How do you eat a barrel of oil?

/ May 16, 2013

I ask ’cause if the dire predictions come true, that’s what we’re gonna have to do. In the Transitions blog, I wonder if we’re on the road to becoming a failed state. My money quote:

Venezuela has so far avoided the fate of its neighbor Colombia, a country still deep in a long civil war with Marxist guerrillas and drug cartels. This is largely due to the deep pockets oil has afforded the government, which allowed for state presence even in the most remote corners of the country. It is hard to see how that presence can be maintained if oil rents were to dry up significantly, and for a prolonged period. This could lead to the type of problems that have bedeviled Colombia, or even poorer neighboring failed states such as Haiti.

Even though its problems are of its own making, the thought of a large, failed state in the heart of the Western Hemisphere should trouble the continent’s leaders.

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16 thoughts on “How do you eat a barrel of oil?”

  1. Somewhat OT, and related, let’s say, to the economics of journalism.

    If the money-quote is, as it seems, premised on some kind of market value assigning transaction, then, I don’t think you can money-quote yourself. But, instead would require for some other reader to come in and freely offer to pick it up…

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    • LOL!! True, money-quotes, like compliments and accolades, can only be given/pointed out by someone other than the author. Otherwise, good post.

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      • Believe it or not, I have given it some thought. So what do you suggest I use to point out the part of the piece that I think is most original when I’m the author?

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  2. Only a little tiny thing. Colombia with all the civil war, and the guerrilla, produced their own food. First time there, 2001, and my family other times, with guerrilla nearby cities etc, going to a supermarket or even in TUNJA you could find food. I could not find Diet pepsi or diet coke ( it seems that by that time, and hate it for that people just eat sweets and everyone was so thin!) .

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  4. Venezuela is already a failed state, and, barring a major political change at the top, or a sudden sustained sharp spike in the price of oil, is becoming more of a failed state as each day passes….

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    • Sadly Venezuela is more than a failed state , its also a failed society , at least a society that cannot function but for a small number of its members and even then with many flaws and dificulties . That society has begot Chavez and through him a monster State . The task is even bigger than might appear .

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  5. Actually, Haiti is a useful comparison, in a lot of ways. Starting with poor resource management.

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  7. Haiti is not a valid comparison. Haiti has a population of 11 million people living on land that cannot produce enough food for one million people, even if it were managed well. Venezuela has enough fertile land to easily feed itself and export enough to feed all the Caribbean Islands, assuming it is put under cultivation. In fact, Venezuela could or should be the “bread basket” for all of the nearby mountainous Andean regions (Colombia, Bolivia, Ecuador).

    When the “Revolution” finally collapses, one of the top priorities for the new government should be to promote agribusiness and allow production to expand, by removing all of the political and economic disincentives. Aside from the obvious benefits, it will also help the cities by providing jobs for people to leave the cities and return to the countryside and small towns. Without the population pressures on the large cities, it will allow them a breather to implement the needed urban planning measures that have been long abandoned, and start the process of eliminating the vast areas of unofficial dwellings (“ranchos”).

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    • How did Haiti get to that point? There is a good and easy to read book by Jared Diamond on this subject called Collapse. It is also among the most corrupt countries in the world. Anecdotal accounts I have heard show similarities in the interconnectedness of government with mafias in the slums similar to Venezuela.

      Also, Sean Penn visits there. So Haiti is an excellent comparison. But I agree that it has its limits.

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      • Jared Diamond’s books, specially Collapse (the one you meant) and Guns, Germs and Steel are great reading and food for thought.

        Now: the case in Haiti seems a little bit more complex than “they cut off all the trees”.
        Of course, a nation where most people were from brutally out-rooted origins and education was non-existent had very bad cards. But then you also had the free trade agreement stupidly implemented, without any second thoughts and, most importantly, the aid industry, which is a Mafia onto itself.

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    • Roy, I don’t know…urban planning is something we don’t do since…well, I don’t know when there was planning in Venezuela.

      One thing is the concept of federalism, so little understood in Spanish countries. We need to depart from the very old (seemingly eternal) paradigm, which is about one central, national caudillo wanting to have all power because ‘”federalism doesn’t work in Venezuela” versus a group of wanna-be local caudillos who want to become the caudillos in their own territories and only for that they tell the people they need ‘decentralization’.

      When the regions start to get enough support, when there is an effective national plan for national development and coordination, most people will want to try their luck in their regions.

      I don’t see any talk about this.

      Chávez wanted to control everything and accomplished nothing. He had grand plans to develop this or that region and it all was just a waste of money. Now: what plans do opposition have about these regions?

      One of the crucial aspects we need to tackle is how to enforce regional as well as national accountability measures. That means, for instance, the possibility of opposition and some main factors of the public to demand concrete answer to concrete questions, a certain frame for actual public debates (big challenge: the concept of “debate” being virtually unknown not only among the average citizen but also among our politicians)
      and transparency mechanisms that need to be fully engrained.

      In the past few decades some of the best agricultural land in Venezuela disappeared by the wild urbanization in such regions as Carabobo and Aragua. Our geography is quite specific. I am no expert on this but the geological conditions in the Coastal Range are completely different than in the Llanos. Even with modern technology, the things you can grow in Carabobo are often different than those you can grow in Guárico or Monagas.
      So: urgent measures need to be implemented to stop the destruction of the remaining agricultural land in the North. But you need to create incentives in the Llanos and elsewhere.

      And by the way: why should we have all the top research centres or governmental agencies in Caracas? It is not about trying to produce a Brasilia (which doesn’t really work). The USA has a lot of national centres spread around the country. Even very centralised France does.

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  9. I don’t think Venezuela will become a “failed state” as long as there is enough oil revenue to pay a security force. That could be as little as $10B/year (after oil production expenses). Recruit 100,000 goons at $50,000/year each; another $1B/year for arms and ammo. If there is “rebellion” anywhere, just kill everyone. This will lead to millions of refugees into neigboring countries, but who cares? The rest will shut up and live as they can on the dregs.

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    • Well, what you’re describing is something like Congo which is … a failed state!

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