Financial Mail - - BETWEEN THE CHAINS - @Sikonathim mantshantshas@fm.co.za

Be­ing rich is bad, it’s in­hu­man,” Venezuela’s for­mer pres­i­dent Hugo Chávez once said. He of­fered this wis­dom on his tele­vi­sion pro­gramme, Hello Pres­i­dent, in 2005. The same year he be­gan ex­pro­pri­at­ing agri­cul­tural and un­ti­tled land with­out compensating the — prob­a­bly — rich own­ers for it. One could say he was strip­ping them of their “in­hu­man­ity”. The fol­low­ing year, Chávez prof­fered this nugget: “Cap­i­tal­ism is the way of the devil and ex­ploita­tion. If you re­ally want to look at things through the eyes of Jesus Christ — who I think was the first so­cial­ist — only so­cial­ism can re­ally cre­ate a gen­uine so­ci­ety.”

Then in 2007 the pres­i­dent forcibly took own­er­ship of Cono­cophillips’s oil rigs in the Orinoco Belt and placed them un­der the na­tional oil com­pany, Petróleos de Venezuela (PDVSA). Cono­cophillips left the coun­try, along with Exxonmo­bil.

At that point, Venezuela had been pro­duc­ing about 3-mil­lion bar­rels of oil a day, ac­cord­ing to Opec. In its 2007 an­nual report, Opec said Venezuela’s econ­omy grew 8% that year, down from the 10.3% recorded the pre­vi­ous year.

From 2009 more pro­duc­tive farm­land was taken from com­mer­cial farm­ers and handed to the poor and to peas­ant farm­ers. A rice mill owned by Cargill was ex­pro­pri­ated, as was 200,000ha of farm­land pro­duc­ing meat for Vestey Foods, a Bri­tish com­pany.

The “rev­o­lu­tion” was very much in progress. With Chávez at the helm, Venezuela was re­claim­ing what right­fully be­longed to the peo­ple. Oil prices played their part, in­creas­ing ten­fold be­tween 1998 and 2008. Many Venezue­lans thought Chávez was the best thing that had ever hap­pened to their coun­try.

So suc­cess­ful was the “rev­o­lu­tion” that would-be left­ist dic­ta­tors who wished to em­u­late “Chav­ismo” in their own coun­tries held Venezuela up as a model. Many took trips to study what Chávez was do­ing.

Among them was our own Julius Malema, who led an ANC Youth League del­e­ga­tion to Venezuela in April 2010. This was shortly af­ter a sim­i­lar visit Malema made to Zim­babwe, where he heaped praise on Robert Mu­gabe who had fa­cil­i­tated the de­struc­tion of the coun­try’s big­gest in­dus­try — agri­cul­ture — by beat­ing up farm­ers and driv­ing them off the land.

A fleet­ing oil-fu­elled par­adise

In Venezuela, not many peo­ple paid at­ten­tion to how these newly ac­quired means of production were be­ing man­aged. Chávez used petrodol­lars to sub­sidise ev­ery­thing from fuel to ed­u­ca­tion, health care and ba­sic foods. Many of the sub­si­dies were abused.

Much of the cheap fuel was smug­gled across the bor­der and sold for hand­some prof­its. Govern­ment bor­row­ing sky­rock­eted while oil rev­enues and production dropped.

Like all pop­ulists, Chávez was sur­rounded by cor­rup­tion and nepo­tism. He re­placed the pro­fes­sional man­age­ment teams of PDVSA with trusted party cadres. Production soon suf­fered. State cor­rup­tion in­creased ex­po­nen­tially. Fall­ing oil prices and spi­ralling sov­er­eign debt didn’t help. The 2016 Opec an­nual report re­veals Venezuela pro­duced 2.1-mil­lion bar­rels of oil that year. This will drop be­low 1-mil­lion bar­rels this year.

To­day, 11 years af­ter the first ex­pro­pri­a­tions of pri­vate prop­erty, Venezue­lans can’t flee their so­cial­ist heaven fast enough. The Fi­nan­cial Times re­ports that Venezue­lan banks this month lim­ited cash with­drawals to the equiv­a­lent of US17C a day. There is no food in the shops. No med­i­ca­tion for the sick. In­fla­tion will hit 1-mil­lion per­cent this year.

Like Zim­babwe, Venezuela is on course to dump its worth­less cur­rency. So yes, we in SA are fol­low­ing these two great ex­am­ples to the let­ter.

Many Venezue­lans thought Chávez was the best thing that had ever hap­pened to their coun­try

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