How Chavez has changed his tune

Oil is one thread running parallel with totalitarianism. This excellent article explores how oil shapes politics in the third world.

What Makes a Revolutionary?
How oil made Venezuela a graveyard of change

…In her groundbreaking book The Paradox of Plenty, Stanford political scientist Terry Lynn Karl studied the effects of the 1970’s oil booms on oil exporting countries the world over. Paying special attention to Venezuela, but also touching on the development strategies of other nations such as Iran and Algeria, Lynn Karl noted that even though these countries had been the recipients of the largest recorded transfer of wealth not to involve a war, decades later they were still plagued by poverty and antiquated infrastructure.

She eventually concluded that the reliance of petro-states such as Venezuela on a single export influences and shapes various aspects of the state, from regime type to the course of public policy, and often warps them in damaging ways. During the 1970’s, with Venezuela awash in oil money, then President Carlos Andres Perez engaged the country in an ambitious populist program, nationalizing the oil industry and condemning the agents of international finance and globalization as “genocide workers in the pay of totalitarianism.” When the 70’s boom came to an end, the massive social welfare programs that Andres Perez had implemented proved largely untenable, and Venezuela experienced two decades of economic stagnation and political frustration that were capped by Chávez’s election in ’98.

“It’s certainly happening all over again, isn’t it?” Lynn Karl told me in a recent interview. “The way Venezuela is set up, the way most petro-states are set up, is that oil revenue goes directly to the executive branch, thus falling under the power of the President.”

And when the price of oil is high, petro-state presidents are able to spend freely and without oversight. The entire process lends itself to the centralization of power and the undermining of the liberal institutions that are necessary in a stable democracy. In moments of astronomically high oil prices, a president is able to exercise power without building consensus amongst the state’s various actors.

“…When Chávez came into power, he had to negotiate because the price of oil was low; he came in speaking as a much more moderate politician.”

Explains a lot, doesn’t it?