Market discipline for Hugo Chavez?

The American Thinker ^ | March 6, 2005 | A.M. Mora y Leon

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Sometimes the simplest solutions are the most striking. Blogger Miguel Octavio in Caracas, Venezuela, has suggested the best way for Venezuela to draw some earnings from its Citgo refineries here in the U.S. is to sell shares.

Houston-based Citgo has been in the news lately, with Hugo Chavez "threatening" to sell its eight U.S.-based refineries. Chavez says he doesn't get enough money out of them, and the U.S. markets suspect he'd like to sell to more easily cut off oil to the U.S. There are a lot of horse laughs in Houston, of course, given how much money he'd lose if he sold.

But Citgo in fact is part of Venezuela's money-losing state-owned oil company, PdVSA. These state organizations are naturally inefficient, and as we see in the Gulf states, they also retard their countries' economic development. The oil earnings don't translate to wealth, except for a politicized elite. In Venezuela, Chavez has changed the elite to a much more corrupt group, and compounded the problem by getting rid of the state company's technocrats who understood the oil industry.

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For a guy like Hugo Chavez, market discipline would feel like the cudgel.

[Kitten Festival]

Here is the link to the real Citgo story, I think it's worth a click:

http://blogs.salon.com/0001330/2005/03/05.html#a2150