Monday 28 May 2007

Venezuela - it's all geography

The Socialist government of Hugo Chavez has this week mpved to extend its totalitarian grip on the country. A well established TV station has been closed down, and demonstrations crushed by tanks. Curiously ignored by the media, though it's on a par with the Greek colonels coup and Pinochet's seizure of power, though not quite so savage a rperession (yet) as Castro.
The government has oil money, of course, just like Castro had money, from the Soviet Union. So Chavez will be able to continue his massive arms build-up, to feed the demand for luxuries for the ruling elite, and give the increasing numbers of urban poor a regular supply of food and possibly even health care.
But, as ever, they will undoubtedly ignore the basic fact of economics; that wealth comes from value-added, not an infusion of money. This means professional people and entrepreneurs, using a free flow of good and information brought by a free press and capitalism. So the real wealth will not materialise, and the country will decline, relatively and absolutely.
It has already begun; the proportion of poor people has already increased.

Another example of the curse of oil; no country ever became wealthy from being resource rich (OK, Australia did, but that's the Anglosphere exception.)

What's this got to do with geography? Simple, really. How easy will it be to escape from the country? Cuba is an island, it is a natural prison and has been for 50 years. North Korea is a peninsula and has tightly controlled, relatively short borders.
Venezuela has a large land border which will be very difficult to police. When the repression gets unbearable - say, in a year or two - the professional classes will be able to leave the country. They will be able to walk out, voting with their feet.
Perhaps Chavez will try to build a new Iron Curtain to keep them in. Perhaps the country will collapse because of an oil price slide deprives the population of the essentials. Perhaps he will use his Russian guns and tanks to massacre the demonstrations.
Nothing is certain. But the determining factor will be geography.

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