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The situation in Venezuela makes my heart hurt. Reading about how Hugo Chavez destroyed PDVSA through ignorance and incompetence is a real life example of how m

The situation in Venezuela makes my heart hurt. Reading about how Hugo Chavez destroyed PDVSA through ignorance and incompetence is a real life example of how much damage a populist strongman can do.

alacombe 8y ago
why "populist" ? I don't think the starving Venezuelans condone the system very much. Venezuelan policies are at foremost socialist.
- misja111 8y ago
  The support for Chavez was immense, in particular amongst the poor Venezuelans.
  - cryptonector 8y ago
    Until it wasn't, thus making it necessary to resort to fake elections.
Findeton 8y ago
The problem is that many people believe government is the solution to everything. Surprisingly this is most true in latin-american countries where the government is not that strong. What I see when I visit those countries is that some sort of government is always there, but not the official one. Frontiers there are a wish list and the few that pay taxes get to pay it in the name of everyone else...
Carlton87 8y ago
Replace strongman with socialist and your statement makes much more sense.
- SllX 8y ago
  A strongman socialist is still a strongman.
crocal 8y ago
Me too. I worked on some good projects there a few years ago and now this. Is there somewhere a “for dummies” analysis / explanation of the chain of events and decisions that led to the current situation in Venezuela? I can’t fathom how it is possible even in the most corrupt place in the world to reach such a sorry state.
- jayess 8y ago
  https://en.wikipedia.org/wiki/Economic_policy_of_the_Hugo_Ch%C3%A1vez_administration https://en.wikipedia.org/wiki/Economic_policy_of_the_Hugo_Ch... In short: price controls, nationalization, high taxation, corruption, Cuban economic influence (read socialism/marxism), economic malinvestment, overspending, debt, and then printing money...
- scythe 8y ago
  The crucial mistake was the firing of tens of thousands of employees of the state oil company, PDVSA. Eviscerating the state oil business in an economy that depends on oil exports is, um, bad. With half of their employees replaced by Chavez yes-men, PDVSA made poor strategic decisions that left them with (almost) no new oil wells when the ones they had been using ran dry. To be specific, money that should have been used to dig new oil wells was diverted to poverty-reduction initiatives by the central government. Venezuela today has the world's largest proven oil reserves (thanks to recent offshore discoveries) and yet ranks low by exports.
  - wonthegame 8y ago
    The firing wasn’t the issue. It was a controversial move but it is not what caused the ongoing collapse. The exchange rates being in their favour is how the govt paid for the social programs. Now that the rate is not in their favour and oil prices have crashed... now it makes it difficult to pay for your debt. The US smelled blood and decided to help speed up the inevitable by adding sanctions. This increased the cost of their debt. Maduro is attempting to avoid further economic harm with the petro coin.
    - 8y ago
Zhenya 8y ago
Populism isn't the problem here. Socialist /fascist policies of govt control of the means of production and the removal of the profit motive is what you see at play.

The situation in Venezuela makes my heart hurt. Reading about how Hugo Chavez destroyed PDVSA through ignorance and incompetence is a real life example of how much damage a populist strongman can do.

alacombe 8y ago

why "populist" ? I don't think the starving Venezuelans condone the system very much. Venezuelan policies are at foremost socialist.

misja111 8y ago
The support for Chavez was immense, in particular amongst the poor Venezuelans.
- cryptonector 8y ago
  Until it wasn't, thus making it necessary to resort to fake elections.

Findeton 8y ago

The problem is that many people believe government is the solution to everything. Surprisingly this is most true in latin-american countries where the government is not that strong. What I see when I visit those countries is that some sort of government is always there, but not the official one. Frontiers there are a wish list and the few that pay taxes get to pay it in the name of everyone else...

Carlton87 8y ago

Replace strongman with socialist and your statement makes much more sense.

SllX 8y ago
A strongman socialist is still a strongman.

crocal 8y ago

Me too. I worked on some good projects there a few years ago and now this. Is there somewhere a “for dummies” analysis / explanation of the chain of events and decisions that led to the current situation in Venezuela? I can’t fathom how it is possible even in the most corrupt place in the world to reach such a sorry state.

jayess 8y ago
https://en.wikipedia.org/wiki/Economic_policy_of_the_Hugo_Ch%C3%A1vez_administration https://en.wikipedia.org/wiki/Economic_policy_of_the_Hugo_Ch... In short: price controls, nationalization, high taxation, corruption, Cuban economic influence (read socialism/marxism), economic malinvestment, overspending, debt, and then printing money...
scythe 8y ago
The crucial mistake was the firing of tens of thousands of employees of the state oil company, PDVSA. Eviscerating the state oil business in an economy that depends on oil exports is, um, bad. With half of their employees replaced by Chavez yes-men, PDVSA made poor strategic decisions that left them with (almost) no new oil wells when the ones they had been using ran dry. To be specific, money that should have been used to dig new oil wells was diverted to poverty-reduction initiatives by the central government. Venezuela today has the world's largest proven oil reserves (thanks to recent offshore discoveries) and yet ranks low by exports.
- wonthegame 8y ago
  The firing wasn’t the issue. It was a controversial move but it is not what caused the ongoing collapse. The exchange rates being in their favour is how the govt paid for the social programs. Now that the rate is not in their favour and oil prices have crashed... now it makes it difficult to pay for your debt. The US smelled blood and decided to help speed up the inevitable by adding sanctions. This increased the cost of their debt. Maduro is attempting to avoid further economic harm with the petro coin.
  - 8y ago

Zhenya 8y ago

Populism isn't the problem here. Socialist /fascist policies of govt control of the means of production and the removal of the profit motive is what you see at play.