Approximately
20 billion barrels of oil have been produced by Norway during the last 32
years, since the Ecofisk oil discovery in 1971. Under the 15 year government of
Hugo Chavez, since 1999, Venezuela has produced about 15 billion barrels of
oil. The Oil Fund of Norway has about $760 billion, this is, about $150,000 for
each of Norway’s 5.2 million people. The Oil Fund of Venezuela has…. Zero.
In fact, the Venezuelan national debt during
those years has grown to about $7,000 for each of Venezuela’s 30 million people.
What
can explain this dramatic difference? As an explanation a Venezuelan
politician, Manuel Peñalver, once said: “We are not Swiss”. We could add now: “We
are not Norwegian, nor are we Chileans”, since the Chilean Stabilization Fund
had about $ 21 billion in 2012 and is very well managed.
The Norwegian Oil
Fund
This
fund collects the surplus wealth and is now the largest in the world. It has
become the largest investment fund in the world, accounting for one percent of
the global equity markets. It is also the largest stock owner in Europe. This
fund was established in 1990, in order to balance the potential declines in oil
income due to oil price volatility. It is managed by the Norwegian Central Bank
and is forecast to reach $1 trillion by the end of 2014.
The
fund invests 60 percent of its portfolio in the international stock market and up
to 5 percent in real state. The political sector of Norway has left the principal
of the fund untouched, exhibiting an unusual degree of restraint for
politicians.
The U.S.
based Peterson Institute for International Economics has awarded the fund 97 points out of a possible 100, the first place in a ranking measuring responsibility, quality of management and
other factors. The Sovereign Wealth Fund Institute also ranks it first in size
and transparency.
The Venezuelan
Oil Fund
The
concept of an anti-cyclical fund, designed to smooth out the effects of feast
and famine cycles derived from changes in the price of oil, dates back to 1960,
when such an instrument was incorporated in the law of the Venezuelan Central
Bank. In 1974 it was transformed into the Venezuelan Investment Fund. An Oil Stabilization Fund was specifically
created in 1998, during the last year of Rafael Caldera’s government. In 2003
the Hugo Chavez government changed its name and some of its mechanisms, calling
it Investment Fund for the Macroeconomic Stabilization, giving the president
total authority to utilize the money as he saw fit. The rules of the fund were
changed 4 times during the Chavez regime.
In
2000 the Venezuelan Fund had about $3, 2 billion. In 2003 it had about $1.1 billion.
I consulted the link: http://www.bcv.org.ve/fem/fms.htm
that was supposed to give details on the performance of the fund but all I could
read was: Information not available.
In 2005 the Venezuelan Central Bank law was, again,
reformed and the international reserves, long sacred, became usable by the
president, who could place it at will into a new fund created by presidential decree for this purpose, the
so-called Fondo de Desarrollo Nacional, FONDEN. This fund rapidly became one of the main nests
of corruption in government, with a total lack of transparency and managed at
will by four persons: the president, the minister of Planning, the minister of
Finance and the minister of Energy and Petroleum. About $80 billion have gone
into this fund from the oil company, PDVSA, and from the Venezuelan Central
Bank. A good portion of this money remains unaccounted for. See also: http://www.frentepatriotico.com/inicio/2012/04/11/la-manipulacion-del-regimen-venezolano-al-fondo-de-estabilizacion-macroeconomica-apariencia-de-riqueza-hambre-para-manana/
and the excellent expose by Miguel Octavio
in : http://devilsexcrement.com/category/the-fonden-papers/
Conclusion
It is true that we are not Norwegians or Chileans
but I refuse to believe honesty and common sense are chromosomal. They can be taught
through civic education. How? this will
be discussed in another article.
Gustavo, you write that Hugo Chavez gave himself “total authority to utilize the money as he saw fit”.
ResponderEliminarLet me assure you, as a first hand witness, that Carlos Andres also had total de-facto authority to do as he pleased with the Venezuelan Investment Fund in 1974. It took me only two weeks to find out.
Any illusion about being able to set up a fund in Venezuela that is independent from government and politicians is just that… an illusion… marketed by those who have the illusion of being able to manage that fund.
Let me also remind all here that in Norway the price of gasoline is about 150 times the price in Venezuela and that the fiscal intake in Norway per barrel of, for this concept only¸ exceeds what Norway receives as a whole when selling as barrel of oil in foreign markets.
Norway got its oil when it was already developed as a nation, otherwise they would not have been able to manage it as good. We should not put oil money in a fund, but give it to the citizens, so that they instead have chance of learning what to do with the oil income… and don´t expect the government to multiply those moneys for them.