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Oil prices help keep
dictators in power
By Frida Ghitis. fghitis@yahoo.com.
Posted on Tue, Aug. 17, 2004 in The
Miam Herald.
We all feel the pain of high gasoline prices.
Few pieces of the global economic puzzle
have the ability to affect us all as quickly
and palpably as the cost of oil, as stratospheric
prices slip a hand into our wallets and
slide it out like the deftest of pickpockets.
The soaring price of oil, however, has implications
that reshape much more than how far we drive
on our summer vacations. Besides slamming
the brakes on economic growth, oil prices
keep dictators in power and weaken the forces
of democracy.
If you have any doubt, you need not look
far. The rulers of Venezuela and Cuba today
breathe a sigh of relief, having seen their
respective positions strengthened and their
ability to tighten their clasp on power
made much safer by the magic of rising petroleum
prices. To many of their citizens, who only
a few months ago believed that their world
would take a sharp political turn, the oil
markets have dealt a demoralizing blow.
The bounty of soaring oil prices gave Venezuelan
President Hugo Chávez, a man with
unquestionable dictatorial tendencies, the
hundreds of millions of dollars for projects
that would endear him to voters and save
his seat. With Chávez apparently
safely in power, according to the latest
electoral returns, Cuba's Fidel Castro appears
to have also dodged a bullet. Castro's ideological
soul mate in Caracas provides Havana with
a cheap oil lifeline during one of the most
difficult periods that Cuba has faced.
Back in March, pollsters found that 65.8
percent of Venezuelans supported forcing
Chávez from office, but clearly his
popularity has improved since then. What
happened? Oil prices rose and filled his
coffers with voter-pleasing ammunition.
Citizens of oil-poor countries may envy
the riches of nations, such as the fabled
Middle East kingdoms, floating splendidly
on oceans of oil. The reality of oil wealth
is much more complicated.
These ''rich'' countries tend to have a
higher percentage of their populations living
in poverty; they have a greater probability
of suffering violent conflict; and they
tend to indulge in the kinds of economic
development that are simply unsustainable
and ultimately fail.
This is the tragedy of ''wealth'' Venezuela,
a country that sells billions of dollars
worth of oil -- the world's fifth largest
exporter -- where 74 percent of the population
lives in poverty.
The simplified explanation for the curse
is that a single resource like oil moves
practically all the nation's wealth through
the government's hands. No government can
survive a system like that without succumbing
to the worst forms of corruption. Just ask
another wealthy/destitute nation like Nigeria.
Or diamond-rich, war-ravaged Sierra Leone.
Venezuela, with the largest oil reserves
outside of the Middle East, built an undisputable
tradition of corruption and nepotism. The
rule of the rich made a perfect setting
for the populist paratrooper Hugo Chávez
to take over power with promises of at last
sharing the country's wealth with the poor.
While handing some long-awaited favors
to the poor, Chávez gradually took
over all the levers of power, while steadily
devastating the economy. Since taking office
in 1998, living standards have fallen sharply
for everyone, including the poor. But Chávez
stirred up class conflict and blamed his
woes on the rich. By now the anti-American
Chávez has solidified his control
over the judiciary and Congress. He has
expanded the size of the courts and named
his own men to the bench, ensuring safe
majorities for all his policies, while keeping
a scrupulously guarded, ever thinning veneer
of democracy.
In the last few months, Venezuela's poor,
who so rightly demand their share of the
country's wealth, have been treated to a
bounty of government programs.
Venezuela does not need a return to corruption
under a different ruler. It needs, like
other oil-rich countries, a government that
will work on developing long-term strategies
for sustainable growth. The grand irony
is that the richer the country becomes,
the more its people are condemned to live
in poverty. Yet another reason to address
our insatiable thirst for gasoline.
Frida Ghitis writes about world affairs.
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