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Why oil, not Maduro, rules Venezuela

Countries like Venezuela have a very specific measure by which to judge the performance of their governments.
Last modified: 21 Feb 2014 08:43

If there is a constant in reporting from Venezuela, one can normally be assured that during any major event - except the death of Hugo Chavez - wealthy kids will be burning garbage and chanting slogans in Altamira Square.

Since around 2008, or perhaps even 1998, the rhetoric from both the government and opposition has been more or less the same.

In a nutshell, the government boasts about reducing inequality, building new homes, opening subsidised grocery stores and generally improving life for the country's long-neglected poor majority.

The opposition decries corruption, an ineffective bureaucracy, a lack of institutional independence and rampant criminality. This discourse has not changed much in years.

Words like "fascism”, “dictatorship”, “imperialism” and “socialism” are thrown around ad nauseam, but there is really one key fact that defines Venezuela in the Bolivarian period.

When the now deceased leader Hugo Chavez won his first election at 1998, oil traded at around $10 a barrel. Today the price is ten-fold.

This gush of cash into the country with the world’s largest proven reserves, rather than political buzzwords and slogans, is the defining element of 21st century Venezuela. And it should be the yardstick against which the performance of any government is measured.

Socialist supporters frequently point out that their party has won more elections than any other in Latin America over this period. The Socialist Party has only ever lost one vote out of 19 contests. They must be doing something right, according to their backers.

Even with inflation running at 56 percent, and around 20,000 murders annually, comrades of President Nicholas Maduro won more than 75 percent of the seats in local elections as recently as December.

Who drives the bus?

Compared with previous governments, the socialists have made significant achievements. But with government revenues rising ten-fold, the opposition notes that one should expect no less - and hopefully a lot more. Is the country ten times better off than it was in 1998? Few, including many Chavistas, would say that it is. 

Venezuela today is more dependent on oil exports than it was before the socialist period. Every self-respecting leftist economist in Latin American history has bemoaned dependence. Raw materials are exported and value added manufactured goods imported from abroad. This dynamic has only gotten worse.

Saudi Arabia covers its oily politics in a veneer of Wahabi Islam, Russia draws on the impulse for czarist-style stability and a return to traditional values, and Venezuela calls it socialism.

From the sands of Saudi Arabia, to Russia’s frigid tundra and Venezuela’s jungle, the economics of oil - rather than ideology - drives national agendas.

In 21st century Venezuela, global oil prices drive the bus rather than Nicholas Maduro. And any government, left or right, should be measured by how well they ride the wave of high prices. Nothing lasts forever.