Crude Nation

Crude Nation: How Oil Riches Ruined Venezuela

Copyright Date: 2016
DOI: 10.2307/j.ctt1dwsswf
Pages: 256
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  • Book Info
    Crude Nation
    Book Description:

    Beneath Venezuelan soil lies an ocean of crude-the world's largest reserves-an oil patch that shaped the nature of the global energy business. Unfortunately, a dysfunctional anti-American, leftist government controls this vast resource and has used its wealth to foster voter support, ultimately wreaking economic havoc.Crude Nationreveals the ways in which this mismanagement has led to Venezuela's economic ruin and turned the country into a cautionary tale for the world. Raúl Gallegos, a former Caracas-based oil correspondent, paints a picture both vivid and analytical of the country's economic decline, the government's foolhardy economic policies, and the wrecked lives of Venezuelans.Without transparency, the Venezuelan government uses oil money to subsidize life for its citizens in myriad unsustainable ways, while regulating nearly every aspect of day-to-day existence in Venezuela. This has created a paradox in which citizens can fill up the tanks of their SUVs for less than one American dollar while simultaneously enduring nationwide shortages of staples such as milk, sugar, and toilet paper. Gallegos's insightful analysis shows how mismanagement has ruined Venezuela again and again over the past century and lays out how Venezuelans can begin to fix their country, a nation that can play an important role in the global energy industry.

    eISBN: 978-1-61234-859-9
    Subjects: Political Science, Economics

Table of Contents

  1. Front Matter
    (pp. i-vi)
    DOI: 10.2307/j.ctt1dwsswf.1
  2. Table of Contents
    (pp. vii-viii)
    DOI: 10.2307/j.ctt1dwsswf.2
  3. List of Illustrations
    (pp. ix-x)
    DOI: 10.2307/j.ctt1dwsswf.3
    (pp. xi-xiv)
    DOI: 10.2307/j.ctt1dwsswf.4
    (pp. xv-xviii)
    DOI: 10.2307/j.ctt1dwsswf.5
  6. PROLOGUE The World’s Craziest Economy
    (pp. 1-8)
    DOI: 10.2307/j.ctt1dwsswf.6

    On my first flight to Venezuela, in June 2004, I smuggled in more than US$9,000 hidden in a money belt. It was a risky thing to do, but I believed I had no choice. I had just taken a post as a Caracas-based correspondent for Dow Jones Newswires and theWall Street Journal, and several colleagues warned me that Venezuela’s strict foreign currency rules made it difficult to bring dollars legally into the country. My job paid me in dollars in a U.S. account, and I was assured that my salary would be more than enough to live comfortably in...

  7. 1 1-800-LEO
    (pp. 9-32)
    DOI: 10.2307/j.ctt1dwsswf.7

    Staying on the twentieth floor of the Renaissance Caracas La Castellana, a Marriott hotel, can be a bizarre experience. Rooms have the usual upscale hotel amenities: expansive city views, a king-size bed, a forty-two-inch flat-screen television, high-speed Internet, and twenty-four-hour room service. Guests can swim laps in the hotel’s infinity pool, work out at the gym, and have a daily buffet breakfast. In January 2015 one night in a standard single room cost 9,469 bolivars, or US$1,503 calculated at Venezuela’s top official exchange rate.¹ At that price the Renaissance was one of the most expensive hotels in the world. But...

    (pp. 33-56)
    DOI: 10.2307/j.ctt1dwsswf.8

    Venezuelans have a problem when they go to the toilet. A toilet paper shortage has forced many people to use paper napkins, paper towels, anything but a normal household roll of toilet paper, which is almost impossible to find. Fortunately for me, I had two rolls in my hotel bathroom during my visits to Caracas, but there wasn’t a single one to be found in Venezuelan supermarkets, stores, or pharmacies. I made it my goal in January 2015 to buy a household roll of toilet paper somewhere, anywhere in the Caracas metropolitan area within three weeks.

    In early 2015 Venezuela...

