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Politics : I Will Continue to Continue, to Pretend....
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To: Sully- who wrote (22967)9/25/2006 11:09:53 AM
From: Sully-   of 35834
 
Hugo Chavez and the Venezuelan economy

Betsy's Page

The Washington Post posits that Hugo Chavez is driving Venezuela's economy into the outhouse.


<<< HUGO CHAVEZ got the attention that he craves by comparing President Bush to Satan last week. But the Venezuelan leader's absurd talk may be less threatening than his equally absurd incompetence. Since Mr. Chávez took power seven years ago, Venezuela has mismanaged its oil so disastrously that production may have fallen by almost half, according to the estimates of outsiders, reducing global oil supply by a bit more than 1 percent. Along with natural disasters and Nigerian rebels, Mr. Chávez's ineptitude has contributed to high energy prices.

It takes sustained determination to reduce output by that much, and Mr. Chávez has provided it. He inherited a competent national oil company that produced three times more per worker than its Mexican counterpart. He immediately starved it of investment capital and dispatched ignorant political cronies to oversee it. When this abuse provoked a strike, Mr. Chávez fired the staff en masse, getting rid of two-thirds of the skilled employees and managers.

Mr. Chávez imagines that he can damage the United States by rerouting Venezuelan oil to other markets. He fails to understand that oil is fungible: If Venezuela's crude is sold to the Chinese, the Chinese will buy less of it elsewhere, freeing up supplies for U.S. consumers. But Mr. Chávez also appears oblivious to the technical difficulties in sending oil halfway round the world rather than selling it in his own hemisphere. Oil tankers do not come cheap, and China will have to build special refineries to process the heavy brand of crude that Venezuela produces. Despite Mr. Chávez's bluster about tripling exports to China in three years, Venezuela will depend on Yanqui consumers for the foreseeable future. >>>

If only the people of Venezuela realized how much more wealthy their country and they could all be if they had a government that understood how economics works and what makes good business practices rather than a Castro wannabe who seeks to become president for life and spread his influence throughout the hemisphere more than he wishes to improve his own country's economy.

betsyspage.blogspot.com

washingtonpost.com
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