Contrary to conventional wisdom, business is booming in Hugo Chavez' Venezula according to BusinessWeek:
No doubt, Venezuela is a pretty scary place to invest these days. But in some respects business is better than ever. Thanks to soaring oil revenues, Chávez is spending heavily--some $13.3 billion last year alone--to win support for his "Bolivarian Revolution." For the past three years the economy has grown at an 11%-to-12% clip, while consumption has expanded by 18% annually. The poor, 58% of all Venezuelans, have seen their meager household incomes more than double since 2004 thanks to cash stipends, subsidized food, and scholarships from the government's social-development programs.
Trade with the US has never been better:
You might call it business' love-hate relationship with Chávez. Local and foreign companies alike are raking in more money than ever in Venezuela. Two-way trade between the U.S. and Venezuela has never been higher. Venezuela exported more than $42 billion to the U.S. last year, including 1 million barrels of oil daily, and imported $9 billion worth of American goods, up 41% from 2005.
High-tech US companies like Intel are finding opportunity in Venzuela:
Other industries are not only putting up with Chávez but also benefiting directly from his programs. Take Intel Corp.: Sales of its microprocessors in Venezuela jumped by 15% in 2006 and look set to grow at the same pace this year as the government equips schools and public offices with new computers.
Venezuela is proving to be a good investment for our ailing auto companies:
Ford and General Motors Corp. (GM) have manufactured cars in Venezuela for nearly a half-century, but with the strength of the bolivar, imports of pricier models such as the Ford Expedition sport-utility vehicle and GM's Silverado pickup are on the rise. Last year, Ford's sales increased 52%, to nearly 62,000 cars and trucks, as its imports more than tripled, to 28,000. GM's sales jumped 21% last year, to 71,000 vehicles, and so far this year are on track to climb by 50%.
On the down side, Hugo Chavez has been steadily consolidating his power and curtailing the opposition in a distinctly non-democratic manner. Still, whenever dealing with these situations it's helpful for us to put things into perspective. Chavez has succeeded in improving the lot of Venezuela's huge lower classes and remains extremely popular with them. The country has always had an extraordinarily stratified society in terms of wealth with a hugely rich and tiny upper class and a massive and impoverished lower class. Correcting that historic imbalance is surely a controversial task, but in doing so Chavez has laid the groundwork for a much more prosperous, egalitarian and middle-class Venezuela in the future.
We do business every day with countries that have far worse human rights and democratic records than Venezuela. Saudi Arabia and Pakistan, two of our most important allies in the war on terror, come immediately to mind. Maybe it's time to get off our high horse when it comes to Venezuela.
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