American Elephants


21st Century Socialist Vision Turns the Lights Off in Venezuela. by The Elephant's Child
May 1, 2010, 8:10 am
Filed under: Energy, Latin America, Politics, Socialism | Tags: , ,


Venezuela, one of the world’s great oil powers — one of the top five providers of crude oil to the United States — is having trouble keeping the lights on at home.  Every day for the past three months, government-programmed blackouts means the lights flicker and go out, in a once prosperous country.

A months-old energy crisis and state interventions are taking a brutal cost on private business.  It’s a major challenge for Venezuela’s President-for-life Hugo Chavez, and his vaunted 21st century socialist experiment.

“The government is paralyzed, unable to handle the situation — and there are no fiscal plans to deal with the crisis,” said José Guerra, a former Central Bank economist who directs the economics department at Central University in Caracas, the capital.  “Our situation is unbelievable, because we have one of the biggest reserves of oil in the world, thermal-electrical and hydroelectric sources.”

Chavez hails his 21st century socialism as the answer to American-style capitalism that he calls an abject failure.  The oil industry is pumping 20% less crude than in the 1990s and is saddled with debt.  Venezuelas hydroelectric plants are unable to generate enough power because they have failed to make the necessary investments to upgrade facilities.  The inflation rate could rise to 35% this year, economists say. Thousands of factories have closed since 1999 for lack of access to money.

To save energy the government has imposed rolling blackouts in cities that can last as much as four hours or more a day.  And they fine  businesses that use too much energy.

They always think that socialism will bring a brighter tomorrow.  But the lights are going out sporadically in Venezuela.

When will they ever learn, when will they ever learn?


1 Comment so far
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Yes, Chavez is an idiot. They have failed to invest and the worst 50 year drought has significantly decreased the output of its hydroelectric dams of which Venezuela gets 73% of its power. The previous government was foolish to depend on one source of energy just as the US relies to much on importing oil.

Until 2007 a majority Venezuela’s electric power was administered by AES Corporation, a global corporation and one of the largest private company’s in Venezuela. AES has had it’s own problems for the past ten years and has been blamed for failing to manage it’s power plants throughout the world because of the debt it has accumulated. AES has a higher debt load than what is average for the industry and their have been some reports of Enron style management and book keeping.

Other droughts throughout the world, such as in the Philippines have caused similar blackouts.

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Comment by Mark Baird




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