Venezuela’s Faded Oil Glory: Unpacking Prosperity, Corruption, And Sky-High Risks
Excerpt:
Senator Ted Cruz has often invoked a striking historical fact to critique modern socialism in Venezuela: in 1950, the country had the fourth-highest GDP per capita in the world. This claim, frequently used in his speeches and social media posts, paints a picture of a once-thriving nation undone by leftist policies. But is it accurate? What does it reveal about Venezuela’s economic past? .....
First, the claim holds water—sort of. Historical datasets from sources like the Maddison Project Database and NationMaster confirm that Venezuela ranked fourth in nominal GDP per capita in 1950, at around $7,424. It trailed only the United States ($9,573), Switzerland ($8,939), and New Zealand ($8,495), while outpacing powerhouses such as Australia, Canada, and the United Kingdom. This surge was fueled by an oil boom that began in the early 20th century, transforming Venezuela into a petro-state. Foreign companies like Standard Oil poured in, extracting vast reserves and boosting national output. Even in purchasing power parity terms, Venezuela hovered in the top 5-7 globally.
However, this metric—mean GDP per capita—tells only half the tale. As I’ve pointed out, it’s an average that can be wildly skewed by wealth concentration. If riches are jammed into the pockets of the top 1%, the figure soars, but the average citizen sees little benefit. Venezuela in the 1950s exemplified this: Oil wealth flowed to elites, government officials, and multinational firms, while rural poverty and urban slums persisted. The Gini coefficient, a measure of inequality, likely exceeded 0.5 during this era, based on Latin American trends and later data from the 1960s-1970s. By comparison, the U.S. Gini in 1950 was about 0.38, indicating a more even spread.
To get a truer sense of “typical” prosperity, we’d look to median income or GDP per capita equivalents, which filter out billionaire outliers. Unfortunately, precise 1950 median data for Venezuela is scarce, but economic historians estimate it could have been 40-60% below the mean, around $3,000-$4,500. This adjustment might drop Venezuela’s ranking below the top 10, revealing a prosperity illusion. Fast-forward to today: Venezuela’s mean GDP per capita lingers around $3,500, but median monthly incomes dip under $100, underscoring persistent disparities amid hyperinflation and economic collapse.
Corruption has been the rot at the core, evident even in the 1950s under the dictatorship of Marcos Pérez Jiménez (1952-1958). His regime was notorious for embezzlement, cronyism in oil contracts, and extravagant projects that lined insiders’ pockets while quashing opposition. Transparency International now ranks Venezuela among the world’s most corrupt nations, scoring a dismal 13/100 in 2023. ......
......Venezuela’s story isn’t just about failed socialism; it’s a cautionary tale of uneven booms, persistent kleptocracy, and the high costs of intervention. With recent shifts post-Maduro, perhaps reform beckons, but history urges skepticism. With a marginal record of political democracy, Venezuela’s actual progress demands addressing the median, not just the mean, and building from within.
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Author uses Cruz as example but even discounting that raises good points about Venezuela’s corruption regardless of who is in power.
Are You Dead?: The viral Chinese app for young people living alone
https://www.bbc.com/news/articles/c3381r5nnn6o
Excerpt:
A new bleak-sounding app has taken China by storm.
Named Are You Dead? the concept is simple. You need to check in with it every two days – clicking a large button – to confirm that you are alive. If not, it will get in touch with your appointed emergency contact and inform them that you may be in trouble.
It was launched in May last year to not much fanfare but attention around it has exploded in recent weeks with many young people, who live alone in Chinese cities, downloading it in droves.
This has propelled it to become the most downloaded paid app in the country.
According to research institutions, there may be up to 200 million one-person households in China by 2030, Chinese state media outlet Global Times reports.
And it’s those people that the app - which describes itself as a “safety company companion... whether you’re a solo office worker, a student living away from home, or anyone choosing a solitary lifestyle” - is trying to target.
“People who live alone at any stage of their life need something like this, as do introverts, those with depression, the unemployed and others in vulnerable situations,” said one user on Chinese social media.
“There is a fear that people living alone might die unnoticed, with no one to call for help. I sometimes wonder, if I died alone, who would collect my body?” said another.
.....The app, which is listed internationally under the name Demumu, ranks in the top two in the US, Singapore and Hong Kong, and top four in Australia and Spain for paid utility apps - possibly driven by Chinese users living overseas.
The current name is a word play on a successful food delivery app called “Are you Hungry?”. In Chinese, “Si-le-ma” sounds like the name of the food app “E-le-ma”.
First launched as a free app, the app has now made its way into the paid category - albeit at the low price of 8 yuan ($1.15; £0.85).
Little is known about the founders of Are You Dead?, but they say they are three people who were born after 1995 who built the app from Zhengzhou in Henan with a small team.
It has certainly grown in value now. One of these men, who goes by the name Mr Guo, told Chinese media that they intended to raise money by selling 10% of the company for a million yuan. That is a lot more than the 1,000 yuan ($140) they say it cost to build the app.
And they’re also looking to grow their target audience - saying they are exploring the idea of a new product specifically designed for the elderly in a country where over one-fifth of its population is over the age of 60.
In an indication that it was seriously looking at this option, it posted over the weekend, “we would like to call on more people to pay attention to the elderly who are living at home, to give them more care and understanding. They have dreams, strive to live, and deserve to be seen, respected and protected.”
Just confirmed with Grok that one one of the best uses of heavy Venezuelan oil is to mix it with the ultra light condensate that comes from Iranian gas fields. The blend can be calibrated for many different refinery types.
Iran can’t stop recovering the condensate with the gas, which is required to power their grid; so, even though their oil is restricted from world market they have to bring it up to the atmosphere where it commences to degrade.
Iran now has a number of floating oil tankers being used as storage vessels, and where the oil is gradually going bad if not used in, I believe, the next few months or so.
I’m sure the Dealmaker in Chief is well aware of this oppportunity.