Tuesday, September 4, 2007

charity starts at home?

Bolstered by windfall oil profits, Chavez's government is now offering more direct state funding to Latin America and the Caribbean than the United States. A tally by the Associated Press shows Venezuela has pledged more than $8.8 billion in aid, financing and energy funding so far this year....[but] it isn't known how much of the Venezuelan money has actually been delivered.

If it hasn't been delivered yet, why are we talking about this?

Opponents say Chavez is spending haphazardly on "giveaways" abroad at a time when more than a quarter of Venezuelans still live on less than $3 a day. They question how long he can sustain it since government revenues are highly dependent on fluctuating oil prices. While Venezuelan asphalt paves streets in Bolivia's capital, a sign recently protruded from one of Caracas' potholes reading: "Why for Bolivia yes and for me no?"

Uhh...good question...

Most of the funding -- $6.3 billion -- involves energy projects, some of which directly benefit Venezuela's oil industry, such as a $3.5 billion refinery to be built in Nicaragua. That also includes funding for electricity plants in Haiti and Bolivia, and an estimated $1.6 billion in fuel financing to at least 17 nations.

To an economist, any rational decision is in one's self-interest-- but perhaps not selfish. With Chavez, we're seeing some range of motives-- from selfless to self-seeking (for political gain and to build up his own industries). American foreign aid is similar in that it is for military and economic purposes-- the latter typically benefiting domestic companies.


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