Sobremesa Chronicles

TheDevilsExcrementBitching about our country is sort of our national sport. We all partake, more or less. But you know where I draw the line? When people say that “oil is a curse.”

Oil is a blessing. A huge one. Folks – oil is the only thing we’ve got goin’ for us.

Our agriculture is the pits pretty much everywhere outside of the southern fringes of Lake Maracaibo – and you know I’m right. Our fabled llanos are not really all that good for growing much. And let’s not even discuss the agricultural potential of Delta Amacuro or Bolívar. Cattle is the only thing we can grow in those places … y de vaina.

Fishing resources? Ni hablar. The Caribbean is just too warm for large-scale fishing potential. Name one Caribbean country where fishing is a main source of income… (crickets)

And let’s not even talk about tourism (we’re too violent for that) or innovation (not with our universities being drained of its talent).

If it weren’t for oil, we’d be Mali.

We have an abundance of a natural resource that thankfully is still in high demand. We have enough of it to last us ages. Think of all we can accomplish if we only administer this wealth right.

So let’s not berate the one thing that can get us out of this hole.

Take it away, Javier Corrales:

“Despite Maduro’s claims, Venezuela’s RIDDS (recession, inflation, dwindling foreign reserves, debt, and shortages) is not the result of external shocks, or even the local bourgeoisie’s “economic warfare.” It’s not the result of oil dependence, either. Neither does it have much to do with the economic incompetence of the country’s leaders, conspicuous as that factor may be. Venezuela’s economic woes started long before the current downturn in oil prices and the start of Maduro’s administration. Rather, the blame for Venezuela’s RIDDS must be laid on the nature of the country’s regime, which disincentivized its leaders from competently managing the oil boom, and is now crippling the government’s ability to respond to the downturn.”

It’s not the oil. It’s the kleptocrats we empower.

Have a great weekend, everyone.

183 thoughts on “Sobremesa Chronicles

  1. Good snippet me thinks.

    Falta de castigo (social) y juridico es lo que ha creado los incentivos para que todos quieran el coroto y luego de tenerlo se fajen a robar!

    The silver lining on the chavista orgy is that the conditions are going to get so bad so fast, that hopefully there is an opportunity for learning the lesson, and driving a change fro accountable effective lean goverment.

    Alberta should look into Venezuela’s fate , with respect to the obvious and important differences and steer away from Robin hood policies that are unsustainable and prejudicial to the societies.

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  2. La impunidad que resulta como consecuencia directa de la celebración y exaltación del comportamiento criminal que es la “viveza criolla”

    Al erradicar la viveza criolla de la mentalidad de la gente es que habrá chance de acomodar esto.

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  3. Oil and/or excessive natural riches are, at least, a double-edge sword.

    Easy come, easy go, as the saying says. Too much money brings hordes of corruption. And corruption is worse than Ebola virus: highly contagious, for too. many reasons to expand on a blog as this.

    Suffice it to say that there is data supporting these claims:

    “A new book from the Open Society Institute, a foundation financed by George Soros, points out that resource-poor countries grew two to three times faster than resource-rich countries between 1960 and 1990 (even after adjusting for differences in population, initial income per head and other variables). Revealingly, the resource-rich countries began to lag only after the 1970s—in other words, only after oil wealth started to pour in.

    Two factors explain this. The main economic problem is known as Dutch Disease, after the effects of the discovery of natural gas in the Netherlands in the 1960s. An oil bonanza causes a sudden rush of foreign earnings; this drives up the value of the currency. That, in turn, makes domestically produced goods less competitive at home and abroad. Over time, domestic manufacturing and agriculture fade and growth suffers.”

    http://www.economist.com/node/1795921

    And what more proof than Uslar Pietri’s Warnings about “sembrar el petroleo” in Corruptzuela?

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  4. “We have an abundance of a natural resource that thankfully is still in high demand. We have enough of it to last us ages. Think of all we can accomplish if we only administer this wealth right.”

    Juan, I am really really surprised you believe that.
    Have you ever done the maths?
    Just do the maths. Even if we were to behave now like Norwegians (and had their educational levels): oil won’t take us much further.

    There are 30 million inhabitants in Venezuela. Whether Venezuela starts to produce much more oil or just like now but manages it a zillion times more efficiently: it won’t do.

    Oil won’t have the same impact 30 years from now. Do you think until then oil prices will keep increasing a lot? Really?

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    • The above article happens to be from a Norwegian Professor. Education is the key, as I always say, especially if a country has the infamous “resources curse”.

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  5. Interesting post. i believe you’re right in the short run. If Venezuela were to lose all of its oil today, we would be doomed.

    However, speaking from a developmental perspective, one can argue that the reason why we lack in innovation, tourism, and in other industries is precisely due to our dependence on oil. Perhaps we would have a flourishing coffee and cocoa industry, like our neighbors to the west. Colombia’s successful development may probably be biggest argument for oil being problematic to our development. The numbers show it; though Venezuela develops much faster than Colombia under good economic conditions, our society also tends to decline faster in times of austerity.

    And I’m not even talking about the authoritarian tendencies of oil-producing countries… that merits an entire book.

    Also, did you write the beginner’s guide? In Hausmann and Rodríguez book (which I read as I looked through your guide), they argue that Venezuela was unable to properly develop partially due to the lack of transferability of oil-sector technology to other industries.

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    • Apparently, as a long-term consequence,
      resource-wealthy countries lose out on ‘‘learning
      by doing’’ since manufacturing industries cannot
      expand, and the increased consumption and
      production booms are invariably followed by
      periods of bust (Rodrı´guez and Sachs 1999). The
      empirical evidence for lower economic growth
      among resource-wealthy countries relative to
      their resource-poor counterparts is quite numerous
      (Dell 2004). This is true in the case of highly
      sophisticated econometric analyses as well as in
      careful comparative research based on a case
      study (Auty 2001; de Soysa 2006; Lal and Mynt
      1996; Sala-I-Martin 1997).
      Ot

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    • If we developed the best coffee and cocoa export industry in the world wed be broke , just do the math . Education alone doesnt do it either , its the creation of the human infrastructure for maximum profit to be made from our resources what might help us achieve a better life , but absent oil we can look at disaster in the face. For every Singapore there are dozens of countries which didnt make it . Singapore happens to be peopled by Chinese and Indians , does anybody know economically what happening in these two countries right now and why ??

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      • I don’t believe you understand my argument. I’m not saying that cocoa and coffee would make us rich (apologies if it seemed that way). My argument is that the focus on oil detracts from other industries. Sure, cocoa and coffee may not be profitable, but the development of those industries would lead a livelier agricultural sector OVERALL. In this way, that example serves the larger argument of oil-deprived economies being more diverse and less susceptible to price fluctuations.

        Singapore is not comparable to Venezuela whatsoever (historically, culturally, politicaly, etc.), so I’m unsure why you mention them. In any case, most Latin American nations that are resource-rich have been more vulnerable to extractive industries that tend to damage the economy by seeking rents instead of increases in productivity.

        I suggest that you read The Magical State by Fernando Coroníl. It is a wonderful anthropological historiography of the influence (both positive and negative) that oil has had on our country.

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        • I have read and admired the book . Its a tour de force on the consequences of combining great wealth with a corrupt culture , but its not the great wealth that creates corruption, rather its the corrupt culture that is methastized when it has the possibility of feeding on great wealth . We were corrupt before oil came into our lives , read our history , but we were among latin americas most poor countries and the corruption was held in check by our own poverty .

          There is a third factor which has to be mentioned to explain the growth of corruption , the coming of electoral politics , Fukuyama explains it rather well , when a country begins using the institutions of democracy , pols need to movilize the masses to support it , and the easiest way to do this is by creating and nurturing a large patronage system , were cronies and allies are compensated for their political support , this means that corruption becomes popular , very wide spread . In the US patronage and populism entered US politics through General Jackson . The only way of countering public corruption is by creating an institutionalized an un partisan professional civil service , this was achieved in the US mostly in the last third of the XIX century (with a great deal of luck and efforts because pols like the convenience of patronage) , Fukuyama however points out that creating such type of career professional civil service is best done before electoral politics become entrenched because one a country starts acting as an electoral democracy the temptation to use patronage corruption is very strong and difficult to put an end to.

          So even if great wealth combined with electoral politics helps the spread of corruption and turns loose the corrupt urges of people as they interact with political power , the corrupt culture has to exist in order for the wealth to be used corruptly.

          One last thing , one thing is corruption being used by the rulers for their own private venal benefit and quite another the use of corruotion as a tool of power . it is the latter kind of corruption I think which might cause most damage to the life of the country.

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  6. I guess the response to that would be that state control of oil in such abundance ensures that there will be nobody in power but kleptocrats. Once a groupito gets their hands on it, by ballot or not, it will be hard to wrest it away.

    Not to go all Tom Friedmanish, but there does seem to be a high inverse correlation between oil wealth and democratic institutions and the rule of law.

    What you see when oil prices fall, is entrenched powers fall with them.

    When you consider along with that problem that resource wealth inflicts on institutions and human productive capacity, the impact that fossil fuel use has wrought on our climate, it really is folly, our reliance on oil. It may well be our last folly. Have a great weekend everyone!

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    • I’d add, my understanding is that the Caribbean is fish-less not because it is warm, but because we have eaten all the fish, hence, all those old fishing boats looking all beaten and romantic doing nothing on Carribbean beaches except carting tourists around. But I will defer to the biologists on that one.

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      • Actually, it is neither the temperature, or the overfishing. There was never much fish to begin with. You see those beautiful, clear blue waters? They are so clear cause there is no phytoplankton (the base of the food chain). Most of the Caribbean (and tropical and subtropical waters) are nuttrient-poor. So, little phytoplankton (and other upper food web organisms) can be sustained. Great fisheries happen in temperate and high latitude regions where plenty of mixing in the water brings nutrients to the surface to feed the phytoplankton and the rest of the food chain. These places are not blue, but green.

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        • I’ll attest to this :-)

          One of the most productive fisheries is the one carried by the Humboldt Current off the coast of Chile and Peru. If you ever see the ocean in a sunny day you will see it a greenish tint to it. Now sunny days are rare and usually happen between December and April.

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          • Indeed, these are zones of upwelling, in which the combination of wind patterns and the rotation of the earth turns water along the coast away to sea; this water must then be replaced by deep water loaded with nutrients. Upwelling regions acount for 0.5% of the surface of the ocean, but 50% of the fish production!
            Other famous areas of upwelling are along the US west coast from northern California to Washington State, and the east coast of Africa. There is also open ocean upwelling along the equator, but nutrient levels there are much lower. In venezuela, there is mild and localized upwelling in Sucre State and near Margarita.

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        • This is interesting, hgdam, but isn’t there also over-fishing in the Caribbean? (even if, evidently, it never was so full with fish) Or are the stories I get from Margariteno fishermen just bogus, just myths? (about more fish in earlier days)

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          • Yes, there is overfishing everywhere. My point was that there was never much fish to begin with in the Caribbean, but not because it is warm, but because nutrients are low.

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        • thank you. So much knowledge on this blog! I do think though and you may no better, that there has been substantial depletion of stocks that do exist. Otherwise, why are there so many unemployed fishermen with empty boats?

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        • “Upwelling” (or rather the lack of) is the key word in the fishing potential matter. Other than that I am very pleased the conversation turn into the right concepts and ideas.

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    • What you see when oil prices fall, is entrenched powers fall with them.
      It certainly happened with the Fourth Republic in the 1990s.

