Venezuela And the "Curse of Oil"
15 March 2014
By Amir Taheri
With attention focused on dramatic events in Ukraine,
another anti-despotic uprising at the other end of the
earth has not received the media treatment it
deserves. And yet the struggle in this second
battlefield for freedom, Venezuela, could have a
greater impact on reshaping international politics.
Democratic change in Venezuela could reverse the
Leftist-autocratic trend that started in Latin America
almost two decades ago and inspire change in
Argentina, Ecuador, Nicaragua and Bolivia, and even
reorient the political trajectory of neighboring
Brazil and its soft-Left regime.
At first glance, Venezuela should be one of the
world's most prosperous nations. It owns the world's
fifth-largest oil reserves and a fair share of the
North American energy market. It also has great
agricultural potential in high-value cash crops. Its
population of around 25 million is neither too big to
pose problems in dealing with deep-rooted mass poverty
nor too small to preclude the emergence of a strong
internal market.
And yet, today Venezuela is an example of
under-achievement, if not outright failure. As the
bloody events of last week showed, it may even be
heading for civil war.
I first visited Venezuela in the 1970s to interview
then-President Carlos Andrés Pérez and was shocked by
the belt of poverty that surrounded the capital,
Caracas. The ruling elite, mostly of Spanish and
Italian descent, behaved as the European upper classes
are said to have done in the 18th and 19th centuries,
regarding the mass of the poor with a mixture of fear
and disdain.
As I learned more about the Venezuelan paradox I began
to wonder whether it was not yet another victim of the
notorious "curse of oil".
According to an adage attributed to France's top oil
man, Christophe de Margerie, the ideal oil country is
one that "has big oil reserves and a small
population." In the 1970s Venezuela fit that
definition. However, what de Margerie presumably did
not take into account was the nefarious effect of a
huge oil income controlled by narrow elites in
conjunction with transnational cartels. Thus, the more
oil Venezuela exported the poorer its people became in
relative terms.
The ruling elites had no incentive to take risks by
attempting industrial and agricultural development.
They didn't need the people as a workforce because oil
production requires a small number of employees,
mostly foreigners. Nor did they need the people to
vote for them because there were either no elections
or if such exercises were attempted the results could
be fixed. Worse still, the rentier elites did not need
the people as taxpayers to finance the state. Oil
income paid the expenses of the military, the security
and the bureaucracy. It also kept the gravy train
running at top speed. Finally, the people were not
even needed to fight for the country when necessary.
That would be done by the forces of big powers
interested in the free flow of oil.
So in 1999, when Colonel Hugo Chávez was swept to
power on a tide of popular legitimacy, some of us
hoped that Venezuela might get a better deal. How
wrong we proved to be.
The same oil income that fed the monster of arrogant
corruption under Pérez was now used to lubricate the
wheels of Chávez's Socialist Bolivarian fantasies.
Chávez realized that as long as oil income kept
pouring in, he too did not need the people. He started
with Robin Hood socialism, robbing from the rich to
give to the poor. Soon, however, he noticed that it
was now he and his extended entourage who were the
rich who ought to be robbed. He turned to Stalinist
centralized socialism sugar-coated with
anti-Imperialist banalities.
Fifteen years later, and under Chávez's successor as
president, Nicolás Maduro, Venezuela looks more like
the scene of a car crash than a country. With
inflation at 57 percent and unemployment topping 20
percent, the national economy, if there ever was such
a thing, is adrift in uncharted waters. More than half
the country suffers from food shortages and power cuts
and water rationing are becoming the norm in some
provinces.
Over the past 15 years more than 2.2 million
Venezuelans have emigrated, among them hundreds of
thousands of professionals. Instead, Venezuela has
imported tens of thousands of people from Cuba, along
with fugitive Colombian FARC terrorists. The Chavista
regime also depends on support from a security network
set up by Cuban intelligence, a 1,200-man Iranian
military mission, and Hezbollah "volunteers" recruited
among Middle Eastern communities across Latin
American.
Despite its huge oil wealth, Venezuela is bottom of
the list in terms of growth, development and
diversification. In broader terms it is even behind
chronically poor Islamic nations such as Pakistan and
Egypt. However, there are areas where Venezuela is a
world leader. Last year it registered more than 25,000
murders, making it first for homicides, ahead of
Honduras and South Africa. And with 113 Cabinet
ministers, Venezuela has robbed China of its top
position as far as a top-heavy bureaucracy is
concerned.
No one knows how the current Venezuelan crisis might
end. The vast network of security and militia created
could still be deployed to crush the popular revolt of
unarmed civilians. However, one thing is certain: even
though Maduro might not know it yet, the Chavist
"revolution" is dead. A majority of Venezuelans,
including many of those who initially backed Chavez,
wish to move on. There are signs that the armed forces
might not be prepared to kill people to keep Maduro in
power. At the same time, however, an Egyptian-style
military move in response to public protests might not
be in the cards.
The best solution would be for a chunk of the ruling
establishment to break away and promote a
power-sharing formula with the opposition. This is
what Maduro pretended to be aiming at when, earlier
this week, he offered a national dialogue.
Getting out of the swamp of Chavismo, however, is only
the first step. The real challenge Venezuela faces is
how to get rid of the curse of oil.
Amir Taheri was born
in Ahvaz, southwest Iran, and educated in Tehran,
London and Paris. He was Executive Editor-in-Chief of
the daily Kayhan in Iran (1972-79). In 1980-84, he was
Middle East Editor for the Sunday Times. In 1984-92,
he served as member of the Executive Board of the
International Press Institute (IPI). Between 1980 and
2004, he was a contributor to the International Herald
Tribune. He has written for the Wall Street Journal,
the New York Post, the New York Times, the London
Times, the French magazine Politique Internationale,
and the German weekly Focus. Between 1989 and 2005, he
was editorial writer for the German daily Die Welt.
Taheri has published 11 books, some of which have been
translated into 20 languages. He has been a columnist
for Asharq Alawsat since 1987. Taheri's latest book
"The Persian Night" is published by Encounter Books in
London and New York.
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