Oliver Stone’s new film, South of the Border, heaps praise on Venezuelan President, Hugo Chavez, for his experiment in “21st-century socialism”. Mr Stone has now gone even further, calling for the US to follow the Venezuelan “model” and nationalise its energy industry. But Stone’s enthusiasm is misguided: Chavez’s economic reforms have proved disastrous. Venezuela is still in recession, the government is unable to provide basic services and the burgeoning black market is fuelling crime and corruption.
Stone’s penchant for left-wing demagoguery misses the reality of life under Chavez for ordinary Venezuelans. During the oil price boom years Chavez was able to redirect money towards gigantic government projects and hand out money to the “poor”. But Chavez also expropriated private property and slapped onerous regulations and price controls on businesses, sending private investment fleeing. Shops and businesses closed and ordinary Venezuelans were increasingly forced to rely upon the government for goods and services. The house of cards collapsed, along with the price of oil, in 2008: Venezuela was plunged into a deep recession from which it has not emerged. Rampant inflation- running at 30%- took hold as the government funds dried up and Chavez printed more money. Venezuelans now face rolling electricity blackouts, falling incomes, acute food shortages and soaring crime rates.
The Venezuelan state-owned oil company, PDVSA, which Stone wants the US to emulate, has suffered an equally troubled past. In addition to being responsible for numerous offshore oil rig disasters, there is considerable evidence that it subject to the short-term political whims of Chavez and his chavistas, who are accused of using the company as a vehicle for their pet spending projects. The disregard for sustainable oil production has led to a huge shortage of cash at PDVSA and its future remains uncertain. A recent review of 15 state-run companies by economist Richard Obuchi found that all “were producing well below goals or production capacity.” And with the Venezuelan private sector running scared, there is no one left to offer an alternative.
Hardly surprising, then, that Stone’s rosy depiction of Chavez tanked in Venezuelan cinemas.