      Oil rents (% of GDP)
      1990 32.9%
      1998 12.7%

      courtesy of World Bank http://data.worldbank.org/

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      • Ok, that finally explains Maduro. Maduro is shrinking the non-oil portion of GDP to raise the portion of GDP from oil rents. That way his entrenched power will be less likely to fall. Smart.
        The only problem is that when oil prices drop, Maduro needs to shrink the non-oil sectors even faster. He is giving it his best shot though.

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  7. Just to kill your entire argument, I will name a country with no natural resources, leaving in the middle of the desert, under a millennial war, and able to succeed in agriculture and technology over the years: Israel
    I know, they are heavily funded by the US but we could have the same funding from our own oil industry, right?
    I don’t share a dime on their values and reasons to be at war with Palestine but the facts are real, they managed to succeed in very bad conditions.

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    • Israel is proof that education is the greatest resource. Israel wants to extend education to Palestinians but the Palestinians refuse to think and believe oil and land will make them better off. It did not work for Vzla and it won’t work in Gaza or the West Bank.

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    • I think there are far, far too many different variables in that comparison to make them equivocal.

      Nearly a sixth of the country is foreign born (compared to 3-4% for Venezuela, of which 60% of those are from Colombia), and that’s well-diluted down from what it was even 10, 20 or 50 years ago due to domestic population growth of the early immigrants. Moreover, most of these immigrants were as much “ideological” migrants as economic ones, bringing with them extensive education, wealth and other skillsets (along with financial ties to their countries of origin) that would make them more capable of “boosting” the economy.

      I also think the external pressure of a literal threat on every side forces them to be substantially more productive.

      Fascinating charts and data from 2010….
      http://www.theguardian.com/global-development/interactive/2013/jan/31/remittances-money-migrants-home-interactive

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  8. . Rather than autonomy for
    doing good, natural resource rents, particularly
    those that are easily captured, such as oil and
    minerals, create perverse incentives that allow
    rulers to do badly without facing punishment.
    High rents dissuade the right policies for
    competitive industrialisation, which in turn has
    repercussions for the economy and the society
    (Auty 2001). In short, access to easy money
    removes the conditions driving the rise of ‘‘developmental
    states’’. The effects are apparently both
    cognitive (generating a spend–consume mentality)
    and strategic (Ross 1999). Resource rents
    apparently create factional political states,
    where rent capture allows politicians to survive
    by dispensing rents, rather than making hard
    choices about reform (Torvik 2002). Political
    survival dictates profligacy and waste, rather
    than providing public goods (Gylfason 2000). In
    fact, the ‘‘paradox of plenty’’ is driven by policy
    failure – human folly and vanity.
    Another subtle view of outcomes under
    resource-wealthy conditions is the so-called
    rentier state effect. According to this view, easy
    22 Indra de Soysa and Helga Malmin Binningsbø
    r UNESCO 2009.
    money leads to bad economic outcomes because
    rulers buy stability by spreading the largess of
    resource wealth. (i.e. Corruptzuela buying entire Governnments’ silence and complicity with oil)”

    The article quoted here clearly demonstrates with Extensive, proven data why the “resource curse” is real.

    http://www.researchgate.net/profile/Indra_Soysa/publication/230187540_The_devil%27s_excrement_as_social_cement_natural_resources_and_political_terror_19802002/links/547461660cf245eb436dda25.pdf

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  9. One of the idiosyncratic Venezuelan ideas I perceived is this syllogism:

    The government has lots of oil => The government is VERY rich => The government should solve all the problems.

    Then you add the fascist idea of “un militar arrecho que ponga este pais en orden y agarre a los -corructos-, como Perez Jimenez ” (A bad ass miitary strongman that will instill order and catches the crooks, like Perez Jimenez).

    And Chavez steps into the breach in messianic fashion fulfilling the previous popular prophecies.

    Chavismo was not an accident but the natural conclusion of a democracy that over promised and a society that forgot its poorest.

    So it’s not an oil problem.

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    • Resources curse + Ignorance, under-education = Disaster = Corruptzuela.

      Oil is CLEARLY an intrinsic part of the equation.

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    • It didnt forget it poor , thats the sentimental gooey explanation , they needed its support to win elections so they corrupted it through use of extensive political patronage and all manner of populist freebies and subsidies . There were many ways in which this corruption operated , one you gave sindicatos headed by political supporters great leeway in extorting benefits which in an rational economic system they would not have gotten. Example . an engineer friend of mine headed a cuadrilla of workers to repair phone connection problems in the old CANTV ( before it was privatized) , during normal working hours the workers would hardly move a finger , did all the loafing they could , if you complained the sindicato would bring the wrath of the CANTV management against you , then when you reached the overtime hours they did the job, taking their own good time. Second example , you had 10.000 reposeros in the roster of Instituto nacional de Puertos at La guaira , people who never worked but went religiously to collect their salaries at the middle and end of each month , (before privatization) , if you tried firing any of these reposeros the sindicatos would skin you alive , they represented the workers interest. and the govt supported them because they were political allies. third example negotiating the Jose workers contract in the midst of its construction , the sindicates insisted that to protect the health of their workers they needed an ambulance and nurse wherever you had a group of 10 or more workers ,of course the govt backed them up . The reason why they needed nurses was because these being highly paid jobs they could get special favours from the girls who wanted to be hired as nurses because of the good pay. Before the 5th many among the poor were given corrupt benefits a dozen different ways in compensation for their political alliance. After the oil prices fell and the population quadrupled maintaining this kind of clientelar corruption became untenable and CAP realizing this tried to sanitize the system by privatizing public companies left and right and other measures , people felt betrayed , they had been deceived , as citizens of a rich country they didnt want to lose all the various corrupt benfits they had grown accostumed to, so they begun loathing the system of political parties that could no longer keep them loaded with benefit and they started looking for the guy who loved them and would restore the old corruptions , finally they found him in Chavez . Corruption is not just for pols wanting to enrich themselves , its for anyone willing to exchange govt goodies in exchange for their political support and that comprises every one , the middle class and the poor.

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      • “It didnt forget it poor , thats the sentimental gooey explanation , they needed its support to win elections so they corrupted it through use of extensive political patronage and all manner of populist freebies and subsidies .”

        Praise the gods! Somebody finally says something against the most used idiotic excuse for everything in Venezuela! I thought I was the only sane person here!

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      • CAP realizing this tried to sanitize the system by privatizing public companies left and right and other measures , people felt betrayed , they had been deceived , as citizens of a rich country they didnt want to lose all the various corrupt benfits they had grown accostumed to, so they begun loathing the system of political parties that could no longer keep them loaded with benefit and they started looking for the guy who loved them and would restore the old corruptions , finally they found him in Chavez .

        Exactly. No accident that Chavez was elected when oil fell to $10, at the end of a decade of falling oil prices.

        For those new to the blog, from Beginner’s Guide at the top of the CC webpage, The petrostate that was and the petrostate that is gives a good explanation of the Petrostate distributing goodies. The Fourth Republic distributed goodies. Chavez did also, but with the difference that with Chavez it became personalized. The party or the state wasn’t distributing the goodies any more- Chavez was distributing them.

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        • “The Fourth Republic distributed goodies. Chavez did also, but with the difference that with Chavez it became personalized.”

          Don’t forget the most important thing about the greatest difference between the two, the 4th didn’t deem everybody who didn’t agree with it deserved to be exterminated, the corpse did.

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  10. You (Venezuelans) screwed yourself. Electing Chavez, a known coupster with autocratic tendencies, was your fatal mistake. Agree that AD and COPEI had run their course when he was elected, but REALLY!! And not only that, you going to stay screwed forever.

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    • This argument is exhausted. “Known coup plotter”, yes; “autocratic tendencies”, nobody really knew, not even those whom claim they did (if anything they had a hunch at best). They guy changed his rhetoric and discourse in 2000. Retrospective analyses are useful to understand causes, no consequences.

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      • Your right (especially on my second point), but you’re still screwed (your “consequences”). Nobody can turn this around, Future historical analysis will see Chavez as a total DISASTER. Even now that much is evident. Not that Venezuela matters much. A side show of previously failed socialist policies. I hope someday Venezuelans will realize this. Thanks for replying.

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  11. Oil ,beach, mountains,sun,
    Natural gas,water,pargo,smiling people, piña, palm oil, parchita, mango, arepa,chicas,malibu, coral,
    Bauxite ,tropical islands, tepui, polar,pinchos,rum, piñata
    Coal, aqua thermales,
    Iron ore, castles, culo,
    Gold, gasolina, rubber,
    Diamonds,horses, waterfalls ,anaconda,
    Copper, langosta, caves,
    Nickel,oysters, carne,
    Asbestos,music,
    Bitumen,dancing, lightning, lakes, jasper,
    Uranium, pearls,waves,
    Palladium,wind, sky,
    Titanium, desert, bridges,
    Timber, crystals, cacti
    Coffee, sima, caiman
    Cacao, avacado, fresa,
    Zinc, Indios , fish,
    Lead , condor, Ajo,
    Titanium , aloe, hardwood,
    Feldspar, jaguar,steel,
    Lithium, guanabana,
    Palladium, guava ,
    Silicone , kite, almonds,
    Manganese, camarones,
    Barite, Cana , hammock,
    Salt, zapoara, rio,
    Nitrogen , hydro,
    Chrome, solar, palm
    Pyrophyllite,trees
    Gypsum,flowers
    Phosphate , aji,cashew,
    Bentonite , caribe,
    Magnesite , ocean

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  12. It’s NOT the “…kleptocrats WE empower.”–It’s the “WE”, the Venezuelan society that elected them, that prefers to be Petro-State peons, than responsible hard-working citizens. I once met a Caracas Canadian Embassy Agricultural Attache that said, “If only Canada had Venezuela’s climate/agricultural natural conditions, we (Canada) would produce three crops a year, instead of only one.” Venezuela could literally have more income from tourism than oil, what with its wide variety of beautiful natural tourist attractions, but its “WE” would always be an insurmountable obstacle. Remember when Aruba was a one-hotel beach with no infrastructure/service just 50 years or so ago, and now has bartenders that speak 5 languages? Can anyone see this sort of thing happening in Venezuela? No, the WE will always get in the way, no matter how poor the WE get….

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    • Beautiful natural attractions? We are destroying them faster than what most think. Venezuelans are worse than Soviets destroying environment and that has been the case for many decades now.

      200 years ago Humboldt compared the Valenia Lake favourably with such lakes as the Geneva Lake.

      Nowadays the Swiss, with a much higher population density than Venezuela, keep a Geneva Lake that is clean, where people can swim, fish, surrounded by agricultural land that produces a lot even if, as someone mentioned here, without the possibility of multiple crops a year as in Venezuela, and a wonderful tourist industry.

      Meanwhile in Greater Valencia we have an environmental disaster, the lake is full of chemicals and crap,
      some of the most fertile lands of Venezuela are gone for good, given place to more urbanizations, slums…
      both oppo and chavistas mayors destroy every piece of mountain, they build buildings they shouldn’t (San Diego will have a huge one in a couple of years destroying a lot of view and worsening environmental conditions around it) and many educated people in the area tell me “ah, pero es que ahora es que tenemos tierra”

      Morrocoy National Park is collapsing from all the rubbish – both the one brought there by the
      humble people coming day after day and by the better off who for many decades now have placed their yachts in that area with the connivance of the military.

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    • “It’s the “WE”, the Venezuelan society…”

      As a math-obssessed engineer, I often refuse to use absolutes to stick social groups in the same sack, the true reason that most of the venezuelan society gets in the way of progress without knowing it (or willingly) is the fact that populist politicians have shaped those people to think that way, because populist policies are way more effective to gain easy votes from ignorant people than actual development policies.

