Eighty years of oil rent | Pasqualina Curcio

Oil has been part of our political culture and also our politics for at least a century. The bad tongues say that Venezuelans live on oil "income", that is why we do not work. This is how they identify us.

When we review the figures we find that, from about 80 years ago, between 1940 and 2020, 1,3 billion dollars have entered from hydrocarbon exports, something like 115 times what 18 countries in Europe needed to get up after the II. World War. When contrasted with, for example, the image of the neighborhoods in Caracas, the question immediately arises: where did that fortune go? Obviously we have not been ordinary Venezuelans who have "lived" from oil revenues.

Some repeat, in a not naive speech, that oil is one of the main evils of Venezuelans. It is the case that the problem is not oil, the real problem lies in the use that we have given to oil revenues, and in how said revenues have been distributed.

The occasion of the anniversary of the village newspaper is propitious Últimas Noticias to quickly review the history of how the oil "rent" has been distributed these 80 years.

Half and Half (1940-1975). In times of world war, Venezuela was listed as one of the three largest oil producers in the world and the main supplier to the United States and the United Kingdom. In the 40s alone, US $ 6.028 million entered our country from oil exports, half of what was invested to rebuild all of Europe. The oil industry, at that time and until 1975, was formally in the hands of foreign private companies.

Isaías Medina Angarita approved the Hydrocarbons Law in 1943 by which it was established that the new concessions for exploitation would be for 40 years in addition to increasing royalties to 16,66% and forcing companies to pay income tax, in that At the moment, 12% according to the law enacted in 1942. Then, in 1948, Rómulo Gallegos approved the fifty-fifty tax, an additional tax that obliged foreign private companies to share half of the profits from the oil business with the State.

Between 1940 and 1975, US $ 77.285 million came in from oil exports. Something like 6 times the Marshall Plan.

From "nationalization" to privatization (1976-1998). It was in 1976 when the oil industry was "nationalized". In 1983, the last concessions granted in 43 would expire and the State would become the owner of the entire industry infrastructure without being obliged to give any compensation according to the Reversion Law of 1971. Foreign companies preferred to advance the expiration of the the concessions in exchange for compensation: the State gave them US $ 8 million and the privilege of becoming "subsidiaries" of the newly created PDVSA.

Framed in the "nationalization", paradoxically in 1992 the privatization of the industry began with the euphemism of the oil opening that with different figures (operating agreements, strategic associations, privileged shares, shared profits and mixed companies) reduced the participation of the State in the oil business. Royalties decreased to 1% and the tax pressure from 50% to 34%, implying a regression to times prior to year 43, even the State's shareholding decreased through the so-called mixed companies and even the right to veto in decisions was conferred on them. to foreign private companies. The excuse for flexibilization and privatization at that time was the need to attract foreign investment to "rescue" the oil industry. Always the same story.

Between 1976 and 1998, foreign exchange entered the country in the order of US $ 290.132 million from oil exports, this time, unlike before 76, through the State. Just as they entered, they escaped. The private sector received from the State, at a subsidized exchange rate, US $ 214.262 million, 74% of what it received from oil. Although this private sector only invested US $ 17.200, it distributed US $ 30.192 million, not counting eventual over-invoicing and the decrease in tax pressure.

Oil belongs to the people (1999-2013)

During the Chávez government, the reversal of privatization began with the approval of the 1999 Constitution and the Organic Hydrocarbons Law in 2001, the main trigger for the coup in 2002. The Constitution gives the State full control of the Oil activity and all the shares of PDVSA, meanwhile, in the aforementioned law royalties were restored, now 30%. Simultaneously, Chávez established in 2003 a system to control the administration of foreign exchange to prevent the flight of resources that entered through oil exports.

Between 1999 and 2013, US $ 856.140 million came in from oil exports. The private sector was assigned, at a preferential rate, US $ 387.940 million, 45% of that income. Although in absolute terms they received much more foreign exchange than before 1999, in relative terms the amount allocated was 29 percentage points lower. 55% of the foreign exchange that did not go to the private sector, allowed the increase of 380% in the public investment necessary for the reactivation of national production, which increased 57% between 1999 and 2013, in addition to the financing of the missions that, among other policies, had an impact on the 60% reduction in poverty.

Large transnational capitals, despite controlling foreign exchange management, appropriated, between 1999 and 2013, US $ 342.805 million from oil revenues, through over-invoicing of imports (US $ 277.922 million) and repatriation of earnings (US $ 64.883 million). Those years only invested US $ 37.784 million.

Economic war (2014-2021). After the physical disappearance of Commander Chávez, imperialism attacked the Venezuelan people, with the oil industry being a strategic objective of the economic war. Between 2014 and 2016 it was affected by the 65% drop in oil prices. In 2017, it initiated a formal blockade against PDVSA that implied a reduction of its production by 82%.

Oil export revenues between 2014 and 2019 amounted to US $ 194.116 million. We do not have figures on the allocation of foreign currency to the private sector, but we know that, in the midst of the economic war, US $ 37.426 million were repatriated between 2014 and 2018.

Today, the international reserves in Venezuela are barely US $ 6.206 million, after having had oil revenues of US $ 1.368.434 million in the last 80 years. Around US $ 498.617 million (nominal) rest in tax havens, not precisely in the bank accounts of ordinary Venezuelans.

It is heard that the current National Assembly will reform the Organic Law of Hydrocarbons approved by Chávez. We hope that, following his legacy, it will be to guarantee full sovereignty over our oil and the revenues it generates. We hope that it is not a reform that, with the same story of the necessary and urgent foreign private investment, takes us back to the 40s of the last century, nor to the "oil opening" of the dark neoliberal times of the Fourth Republic.


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