November 12, 2009

MEGAN MCARDLE: Chavez’s Economic Problems Turn Nasty: “For a long time I have been saying (along with a lot of other people), that Hugo Chavez was running his country into the ground. He diverted investment funds from PDVSA, Venezuela’s state-run oil company, into social programs. As long as the price of oil kept rising, he could do that. Unfortunately, Venezuela’s sour, heavy crude is particularly hard to get at and refine, and requires a high rate of investment in order to keep production up. As a result, the number of barrels per day (bpd) that Venezuela produces has declined pretty sharply since he took office in 1999. As a consequence, the money that Chavez used to paper over the cracks in his socialist paradise has vanished, and the cracks are deepening.”

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