      It’s not only that a lot of people in Venezuela have been conditioned to consider populism good, they also have been taught to hate those who actually work with a passion, not because they “have more than the poor”, but because working, independent people aren’t tied to the whims of the populist and thus can’t be controlled that easily.

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  13. Finally someone says the unbarnished truth , Oil is our blessing except that its not enough to offset our main curse , a people totally incapable of organizing its state and institutions and economic efforts in a half decent way . There is much that we can do better if we are sucessful in changing ourselves but on our own there is nowhere to go , we need the oil. We dont realize how difficult building a productive economy is with just ordinary stuff like manufactures and agriculture , specially you need people who are very hard working , ambitious , disciplined, with a talent for social organization and lots of luck .

    Many years ago I heard from a wise friend of mine something that stuck in my head , the most productive business in the world is a well run oil industry , the second best business in the world is a mediochrely run oil industry , and the third best business in the world is a badly run oil industry , what he couldnt imagine was that an industry could be so terribly run that it could go broke as is our case in Venezuela of today.

    Read what percentage of world trade during the last 10 years has consisted of oil trading and trading in other oil related products vs all other areas of trade . Then youll understand what the blog is saying .

    That doenst mean that you cant use oil income to make corruption worse than would be the case if it were totally absent . but Venezuela was a chronicaly corrupt country for decades before oil became our mainsty industry , going back to colonial times , the whole of the XIX century. Maybe less people could enjoy the benefits of corruption because it went with power and power was more socially concentrated than it is now , but there was plenty of it.

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    • Couldn’t possibly disagree with you more on this one, BB. For the numerous reasons exposed on the 3 articles I liked above.

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  14. Mr Juan Cristobal Nagel, please post this writing of yours on a South Korean blog and see how long they are going to laugh. Imagine South Korean with oil?

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  15. Floyd when I was younger i was very enthusiastic about agriculture not just as a business but as an economic activity , I poured over books that explained how agriculture functioned , the kind of recources , land , hidrology soil animal breeds needed , the different species that could prosper in tropical climes vs in other countries . Then I talked to relatives with farms in los llanos , in south of lake Maracaibo , etc and I visited their farms . What the blog describes is true , The soil in the guayana area ( close to half the country) is highly acidic, not good for intensive agriculture , Went to the llanos (t least 1/3 of the land ) and discovered that beside certain areas rich in river loam the land was very poor , in south lake maracaibo you had grass covering the whole ground , in large tracts of the llanos the soil is so poor that the grasses are interpersed with sterile grounds , the dry season is awful but the rainy season is worse . cattle that can live in these conditions are very poor milk producers , they produce 3 to 5 liters on average per cow , in Germany Denmark the US you have cattle that can produce more than 20 liters a day , one tropical tick can kill an european animal , it doesnt kill the local ones but leaves them ill and reduced to skin and bones . Ive looked at agriculture in the face and in our country unless youre located in some very limited favourable areas its hell on earth for the grower and cattle rancher . they have to work real hard and then never be certain that the reward be there. Even without taking account of the human factor , getting people to come on mondays to work , to do the job they are hired to do , the pilfering of all agricultural implements that arent tied down fast . Agriculture in some places which represent a small part of the land can allow for great growing conditions if you work hard at it and invest large amounts but for the average part of the land agriculture is nothing to brag about . To think that agriculture can replace oil as a producer of wealth in Venezuela is a joke . It can help , we need to develop to the maximum our agricultural resources but the wealth we can produce from it is very limited . Compare our agricultural resource with those of countries like argentina , brasil , even poor paraguay , Do we have the capacity to replace them as producers of the things they export , noway and if we tried it wouldnt bring in the money from one gool oil field ., I spent years trying to understand what agriculture could mean to Venezuela and ended up by having to recognize that never what oil represented for the country . At best we might be a second honduras or nicaragua . be able to feed ourselves and have a bit of surplus to supplement our oil exports but nothing else.

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    • You gotta be kiddin. I thought the “lack of resources” and Llanos crap was a joke.. A country twice the size of France, and some actually says it has no agricultural or mining or fishing possibilities, nothing but but oil?

      Insane. Wasting no more time here. I stick to the 3 articles linked before, for lack of motivation to say more.

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  16. The true curse is our inability as a people to organize ourselves so as to pursue our political and economic and institutional life with a minimum of effectiveness and civilized order . Do you think if our oil resources was all located in japan or Canada or in France they would have ended up the way we have ?? We have used natures providence to ruin our selves !!

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    • When I compare Venezuela and Canada, which have comparable population sizes and comparable oil production, I think the difference in the strength of democratic institutions and economic diversification must be because in Canada, the economy and institutions of our democracy had a chance to develop before oil came to dominate the economy, whereas in Venezuela, oil and economic and institutional development occurred (or not) at roughly the same time. Having said that, I see institutional and economic weaknesses in Canada that can be tied, directly or indirectly, to the incredible surge in oil prices over the last few years and its dominance in our economy. Just yesterday, I was looking at more political propaganda on a government services website and I thought – this is something new and shocking- and I thought of Hugo Chavez….As for Japan, I am sure they would be wrecked with oil too. They are a highly developed nation because of the resources they lack.

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      • Back in the 80’s when Puntofijismo’s engine started to knock I remember that I used to joke by insisting that the best solution to Venezuela’s predicaments was to rent the country to Japan to manage and simply pay us the amounts we had negotiated. Looking back from where we stand today it wasn’t such a bad idea, was it..?

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    • The are way more EDUCATED, civilized, Bill, just like Norway, How many types should I type the deadly equation?

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      • And they educated themselves, to begin with, in part because they had to and could. They weren’t so busy stealing and consuming the free-flowing Petroleo del Diablo. They were building things instead, building character, much like the English who came to the USA and decided to “Go West young Man”.. That’s how you build a strong country: WORKING and Educating people, not opening up an easy flow of CASH and then stealing all you can without doing anything.

        The Japanese, the Europeans, etc, had to WORK. and educated themselves in all trades. Built infrastructure, and above all built Character. Something obviously Corruptzuelans lack.

        Exactly what Uslar Pietri warned about, a deadly curse if not averted, I think he said. Exactly what numerous Scholars have explored and described in depth, the “Dutch demise”, or resource curse” is extremely welll Documented, statistically and with precise geographical/historical Data to back it up.

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        • Remember Floyd the old english adage that the empire was made in the playing fields of Eton (one of my fondest memory is watching from afar the green playing fields of Eton) , what they meant by that was that what counted was not an scholarly education but the way you formed character in people so they could achieve great things , how do you form character ( from which the will power , steadfastness , spirit of resilience, self discipline , the ambition , team spirit and love of hard work that characterized much of the british imperial effort) , you do it inmersing a people in a culture, in a social milieu where those character traits develop to the outmost . now observe the Venezuean social culture , the culture of the barrios , the kind of people it produces , are they hard working , responsible parents , self disciplined ?? unless you change the culture scholarlu education is near useless . Studies of generations of ghetto children in the US have demonstrated that the family is the main factor in the formation of character, that how much money you spend trying to educate those children is for naught unless the change in family culture allows the child to learn the character traits that are needed for it to take full advantage of the educational opportunities presented to it.

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          • Not to beat the populist drum, Bill, but are you by any chance implying that the folk from the slum-raised and the rural poor that shed their blood in the ranks of the Brittish army and navy acquired their intestinal fortitude playing rugby at Eton?

            I’m under the, perhaps mistaken (blame “Downton Abbey”), impression, that Etonians, generally speaking, moved on to Oxford and Cambridge, and from there the “The City”, Whitehall, or the Inns of Court. Many of them, of course, led the troops during the major conflicts of the twentieth century, but most of the ones who made up the military leadership during the Brittish imperial expansion trained at Sandhurst and the Royal Naval Academy (now “College”). And, yes, they very likely, attended Eton or one of the other famous public schools before donning their cadet uniforms.

            One could, of course, hypothesize, that if the Venezuelan military drew its leadership from a similar social/economic stratus, we might have ended up with a different sort of country, but far be it from me to open up that can of fishing bait.

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            • I think the reference to Eton playing fields may have been misunderstood , Eton may or may not have had the influence in the formation of its pupils character that its alleged that it had. Whats important is that there are human organizations or social milieus which have the capacity to model the character traits of the people that pass through them or who live or work in them , they can do this because they develop an organizational culture that influences the way people who are linked to it think or feel or act . The organization may be the family , the culture of the street in which young people meet and coexist , the army , a school , a work place . The thing is that people adopt character traits depending in part to genetic factor but depending also on the social or organizational culture they are brought up with or become part of .

              Problem in Venezuela there are a large portion of its people whose upbringing in dysfunctional families and disavantaged cultural milieus makes them less than responsible , disciplined , hard working honest than may be desirable for them to access the benefits of working in a modern economy . Its not merely a question of learned skills although these count too , or of the formal learning they recieve at school but f the way the respond to the challenges that life in a modern society poses for them . The problem is the way a disavantaged culture forms their character , something that simply exposing them to more years of formal education and vocational or professional training will not do . You educate the mind or the hands , but you build character and behavioural habits , and it is the importance of the latter that is too often overlooked.

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              • I’m inclined to ascribe minimal importance to “the genetic factor”. I agree with you on the role of education, of course, but when comparing imperial Britain of Victorian and Edwardian times with Venezuela during the twentieth and twenty first centuries, I believe that education and social and economic milieu accounted for much of the effectiveness of the leadership, while that of the hoi polloi was hardly superior to that of the modern Venezuelan version thereof.

                I worked in a supervisory capacity in the Bolivar Coastal Fields of the Venezuelan oil patch and had little to complain about regarding the skill and work ethic of our labor force, many of whom were only semi literate. Yes, the company I worked for made a concerted effort to upgrade their educational and performance levels, but the major incentive, I insist was good pay, respectful treatment, and support to improve their workers lives and that of their families, especially in terms of providing them with the opportunity to give their children an education that would help them secure a better future. That isn’t so much to ask from any employer, nor does it take celestial enlightenment for a government to create the conditions that make this possible. I feel we were on the right track, but screwed up royally before we institutionalized the progress we were making. The blame for that lies clearly with our social and political elite, not with the common folk. That to me that is where “The Playing Fields of Eton” play their role.

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  17. There are many countries in latin america , africa , eastern europe and asia that didnt have oil resources and which have never developed economically or which if they did, developed aenemically and by fits and starts with lot of people left behind. The absence of oil doenst by itself make people productive or prosperous , where the idea came from I havent the foggiest but its certainly false.!!

    OIl has given Venezuela many advantages , the advantages are real but our culture didnt allow us to profit as we should from the wealth that Oil gave us , What Im pretty certain is that if we hadnt had oil we would be like a big honduras o nicaragua or a big jamaica , Not norway , nor south korea , not canada or even chile.

    Its well known that if you put good wine into the wrong container you can spoil its taste , make it into a vinagry wine , same thing with advantages like oil wealth which if given to people who dont know how to manage that wealth get destroyed by their misuse of it.

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    • Don’t know anything about Jamaica but last time I worked in Nicaragua and Honduras they could feed their population without queuing for hours on end.

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      • Right. They have no choice but work more. They’had horrible government too, but guess who’s producing all the coffee and bananas, etc these days? With time, they’ll pull through: they are building Character without easy, putrid Oil.

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    • OF COURSE it’s not just Oil, but a combination of multiple factors. You can’t isolate a factor and jump to conclusions. I’m guessing you had too much oil for breakfast, Bill.

