The joke's on Bush as Chavez strikes it even luckier

Estimated oil reserves have just overtaken those of Saudi Arabia
By Christopher Walker
Published: 16 April 2006

There is nowhere on this earth quite like Caracas. Certainly the business traveller has no shortage of time to admire the physical beauty of its setting - two-hour traffic jams characterise this oil-boom city, where petrol costs a mere tuppence a litre. We'd better get used to it. For Venezuela has just overtaken Saudi Arabia in its estimated oil reserves to become number one in the world. Venezuela is here to stay.

When the reports of the country's latest good fortune came through to New York, a banker turned to me and said: "Surely by now George Bush must realise God is not on his side." Even under the old estimates, Venezuela already had its place as a major oil producer guaranteed for the next 80 years. Now it would appear to stretch into infinity. Together with the Middle East, Caracas will be the major force in world energy markets.

In Venezuela itself, high oil prices are having dramatic effects. The Dallas-like skyline is testament to an economy that grew by an astonishing 18 per cent in 2004 and nearly 10 per cent last year. Oil now accounts for well over 80 per cent of exports and more than 50 per cent of government revenues.

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At home, Chavez is fostering his "21st-century socialism", an interesting blend of state control and capitalism, which sees the state establishing its own companies to outdo the private sector. This is combined with strict controls on prices, bank lending and foreign exchange. Chavez has delivered tangible benefits to the many millions of peasants who make up the bulk of Venezuela's population. Food handouts and free medicine are the order of the day, ensuring that Chavez's weekly TV show, Hello, Mr President, has mass appeal. It lasted six hours the Sunday I was there.

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