The Oil Industry & Corruption In Venezuela: A Mutual Blame Game:


 In which Latin American country is business malpractice & fraud most prevalent? Haiti? Honduras. Nicaragua? No. According to the most recent “Corruption Perceptions Index” published by “Transparency International”  (quoted during August in “The Economist Magazine” and Spain’s “El Pais”) that status belongs to Venezuela, ranked at position 165 (out of 176 nations), just above Iraq, Turkmenistan and Uzbekistan. How did this happen and who is responsible? In his lecture to a large & attentive audience at the new Canning House address (14/15 Belgrave Square SW1) on September 9th, Gustavo Coronel – a former director of Petroleos de Venezuela (PDVSA), founder of the anti-corruption organisation “Pro Calidad de Vida” and Venezuela’s representative to Transparency International (1996-2000) – firmly ascribed the blame to the Chavez / Maduro Governments.

He did acknowledge, however, that Hugo Chavez had been elected President in 1998 mainly because he was perceived as a more honest alternative to his immediate predecessors – and thus that the problem of corruption “ is not exclusive to the revolution”. On the contrary (declared Coronel), it is “ a blend of the newcomers and the old hands who have always been there”.

Meanwhile, both the Venezuelan Government and the opposition have been levelling increasingly vehement accusations at each other. As “Venezuela” reported on 4th August, the previous day both sets of supporters had held rallies in separate areas of Caracas to demonstrate against the “inefficiency & corruption of the politicians on the other side”. At the Plaza Bolivar, President Maduro called on the people of Venezuela to “combat capitalist corruption, wherever it is, within the corrupt rightwing or in a Chavista traitor who falls victim to it”.

 In a televised speech on 12th August (noted Venezuela Analysis), Maduro announced that he would “apply for special decree powers to begin the process of reform”. Between 8th July – 13th August “103 arrests were made in the anti-corruption campaign, including officials from the consumer protection agency IDEPABIS, the state-owned iron company Ferrominera, a joint Sino-Venezuelan development fund and even six judicial personnel”. Furthermore, the President has contended that the blackouts which affected 70% of the country on 4th September were due to sabotage and constituted a rehearsal for an “electric coup”.

The Opposition leader and Miranda State Governor Henrique Capriles promptly rejected these allegations and argued instead that the blackouts showed “ once again the terrible failure of the Government”. It was evident at Canning House that Gustavo Coronel agrees with this interpretation.The country, he insisted, “is in economic & social ruin” due to the “fatal combination of being hooked on oil to the point that we are over-sensitive to the fluctuations in price and the ‘hyper-corruption’ of the company (PDVSA) that generates this mono-export”. He asserted that the Government had “ransacked” the country’s oil fund and that the national debt had rocketed from $25 billion dollars in 1999 to around $170 billion now: “96% of Venezuela’s exports are oil: The price per barrel during the last ten years has been $85 – $105, so we should be awash with money – but are not”.

Coronel maintained this was due to the oil income  being diverted from the Central Bank to “unaccountable parallel funds” managed by what he portrayed as “The Gang of Four” (The President & the Ministers of Planning, Finance and Energy) whose main purpose was “ to consolidate their political power through a policy of handouts”. Because these are “not as abundant as before”, the poor (he believes) are “beginning to feel abandoned”. The country (he proclaimed) “has a lot of problems of its own”, so shouldn’t be giving oil money to “ideological friends” such as Cristina Fernandez (Argentina), Rafael Correa (Ecuador), Daniel Ortega (Nicaragua), Alexander Lukashenko (Belarus), Hezbollah & Hamas.

Coronel was especially hostile to what he regarded as the “main crime”: Donating (by his estimation) $4 billion pa to Cuba, “more than they received from the USSR in the 1960’s”. He claimed that the “whole managerial structure” of PDVSA is “on the take” and that its debts are $85 billion – not the official figure of $45 billion. As the value of the company’s assets “are closer to $75 billion, that means it is going bankrupt”.

Robert Capurro, the Canning House Chief Executive Officer  – when introducing Coronel – requested that the questions afterwards should be “civil”. He needn’t have worried. There appeared to be scarcely any supporters of the Bolivarian revolution in the auditorium.

On 9th September, the “Live Science Centre” released its list of the “World’s Happiest Countries”. Venezuela was at No. 20 (out of 156) – despite the gloomy scenario depicted by Gustavo Coronel.



Filed under: Politics | Posted on September 17th, 2013 by Colin D Gordon

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