Venezuela a great example of misrule, mismanagement

Published: Monday, May 17, 2010
Bylined to: Dale McFeatters

Dale McFeatters: Venezuela has the largest oil reserves outside the Mideast and some of the largest known natural gas deposits. Yet the country is an economic shambles thanks to the mismanagement of its buffoonish and authoritarian President, Hugo Chavez.

This past week, he further crippled the economy by effectively banning private bond trading in order to stop Venezuelans from sequestering their savings in dollar accounts. He instituted currency controls of 2.60 bolivars to the dollar for priority goods and 4.30 for nonessential items. The black market rate is 8.20 bolivars to the dollar. Not surprisingly, there is a thriving black market, widespread shortages and soaring inflation of more than 30%.

In 2003, when Chavez began experimenting with price controls, Venezuela was self-sufficient in beef. Last year it imported more than half of what it consumed. After his police began rounding up butchers for selling beef at more than the state-mandated price, beef disappeared almost altogether from the stores.

The same has happened with coffee. After expropriating roasting companies, coffee warehouses and plantations, production in coffee-producing Venezuela fell by more than 16% last year and continues to decline.

Because of lack of investment in the national grid -- and with some help from a drought -- electricity is rationed and there are frequent blackouts and mandatory power cuts. Similarly, since he barred Western firms from participating in Venezuela's oil industry, investment has fallen and the country has turned to the Chinese for help.

Chavez has been incapable of dealing with the country's chronic crime and the Economist newspaper describes Caracas as "the most violent capital in South America."

He has spent $4 billion on Russian weapons against the imaginary threat of a US invasion. His foreign policy consists of trying to build an anti-US alliance of "21st-century socialists" like Cuba, Nicaragua, Iran Bolivia. He has been accused, convincingly in the case of Colombia, of aiding communist guerrillas and harboring violent Basque separatists from Spain.

In advance of next September's congressional elections, he has begun jailing opposition leaders on assorted trumped-up charges, such as the crime of spreading false information -- the false information being criticism of Chavez and his policies.

Venezuelans, to their credit, stubbornly cling to democratic traditions. Despite his control of the judiciary, suppression of the opposition media and lavish spending on his base in the sprawling slums, his re-election in 2012 is no foregone conclusion. There may be a limit to Venezuelans tolerance for lowered standards of living and diminished freedoms.

Chavez' explanation: "There's an economic conspiracy against the revolution to boost inflation, increase shortages and malaise among the people."

We know who the conspirator is.

http://www.newschief.com/article/201005
17/NEWS/5175044/1013?p=1&tc=pg