Venezuela’s populist authoritarian President continues to battle a slumping economy, high inflation and faltering popular approval ratings. With the national oil company (PDVSA) the chief lifeline of his regime, Chavez will literally beg, borrow or steal to keep pumping oil.
Chavez’s nationalization mania took off in earnest in 2007. Last year, facing $40 billion in debt, many properties of foreign oil and service companies were nationalized. This week the Chavez’s continued his war of attrition against foreign operators, commandeering 11 U.S.-owned oil drilling rigs belonging to Helmerich and Payne of Oklahoma.
Chavez promises all will be compensated at market value, hence theft with compensation. One has a feeling the growing line of international claimants for compensation in Venezuela has begun to resemble a visa line outside an American embassy. As for Chavez, he seems to enjoy terrorizing investors just as he favors terrorists in general.
It is also strange that for all Chavez’s many agreements with Belarus, China, Russia, Iran, etc. for joint investments and oil production, he can’t stop going after American and other western companies.
This latest round of legalized plundering comes amidst continued outcry over the regime’s own ineptitude that allowed thousands of tons of food to rot in government warehouses and news filtering out regarding a substantial oil spill in Lake Maracaibo. Overall, Venezuelans are paying the price for Chavez’s throttling of economic freedom.
No wonder, the State Department’s point man on Latin America Arturo Valenzuela called Venezuela the toughest problem for the U.S. in Latin America. Unfortunately, his bosses have yet to devise a serious Venezuela strategy.