Oil is the life-giver of current human societies’ modern economy and lifestyle. Thus, access to oil is essential for that lifestyle to be achieved.
Enter Hugo Chavez, leftist President of Venezuela. He controls the 5th largest oil exporting economy in the world, and as such has the power to influence many many lives.
Yesterday, he took a step to increase his, and his countrys’ influence in the Western Hemisphere.
Chavez has proposed setting up an initiative to deliver oil to the poor Caribbean nations at a heavily discounted price. Thus allowing them to spend less of their money on oil imports and more on improving the lifestyle and situation of their citizens.
His stated goal is of course much different from his real one… which is to make Venezuela more influential and limit its’ dependance on the United States for import of it’s fuel.
The one major stipulation Chavez has put on this deal has been this…
” all this new business must be between governments, … the region could not hand any more over to Texaco and other private companies.”
It will be interesting to see how the lobby groups in the United States would react to this actually happening. Certainly Chavez will have the support of the poor in the caribbean, and of certain leaders like Casto… but others may be less willing to go along with his plans.
I imagine that if he discounts enough oil to make a difference, this could artificially deflate the price of oil on world markets. Of course, since oil is fungible, this is essentially a foreign aid package under another name.
As much as I’d like to see a drop in oil prices, however, I don’t think this will have much of an impact. Just Chavez being Chavez.
I worry more about the irrational conviction that free trade will only serve to impoverish Central American countries. Trade is the way out of poverty. But capitalism is in ill repute today in Europe and parts of South America. This silliness will cost much where it can be least afforded if this trend continues.
If I was in one of those other Caribbean nations, I’d be less worried about Texaco than I would about my nation becoming heavily dependent upon the good graces of Hugo Chavez … and the local government.