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    • Bill, we are talking about the development of countries SINCE oil and technology came around, last few decades. Not hundreds and thousands of years, or since the first men walked in Ethiopia.

      Corruptzuela and most of South America was nothing more than a few indian villages a couple hundred years ago. You can’t compare that to the Roman Empire or Chinese Dynasties!!

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  18. Every time this issue surfaces I can not but sum it up with a piece of humor which I know not where it came from. None of this academic merry-go-round! A very straightforward popular reasoning that is fundamental enough so as to include individuals from any and all social classes in Venezuela. It goes like this (and I’m sure most of you have heard it before): God All Mighty is busy creating the countries on Earth and when he comes to a small stretch of land on the northern portion of what we today call South America he goes into a sudden frenzy and bestows on that territory all the goodies listed above in Mick Campbell (May 8, 2015 at 7:05 pm). Dumbfounded by such largesse St. Peter, his secretary, inmediately inquires “My Lord, are you not exaggerating your generosity for such area”? “Not a bit”, responded God.” I will compensate by creating a human strain that will be known as venezuelans”. As simple as that.
    BTW, Bill Bass (May 8, 2015 at 8:27 pm and 9:50 pm) wrote the same but in nicer wording.

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  19. If we had no oil, Venezuela would have a third of the population, inmigration would have been much less and the wealth would not have been there. Maybe Governments would have been less intrusive and allow the private sector to develop other things, maybe tourism and cacao would be our main industries. Mali is ot a good example of what we would be.

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    • Colombia might be a good example of what we might be

      Mali is landlocked and half of it is in desert. That combination is a big big difference (no, the fact Switzerland and the Czech Republic are landlocked is not the same…we are talking about regions with very different developments in education)

      Miguel, what is your take about the buck we can get per person?

      GDP calculations are complex. Still, let’s think this through: imagine oil is managed appropriately for the first time in our history (just imagine the impossible)…our population is 30.000.000 inhabitants. The world is not going to depend on oil forever. If oil goes up again, the energy shift will come faster. Even now, it will come.
      Venezuela might be sitting on the largest reserves, but one way or the other, possibilities are limited. If the country were – through massive foreign investment – to increase dramatically oil production, this would have effects in the market and prices would go down. If it didn’t, well it would be like now.

      How many petrodollars for each citizen?

      We cannot live from oil anymore! It won’t even buy us much time to diversify.

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  20. This “Sobremesa” was good.

    Respectfully, suggestions for the next ones:

    1. Is Venezuela really as happy as Denmark?

    2. Are Venezuelan women the most beautiful… o solo un montón de ordinarias rellenas de plástico?

    3. are Venezuelan men dashing… o solo un montón de monos sin gusto para la ropa?

    4. The role of intellectuals in Venezuela, have they been as completely useless as they appear?

    5. UCV, USB, UCAB, UNIMET, ULA. Why are these universities so respected when they are shit?

    6. Do Venezuelans prefer to sell themselves and their children for food before protesting against a mental government?

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    • You could have simply written your opinions in a paragraph. It would have been more honest if you had written what you thought:
      “Venezuela is an unhappy place where women are vulgar and full of silicon, where men are apes without taste, where so-called intellectuals are useless, unless yourself and where all universities are completely shit. It is also a country where people prefer to sell their children”.

      That’s what you wanted to tell us, Alejandro?

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    • Just to carry on the joke, I’ll give some answers to those questions:

      1. Is Venezuela really as happy as Denmark?
      Not by a long shot.

      2. Are Venezuelan women the most beautiful… o solo un montón de ordinarias rellenas de plástico?
      “Beautiful women” are a small percentage of the population, of course, “beautiful” is something subjective, if I like fit brunette women, some other guy might say he likes big-reared blonde ladies.

      3. are Venezuelan men dashing… o solo un montón de monos sin gusto para la ropa?
      Same as above.

      4. The role of intellectuals in Venezuela, have they been as completely useless as they appear?
      Define “intellectual”, because those who call themselves with that title seem to be working for the regime.

      5. UCV, USB, UCAB, UNIMET, ULA. Why are these universities so respected when they are shit?
      Because a lot of people they prepare result to be competent at their jobs? Results matter a lot.

      6. Do Venezuelans prefer to sell themselves and their children for food before protesting against a mental government?
      The brain-eating worm of populism has struck down the IQ of a lot of people here, people that prefer to endure selling themselves for food before working to maintain themselves or facing violence.

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  21. In Venezuela the government currently receives directly 97% or more of all the nation´s exports. From what I read Corrales implies that if only there were some other more qualified leaders managing all that income on behalf of the nation, all could be fine and dandy.

    And so I have to ask Mr. Corrales: are you a communist or is it that you believe in other type of autocratic systems of government? Is it that we need a technocratic meritocratic benevolent Sheik?

    ¿Donde están los candidatos a diputados por los cuales de verdad quisiese votar? http://bit.ly/1EhnmTe

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    • One sign of our culture primitiveness is this obsession with the great leaders who will magically set things aright , thats to put it unpolitically is total crap !! What really makes society develop and function are organizations , effective , well run , highly functioning and performing organizations . Take away the 50 top institutions of any great country be they academic , business or public and what do you have left . We have to create institutions , organizations , teams of people trained and inspired to work in those organizations and serve their ends . They dont have to be many , but they have to function well and that takes more than a great leader , it takes a whole host of people who know how to work together at producing results . We need to become a country of competent organizations and that means that those organizations have to be technocratic and meritocratic and elitist in the way they select and develop peoples skills and talents .What makes those organizations impossible to create is not authoritarian forms of government but the corruption that popular politics entices and fosters , the clientelism and populism that thwart every effort to instituttionalize the operation of public and business life.

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      • “One sign of our culture primitiveness is this obsession with the great leaders who will magically set things aright…”

        That’s called populism.

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  22. Of course the most common flaw in Venezuelans character is a penchant for conceit ,(the bolivar biographer Kepler kindly brought to our attention- Monsieur Holsteing or another – was a witness to this 2 centuries ago ) to feed our conceit we exagerate , we are great at melodramatizing stuff and exagerating the beauty of our women and the brave prowess of our heroes . Reality isnt that sharp and clear cut , there is something about the beauty of some women , remember foreign visitors to the company I worked with how worked up they would become at the sight of the women in places like the CCCT , Even the Kepler biographer mentions it , when I lived in London my fellow workers who had visited Caracas would go bonkers describing not just the beauty of the women but their intoxicating feminity , their gestures and manners , the way they walked . Of course we exagerate in not recognizing the even more stunning beauty of women from other places .and the fact that for every handsome woman you find in Venezuela there are something like 9 ugly or plain looking ones.

    Happiness is a very subjective thing , prosperity doenst neessarily make you happy it protects you from certain kinds of unhappiness which afflict the poor . Read Lureano Marques latest piece on his last visit to Miami and what the Cuban driver told him when asked whether he was happy in the US . I suspect that in Venezuela people can be happy because personal relationships ar encouraged to flourish and aborad sometimes people are more isolated from each other than they are here where you meet someone and in 5 minutes flat he is telling you about their children , wife , origins , job , last holiday , favourite dishes etc. this is a place where intimacy comes easy and relationships are easily personalized.

    The other factor is that one thing is to believe one self happy and declare oneself happy and quite different is to inwardly really feeling happy , Venezuelans being generally so conceited might declar themselves happy because not to be happy ( desdichado) is to be a failure at life , in other words losers, and proud people can never admitt to being losers.

    Venezuela is not a country that really respects its intellectuals as much as people who project power and self confidence and a manly humour . It makes a show of revering intellectuals without really doing much to be like them or understanding their thinking . But aside from Colombia thats true of most of Latin America

    The Universities are second rate compared to top US and European Universities and yet for whatever reason they are sometimes capable fo producing some really outstanding people , people who once abroad are able to be outstanding in their professions . Alejandro behind his anonimous mask may be a case in point ……

    .

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    • “for every handsome woman you find in Venezuela there are something like 9 ugly or plain looking ones.”

      If you know that you have to learn how to discern my friend. When I look at 10 women I know instinctively of how to look solely at the most beautiful one ☺

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    • Please do not make the mistake of confusing a university’s quality with the quality of some of its graduates.

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  23. ..most common flaw in Venezuelans character “. Another rather dumb generalization, Bill. I’m surprised that an educated, alert blogger as yourself is so full of it on this particular topic. Love your informative posts, but you often over-intellectualize things.

    It’s very hard, if not impossible to define the “character” of an entire population. As Lazy, joyous, or devious in any way. People are people. You raise them in a certain culture, weather and environment, and that’s what you get: Americans are made of all kinds of people from everywhere. Once they go through the system, they are somewhat educated, law abiding, hard working, thus, they “do well”, at least in a “material” world. (Spiritual growth is another story..)

    Corruptzuelans are SPOILED. And oil is one of the many reasons. You get Portuguese, Spaniards, Italians, mixed with Blacks, Indians and all other immigrants, just like anywhere else in Latin America or the World’s Melting Pots.

    But why is Venezuela at the botton of the infernal pit today? Huge country, all kinds of people from everywhere, like Colombia or Brazil or Costa Rica or Chile or even the less fortunate, smaller countries.

    Oil is a major FACTOR, of course. With the correlated lack of education, which brings corrupt regimes. Why? Read the 3 links, to start with. Don’t be so lazy with all your oil-given easy technology, and build some character!

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    • “It’s very hard, if not impossible to define the “character” of an entire population”. FLOYD, that’s exactly what you are trying to do, in the same paragraph, by “describing” what a typical American is… A bit of coherence, consistence, please…

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  24. Thanks to JCN and this post, however, I was reminded that it’s true that Corruptzuela has limited Agricultural and perhaps fishing resources.

    But C’mon.. He conveniently leaves out some majot, major factors: Vzla is huge: Twice the size of France, comparable to Canada or Russia, because it’s not FROZEN most of the year. Favorable Tropical weather is a Major factor in such territorial % comparisons.

    So 5% or 40% of exploitable territory in agriculture, plus a Vast Northern coast for fishing (ask Bolivia or Uruguay or even Argentina about fishing..) is comparable to a lot more resources than Chile and most Latin American countries!

    So we can’t have a huge Agricultural, Fishing and Cattle production in Vzla? Eso no se lo cree nadie!! Look at Argentina with meat, they only have a little arid piece of land, the Pampas, that isn’t Frozen.. Look at what Venezuela used to produce, with only a few million inhabitants, leaders in the world for Coffee, for example.

    Not to mention Mining, and the amazing richness of all sorts of Minerals, completely unexploited or wasted, enough to build an entire, Rich 30 Million people nation without oil, or agriculture or fishing!

    So, to even suggest Vzla is nothing without Oil is beyond ridiculous. Or to suggest that thank God we have oil coz we have nothing else is just… IGNORANT.

    The point is that mainly because of this oil “blessing”, Corruptzuela has done Nothing else except stealing. No infrastructure, no agriculture, no mining, no education, nothing. Steal, and leave,

    Therefore, such a Huge Land with Oceans, huge Rivers for Hydro-electrical power, all 5 Ecosystems, or more, is THE worst country to live in in the entire World today.

    Go figure.

    “Venezuelan Character” is “lazy” and corrupt for mysterious genetic reasons. Yeah, right. Y las vacas vuelan.

