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Venezuela: Chávez Can’t See The Light
Monday, 12 September 2011 18:40
(Opinion) - It didn’t go down very well with Venezuelans, for whom blackouts are a daily nuisance, when they were told
this week that their government had “given” the tiny west African state of the Gambia $22m for its electricity sector.In fact, it was only a loan (even if “lending” often becomes “giving” in this country), but it was an unwelcome reminder of the ongoing fiasco that is Venezuela’s electricity sector, which caused the economy to contract in the second quarter.
Although year-on-year figures show growth of 2.5 per cent in the second quarter, after a strapping 4.8 per cent in the first, quarter-on-quarter, GDP actually shrunk by 1.2 per cent, according to a report published this week by Bank of America Merrill Lynch.
The weakest performance was in the energy-intensive manufacturing and mining sectors. Although the bank thinks the probability of a double dip recession in Venezuela has risen because of the lack of electricity, it probably won’t happen as big investments in electrical generation made by the government in 2009 are starting to come on line.
Still, in a remarkable volte-face, for the first time this week Hugo Chávez admitted that the government was, after all, largely to blame for the electricity shortages and rationing that are hampering the economy, having previously tried to blame it on a drought, which dried up Venezuela’s hydroelectric reservoirs. That argument didn’t work so well this year, with torrential rains flooding much of the country.
As one editorialist put it, Chávez “saw the light. Or rather, he saw that there wasn’t any light”. Perhaps that’s why he also saw fit this week to appoint his brother, Argenis, as president of the National Electric Corporation – its fourth president since the entity was created in 2007.
Nepotism aside – and there are plenty of other examples, although, to be fair, Argenis is an electrical engineer – Chávez will be hoping this doesn’t just personalise the problem even more.
Written by Benedict Mander
Source: blogs.ft.com
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