Electoral Fates and the Oil Market: Venezuela's Quiet Revolution

Elections in Venezuela's regions forced many in Chavez's government to take a hard look in the mirror in their attempt to build political support for Constitutional reforms that would extend Chavez's mandate in office eternally from the point of view of much of his opposition. In the latest round of elections, Chavez's party won much of the vote, but cracks in his support have arisen in the vote rich costal area and within many urban centres where opposition to Chavez by growing poverty is slowly showing in record breaking levels of crime and increasing criticism of Chavez for cutting of financial support for many regions who vote for opposition candidates and giving open financial support for government incumbents. Criticisms of Chavez recently by Human Rights Watch also met with two HRW employees, resulting in their forceful ejection from the country after the publishing of a report on the administration of Chavez since 1999. The loss of support created a muted victory for the Venezuelan President, diminishing his goal of extending the mandate of his leadership through popular vote and pushing nationalisations and benefits from oil revenues as his remaining tools to increase his mandate beyond constitutional limits.

Opposition supporters will likely get some extra luck sent there way, as OPEC leaders last month voted to cut production to keep prices and their windfalls high were unable to secure production measures in many OPEC producing nations. With another attempt in December to curb production by 1 million barrels a day and forcing purchasing countries to re-gauge inflation for the increasing number of debt ridden citizens worldwide, it is likely that OPEC and oil producing nations need to realise that economics are linked with the livelihood of real people, and that a process of de-fossilization which began in the late 70's may finally get its opportunity to grow and reduce oil prices indefinitely. Politically, countries such as Iran and Chavez's Venezuela might envy the past with Bush's America spending as much on crude as on political currency, a dual benefit for many anti-American populists, a day which might come to an end with low oil prices and Obama.

In the end, like in the late 70's, Oil prices will always find a way to follow the market, and as any first year Economics student knows, prices will always fall and rise based on supply and demand, unless of course the government bails out too many faulted companies, or activities that should be illegal create chaos in markets which do not produce anything but ill gotten liquid investment and is tied into every industry in the world whether healthy or problematic. This last month of economic downturn was inevitable, but politics, crime and a lack of transparency may rob many generations of a future they well deserve, including Venezuelans.