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    • “Venezuela dispone para su uso agrícola de una muy baja proporción de tierras (2 por ciento), que prácticamente no tienen limitaciones grofísicas. La mayoría de las mismas están limitadas en orden de Importancia, de acuerdo a su extensión por las siguientes razones excesivo relieve (44 por ciento), baja fertilidad natural (32 sin ciento), falta de drenaje (18 por ciento), y aridez (4 por ciento); Por embargo, por la factibilidad de aplicar tecnologías ya conocidas, razones de distribución de la población y por el tipo de cultivos requeridos para alimentar la población, el mejoramiento del drenaje, la aplicación de fertilizantes y la aplicación de riego, aparecen e este momento como las tecnologías ya conocidas, que mayor impacto tendrían en aumentar la disponibilidad de tierras agrícolas.

      Con la aplicación de tecnologías ya probadas por investigador y agricultores avanzados, es posible extender dicha disponibilidad d tierras hasta aproximadamente un 4 por ciento del total nacion para ser usadas con una limitada gama de cultivos, en un 30 por ciento para ser usadas en ganadería, en un 41 por ciento para bosques, recreación, conservación de cuencas, vida silvestre, etc., y en un 11 por ciento para este último fin en estrecha mescolanza con área aptas para un uso con limitada gama de cultivos.”

      Sure but what’s 30% of Venezuela for ganaderia, plus 10% for agriculture, plus Huge Mineria resources, plus the Endless Rivers and Ocean for Fishing… for just 30 million people.. Maldito Petroleo e’ mierda.. There, I said it.

      http://sian.inia.gob.ve/repositorio/revistas_ci/Agronomia%20Tropical/at2802/arti/comerma_j.htm

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      • “Sure but what’s 30% of Venezuela for ganaderia, plus 10% for agriculture, plus Huge Mineria resources, plus the Endless Rivers and Ocean for Fishing… for just 30 million people.. Maldito Petroleo e’ mierda.. There, I said it”

        I would say “maldito MONOPOLIO CONTROLADO POR EL GOBIERNO e’ mierda”

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        • Try competing with Australia , Argentina , Brasil , Uruguay and Colombia to export meat products , with Argentina , Brasil , the US , Australia , Canada for grain and soy products , it aint easy , try to compete with Chinese manufactures and youll understand why creating a venezuelan economy that functions without the help of oil is a hallucination .

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          • Bill Bass, you’re making a series of assumptions that are not truly necessary. For example, Venezuela would not have to compete against those nations you mention in the same markets. Start with the Venezuelan market: so long as we can produce meat, or grain and soy products, for local use, we could compete against all imports merely because of the transportation costs, which can be one third of the price.

            One industry at which they could not compete is Venezuelan tourism. (By that I mean that they can offer tourism anywhere else, but only Venezuela can offer tourism in Venezuela). If Venezuela locally produced most of its locally needed products, then any tourism within Venezuela would also help all locally produced goods and services. This would also create the opportunity for Venezuelan branding, which has the potential of making export more viable.

            In general, if the government creates a business favorable environment, then businesses would want to establish themselves in Venezuela, even foreign ones.

            There are many ways to get a non oil economy going. Of course, having oil is a leg up in making that happen. The problem having oil creates reminds me of beginners at chess that learn of the power of the queen. They can’t keep their fingers off of the queen and they forget to develop the rest of the pieces. If only we could distribute the power of the queen to all the other pieces…

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          • Didn’t Venezuela at least had the capacity to produce MOST of its own food before the corpse came over to destroy everything?

            Ok, just a naive question: Before considering exporting stuff, shouldn’t we focus first in PRODUCING the food we’re gonna eat AT LEAST instead of importing everything?

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    • Well I have been involved in profitably sending orange juice concentrate to Miami, competing with Brazil’s, and placed mangoes in Harrods… but at the end it has all come to nothing because of a bolivar kept too strong by oil revenues… the Dutch Gas Syndrome…And let us not forget about chocolate exports.

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    • Does anyone think that if the land of Venezuela had been peopled by Japanese or by Koreans or by Swedes they would have turned out exactly like we are today ??? Character is entwined with culture and with the happenstance of history , there are of course many different kinds of characters in a countrys population but there is a basic or core character that identifies the behaviour and mindset of a population as a whole . There are many venezuelans with great traits of character and behaviour , which would make admirable candidates for the most developed types of human being but they are unfortunately in a minority and in electoral politics numbers are what count , ultimately decisions are taken to please them not the minority.

      I write a lot of stuff that doesnt get read , and which I then have to repeat , I have the idea that sometimes certain character traits become distorted through some historical or circumstantial influences , for example if you look at todays barrio culture and then compare it to the old traditional rural culture you find a difference , in fact a certain degradation that makes things worse than they used to be . How did that happen , you had a quintupling of the population ( specialy among the poorest) , you had a massive disorderly emigration of people to the big cities to live in slums far away from traditional family influences , educational and health services were strained to total ineffectiveness , fathers no longer took care of their children , their grandpas and uncles lived far away , mothers having children with different fathers were always looking for a new man to represent them , they also started neglecting those children , they grew up with skin diseases , malnourished , which affected the level of their intelligence and general health and body size , they were left alone with their smaller sisters and brothers locked up in ranchos while their mothers were looking for the next man. they grew up without an authority figure inside the home , loose on the streets etc the generation born of these experiences was not a model human being , the form of criminal activity itself changed and become more cruel . This generation of barrio dwellers grew and grew and wanted someone to take care of them , they finally found their macho but parental figure in Chavez , their darling leader. There is one core culture in Venezuela and several subcultures which has developed in different social segments. subcultures which foster warped and damaged personalities and behavioiural traits.

      Corruption is a core trait of our culture (viveza criolla) , with the coming of electoral politics and the increased oil wealth these traits took a more disruptive force and widespread effect. Certain character flaws became worse , I can write for hours about this topic and give plenty of examples and data and quote authors but I get tired that I will never end , until I have written a whole book which is not the intent of these blog pages . The responses I get are not always analytically weighted , they contain much that is true but also much which is rough hewn and imprecise and generally wrong . They use a bludgeon when they should use a scapel , they seek things to blame rather than factors to understand. !!

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      • Bill, I fully agree with your “politically incorrect” claims. Most unfortunatelly no leader would be willing to state these truths publically. They rather hide the rubbish under the carpet. You have no idea of how nauseated I feel every time I hear somebody recalling “al bravo pueblo”… Guácala!!

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    • Joke from a friend now living in Europe: the perfect latin american : modest like an argentinian, beautiful like a bolivian , honest like a Colombian , hard working as a Venezuelan !! Ask people who hire latin americans for hard labour jobs in the US or Europe what they think of Venezuelans .??

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      • There is some truth in the above jokes. I am reminded of an old joke: How do you get rich? Buy an Argentine for what he’s worth, and sell him for what he’s worth. However, the women of Santa Cruz, Bolivia -a.k.a. Cambas- have a well-deserved reputation for beauty. And which I will testify to. The saying in my former company was that any gringo who spent a year in Santa Cruz would marry a Camba.

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  25. Whepn oil was less than two dollars, Venezuela was stable, had a strong currency and was considered on its way to developing. The. Oil started going up and things got unravelled by the easy money, if that is not proof that it is a curse, what is? We still dont have a development model due to oil and small mindedpoliticians, thanks also to oil.

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    • There’s a saying that goes like: “Rich grandfather, noble son, poor grandson.”

      Easy money is, essentially a good thing, obviously. But it can become a curse quite easily. To be aware of that is the key to avoid the problems that easy money brings. Of course we can’t expect anything in this regard from Maduro and company.

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  26. I suggest to those who can understand spanish to watch these two:

    I know she’ll hurt your populism-loving nerves, but you can’t deny she’s saying big truths there.

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  27. “If it weren’t for oil, we’d be Mali.”

    Given that there’s no country comparable to Mali in South America, I really doubt that this would be the case about Venezuela. Not even Bolivia, the poorest country in the region, is Mali!

    A question:

    Would Chavismo’s populism have been possible without so much oil revenue?

    – If no, we may say that Chavismo’s appeal to the masses has an umbilical relation to the oil revenues.

    – If yes, then we may assume that they wouldn’t have totally destroyed the private sector, because they would have to take their money from somewhere to give to the poor, right? In that scenario, It would have been a far more inoffensive revolution, a process similr to what Correa has been leading.

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    • – The Mali comparison is ridiculous, for countless, obvious reasons. Try Colombia, Chile or Costa Rica.

      There are numerous, carefully studied and documented reasons for the “Paradox of Plenty” or Resources Curse”. Stop being so VenezuelanLazy, and google them up. No one seems to dispute the historical, geographical and economic Data behind this rationale.

      For example, among the countless reasons and correlations between Easy Natural Riches and disaster, here are a few more reasons for the Corrupt Governments that Invariably follow the Oil curse:

      http://www.economist.com/node/5323394

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      • Why? Economics offers some answers. Unlike agriculture, the oil sector employs few unskilled people. The inherent volatility of commodity prices hurts the poor the most, as they are least able to hedge their risks. And because the resource is concentrated, the resulting wealth passes through only a few hands—and so is more susceptible to misdirection.

        This misdirection points to another explanation for the oil curse that is gaining favour: politics. Because oil money often flows directly from Big Oil to the Big Man, as Africa’s dictators are known, governments have little need to raise revenues through taxes. Arvind Subramanian of the IMF argues that such rulers have no incentive to develop non-oil sources of wealth, and the ruled (but untaxed) consequently have little incentive to hold their rulers accountable.”

        UNLESS, of course, that “cursed” country with Oil Educated its population first, and developed other resources First, and went through hardship first, building some character and ethics, as in Norway or Alaska/USA now. Then, perhaps, the Trillions of Oil money don’t get stolen and other parts of the economy also work. I’ll say it again: you cannot give easy caviar to young, uneducated indians. Period.

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          • Just on that little, “socialist” wiki-article, you have wealth of leading economic theories on the subject..

            “Petroleum and Poverty Paradox” (just Google that, you’ll get 18,000 results of Scholar Studies only)

            Resource Curse, or Dutch Desease, Revenue Volatilty, Enclave Effects, Human Resource and Education effects, Political (corruption) effects, AKA “Renter States”, and many more.

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      • “Stop being so VenezuelanLazy”

        A honest question: do people commonly treat each other like that in Venezuela? Is this a trait of Venezuelan society in general? I mean, this is something that widespread among all layers of society that everyone just shrug and take it as a “Venezuelan cultural trait”?

        One thing that I have never understood too is how people on TV and articles say and write foul language. For exemple, you are reading what you think is a professionally written article and there’s a “carajo” there somewhere. It’s quite a curious thing to me.

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          • I don’t know, man… This is not a ONU conference, but it’s not the youtube’s comments section either. It’s disheartening to see the guys fighting Chavismo being so similar to Chavistas. It makes one lose hope.

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      • Arnold Toynbee used to be a highly recognized british historical author in the fiftees and early sixtees , his main contention was that civilization needed the spurr of natural challenge to develop , absent such challenge civilization would not arise. In time his theories ( very similar to the Oil Curse Argument ) that abundance of resources made people incapable of developing a civilization were totally discredited by more serious scientists and historians. he is hardly mentioned now a days . Evidently bad ideas have a tendency to come back to haunt us . .

        Before oil Venezuela was among latin americas poorest countries , it exported a lot of coffee and cocoa but that didnt make it rich . If we compare the economic scale of Colombian and Costa Rican economies they are much smaller than Venezuelas but better organized so that even if basically poor they have managed to do much with the few resources they posses .

        If Venezuela was a better organized society , with the oil it has ( but better managed ) we would be a much richer society than Chile , Colombia and Costa Rica put together . The problem is not having oil but not knowing how to make a good use of it , instead weve used it to dig our own graves . If we had no oil we would not be better off than if we managed to sanitize our institutional life .

