Hard Questions for Chávez Over Refinery Fire

Brazilian centre-right daily O Estado de São Paulo has used its editorial page to unleash a fusillade against the capacity of Venezuela to maintain its oil infrastructure. The editorial board draws particular attention to government claims that the Amuay refinery was maintained properly and internal PDVSA documents that suggest that repairs were delayed due to a shortage of materials.

While the Estadão has not exactly been a friend to Chávez, the tone of the editorial does resurrect long-standing and legitimate worries that oil production capacity in Venezuela has actually declined under Bolivarian management. As far back as 2006, the influential business intelligence and consulting firm Oxford Analytica has been raising concerns about what exactly is going on with PDVSA (and raised similar issues earlier this year). Similar issues were raised three years later by the Council on Foreign Relations, which pointed to indications that production capacity had fallen.

For Venezuelans the tragedy at the Amuay refinery may well extend beyond the horrific loss of life this week. Irrespective of what you think about Chávez’s politics, the reality is that he has done quite a bit to help human development in Venezuela and raise the self confidence of the poor to the point where they can and do think about making new realities for themselves. State help has been essential for this and will remain critical for continued human development progress. If oil production is falling and, as Estadão charges, the necessary production infrastructure is collapsing, then Venezuela is in real danger of losing a massive income stream that can be used to help drive sustainable national development. It will be interesting to see if this issue comes up and is seriously addressed during the current presidential campaign.

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