Crude Nation: How Oil Riches Ruined Venezuela

Crude Nation: How Oil Riches Ruined Venezuela

Crude Nation: How Oil Riches Ruined Venezuela

Crude Nation: How Oil Riches Ruined Venezuela

Synopsis

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 Nation reveals the ways in which this mismanagement has led to Venezuela's economic ruin and turned the country into a cautionary tale for the world. Ra#65533;l 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.

Excerpt

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 the Wall 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 this oil-rich nation. I had heard stories of foreigners enjoying a five-star lifestyle in Caracas: living in luxury apartments in the ritziest neighborhoods, being catered to by cooks and cleaning ladies, and frequenting the best restaurants, bars, and clubs. Some kept weekend apartments by the beach, drove around in SUVs, and saved plenty of money as well.

But there was a catch. Converting a dollar salary into bolivars, the local currency, could be tricky. Dealing in greenbacks was an illegal, obscure business. Foreigners exchanged their money by wiring dollars to people they hardly knew. Everyone had some unnamed contact that secretly converted dollars into bolivars. People had two options: deal with black market dollar traders or exchange their money at the official rate with local banks, which made life very expensive. Selling dollars legally meant an expat could no longer afford a life of luxury. Legality didn’t stand a chance.

I had no contacts in this dollar underworld— in fact I didn’t know anyone . . .

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