        The wealth as a curse idea has a puritan origin which makes us feel morally pure . but really what we have to learn is to make better use of that wealth and not misuse it to destroy the fabric of our social and economic life . Oil was a blessing to our lives until we asked too much of it , we wanted to make up for our failure to use it in the development of a more stable and sane institutional and economic structure for our country. We would have to have a 1000 Polars and other similar companies and a population inmmune to the enticements of sick demagogues to be able not to replace oil but to simply survive not having it .

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      • Last exports figures from Colombia I saw showed 60 bln $ in exports of which some 60-70% consisted of crude oil and oil products , coal and coke , some 9% of agricultural products ( including coffee , cut flowers , raw sugar , bovine (meat and milk) products and candies ) , manufacture 12% . . Despite being a strong agricultural country and one of the most advanced manufacturing countries in south america . Agriculture bough in only some 6 bln dollars , one advantage though they were able to feed themselves .

        Colombia is probably the country that geographically most resembles Venezuela although bigger in size and population . Its evident that agriculture is not a big bread winner for Colombia despite being one of the biggest agricutural powerhouses of the tropics .

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  28. Underlying the notion that Oil is a Curse is the idea that people are naturally organized , disciplined and productive , that they are natural hard working capitalist so that with the proper inducements they will automatically develop a first class capitalist economy all by themselves . This is not what history tells us , It may work in places like north europe , scandinavia , some far eastern countries like japan , taiwan , korea , but for most of the world those capitalist virtues are lacking . My own fear is that if we had the perfect inducements for stimulating people to become hard working ambitious productive capitalist nothing would happen, people would just create for themselves a morass of economic passivity and remain the prisioners of their own lack of capitalist capacities and virtues. If you look at the manufactures and agricultural we developed as a country before oil became part of our life youd sit down and cry . It takes a lot of effort and luck to create the cultural conditions that might rouse people out of their original slumber .

    My own idea is that you cant count on a mass conversion to capitalist virtues , that only a minority of people are so blessed , they may work to subsist , make enough to enjoy some beers at the beach and start dancing and partying or create a nice tertulia in some shaded cafe. So how does a country kick start its development . By creating a selected number of elite meritocratic institutions , giving them the resources to start growing and operating and then have them act as locomotives to carry forward with their example the rest of society .

    How did Japan and Korea do it , they called 6 or 7 of their biggest best organized private business concerns gave them all the incentives they could , nurtured them and gave them the job of creating a world class economy , thats the origin of the Saibatzus in Japan . You dont attempt to change every thing at one go , you try and foster the development of the best youve got in business in public agencies , create models that can culturally colonize the economic landscape and let them rip. . I tmeans reining in your populist urges , phocusing in the best advantages that nature or circumstances give you . In this sense Oil is our best bet to be used to help fund and organize other economic areas to maximize their growth and contribution to the economy . Agriculture is never going to be a star , At most a modest cash cow to help feed the country and maybe compete at the fringes with some of the already well established agricultural producers and exporters . Do remember that agricutural prices even now are propportionately a fraction of what oil prices are . !! The bedrock of the economy is oil and perhaps the exploitation of other natural resources but then you have to expand to other economic areas which offer the best opportunity for growth . Competition in todays world is very tought and you have entrenched players who have a lot of gained advantages in most product areas. Starting last isnt going to make life easier .

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    • I certainly agree with you, Bill Bass. It is impressive the amount of words you have written today. You write so much that I have to read you in diagonal just to get the gist of it because I don’t have time for more but, I repeat it, I couldn’t agree more with you. You are certainly the best commentator of this column. I posted this video https://www.youtube.com/watch?v=XovckdWCuM8 some time ago and I will do it now again. I think you may like it. Antonio Escotado in the minute 13 says with his own words basically the same you say. He is a very good intellectual who has studied economy (and many other things) a lot and he certainly knows what he is talking about.

      take care and thanks for your effort

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      • Im sure I dont deserve the compliments , I apologize for being so wordy and incontinent in my writing. thank you for discovering the thoughts of this interesting author . I have overtaxed the patience of poor Floyd with my arguments and for that too I apologize !!

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  29. “Devil’s excrement” no doubt, if the concepts of cause vs consequences are mastered. The rest is only useless rhetoric and technicism.

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  30. “Underlying the notion that Oil is a Curse is the idea that people are naturally organized , disciplined and productive,,”

    Precisely the opposite. But it sure doesn’t help any work ethics..

    Can’t disagree more on this. Dozens of experts and scholars I’ve quoted disagree with you too.

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    • Once the regime finishes its ongoing destruction of the Venezuelan oil industry , people will know the blessings of being able to develop a rich capitalist economy on their own . We will then be free to replace our corrupt oil income with income from the export of the bountiful rich produce of our land . Our manufactures will fill the world markets with wonderful products wrought with the clean effort of our hard working , inventive and clever entrepeneurs, We will become a paradise!! . Let us prepare ourselves for this marvelous moment when the corrupt influence of oil will no longer darken our native capitalist enthusiasm ,!!

      It must be a great consolation to know that this marvelous horizon will soon open itself to our country’s future !! .

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      • I disagree, again. Why? We have been doing very littlle about Education. Or building character, through hard work. Or developing other industries, “sembrando el petroleo”, as Uslar Pietri warned us 80 years ago.

        No suenes con pajaritos chavistas prenados. When another “MUD” government comes, with more adecos/copeyanos, etc, and oil gets back to 100/barrel,things will only slightly improve, until the oil prices go back down again (Revenue Futility Theory, # 4 trend explained above). They will continue to STEAL, a bit less than Masburrismo? Sure!

        Corruptzuela is nothing like Norway. One bright day, it just won’t “wake up”, inspired, educated, hard-working, etc, just because it went through a couple decades of Chavismo hell.

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          • Floyd I was putting words into your mouth , you seem to think that oil is the source of all our ills and that absent oil in our lives we would become an ideal capitalist economy using our great (imaginary) agricultural wealth and our great (imaginary) native capacity to create fabulous manufactures . Surprise, !! the 17 year old child is yourself .!! My own contention is simply that oil can be a wonderful asset to have , that the fact that we have been incapable of using it wisely and instead have used it to fuel our vices and bungle our economic life is not blameable on the oil but in our own weaknesses as a people.

            Oil stood well for us for many decades , then our system became increasingly corrupt and incompetent and went into a crisis from which arose that monstruosity of the Chavez regime .!!

            My message is that our relationship wth the oil we have has never been quite what it should be , that if we learn how to deal with our oil wealth in a sane way we can make it help us become a better country . Its like blaming property and money for all the ills of society so that if we abolish it then we will enter a rosy clouded paradise . We have to have a more mature relationship with our oil industry . At the same time its unrealistic to think we can dispense from it and hae much chance of becoming an economically prosperous country .

            Queen Christina of Sweden had a tough time reconciling her italianate catholicism and being queen of a lutheran country , many believed that she should renounce her throne , but she spelled her position in a phrase she had inscribed in one of her rings , surrounding the effigy of a crown , the phrase was ‘non me basta e non me bisogna ‘ (n spanish: ni me basta ni me sobra) . We cannot dispense with oil at the same time having oil is not enogh , we must learn to grow our economy beyond oil , including finding ways of improving the contributions of our agriculture and our manufactures to the building of a more balanced and healthy economy. . But to do that we have to fix certain flaws in our ethos and in our culture including the way se understand our oil. !!

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  31. I’ll try to keep the Oil subject aside, because I worked on oil market analysis for several years, while in Caracas. And it was for 2 different goverments. I’ve been taking notice of a more structural and substantial truth that is the canary in a coal mine: the lack of natural resources to sustain the venezuelan population. The oil has been putting food on the table for venezuelan families from a long time ago. These handicaps, like the lack of fisheries, lack of arable land, lack of underground water supplies, are creating a perfect storm, when you add to them the global warming. I’d put my eyes on the future of food demand and the supply-demand balance. I’m surprised. Most of the food labeled “Made in Vzla”, has a very high portion of imported materials. And when you look at the growing and widening breach between the world and Vzla… You’ll sweat.

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    • “..the lack of natural resources to sustain the venezuelan population. The oil has been putting food on the table for venezuelan families from a long time ago. These handicaps, like the lack of fisheries, lack of arable land, lack of underground water supplies..”

      Unbelievable. So a Tropical country, blessed with a vast ocean coast, biggest rivers, 5 splendid ecosystems, a huge territory Twice the size of France, with only 30 million people…. has a “lack of natural resources” to feed its own people.

      ‘Already then. Done with this topic.

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      • I think TheMan is right. You should read the replies, and after that, maybe you can understand.

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        • You should read the dozen links and other posts here from experts. Most agree that Oil has been more of curse than a blessing. Especially on ignorant, under-developped 3rd world countries.

          If Corrutzuela isn’t a good example for you, try any African mess, like Nigeria, Lybia or Congo.

          Blessed with Riches, huh?!

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        • Floyd is right and many others here (including Juan) are dead wrong about the “lack of arable land”. That notion is just preposterous. I could bring farmers from California and in twenty years, have Venezuela producing enough food to feed all of Latin America AND the Caribbean. Venezuela has millions of hectares arable land that is not being cultivated. The ONLY reason that Venezuela doesn’t produce enough food is because of the currency controls! Local producers cannot compete with such highly subsidized imports.

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          • Exactly. 4% or 10% or “arable” fertile land in Venezuela is equal to the size of Costa Rica or many entire Central American countries.

            And cry me a river about not having enough Fishies in the freaking Caribbean Ocean plus the Orinoco and the Amazonas!! Not to mention Gold and other immense Mineral resources everywhere..

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            • Heck, we had a small “Finca” close to Higuerote, Barlovento. 8 Hectares. In a few years of hard work, we had hundreds of Naranjos, Mango Injerto, Grape-fruit gigante, tomatoes, mani, pina, thousands of Lechosa, Cambut, Miaz, anything would grow, including my mom’s fancy Pears and other imported fruits.

              That was just with 1 campesino, his name was “Demesio Borotoche”, I kid you not. Typical conuco guy, drunk as a skunk as soon as he grabbed his check, with half a dozen kids and women here and there, but relatively honest y buena-gente.

              That guy could have really prospered with some education.. We built a little brick house, a pozo and a tank for fresh water, a generator for some electricity.. But of course, after he barely did some maintenance and surveillance, basically, so they wouldn’t rob everything, he just sat around..

              Demesio Borotoche preferred our traditional agricultural method of “siembra al voleo”, and he was a natural “hunter-gatherer” of the 21st century, with that huge machete that was our size as kids, about 4 ft long, dealing with wild grass or “gamelote” 6-8 feet tall.. the guy taught us how to kill Cachicamos at night with freaking bait, light and machetes, as he would kill “lapas” “vaquiros” and other exquisite wild game.

              But mostly, he preferred la Polar, and la “siembra al voleo”: The land was so fertile, as it is in the entire Barlovento and Oriente area, that all they did was literally throw the Corn or Patilla, Melon, any seeds in the air !! Just cut the gamelote, shuffle the land a bit, siembra-al-voleo, and wait for the rain!

              That’s how tough “Agriculture” can be in Corruptzuela.

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          • I think your are right but missing the point , of course our agriculture can be more productive , well managed it should allow us to feed ourselves and produce quite a bit of exportable surplus , before Chavez we had a prospering agrobusiness that if left alone and given some incentives could have grown to become an important part of our economy. Thats all gone now . But the potential is there . What really isnt true is that our agricultural resources can compare with those of countries that have made agriculture one of the mainstain of their economy like Argentina , Brasil or to a lesser extent Uruguay . The other point is that such agricultural production can never replace oil as a source of wealth for the country . The agricultural prices are in comparison a fractin of those which apply to oil . Im lazy but I have in the past looked at these figures many times , search for the percentage of world trade which is made up of oil and related products and then at the figures for the percentage of world trade which is made up of agricultural products , the difference is telling and undeniable . We have no choice but to use our oil wealth ( which needs rescuing ) as lever to improve our living standards and try to create in time a more diversified economy .

