All NEW Investors: Your gift matched $ for $ this week! GIVE NOW

Chavez swimming in oil profits

Dan Grech Jul 31, 2007


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.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.