    (pp. 57-86)
    DOI: 10.2307/j.ctt1dwsswf.9

    Life changed in Venezuela on July 31, 1914, when a hole in the ground—443 feet deep—spewed a dark viscous liquid at a rate of more than 250 barrels a day. Venezuelans knew this was their first major oil discovery, but they didn’t understand what this meant for their future. Oil and Venezuela were so new that things and places needed names. That oil well became known as Zumaque, from the indigenous word for a shrub that grew nearby in Venezuela’s northwest. A hill next to the well becameCerro Estrella, or Hill of the Star, named after the...

  10. 4 EVERYMAN
    (pp. 87-106)
    DOI: 10.2307/j.ctt1dwsswf.10

    The San Ignacio Surgical Medical Center, on the ninth floor of the exclusive Copernico Tower in Caracas, is literally and figuratively the summit of plastic surgery practice in Venezuela. The lobby of the eleven-thousand-square-foot clinic boasts gleaming Portuguese and Italian marble floors. Offices and rooms offer imposing northern views of the Ávila. The center has three operating rooms, ten beds, and a staff of sixty people, including a roster of fourteen surgeons, performing an average of ten procedures a day. The clinic is the domain of Bernardo Krulig, a thirty-two-year-old plastic surgeon whose name is associated with the very best...

    (pp. None)
    DOI: 10.2307/j.ctt1dwsswf.11
    (pp. 107-132)
    DOI: 10.2307/j.ctt1dwsswf.12

    Alberto Vollmer, the forty-six-year-old chairman and chief executive officer of Ron Santa Teresa, still remembers a stark lesson his father taught him when he was just a boy. It was February 1983, and Venezuela’s economy was in the midst of a currency debacle remembered as Black Friday. The bolivar suffered a massive devaluation against the dollar on the back of plummeting oil prices and a debt load the country could barely pay. People desperately tried to convert their bolivars into foreign currency. It was all very confusing to the young Vollmer, who turned to his father for an explanation as...

    (pp. 133-158)
    DOI: 10.2307/j.ctt1dwsswf.13

    José “Pepe” Martín is in the business of practically giving gasoline away for free. Pepe is the fast-talking manager of a three-pump gas station in Parque Cristal, a corporate office center in eastern Caracas. His filling station is one of 1,691 across Venezuela that sold a gallon of premium unleaded gas in 2015 for, at most, six U.S. cents.¹ Venezuela’s gasoline is the cheapest in the world. And Venezuelans are so used to this entitlement that most of them are stumped when asked to recall the price of gas—they simply don’t know or care to know. Owning a car...

    (pp. 159-186)
    DOI: 10.2307/j.ctt1dwsswf.14

    On Saturday, April 18, 2015, Marleni Olivo managed to hit Venezuela’s president, Nicolás Maduro, on the head with a yellow mango. Olivo was attending a political rally in the north-central state of Aragua, where the president—a former bus driver—made an appearance driving a red bus with the window open, waving as he made his way through a packed crowd. The woman threw the fruit and struck the president right above the left ear. A video captures the moment when Maduro feels the impact and ducks, while one of his security guards tries to find the culprit in the...

    (pp. 187-190)
    DOI: 10.2307/j.ctt1dwsswf.15

    In early December 2015, Venezuelans voted against Chavismo in congressional elections, giving opposition parties control over 112 seats in the National Assembly, a two-thirds supermajority. It was the biggest electoral defeat in Chavismo’s seventeen years in power and a clear message from Venezuelans frustrated with an economy in free fall. A photo of a crestfallen Che immediately following the results appeared in several international news outlets. In the following weeks, the outgoing Chavista congress used its last few days in office to stuff the Supreme Court with loyal judges. And a month later, in January 2016, those same Supreme Court...

    (pp. 191-194)
    DOI: 10.2307/j.ctt1dwsswf.16
  17. NOTES
    (pp. 195-216)
    DOI: 10.2307/j.ctt1dwsswf.17
    (pp. 217-218)
    DOI: 10.2307/j.ctt1dwsswf.18
  19. INDEX
    (pp. 219-226)
    DOI: 10.2307/j.ctt1dwsswf.19