January 22, 2007
PITY THE POOR VENEZUELANS:
Collapsing Venezuela (Richard W. Rahn, January 22, 2007, Washington Times)
Since 2004, the Venezuelan Central Bank has transferred about $22.5 billion to accounts abroad by the Chavez government, and about $12 billion of that remains unaccounted for. It has also been reported that the gold reserves have been removed from the Central Bank.
Mr. Chavez has also set up a "development bank," which operates without transparency. As the Chavez government takes over more and more of private industry, it also ceases reporting on the financial results of those industries, such as the state-owned oil company, which operates Citgo in the U.S. Mr. Chavez announced this month he will take over the privately owned telecommunications and power companies, and we can expect that shortly after he does so his government will also stop reporting their finances. Increasingly, Mr. Chavez uses the massive oil revenues the country receives, as well as other government revenues, as his own private piggy bank.
Where has all the money gone? It has gone to buy foreign political influence and loyalties in places like Cuba, Bolivia, Nicaragua and even the United States (notably to subsidize some New England fuel oil consumers through a company controlled by members of the Kennedy family). The money has gone to buy weapons from Russia, Spain and elsewhere, endearing those countries to Mr. Chavez. The money has gone to local cronies for inflated infrastructure and economic development projects and to buy the loyalty of government officials and supporters, including judges. [...]
Mr. Chavez and his cronies had already been spending far more than they were taking in before the recent drop in oil prices. Without a big jump back up to $70 a barrel or more for oil, the Venezuelans will be increasingly squeezed, and you can bet the blood from the innocent Venezuelan people will be drained long before those on the take from Mr. Chavez agree to have their looting stopped.
They're paying a high price as the Western Left tries one more time to show that socialism really can work. Posted by Orrin Judd at January 22, 2007 3:34 PM
I wouldn't be the least bit surprised if Kofi Annan and Mark Malloch Brown had some connection to the missing $12 billion.
The US should kidnap Benan Sevan and bring him here for trial. A simple act that would send the fear of God through Turtle Bay. Would George Voinovich weep?
Posted by: jim hamlen at January 22, 2007 6:15 PMChavez is also about to take over 1 of the 2 private TV networks (RCTV). NPR did a story on this the other day, talking about his political goals (he perceives the 2 networks as being biased against him) and wondering whether the novelas and other staples of Venezuelan TV will disappear. What the story did not mention is the economic reality: Chavez will likely put the station in the hands of cronies, who will continue to run it as a commercial enterprise (but in the name of the People of Venezuela) and kick back a % of the profits to Chavez. He needs the profits from the nationalized industries to pay off the military leadership, who would otherwise oust him in a heartbeat.
Posted by: Foos at January 22, 2007 9:06 PM