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Venezuela's Chavez Receiving Lower Oil Revenues than Previous Governments

July 7, 2004—According to a report issued by the Venezuelan Finance Minister Tobias Nobrega, the government of President Hugo Chavez has received significantly lower oil revenues than the previous five Venezuelan administrations.

“It is false that the government of President Chavez has received fiscal oil revenues that are superior to those of previous governments,” said Nobrega.

The report specified that, “The Bolivarian government has received 26% of the oil revenues obtained by the Carlos Andres Perez administration; 35% of the revenues of Luis Herrera Campins, 56% of the revenues of Jaime Lusinchi, 49% of the revenues of the second period of Carlos Andres Perez, and 85% of the revenues received by the last administration of Rafael Caldera,” based on real per capita terms.

According to the Finance Minister, the analysis should be made taking into account important economic variables, such as population growth, inflation rate, the balance of import-export, among other elements that determine the real profits. As a result, Nobrega affirms that: “The Chavez administration has received the smallest amount of oil revenues since 1974.”

Despite the increase in oil prices for this year, if the price averages out at $30 per barrel for 2004, Venezuela would still receive only 60% of the oil revenues received in 1974. Nobrega added that to this one must also take into account a doubling of Venezuela’s population, which went from 12.3 to 26 million between 1974 and 2003.

The Finance Minister also pointed out that by the end of the 1990’s a process of deterioration of the fiscal oil contribution began due to, among other causes, high operational costs. For this reason, by 1998 the oil contribution fell down to 5.5% of the Gross Domestic Product.  However, since President Chavez took office a recuperation of the fiscal oil contribution began, thus causing resistance by high ranking executives inside the state owned oil company (PDVSA). This was the detonator of the conspiracy against the Venezuelan oil industry in April and December 2002.

Finally, the Minister said that those so called oil analysts who criticize the use of the oil revenues for social programs must recognize that these revenues are being used to recover state investment in goods and services for the most excluded segments of Venezuelan society. Many regions that are in need have benefited from the transfer of resources in order to improve social security, investment in infrastructure, public health, and education.

Sources: Radio Nacional de Venezuela and Venpres

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Published on Jul 7th 2004 at 3.22pm