Running out of someone else's money your own money - Venezuela
Hugo Chavez nationalized Venezuela's oil companies and was using the profits to fund his over the top social programs. It seems he didn't think to put anything back into the oil infrastructure so that cash cow is on its last legs.
From
ABC News:
Outlook Grim in Venezuela's Essential Oil Industry
Only the filthy water from broken sewer pipes keeps the dust down in front of Ramon Boet's shop, which sells statues of saints and other religious objects.
In the distance, massive tankers pull up to a half-century-old refinery that processes much of the oil that earns Venezuela more than $100 billion a year.
"It doesn't help us at all," Boet, 58, says as a blackout snuffs the lights in his shop in this Caribbean coastal town. He closes before dusk. Too many robbers.
The oil flowing from the El Palito refinery sells for more than five times what it cost when President Hugo Chavez took office in 1999. Yet when Chavez died in March he left Venezuela's cash cow, its state-run oil company, in such dire straits that analysts say $100-a-barrel oil may no longer be enough to keep the country afloat barring a complete overhaul of a deteriorating petroleum industry.
The situation is more urgent than ever, analysts say. The price of crude has slumped in recent weeks and Chavez's heir, Nicolas Maduro, appears to have done little to address declining production, billions in debt and infrastructure deficiencies that have caused major accidents including a blaze that killed at least 42 people at Venezuela's largest refinery last year.
A bit more -- Rafael Ramirez is Venezuela's oil minister and the head of state oil company Petroleos de Venezuela S.A.:
(isn't that a big conflict of interest? -- just sayin')
"We're in a process of trying to attract investment in dollars other than ours," Ramirez said, assuring reporters that PDVSA would work with private investors to not take on more debt to make new investment.
Like hell I am going to put my money into Venezuela -- Chavez nationalized (ie: stole) the companies that came in there 50 years ago. So Chavez-lite(tm) is expecting the world's oil companies to forget what happened and to spend money to upgrade and develop only to have this stolen again?
This is the ugly end-game of socialism. It is like a Ponzi scam -- there is no graceful exit strategy, this only ends in systemic collapse. Had Chavez spent 20% of the money he spent on social programs rebuilding the infrastructure and developing new sites, Maduro would not be having the problems he is having now. And of course, because Maduro is just a Chavez-lite(tm), he cannot reign in the social programs or there will be mass uprisings of the uninformed people wanting their free stuff...
Posted by DaveH at May 6, 2013 9:09 PM