fossilfuelopolis

Prospecting the academic grounds on global energies patterns

The use of fossil fuels revenues

As lenghtly described on the pages “Rentiers States” and “Dutch Disease”, possessing properous  grounds is rarely synonym of industrial development, equity, … Yet, a few countries found their ways to use fossil fuel revenues to benefit the majority.

Alaska implements direct distribution of oil revenues to citizens. In the 70s-80s, two funds were created to share its abundant oil wealth with its citizens:

A budgetary reserve funds was created in 1976 to stabilize the budget by making loans to the states during difficult times, reimbursed during years of budget surpluses.

A second fund would receive permanent funds that save revenues for future generations from royalties, revenues, taxes, and signature bonuses. In 1982, a portion of these permanent funds were turned into “dividends” that directly distribute part of the revenues generated by the funds to all citizens of Alaska (Yama Nkounga 2004: 187).

Norway also instituted a state petroleum fund that serves both budgetary stability and a savings account for future generations.

Revenues generated by oil enclaves can be harnessed for human development. A steminal example is the case of Venezuela presented …

Venezuela enjoyed huge oil revenues but during the neoliberal era these had been mopped up by a tiny percentage of the population. “After two decades of American-style capitalism, the great majority of the Venezulans had become permanently poor and hungry. In 1995, the top 10% if the population was receiving 50% of the national income while 80% of the population was earning “the minimum wage or under”. In 1996, 40% of the population was living in “critical poverty”. (Gott 2005: 173)” (Yatts, 2012: 228)

Those statistics were well-known to Hugo Chavez who started a constitutional reform in 1999 and passed the Hydrocarbons Law in 2001 that renationalized petroleum ressources and renegociated contracts with foreign oil companies. The new law mandated a majority of shares in any oil project to be held by the national oil company Petroleos de Venezuela (PDVSA).

All the oil contracts signed during privatization in the 1990s were revised. Taxes and royalties were increased. Government revenues were thus expanded.

Chavez first created a Social Fund (FUS) linking together a number of earlier government organizations that used to deal with health and social welfare. The FUS, associated with the People’s Bank, was designed to carry through social politics that were aimed at improving the health and welfare of the poor majority of the population. Its budget derived from those of the earlier organizations it has gobbled up, and from the Macroeconomic Stabilization Fund (FEM) that channeled oil revenues into government projects.

The FUS which derived almost half of its budget from the FEM fund schools, hospitals, churches, and the “Plan Bolivar 2000” (Gott 177-9)

The latter plan consist in mobilizing the spare capacity of the armed forces, linked up with local community groups to send them rebuild road and schools in the countryside. Venezuela was then divided in 25 zones, where 40000 soldiers and volunteers took part of reconstruction projects.

Chavez political stances were not to satisfy everyone and he faced strikes and protest in the years (…). PDVSA was renationalized and a new and more radical phase of the “Bolivarian Revolution” (Bolivarian refers to “Bolivarism“) started.

In the course of 2003, oil revenues were redirected into social programs known as missions which were gradually established throughout the country.

Mission Barrio Adentro consisted in training Venezuelan doctors with Cuban counterparts. They went working in pairs in the poorest barrios and set up health clinics. These clinics provided uninterrupted local health services with Cuban medecine.  4400 community health clinics were built providing free primary care to 68% of the population. (Buxton 2008: 208).

Mission Robinson was a literacy campaign designed to teach one million people to read and write, or to use basic arithmetic. Mission Ribas enrolled 600,000 students who had dropped out of school into night programs, with a paid stipend, to allow them to finish their secondary studies. You could hear of Missions Sucre, Merca, or Piar, all missions address a specific Venezuelan issue or aim at a specific group of the populations (peasants, indigenous populations,…).

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