Thursday, October 23, 2008

Lights Out in the Socialist Paradise

The happy workers in Hugo Chavez's socialist paradise had better get used to working by candle light, since the Venezuelan government can't seem to keep the electricity running in its major cities.

A massive power cut has left millions of Venezuelans without electricity on Sunday, the third big outage this year.

The blackout hit several of the country's most populous states, including the capital, Caracas.

Venezuelan President Hugo Chavez praised officials for quickly detecting and beginning to repair the fault.

Mr Chavez says upgrading the grid after years of under-investment will take time but rejects criticism that nationalisation has made things worse.

The blackout happened mid-morning on Sunday, affecting about a third of the country.

In the capital, power was down for at least an hour, while in some other regions it was double that.

"Technically there is no reason for the failure," the head of the state electricity corporation, Hipolito Izquierdo, told state television.

"It's strange and worrying that a blackout of this size should happen on a Sunday, when demand is much below the daily average and when there is no great demand from industry," he said.

The two previous power cuts were during the week.

Sunday's blackout happened when a major electricity distribution line, supplying about 70% of the electricity consumed in the country, failed, officials said.

Recall that Venezuela is one of the world's largest oil exporters, and should be swimming in billions of dollars of surplus due to astronomically elevated oil prices over the past two years. Unfortunately for Venezuelans, the opportunity to profit from those boom times were squandered by the Chavez regime, which doled out tens of billions to keep his socialist allies like Cuba and Bolivia afloat, while spreading the cash around to his cronies to keep the regime in power. Now with oil prices tumbling on world exchanges, Venezuela finds the value of its primary export crashing even as its ability to produce it has slipped by twenty-five percent. Not good for the welfare state!

The sector has been completely in state hands since 2007 but Mr Chavez has said nationalisation has not contributed to the current problems.

He says the private companies who used to be in charge failed to make the necessary investment to upgrade the system to cope with increasing demand.

One wonders, then, who is to blame for failing to make the necessary investments in the government-run oil company, PSVDA, which has caused its production output to fall by a quarter over the last few years. PSVDA has been government owned for decades.

The power outages and falling oil revenues are putting the squeeze on Chavez's electoral grip.

Venezuela holds state and municipal elections next month, amid indications that Mr Chavez's United Socialist Party of

Venezuela (PSUV) could face tough fights in some areas.

Mr Chavez, who last December suffered his first electoral setback when his plans for constitutional change were defeated, has called the forthcoming vote the most important in the history of Venezuela.

Analysts say power cuts could come to symbolise what some voters feel are the president's failings in running the country.

Chavez does not take criticism, or defeat, very well.


At 10:46 PM , Anonymous Anonymous said...

Im sure the United States will get blamed for these power outages by some. No matter what happens, its always our fault.

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