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            • I am sure Vzla has WAAAAAAAAYYYYY more land than many countries, including Uruguay to develop vast agricultural programs of all kinds. I know that perhap’s only 5% or Venezuela’s land is “fertile”, top quality,but 5% of Venezuela is what? Half of Costa Rica? 5% of top quality, Fertile Vzlan land, without using modern agricultural methods to cultivate tougher lands— it’s equal to Jamaica and Dominican Republic Combined! Does Chile have thousand of hectares of great land for agriculture? Does even France have much, half of the time under the snow, and half the SIZE of Vzla?

              And Agriculture is only one of the many resources countries develop when they don’t have oil. Mining could be huge in Vzla, and since you compare Norway to Vzla, how about Logging and many other things they produce out of nothing.

              Vzla has enough territory, rivers and forests to feed all of the Caribbean and part of Central America if it wanted to! Yet, it imports NINETY NINE % of everything.

              And you still think the easy oil has helped?!

              We are THE WORST Country in the world right now, in many ways. Twice the size of France. Tropical weather. A mere 30 million souls. Do the math!!

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              • Ignorance is boundless , so many pipe dreams can be born of ignorance that its almost embarrassing to point them out . for example tropical forests are different from forests from other more temperate parts , the high number of varieties / species of trees makes its exploitation much more costly and difficult than the small uniform number of species found in more template climes , the soil is often so poor that once you cut the forest getting the same forest back can become a challenge. Norways forest are much more easy and profitable to exploit , than those in Venezuela also they have the european market next door. which represents a big advantage. Venezuela had a much more prosperous agriculture before Chavez started messing with the farmers and ranch holders , it very nearly fed itself ( except of course for those grains and other products that dont grow in the tropics , for example wheat barley and the like for making bread and other like products) . We also exported but of course our capacity to export the quantities of product that places like argentina with more temperate climes bigger agricutural lands and much richer soils have wasnt all that profitable . ( youve probably heard of the economy of scale principle) .competition is fierce between poor countries for the export of agricultural products that are other wise short on oil and iron ore and other metal . By the way cattle in tropical climes produce lots of less premium beef and milk than those in temperat climes , compare the beef from a black or red angus or red horn to that from a criollo cattle or at most a guzerat , no comparison As to milk compare a typical criollo milk cow ( even if you cross her with a Cebu Gyr with a Holstein or guernsey cow and again no comparison.. The list could go on forever , you sir appear to be an aficionado of agricultural and cattle information , you know about recreational holdings in near by barlovento but youve never managed a cattle ranch of middling or large size. Did you know that the grasses in template climes are on average cultivated (not grown naturally) ,same as if they were agricultural land , that they are much more nourishing , that tropical cattle refuse to eat dried grass packs like they do in the US , that the number of diseases that affect them are many times over more numerous than those that afflict cows in the US or Europe . That in the llanos you need at least 10 hectares a year per grown animal while in South of lake maracaibo you need only one hectare per animal per year . Do you know what happens when you try planting manioc in sandy soil so common in south of lake maracaibo , you get one good crop and then the following year you get nothing because the soil has become exhausted . This not a rich soil country like costa rica with the rich volcanic soil of their high lands . There are so many thing you dont know about the knots and bolts of practical agriculture and cattle raising as a business in Venezuela thats its easy for you to overestimate Venezuelas agricultural potential .

                My guess is that if you planted a 10.000 hectares of maize you could make as much money as is produced by small sized oil well . You sir want to make a point but you have not researched this issue well . Agriculture is a second rate industry , look at the world trade figures per product and get a sense of the economic reality that rules international trade !! The energy needed to correct so many errors in your texts is tiresome , so please try and inform yourself better before you make so many outlandish statements!!

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      • % Arable land (% of land area)

        Spain, Kingdom of 25% (2010) 12.528.000 (hectares)
        Venezuela, R.B. 3% (2010) 2.600.000 (hectares)

        If this is not cristal clear, please pay attention to the spanish government information (official source in spanish):

        “España es el primer exportador de frutas y hortalizas de la Unión Europea y uno de los tres primeros exportadores mundiales junto con China y EEUU. El sector tiene una clara vocación exportadora ya que el 47% de la producción (media 2008 – 2012) se destina a la exportación, siendo además el primer subsector dentro del conjunto de las exportaciones del sector agroalimentario.

        Las exportaciones tienen una evolución creciente en los últimos años tanto en volumen como en valor, habiendo alcanzando en 2012 la cifra record de 12,1 millones de toneladas y 10.829 millones de euros de valor. Los principales productos que se exportan son los de invernadero (tomate, pimiento, pepino), los cítricos y el melocotón y la nectarina.

        Las importaciones son menos significativas y además en los últimos años están siguiendo una evolución decreciente. Los principales productos que se importan son el plátano, la piña, la manzana y el kiwi.

        La balanza comercial es positiva a nivel global, aunque algunos subsectores concretos presentan una balanza negativa como la fruta de pepita, la tropical, los frutos de cáscara, el plátano y la patata.”

        Data and information from:

        http://databank.worldbank.org/data/views/reports/tableview.aspx#

        http://www.magrama.gob.es/es/agricultura/temas/producciones-agricolas/frutas-y-hortalizas/#

        And as you may know, Spain population is about 47 million people, plus 60 million of tourist in one year, which total about 107 million people living here.

        Venezuela’s population, on the other hand, is about 30,41 million, and 911.275 tourists visited Vzla in 2006, according with Wikipedia. Oil basket average for 2006: US$ 54,44 / bl.

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  32. Floyd, I gotta say this in my own language. I apologize to those out there who do not speak Spanish.
    Mi estimado, usted tiene que venir de la misma generación que yo, la que desde la escuela primaria está escuchando el cuento (quise escribir “mojón” pero de repente hiero sensibilidades) de que Venezuela es “un país rico, con petróleo, montañas, sabanas, hierro, bauxita, ríos, gas natural, café, cacao, clima excelente, bla, bla, bla…”. Lema vacío que se incrustó en la conciencia de los venezolanos para servir de represa del desarrollo posible y ralentizarlo horriblemente. Y resulta que el que venía a darle vuelta a esta torta también recibió esa educación pero elevó la afirmación a nivel de dogma ideológico; en cada reunión del extinto o del ilegítimo siempre sale a colación el “Venezuela tiene las reservas de petróleo + grandes del mundo, bla. bla, bla”… Y…? Y qué…? So what..?
    Los comentarios de Bill Blass en esta edición son prácticamente irrebatibles. La situación actual del país así lo confirma. Nice job, Bill.

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    • Esa es tu opinion. Estoy completamente en desacuerdo, por lo ya explicado y basado en los multiple articulos enlazados, muchos de los cuales son estudios recientes e internacionales.

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  33. David Bodanis does a good job of surveying the problem in his book “The undercover economist”. In chapter 8 (“why poor countries are poor”) he discusses the case of a library built in Cameroon whose construction was mismanaged by authorities who spent heavily on a monumental rather than functional building. His conclusion is that the problems in developing countries have to do with the incentives of decision makers:

    “Self-interested and ambitious people are in positions of power, great and small, all over the world. In many places, they are restrained by the law, the press and democratic opposition.”

    He then goes on with a section titled “Institutions matter”. Bodanis makes the case that leadership fails when there are inadequate checks and balances to create the right incentives.

    Another good way to look at the problem is from the perspective of a poor person with little education. Take the case of a recently deceased woman in England, Vivian Nicholson, who grew up very poor. Her obit made circles as she acquired some fame (notoriety?) when she won the lottery in the early 60’s and proceeded to spend her new fortune on luxury items, only to find herself in penury again when the money ran out.

    Pick your story – poor judgment or poor institutions, in some cases they are different sides of the same coin.

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    • Correct. Easy money (oil) almost invariably brings bad governments, corruption and lack of investment in other areas. It’s written in stone, with only a few exceptions that confirm the rule, historically, worldwide. Norway? They were EDUCATED when they discovered oil, and already knew all about hard work and restraint.

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  34. I think the whole debate on whether or not Venezuela having oil is an advantage is, in my opinion, pointless. There’s really nothing we can do about it, you can’t get rid of it (You could make the case that 16 years of Chavismo have more or less done that anyway) and it would be counter-productive to not use it, the problem is people’s mentality towards the whole issue.

    If by a goddamn miracle Venezuela manages to elect a non-populist government (a BIG if, I know) then oil could be a wonderful thing to have, the economy could recover amazingly fast despite all the horrible decisions the chavista government has taken. If not, people aren’t going to have the chance to make their lives whatever the fuck they want them to be, they’ll be forced to ask papi government for their “allowance”.

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    • Diego,

      Excellent point. It reminded me of an article written by a Cuban called “Learning to Live with the Elephant”. (sorry, couldn’t find a link)

      It made the point that Cuba, in looking at it’s future, was trying to pretend that the United States in all its economic and cultural hugeness didn’t exist just ninety miles to the north, like having an elephant in your living room and trying to ignore it and not talk about it. It argued that Cubans must come to terms with its neighbor to the north and find a way “live with the elephant” while retaining its own culture and Cuban-ness.

      There is no point in trying to ignore that Venezuela has oil, or to blame oil for Venezuela’s problems. There are other countries that have oil and have found solutions for managing the social and economic consequences. It is not as though we have no other models to emulate or historical experiences to draw from. The Venezuelans have only themselves to blame for this mess, and the lesson is that it is time to grow up and start behaving like responsible adults.

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      • How many times do I have to repeat that the Few countries that have found Oil and solutions, notably Norway (It’s called the ‘Norway Paradox’, by Economists worldwide, btw), or Alaska and the USA with Fracking, it’s because they were developed already, educated, hard-working,.

        Otherwise, every time, every country that was not prepared for a sudden flow of easy oil or other riches (minerals in Africa) the political and economical disasters were IMMENSE, and undeniable.

        Every time.

        You need to educate the people, develop and diversify the economy and good habits and institutions first. For multiple reasons explained in numerous links above.

        After Chavismo, Corruptzuela will fall back to MUD crap: More adeco/copeyano style “democracy”. Better, of course than todays disaster, but trust me, it won’t be no Norway, or much less, Singapore miracle.

        Unfortunately, IMHO, even after Chavismo Corruptzuela is doomed, to many more decades of corruption, inefficient, volatile economy completely dependant on imports and oil fluctuations, as it has been since the 70’s.

        They did not listen to the Elite, like Uslar Pietri, so they will remain ignorant with lots of oil to steal.

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  35. And for the last time, OF COURSE Oil ITSELF is not the root of the countless problems in countries like Vzla and Nigeria. (THAT’s to what we should be compared today, except, maybe, for the Genocides).

    OF COURSE Oil is great, IF you know how to handle it. The entire World Balance will now shift again to the USA, with Fracking. One way or another, will some ecological collateral damage, they will make pretty damn good use of the resource, almost like the Norway Oil Paradox.

    Why? Unlike Corruptzuelans, they are way more EDUCATED, with previous development of other industries, agriculture, mining, etc, they are used to Justice, Hard Work, a system is in place with rules and accountability BEFORE the Oil came.

    OIL is great!! But only for those prepared to handle it. Venezuela is faaaaar from that, and will continue to be a Corruption Mess way after Chavismo is gone. They will have to learn the hard way, when oil is less important. 50 years, at least.

