VENEZUELA'S BRAIN DRAIN

July 28, 2009

When they first elected him in 1998, Venezuelans hoped that Hugo Chávez would be a healer.  Instead, they got a tyrant who seizes private companies and farms, crushes labor unions and harasses political opponents.  Now after a decade of the so-called Bolivarian revolution, tens of thousands of disillusioned Venezuelan professionals have had enough.  An estimated one million Venezuelans have moved away since Chávez took power, says Newsweek.

The exodus is sabotaging the country's future and no industry has been harder hit than Venezuela's oil sector, says Newsweek:

  • A decade ago, Petróleos de Venezuela (PDVSA) ranked as one of the top five energy companies in the world.
  • Then Chávez named a Marxist university professor with no experience in the industry to head the company and PDVSA's top staff immediately went on strike and paralyzed the country.
  • Chávez responded by firing 22,000 people practically overnight, including the country's leading oil experts.
  • Today, as many as 4,000 of PDVSA's elite staff are now working overseas, and the talent deficit has crippled the company: PDVSA produced 3.2 million barrels of crude oil a day when Chávez took control, but now pumps only 2.4 million.

Much of the same is happening in the Axis of Hugo, the states following Chávez.  Leaders in Bolivia, Ecuador and Nicaragua are rewriting their constitutions, intimidating the media and stoking class and ethnic conflicts.

The result?  More flight, says Newsweek:

  • More than one in three Bolivians under 30 have plans to emigrate, up from 12 percent a decade ago.
  • Venezuela, Bolivia, Ecuador and Nicaragua have all fallen in the World Economic Forum's competitiveness index.
  • Fitch Ratings, which analyzes credit risk, recently demoted Venezuela, Bolivia and Ecuador to junk status.

These states may be commodity-rich, but their biggest export is no longer minerals or oil.  It's the one resource best kept at home: talent, says Newsweek.

Source: Mac Margolis, "Venezuela's Brain Drain," Newsweek, July 13, 2009.

 

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