(Photo from Nunscio)Oil-Fueled Nation Feels Pinch -- Washington Post
As the Price of Crude Plunges, Venezuela Is Poised to Face a Lot of Pain
BOGOTA, Colombia -- Venezuelan President Hugo Chávez has delighted in the economic meltdown in the United States, mocking the Bush administration for its bailout plan and predicting the end of American economic dominance.
"The U.S. model of capitalism is collapsing," Chávez, a self-avowed socialist, told reporters recently.
But Venezuela's oil-fueled economy is deeply intertwined with the United States and is poised to face major challenges as the crisis pushes down the price of crude, economic analysts and oil experts say.
The price of a barrel of oil has fallen from $147 in July to less than $70, and analysts say the drop is a blow to Chávez's free-spending administration, which depends on oil for 50 percent of government revenue and 95 percent of its export earnings. Other oil-producing countries, which like Venezuela ramped up spending as the price of oil rose to historic highs in recent years, also face serious economic problems, analysts say.
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My Comment: Chavez may be limited on some of the things that he may want to do in the Americas, but his power base in Venezuela will still support him.