The self-isolation of Venezuela and Iran

Two anti-US leaders who promise oil riches to their poor masses embraced each other Saturday, declaring they're waging the "same revolution." But for Venezuela's Hugo Chávez and Iran's Mahmoud Ahmadinejad, the revolution isn't going as planned.

Mr. Ahmadinejad, an Islamist with nuclear-power ambitions, is barely clinging to power even as he meddles in Washington's backyard by visiting Latin American leftist leaders this past week, starting with the newly declared communist, Mr. Chávez.

His economic populism has faltered, leading to his candidates losing badly in recent elections. And now supreme leader Ayatollah Ali Khamenei is letting loose critics to rein in the fiery president, whose extreme threats and strident rhetoric helped push the UN to isolate Iran with sanctions over its nuclear program.

Instead of putting Iran's oil wealth "on the people's table," as he promised when taking office in 2005, Ahmadinejad now faces runaway inflation, stagnant unemployment, and the ironic need of an OPEC nation to plan to ration gasoline because of a lack of refineries.

Like Chávez, his easy prescriptions of wealth distribution and more state enterprises might sound appealing to the neglected poor. But they fail to solve deeper problems of corruption, mismanagement, and a lack of incentives for the long-term investment to sustain oil capacity and wealth creation in private business.

The more their socialist populism falters, the more Chávez and Ahmadinejad try to divert the attention of their poor majorities into believing the US is a threat. "Imperialism [meaning Washington] won't rest in its effort to weaken us, and one of the strategies is to weaken the price of oil," Chávez said during the visit of Iran's president.

Indeed, falling oil prices have reduced the money available for both governments to continue social handouts or makeshift jobs. For Chávez, who now wants to alter the Constitution to stay in power for a very long time, the solution is to grab added wealth by gaining more control of the means of production, Cuban style. He plans to nationalize the electricity company EDC and the telecom company CANTV. He also will end the central bank's autonomy and demand more revenue from foreign oil producers.

Such steps are a throwback to the failed policies of nationalized industries in Latin America during the 1970s. They are based on the false assumption that primary causes of poverty are wealth disparity and elitist politics, rather than a widespread culture of corruption and lack of education and smallscale capital.

Venezuela now ranks as the second most corrupt Latin American nation, and Chávez's socialism has produced rampant crime, high inflation, and slowing oil production. Unless he starts to buy Iranian know-how to make bomb-grade nuclear materials, the best the US can do is let his economic experiment fall of its own weight, as the Soviet Union's did, and as Cuba's is still doing.

The self-isolation of Iran and Venezuela comes out of a faulty vision in economics and a heavy hand in reducing democracy down to autocracy. The more they try to use oil wealth to win other nations over to an anti-US axis, the more they put their weak policies on display. Some revolutions aren't very revolutionary.

You've read  of  free articles. Subscribe to continue.
QR Code to The self-isolation of Venezuela and Iran
Read this article in
QR Code to Subscription page
Start your subscription today