror’ and Israel
Richard Moser
Universal Values are Revolutionary Values
Russell Mokhiber
Build the Bagdikian Wall: “Sponsored News” at the Washington Post
Yoav Litvin
Establishment Narcissism – The Democrats’ Game of Thrones
David Rosen
Return of the Repressed: Trump & the Revival of the Culture Wars
Robert Koehler
War Consciousness and the F-35
Rev. William Alberts
The New Smell of McCarthyism Demands Faith Leaders Speak Truth to Power
John Laforge
Federal Regulator Halts Move to Toughen Radiation Exposure Limits
Norman Pollack
Farewell Address: Nazification of Hope
David Swanson
Imagine the Confirmation Hearing for Secretary of Peace
CJ Hopkins
Why Ridiculous Official Propaganda Still Works
Ron Jacobs
Striking in Reagan Time
Missy Comley Beattie
The Streep
Graham Peebles
Climate Change: The Potential Impacts of Collective Inaction
Uri Avnery
Confessions of a Megalomaniac
Kenneth Worles
Black Without a Home: King’s Dream Still Deferred
Geoff Dutton
The Russian Patsy
Jill Richardson
The Coming War on Regulations
Jeremy Brecher
Resisting the Trump Agenda is Social Self-Defense
FacebookTwitterGoogle+RedditEmail