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  36. You guys compare Vza with every country on Earth, why not Texas? Population about the same. Stinking hot climate. Probably less natural resources than Vza. They have lived with the curse for a long, long time and consistently out-perform the rest of the US with lower unemployment and new business start-ups. Pretty good agriculture too, in spite of the fact it takes about 12 acres of range to graze one cow.

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    • Of course, with today’s agricultural technologies and mechanization, anything is possible. But it’s a lot easier and profitable for our corruptos to drill some easy-flwing oil straight into Andorra bank accounts.

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    • Thats not a bad example , Texas used to depend much more on oil than it does now that it has a diversified economy. If we are smart we should try to emulate what Texas did after the first fall in oil prices . There is of course a difference in ethos and culture which may be important . Remember visiting Texas at the time of the first drop in oil prices , everything was down , shut offices , empty restaurants , big drop in consumption spending . Meantime in Venezuela despite the crisis the restaurants were full, people spending all they could, you knew from the papers that the economy was in crisis but on the streets nobody was paying much attention , Also Texas is an economy embedded in a much larger economy and could recieve federal help which is of course not the case in Venezuela .

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      • Can’t complain Texas to Vzla, unless you’re talking about a hundred years ago, the Wild, Wild West.

        Today Vzla is more comparable to Nigeria, for example. Except with less food and more murders.

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  37. In Venezuela same as happened to Norway the core ethos of the country was formed before it struck oil , only that history , circumstances etc made Venezuelas ethos different from the Norwegian ethos so that the norwegians were better able to handled their oil wealth than Venezuelans .

    The key difference is in the way we look at institutions and institutional norms , we are basically nomophobic , the norwegians are basically nomophilic , like the anglos , the germans, the japanese. They love order, discipline , self sacrifice , authority and have a penchant for forming social organizations that work and function effectively and decently , that organize the collective efforts of every group and community in a productive way. In our culture its every man for himself except for ties of kinship and cronyism ( el compinchismo) thus the success of clientelar politics , authority is loathed unless it has a personalized basis (el primo , el compinche, el compadre ) , families are unstable , parents abandon or neglect their children , love it when someone is able to hoodwink his fellow to show how clever he is , no respect for obligations , no impersonal loyalties . we are easy going , party going dancing creatures .

    Of course our institutions are farcical , a pure fachade behind which the grossest human passions operate .

    Unless you come up with a road plan to create nomophilic effective islands of people competent at doing the core social and public tasks that need doing , you have no chance, you cannot change a whole culture a whole people at one go, that takes generations of closely directed effort , but you start by creating some basic institutions that function to create a core structure an ink spot which can spread and colonize other social areas until the change is effected.

    You need not great leaders , thats primitive , you need professional teams of people , who take their jobs seriously and know how to work together achieving things , that can be competent in what they do acting within each organization .

    Our job is not helped simply by blaming oil , but understanding how we can tame the inner tiger that has us use our oil wealth to our own detriment .

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    • … that correlation does not imply causation (basic statistics)? Cities near the coalfields grew largest in size with populations of blue collar workers desiring better living and working conditions. Anyway, without a source it’s hard to argue further. The modern day latte liberals which define current urban political trends are a different breed from the rock throwing “liberal” revolutionaries of the 1800s.

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      • “Cities near the coalfields grew largest in size with populations of blue collar workers desiring better living and working conditions.”

        Replace ‘coalfields’ by ‘factories’ and you will be talking about most of the UK territory, not only the cities near the coalfields. The navigable rivers of the UK allowed industries to spread far from the coalfields (basic economic history).

        I read an article some days ago about how leftist unions destroyed an industrial city in the state of São Paulo, Brazil, a city that used to very rich called Santo André. The unions (and population as a whole) started to demand ‘better living and working conditions’ from the automotive industry installed there by using their elected leftists to put pressure on these companies, and at some point these companies decided it was enough, and started to either reduce drastically investments or/and move to another more welcoming cities and states of the country. And now, as expected, the city of Santo André is in total decadence. But while industries are quite mobile (see the Soviets rebuilding all its industrial park in the East to protect it from nazis), coalfields and oilfields are not. In short: the population of Santo André now hates the left and blame leftists for the destruction of the city’s economy (Aécio had 63,34% of the votes, Dilma had 36% in the last elections). I doubt that this same pattern would have happened if they had a coalfield or oilfield installed there, because the royalties would have kept flowing in an steady pace no matter what.

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        • I see your point. The bit about the coalfields is interesting, never given it much thought. The wikipedia article points out that for instance Manchester grew thanks to a canal that allowed cheap transport of coal which eventually fed its industrial expansion. See http://en.wikipedia.org/wiki/Manchester#Industrial_Revolution

          Politicians try to overreach and underestimate the impact of their policies. That’s why in the USA evidence based policies are increasingly demanded. This is one thing Obama has been emphasizing (the other is of course increases for wage workers which may have as a consequence some of the effects you describe for Santo Andre)

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          • gro, a correlation map similar to yours could have been drawn for the eastern US ten years ago, but two things happened:
            1) Obama announced stricter emission controls for fossil power plants
            2) (You guessed it!) Fracking has made natural gas so cheap that utilities are switching

            Tough times in the coal fields and Obama and the Democrats are getting the blame.

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  38. This following is perhaps the most comprehensive, clear study I’ve found:

    http://iis-db.stanford.edu/pubs/21537/No_80_Terry_Karl_-_Effects_of_Oil_Development.pdf

    At least the first 7 pages are crucial for understanding the World Famous, and vastly demonstrated “Resource Curse”.

    “Conclusion:

    More than any other group of countries, oil dependent countries demonstrate perverse
    linkages between economic performance, poverty, bad governance, injustice and conflict.
    This is not due to the resource per se, but to the structures and incentives that oil
    dependence creates. Various proposals exist to mitigate this “paradox of plenty,”
    including demands for revenue transparency by oil companies and exporting
    governments, revenue management schemes, stabilization funds to mitigate price shocks,
    reforms of taxation and civil service, and the democratization and deconcentration of
    both the industry and the exporting countries. Without the implementation of reforms,
    the consequences of oil dependence will continue to be adverse”

    After reading this, plus dozens of other independent studies linked above, my personal conclusions remain quite pessimistic for Venezuela, for the next several decades.

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    • “Various proposals exist to mitigate this “paradox of plenty,” including demands for revenue transparency by oil companies and exporting governments, revenue management schemes, stabilization funds to mitigate price shocks,reforms of taxation and civil service, and the democratization and deconcentration of
      both the industry and the exporting countries. ….”

      This is the most important part , whatever curse is claimed for the presence of oil in a country , the solution lies in the adoption of the above measures , in any event the curse of oil is benign compared to the curse of being a poor resourceless country with nothing to lever its economic growth except the rather limited entrepeneural spirit of most of its people . the result of a culture gone bad and long preceding the coming of oil into the country.

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        • The text with which you disagree is one you yourself posted , so you disagree with your self !! I think you disagree with any thing I post without even having the courtesy of reading it , that s more than impolite , thats rather offensive , but I have great patience with children and can understand where you come from . the desire of winning an argument is more important to you than the discussion or understanding of an idea.!!

          Still I will read the new text you ve posted and maybe find something new that I havent already read and considered in my prior responses , that will be my gain .

          I do think there are two comments which I shall make , one is that the dutch disease is one which afflicts the Netherlands , an already developed country which had an existing extensive industrial and agricultural export infrastructure before it found oil , so that for them oil competed with something which already existed and could continue to be developed. That of course is not the case for Venezuela which was an undeveloped country before oil wealth came into its life , so the monicker Dutch Disease is inapplicable to describe Venezuelas situation .

          The second thing to remark is that whatever problems are caused by the sudden development of a countrys natural resources (where it lacks an existing industrial or agricultural infrastructure worthy of note) , these can be readily handled where there is a mature or competent institutional culture that rules its social and political life, hence it is the lack of this culture that is the ultimate cause of the so called curse , not the existence of the resource itself.

          By way of example I wonder whether our oil wealth could have been ever considered a curse to us if CAP and his host of talented ministers had been able to consolidate and root the reforms which they had in mind or if Chavez had maintained the hands off policty vis a vis the oil industry management organization , respected existing property rights and allowed technocratic professionals to handle the economy much as has been the case in Bolivia and Ecuador even while advancing his populist agenda.

          One thing I perhaps should have mentioned earlier is my belief that there is no good thing that isnt followed by a shadow of undesirable implications , and that what you have to do is try and deal with the shadow of undesirable implications to minimize them ( they will realistically never dissapear altogether) and take maximum advantage of the good thing you have been able to attain or recieve.

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          • “Various proposals exist to mitigate this “paradox of plenty,”

            Yes proposal´s made up by experts that are willing to help us out to make us able to manage the government receiving directly 97 percent of all exports. This is quitate-tu-pa-ponerme-yo experts selling their services to quitate-tu-pa-ponerme-yo politicians.

            By the way. The Dutch syndrome refers exclusively to the strengthening of the currency that results from export of natural resources and that makes it hard to compete in other areas. Which is why Holland decided to become the distributor for Europe. The natural resource curse is the wider concept.

            And anyone who thinks a government can manage an overwhelming income that does not come from its citizens, without affecting negatively the citizens and the economy can only be one of three things: an aspiring quitate-tu, a communist, or someone wishing we had a sheik.

            We Venezuelans, we do not live in a nation, we live in somebody else’s business.

            http://theoilcurse.blogspot.com

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            • Alerta Pueblo !! There is a worse curse than the oil curse albeit not sufficiently acknowledged and thats the Motorcar Curse, in countries where people rapidly start having access to private motorcars causing road accidents to rise exponentially increasing the number of victims of roadside injuries or deaths . Of course this curse could be avoided by having people ride bicycles , asses and horse drawn carriages. People who promote the massive use of motorcars (the fiendish motorcar makers) are part of a nefarious conspiracy to oust the bycicle makers ,the rearers of asses and horses and the builders of horse drawn carriages. !! These industries well deserve their survival given their contribution to the countrys economy !!

              There are people with dark plots to foster the use of motorcars by promoting the use of traffic rules and the filtering of incompetent drivers by requiring them to undergo special training and tests to ensure they get driving licenses to be able to drive , also by fining bad drivers and impounding their cars . ‘Alerta Pueblo’

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              • All kidding aside I share Pers concern at having an almost intrinsically corrupt government recieve 97% of the countrys income to misuse and waste at its whim . All governments where institutions are weak and social sstems ar chaotic and disorderly tend to become corrupted by the need to maintain itself in power in an electoral system where most votes have to be bought with populist gifts and subsidies

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            • “I have lived through two immense oil revenue bonanzas in my country and I am absolutely convinced that when the oil revenues a government receives exceed 5% of the nations GDP, or 15% of its exports, or 25% of all taxes paid by citizens, the balance of power is so fundamentally affected that bad governance and bad citizenship becomes the major malignant symptoms of the oil-curse.”

              Right. Even the exception that confirms the rule, Norway, has high taxes, high gas price, extreme transparency, and a completely different system. The “model” your blog suggest would have to include that plus some sort of “oil-to-cash” system, as explained in the video linked above.

              That would never happen in Corruptzuela today, even when the MUD crap comes back to power after Chavismo falls. We are simply not Norway, uneducated, corrupt to the bone, and lack the human resources and integrity such unique effort requires to avoid the OIL CURSE.

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          • I agree with the entire text, not just your convenient little extract, BB. Classic out-of context ruse.

            I generally disagree with your entire view on this topic. Why? See the links.

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