NEWS BLOG (WSAU) My family follows the news from Venezuela with some interest. My grandfather lived there for two years. He left his family behind in New York, and worked as an industrial engineer building the oil fields. Eventually his wife and two children would join him. My father, 15 at the time, went to high school in Venezuela for a year.
My grandparents had fond memories of their time there. They lived in a gated community in the hills overlooking Caracas. Foreign managers lived well there – a better standard of living than they’d have in the U.S. And since many living expenses were included with their job, it was possible to bank a lot of cash for the return to the U.S. when the Venezuelan project was done.
But my grandparents packed up and left Venezuela on 24-hours notice. A government minister who became a family friend told them of a military coup that was imminent. They returned to New York that night, a day before tanks rolled through the capital.
The oil fields my grandfather helped to build were developed by Royal Dutch Shell – foreign investors who were invited into Venezuela to help develop that nation’s natural resources. All were taken – stolen – by the government when Hugo Chavez nationalized the oil industry in 2006. Mining, telecommunications, electric companies and water-works were nationalized in short order.
Anyone who wants to see the shortcomings of socialism needs to look no further than these industries under Chavez’ control. Oil output plummeted. The government doesn’t have the expertise to run the oil fields. They don’t have access to the new technology that’s needed to bring more oil to market. No foreign company will invest there. Corruption and graft are rampant. At a time when crude oil was selling for $105 a barrel, Venezuela couldn’t capitalize. The amount of money that didn’t flow into the Venezuelan economy is staggering. The other nationalized industries didn’t fare much better. There were rolling blackouts in some industries because there wasn’t enough electricity being produced.
Outside investment grows an economy. Venezuela has been pumped full of nationalistic rhetoric. And, despite abundant resources, it remains an impoverished country with little hope for improvement. That’s the legacy of Hugo Chavez.