An Agenda for a New Oil Policy
Hellinger, Daniel
With the collapse of oil prices between 1981 and 1983, Venezuela's revenue crisis could not be resolved by demanding a higher share of profits from the oil companies, as in the past. At first,...
...Today that phrase has been replaced with "Ia noche post-rentista," the post-rentier night...
...The first depends on the monopoly that the state exercises over a natural resource in great demand which permits the obtaining of a remuneration for use of it...
...The change reflects the realization that the crisis has not been sparked, as long expected, by the draining of the oil fields themselves, but by changes in the global economy...
...In its official program, it argues: Today it is a recognized fact that [oil] income springs from two sources of a distinctive nature: petroleum as a source of rent and petroleum as a productive activity...
...The second depends upon the capital and work applied to produc- tion.' Causa R's program calls for the state oil company, Petroleos de Venezuela (PDVSA), to develop "strategic complementary associations that are required by financial, technological and market necessities...
...The partylike President Rafael Calderaadvocates tying pricing to debt negotiations, and it opposes renouncing state ownership of natural resources or returning to a system of concessions...
...Among the major political forces, Causa R seems to have most clearly grasped the distinction between rent and profit in its approach to oil policy...
...In a world where international bankers extract extraordinary interest payments from Third World debtors, Venezuela has every right to continue collecting a rent for First-World access to its considerable hydrocarbon reserves...
...A new policy will need to balance the nation's interest in extracting a rent from foreign capital, with the need to keep the industry competitive with the private transnationals...
...2 But Causa R's break with the populist past does not mean it embraces neoliberalism...
...Regarding internal market prices, Causa R asserts, "There is no doubt that these must be in relation to the cost of production plus a normal profit...
...Oil revenues should be used not so much as a source of capital to "sow" in other branches of the economy, but to make the industry itself a motor of national industrial development...
...It also assures the country a steady source of income, despite falling prices and higher costs of production...
...These positions contrast notably with the traditional leftist and populist calls for no increases in prices and rejection of any role for private or foreign capital in "basic industries...
...It also rejects the IMF demand to raise domestic gas prices to international levels...
...Most importantly, Venezuela must maintain propri- etary control over the oil in its soil...
...This can be an effective lever in negotiating favorable operating agreements and joint ventures for PDVSA with foreign and domestic capital...
...In this sense, a modest increase in the prices of combustibles is necessary...
...In all cases," it claims, "any rational increase of prices must be to fortify production itself and not to artificially supplement fiscal spending...
...The party also calls for taking "social impact" into account in determining prices.3 C aldera seems to share many of Causa R's views, but he must avoid the populist temptation to resolve the enormous gap between the projected budget for 1994 and anticipated revenues by taxing PDVSA more heavily...
...At first, the crisis was called "Ia noche post-petrolera," the post-petroleum night...
...A broader strategy, however, is needed...
...In this latter respect it is necessary to open possibilities not only for foreign but private national investment...
...No modern multinational corporation state-owned or privatecan operate effectively in the world today without such associations that bring needed capital and technology...
...He must deal realistically with PDVSA's need to enter into joint operating agreements with foreign companies...
Vol. 27 • March 1994 • No. 5
