Chavez 's Control Of The State Oil Company

1077 Words5 Pages
“From 1999-2003, the government did not control the state oil company; in fact, it was controlled by his opponents, who used it to try to overthrow the government, including the devastating oil strike of 2002–2003. For that reason, a better measure of economic growth under the Chávez government would start after it got control over the state oil company, and therefore the economy.” (Kozameh, 2014) In 2003, Chavez gained control of Petroleos de Venezuela (PDVSA) after the strike. Because of this control, Chavez had direct control over oil revenue. As Chavez gained power, the transparency with PDVSA went away and the company neglected to produce numbers and statistics on production or sales. Funding through PDVSA for discreet outside social…show more content…
During the Chavez era, everything from electricity to banking to farming. This made the number of private companies drop by over 30% percent from 1998 to 2011. Chavez’s economic corruption also lead foreign investors to turn to Venezuela’s neighbors, Brazil and Colombia, for investment opportunity. In 2008, Chavez declared a change in currency that has made inflation skyrocket. The Bolivar Fuertes lost nearly two-thirds of its value from 2008 to 2010. This has caused prices in Venezuela to increase by over twenty percent each year from 1999 to 2011. “Investment is virtually non-existent, but disinvestment is rampant. In the last decade, more than 4,000 businesses have shut their doors, with several factories relocating to the Colombian coastal city of Barranquilla and other friendly locations.” (Thomson, 2010) Despite oil wealth, Venezuela 's government has been borrowing heavily inside the country in order to finance a fiscal deficit that in 2004 reached about 3 percent of GDP. (Lapper, 2005) Other than the oil sector, private investment has virtually gone away. Public investment was not enough to maintain roads, bridges, ports and other aspects of
Open Document