venezuelan oil policy under chavez administration and its impacts on foreign and domestic affairs

8/8/2019 Venezuelan Oil Policy under Chavez Administration and its Impacts on Foreign and Domestic Affairs

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Location: South America,Caribbean Sea and theNorth Atlantic Ocean,

between Colombia andGuyana

Population: 27,223,228

revenues: $66.53 billion

Expditeurs: $86.69billion (2009 est.)

Current President: HugoChavez

Background of Venezuela


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Colonel Thoneste BagosoraOil reserve & income

Venezuela oil production estimates to 2.472million bbl/day

Current levels of production remain a subject of

debate, with considerable difference between thelevels cited by theVenezuelan Government andthose cited by private sector and internationalobservers. (US Department of State, 2010)

V

enezuela oil consumption is 740,000 bbl/day(2009 estimation) It Exports 2.182 million bbl/day (2007 estimation)Recent proven reserved oil estimated to 270

billion bbl (Marcus, U.)


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Distribution of its Refinery


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Oil Policy under Chavez administration: Shifting

Supply Markety Chvez-China Oil Deal,

India is included, as well.y President Hugo Chvez's goal

of increasing Venezuelan oilexports to China from lessthan 100,000 bpd today to500,000 bpd by 2009 and 1million bpd by 2012 garneredconsiderable attention.(

global envision ,g2006).y Despite the fact such attempt

would be costly, the aim is tostand against the US.


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Oil Policy under Chavez administration: Bolivarian

Revolutiony He calls for the creation of

the Bolivarian Alternativefor Latin America and theCaribbean (ALBA), whichis an accord signed byCastro and Chavez inHavana.

y Chvez celebrates thespending as revolutionary

largess, designed to furtherhis dream of unifying LatinAmerica in a way SimnBolvar could only dreamof. (Forero J, 2006).


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Oil Policy under Chavez administration: Buying

Loyalty outsidey Chvez has been subsidizing

diverse items like samba paradesin Brazil, eye surgery for poorMexicans. By some estimates,the spending now surpasses the

nearly$2 billion thatWashington allocates annuallyfor development programs andthe drug war in western South

America (Forero J, 2006).y What is clear is that more than

30 countries as far away as

Indonesia have received someform of aid or preferential deals(Forero J, 2006).


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Impacts of Chaves Oil Policy on Venezuelan Foreign

Policy Increased tension with the USA. Negatively

affects on Venezuela Strengthen its tie with other leftist leaders of

Latin American countries

enhanced relationship with anti-Americancountries such as Iran, Syria, North Korea,China and Russia

Mr. Chavez popularity depends on Oil Price It aids other Latin countries especially Cuba,

Ecuador and Bolivia angered domestic

In 2006, it spend 25,9 billion as aid to westernHemisphere Partners Argentina receives $3,95 billion, Brazil $4,38,

Cuba 4,34 billion Venezuela supply 100,000 bbl/d to Cuba in

exchange for the services of Cuban doctorsand other specialist which is wasting N.R


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He offered the armys services to build aroad in Nicaragua at a projected cost of

$350 million instead of paving poorneighborhoods of Caracas Chavez approved a $120 million

assistance fund for Bolivia in may 2007 Chavez popularity dropped after its

foreign aid expected to drop by$3

billions Despite spending that huge amount of

money, Venezuela politics is still notstable

Impacts of Chaves Oil Policy on Venezuelan Foreign

Policy


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Impacts of Chaves Oil Policy on Venezuelan Domestic

affairsy Rising price of oil helped Venezuela to grew its

economy by 8% according to 2007 IMF estimation

y PdVSA provide $13.3 billion of its total revenue forsocial spending especial in health care andeducation sectors

y Poverty rate is 9.5% despite huge amount of oilrevenue. (Will Gran, 2009)

y Since 2005Venezuela has purchased over $4 billionin arms from Russia (USDS,2010)

y Arm spending increased poverty

y highest level of corruption in the Americas apartfrom Haiti" (Will Gran, 2009)

y Oppositions portray Chavez programs as"destruction of the economic system"

y Public spending grew 43%, widening the gapbetween total government income and outlays toabout 1.5% of the total economy, according toestimates by Morgan Stanley


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Unemployment rate officially is 6%,however, those statistics do notaccount informal sectors thatestimated to 50% of total Venezuelanworkforce (USDS,2010)

Out of a total workforce of45,000,over 20,000 PDVSA managementand workers were dismissed because

the government proclaimed they hadabandoned their jobs during thestrike

Inflation rate reached to 30% in 2010,

highest in Latin America

Chavez oil policy and Venezuela domestic policy


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Bibliography:

http://www.nationalreview.com/corner/136768/chavez-betting-wrong-way-oil-prices/mario-loyola

http://news.bbc.co.uk/2/hi/americas/3569674.stm#Marcohttp://news.bbc.co.uk/2/hi/americas/7858041.stmhttp://tech.mit.edu/V127/N6/long2.htmlhttp://corporateforeignpolicy.com/corruption/hugo-chavez-cant-buy-love

http://www.usatoday.com/money/world/2010-05-08-venezuela-inflation_N.htmhttp://www.state.gov/r/pa/ei/bgn/35766.htmhttp://www.eia.doe.gov/cabs/venezuela/oil.html


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Conclusiony Since Chaves has taken power from 1998, the oil policy

has been shifted

yHe spend huge amount of money to achieve popularityoutside of the country, but he failed to achieve most ofhis goals and have had negatively affected onVenezuela domestic and raised poverty.

y

Chavez policies caused high rates of unemploymentand corruption

venezuelan oil policy under chavez administration and its impacts on foreign and domestic affairs

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