Red-hot economic growth, record oil prices and a strong president--all that should make investors in an oil-exporting country enthusiastic about the future. Unless you're talking about Venezuela's Hugo Chavez.
The August referendum went Chavez's way, sweeping him a convincing victory on the support of millions of poor Venezuelans who believe that for the first time they will see a share of their nation's oil wealth.
The prospect of stability under a continued Chavez government did immediately calm oil markets. "Venezuela disappears as a bullish factor but does not become a bearish factor" in petroleum markets, says Roger Diwan, managing director of crude markets for PFC Energy in Washington. Observers estimate that Venezuela is pumping 2.5 million barrels of oil per day--half a million less than the government claims. Oil multinationals are investing, although big production increases are years away.
It's hard to imagine what the poor will get for their support, though, as the pie has shrunk dramatically...