Expectedly, at its emergency meeting in Vienna, OPEC decided to slash production. It settled for a 5 per cent output cut, which translates into 1.5 million barrels per day. Venezuela, Iran and Libya had been pushing for an output cut to keep oil at $100 a barrel but Saudi Arabia, more concerned about the health of the global economy, had been advising caution. But oil prices immediately fell further. Now, the Saudi economy is better managed. Venezuela’s and Iran’s are not.

For defenders of the faith, Venezuela is the perfect social democracy and the Pirate of the Caribbean who runs the country, the redistributive dream. Remember his reception in Kolkata and JNU? Using oil money to feed, educate and treat the masses in shantytowns and villages is the socialist idyll that communism couldn’t write. Except that Hugo Chávez’s investment in the “misiones” isn’t quite paying off. And he may soon run out of oil money to persist in the “Bolivarian” revolution. On November 23 Chávez may just learn, when Venezuela holds crucial regional and local elections, that populist gestures and the politics of polarisation have run their course.

Venezuela is synonymous with oil and Venezuelan oil with Petróleos de Venezuela Sociedad Anónima (or Pdvsa). To look at what has happened to Venezuela under Chávez is to look at what has happened to Pdvsa, the state oil company that has turned into his cash cow, financing social programmes in the barrios. All Chávez has to do is just ask and Rafael Ramirez, Pdvsa president and Venezuelan energy minister, obliges. The Pdvsa, which was owned by Exxon till December 31, 1975, was even after Carlos Pérez’s nationalisation one of the best-run oil companies on the planet. That because the management was kept intact and it functioned as a private firm for all practical purposes, save for the fact that the revenues were now headed for the state coffers. It was left alone even through the troubled ’90s. The coming of Chávez changed all that.

... contd.