Here’s more thoughts about Venezuela and Chavez, you can read it
Thinking a little bit more about Chavez’s plans, I am curious to see how this comes out. With the largest oil reserves in the world, he may be able to live with the massive inefficiencies that a socialist system brings with it. Of course if they didn’t have to those inefficiencies eating away their money, there would be even more to go to the regular folks… There’s an interesting article on the arab news site(http://www.arabnews.com/?page=7§ion=0&article=91073&d=18&m=1&y=2007) that talks about the similarities between Chavez and a former Venezuelan president. The key to Chavez having any hope of doing what he intends and for him to stay in power is high oil prices. It wouldn’t seem to be too much of a problem these days with China and India always increasing their demands, but one can never tell. It is quite possible that supply could free up if the Iraq situation ever gets on track (long shot I know) and Russia and Canada are wild cards in this scene as well. Opec is a powerful cartel, but all cartels live with the risk of their members cheating on the deals they make. Usually it is the countries that need the most cast that are liable to cheat on production quotas. Nigeria, Russia, and Venezuela are the most likely candidates for cheating… If Chavez is lucky enough to enjoy high oil prices, they might not do too badly, they could certainly be better than they are. Of course if oil prices stay high, they could be even better by not going with a socialist government. I’m guessing the difference would be something like the one between Egypt and the UAE. While Egypt’s standard of living would be a likely upgrade for the residents of Venezuela, the thugocracy/socialist approach will prevent the country from approaching the unbelievable standards of the well functioning gulf states. Hugo Chavez will most likely amass a fortune comparable to the Saudi royal family (just like any good socialist would:-), but his subjects will never be able to taste it with his current plan…
Isaac