The American Mind

The self-proclaimed revolutionary Hugo Chavez is using the national oil company to gobble up more and more of Venezuela’s economy placing greater control in the authoritarian’s hands:

Petróleos de Venezuela, the state oil company that controls the biggest reserves in South America, may begin making shoes, building ships and farming soybeans as President Hugo Chavez widens the government’s role in the economy.

Chavez has approved the creation of seven subsidiaries that range from oil services to agriculture, according to a written report to the company’s management.

The plan would make PDVSA an even bigger force in the country’s daily life and put it in competition against companies from around the world.

PDVSA already controls the oil production that accounts for 90 percent of Venezuelan foreign trade and about half of government revenue. The effort to expand may siphon off managers and capital, hobbling efforts to reverse a slide in energy production.

This isn’t good for average Venezuelans since this economic consolidation is preventing the oil company from improving its core business, pumping oil. 90% of Venezuela’s exports are oil. Diminishing capabilities directly impact their economy. Exxon Mobil Corp. and ConocoPhillips have left the South American country denying them state-of-the-art knowledge and technology.

But this economic centralization isn’t the only example of Chavez showing how much of an authoritarian he is. Ed Morrissey links to a story about Chavez threatening to expel foreigners for criticizing the government (i.e. Chavez):

Venezuelan President Hugo Chavez has vowed to expel foreigners who publicly criticise him or his government.
“No foreigner can come here to attack us. Anyone who does must be removed from this country,” he said during his weekly TV and radio programme.

Mr Chavez also ordered officials to monitor statements made by international figures in Venezuela.

Economic centralization doesn’t bring about prosperity, but police-state tactics can prevent political uprising. Sadly we will watch Venezuela sink into an economy abyss while political opposition is oppressed.

“Wider Role Forming for PDVSA”