Thursday, October 23, 2008

The left wing success story that is hugo chavez

Reuters is reporting:

SAN FELIX, Venezuela (Reuters) – Despite having some of the
world's largest energy reserves, Venezuela is increasingly struggling to
maintain basic electrical service, a growing challenge for leftist President
Hugo Chavez.
The OPEC nation has suffered three nationwide blackouts this
year, and chronic power shortages have sparked protests from the western Andean
highlands to San Felix, a city of mostly poor industrial workers in the
sweltering south.
Shoddy electrical service is now one of Venezuelans' top
concerns, according to a recent poll, and may be a factor in elections next
month for governors and mayors in which Chavez allies are expected to lose key
posts, in part on complaints of poor services.
The problem suggests that
Chavez, with his ambitious international alliances and promises to end
capitalism, risks alienating supporters by failing to focus on basic issues like
electricity, trash collection and law enforcement.
"With so much energy in
Venezuela, how can we be without power?" asked Fernando Aponte, 49, whose slum
neighborhood of Las Delicias in San Felix spent 15 days without electricity --
leading him to block a nearby avenue with burning tires in protest.
Just next
door, Carmen Fernandez, 82, who is blind and has a pacemaker, says she has
trouble sleeping through sultry nights without even a fan to cool
Experts say Venezuela for years has skimped billions of dollars in
electrical investments, leaving generation 20 percent below the level necessary
for a stable power grid and increasing the risk of national outages. Officially
Venezuela has a capacity of 22,500 megawatts for a population of 28 million
people, but a sizeable proportion is not working, analysts say.
And while
Chavez has won praise for investing in health and education, his government has
done little to repair local distribution systems that deliver electricity to end
users, from barrio residents to business and industries.
Pastora Medina, a legislator representing San Felix and nearby cities
suffering chronic power problems, this month tried to bring the issue up in the
national Congress in Caracas, but the legislature's leadership refused to let
her speak.
Several hours later, as the legislature discussed a South American
integration plan created by Chavez, Congress itself lost power for around 10
"Congress wouldn't listen to me, but God must have," Medina said
with a chuckle as she recounted the incident later at her office in San
Though it is a key oil exporter, most of Venezuela's power comes from
hydroelectricity generated in dams in the southeast, near Brazil, and sent to
the rest of the country. The remainder comes mainly from aging oil-fired
The transimission system is also suffering from underinvestment,
which makes it vulnerable to the failures that caused this year's
The government has responded by building dozens of tiny local
plants that generate a fraction of a percent of national consumption, a model
known as "distributed generation" used in Cuba, where a U.S. embargo impedes
electrical development.
But to keep up with demand, Venezuela needed to add
1,000 megawatts of new generation capacity every year for at least the last five
years, but instead it has installed only about 350 MW a year.
"We have to
reach the most remote villages with the system of distributed generation,"
Chavez said in recent speech, inaugurating a generator in a town with deficient
His government has also promised to accelerate new generation and
boost transmission grid investment.
But critics say these
small power plants are political quick fixes that avoid tackling the thorny
problems of boosting generation and fixing decrepit distribution systems.
"We need a clear energy policy, because the policy we have is not
sustainable," Andres Matas, a former planning chief for a state power company.
"This is a problem for the entire country."
He said this will require
investment in local distribution systems, speeding up generation projects
stalled for years by bureaucracy and lifting state-imposed price controls that
keep tariffs at about 20 percent of what U.S. residents pay.
It will also
require collecting fees from millions of barrio residents who illegally link
their homes to the power grid with improvised and dangerous lines -- a move not
likely to be popular with a government that depends on barrio votes.
Even as
he enjoys strong support for his oil-financed social development campaign, polls
show Chavez sympathizers are losing patience with the national and local
politicians' inability to tackle bread-and-butter issues.
Chavez last year
fired up his supporters with a wave of state takeovers including the
nationalization of electricity operations, among them Electricidad de Caracas,
which was majority owned by U.S.-based AES Corp.
But his supporters now seem
more concerned about deteriorating service than the state ownership.
power problems take the strongest toll in barrios like those of San Felix --
still bastions of Chavez support -- where power surges routinely burn out home
"Our refrigerators have burned out so we can't shop for the
week, we can only shop for one day at a time," said Nestor Pacheco, 39. "The
situation is serious."
(Reporting by Brian Ellsworth; Editing by Eddie

About four years ago hugo nationalized the energy industry. Nationalizing private businesses NEVER works. We are going to be in mess with the efforts of the 'bailout' of the banks. What happens if we nationalize health care...well we know, but we are going to try it anyway.

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