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Chavez swimming in oil profits

Venezuelan President Hugo Chavez delivers a speech May 1, shortly after his government took control of privately-run installations in what could be the world's richest oil fields as part of his nationalization drive.

TEXT OF STORY

Scott Jagow: Yeah, there's plenty of oil money in Venezuela, for sure. A lot of it comes from huge taxes on foreign oil companies. That's how President Hugo Chavez forced Big Oil out of his country, so he could take over the business. Dan Grech has more on this from our Americas Desk at WLRN.


Dan Grech: Oil company royalties in Venezuela were once as low as 1 percent. Now in some cases, they're 50 percent.

Back in May, President Chavez seized four foreign oil ventures. That earned his government a cool $800 million bucks a year. All told, Venezuela has upped its annual oil income by $5.8 billion.

Ian Vasquez: The problem in Venezuela isn't that the government doesn't have enough money. It's that it has too much money.

That's Ian Vasquez. He's with the Cato Institute, a U.S. think tank that favors limited government intervention in the economy.

Vasquez: Venezuela looks like it's suffering from a classic curse of oil. The money comes in like manna from heaven, and the institutions that create wealth are destroyed in the process. And that's a recipe for poverty.

Chavez supporters say Big Oil's simply footing the bill for Big State health and education programs.

I'm Dan Grech for Marketplace.

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