“In 10 or 20 years you will see that oil will lead us to collapse.”


06 Dec 2009

Why did Juan Pablo Pérez Alfonzo, the oil minister of Venezuela from 1959 to 1963, call oil “the devil’s excrement”?

Alfonzo was known as “the father of OPEC” (according to Peter Maass’ Crude World), but was also “the first to call attention to the oil curse” (says Foreign Policy editor Moises Naim).

It’s because Venezuela’s economy floats on oil—rising high when the price soars, and sinking when the price drops. Despite his country’s oil riches, with the world’s sixth-biggest proven reserves, the country has struggled to develop and diversify. As the CIA Factbook points out: “Venezuela remains highly dependent on oil revenues, which account for roughly 90% of export earnings, about 50% of the federal budget revenues, and around 30% of GDP.”

The situation was much the same in the 1970s, when Alfonzo predicted “in 10 or 20 years you will see that oil will lead us to collapse.”

(That quote is from Collapse of an Empire: Lessons for Modern Russia by Yegor Gaidar, the acting prime minister of Russia in 1992, the first after the Soviet collapse.)

As a 2003 article in Fortune magazine wrote about Alfonzo:

Today he seems a prophet. When it hit the jackpot, Venezuela had a functioning democracy and the highest per-capita income on the continent. Now it has a state of near-civil war and a per-capita income lower than its 1960 level.

For a great up-to-date, on-the-ground picture of Venezuela, check out Chapter 10 of Peter Maass’ new book, Crude World: The Violent Twilight of Oil.

bookshelf

books I've read on failure & grace

The World Without Us
The Last Oil Shock: A Survival Guide to the Imminent Extinction of Petroleum Man
Zeitoun
A Paradise Built in Hell: The Extraordinary Communities That Arise in Disaster
Hell and High Water: Global Warming--the Solution and the Politics--and What We Should Do
The Worst Hard Time: The Untold Story of Those Who Survived the Great American Dust Bowl
The Tipping Point
Three Cups of Tea: One Man's Mission to Promote Peace... One School at a Time
The Upside of Down: Catastrophe, Creativity and the Renewal of Civilization
Out of Poverty: What Works When Traditional Approaches Fail
The Little Ice Age: How Climate Made History, 1300-1850
Confessions of an Eco-Sinner: Tracking Down the Sources of My Stuff
Deep Economy: The Wealth of Communities and the Durable Future
The Geography of Bliss: One Grump's Search for the Happiest Places in the World


Mason's favorite books »