Facing an unprecedented and potentially disastrous drop in the country’s vital oil income, Venezuelan President Hugo Chávez should be trying to keep private enterprise alive, to weather what will potentially be a national and worldwide economic crisis. However, against virtually unanimous professional judgment, he continues doing his utmost to cripple the commercial, agriculture and industrial sectors, which his actions had already gravely hobbled during his first decade in power.
To make matters worse, every move the red-shirted autocrat has made to socialize the nation has only worsened Venezuela’s economic malaise. Mr. Chávez chose Mother’s Day to launch the locally assembled Vergatario mobile phone, making a call to his mother during his weekly Alo Presidente television performance. Produced in an 85–15 percent joint venture with China from Chinese-manufactured parts, the phone retails for $15, less than a quarter of its cost. If the Vergatario sells six hundred thousand phones during 2009, as he predicts, the Chávez regime will lose more than $7 million. What’s more, if his sales projection of 2 million units in 2011 is correct, annual losses will mushroom to $24 million.
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