Chavez Greases Palms

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According to Gustavo Coronel of Petroleumworld, who spoke at a recent American Enterprise Institute event, Hugo Chavez has had four objectives to define his career as president of the Bolivarian Republic of Venezuela. First, “he started using oil…as a political tool to gain loyalties…in the Western Hemisphere…. Second, he established the economic and political alliances in the region to exclude or to diminish the influence of the United States…. [The] third objective he had was to consolidate his political power domestically in Venezuela through the use of massive handouts as a state policy, rather than…more structural programs.” For the most part, Chavez has done well in achieving his goals. Those whom he can’t reach with his politics can be bought over by his oil money. Or that’s how it was before the drop in oil prices. Coronel observes that since the price of oil has dropped, Chavez’s cash flow has also decreased.

Coronel points out that Chavez used his money from the oil companies to further his political goals. He used it to make friends with bigger countries with more political influence and more money. He would use these friendships to borrow money, and the national debt of Venezuela has tripled since he came into power.

Coronel argues that Chavez still spends more money than he should on projects that do not need the money—Coronel gives an example of money Chavez sent to New York to clean up the Hudson River, when a river in Venezuela was much more disgusting and in need of cleaning. Also, without Chavez’s money, away go his allies. Coronel argues that countries already refuse to lend Venezuela money.

Another problem that goes along with a loss of money is the inability to give it away. Coronel holds that Chavez has gained a lot of popularity because he gives so much to the people—so much so that they have become almost dependent on it. Coronel asserts that this massive policy of handouts is detrimental to the people because, rather than teaching them a trade or to take care of themselves, it makes them dependent on the government. “Chavez has been throwing fish at the people, but he’s not teaching anyone how to fish,” he says.

Coronel argues that there are a few things Chavez needs to do. The first is he needs to end all of his handouts. Although it may put a large impact on the people, it will end up helping them in the end. The second action Coronel suggests is for Chavez to stop taking over companies. The cost of his business endeavors is too much for the government to handle. Oil contractors are even quitting because they are not getting paid. Third, Chavez needs to stop spending wastefully and start trying to balance the budget for however much longer he is in office.

Heather Latham is an intern at the American Journalism Center, a training program run by Accuracy in Media and Accuracy in Academia.