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Tuesday, December 13, 2005

Chávez Saves Christmas?

I received an email earlier this week that had a message something like this:
Looking for an easy way to protest Bush foreign policy week after week? And an easy way to help alleviate global poverty? Buy your gasoline at Citgo stations.

And tell your friends.

Of the top oil producing countries in the world, only one is a democracy with a president who was elected on a platform of using his nation's oil revenue to benefit the poor. The country is Venezuela. The President is Hugo Chavez. Call him "the Anti-Bush."

Citgo is a U.S. refining and marketing firm that is a wholly owned subsidiary of Venezuela's state-owned oil company. Money you pay to Citgo goes primarily to Venezuela -- not Saudi Arabia or the Middle East. There are 14,000 Citgo gas stations in the US.
Scholars have been looking at the relationship between oil and democracy for some time. Whether you study the Middle Eastern suppliers, Nigeria, Central Asia, Russia, or Texas, you know that oil can badly distort politics and undermine democracy.

Indeed, Michael L. Ross had an interesting article on this precise topic in the prestigious academic journal World Politics called, "Does Oil Hinder Democracy," April 2001. He found that oil does hinder democratization (p. 356):
the oil-impedes-democracy claim is both valid and statistically robust; in other words, oil does hurt democracy. Moreover, oil does greater damage to democracy in poor states than in rich ones...Oil wealth has probably made democratization harder in states like Indonesia, Malaysia, Mexico, and Nigeria; it may well have the same affect on the oil-rich states of Central Asia.
Norway and the UK are notable exceptions, but their populations aren't poor.

Ross continues (p. 356-7):
there is at least tentative support for three causal mechanisms that link oil and authoritarianism: a rentier effect, through which governments use low tax rates and high spending to dampen pressures for democracy; a repression effect, by which governments build up their internal security forces to ward off democratic pressures; and a modernization effect, in which the failure of the population to move into industrial and service sector jobs renders them less likely to push for democracy.
Anecdotally, even the Vice President recognizes the problem.
At a 1996 energy conference in New Orleans, Dick Cheney, then CEO of Halliburton said, "The problem is that the good Lord didn't see fit to put oil and gas reserves where there are democratic governments."
Thus, Venezuela and Citgo are a truly interesting case, especially given that Venezuela is in the Global South.

In addition to these points, Citgo recently announced that it is sending discount heating oil to poor people in Boston (a famous Citgo sign is readable from inside Fenway Park), worth $14 million, and New York, for up to a 40% savings.
"This is a humanitarian gesture on the part of the Venezuelan people to our neighbors in need." ...The program "is consistent with our outreach to other countries in the Americas, using our oil to assist in economic development and regional integration," [Venezuelan Ambassador to the U.S. Bernardo] Alvarez said. "We are all Americans."
Before winter is over, other US cities may also receive discount oil from Citgo.

Here's the Bush administration spin:
U.S. Energy Secretary Sam Bodman offered a similar response to questions about the program.

“We’re for corporate philanthropy, and if that is what he (Chávez) chooses to do, we’re certainly not going to argue with him,” Bodman told reporters Thursday.
This is mealy-mouthed.

Venezuelan President Hugo Chávez just saved Christmas.

Someone should alert Bill O'Reilly.

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