A PETROSTATE OF MIND

Two leaders of two petrostates. Both have been won multiple times in democratic elections. Both have been described as tyrants and great leaders. Both traffic in heavy crude. Beyond that, they don’t have much in common.

The first is president Hugo Chavez of Venezuela. The second is Prime Minister Stephen Harper of Canada. You can’t get the first one to shut up (his television addresses go on for hours) and you can’t get the second one to answer a question (his disdain for the press is legendary).

Harper is planning to sign a trade deal on Nov. 1 that allows Chinese companies to sue Canada outside of Canadian courts. Incredibly, the lawsuits can proceed behind closed doors, in effect giving Asian firms more clout than Canadian voters, according to Gus Van Harten, a professor of international investment law.

“The Canada-China deal undermines basic Canadian principles of public accountability and open courts. It raises dramatically the stakes of Chinese takeovers in the resource sector. If ratified, it will tie the hands of future elected governments for at least 31 years,” insists Harten in a Toronto Star editorial.

ImageIn contrast, Chavez has nationalized much of the oil industry in Venezuela. In 2007, his government took a majority stake in four oil projects in the vast Orinoco river basin, worth an estimated $30 billion. As a result, the oil giants Exxon Mobil Corp and ConocoPhillips pulled up stakes and filed claims against Venezuela. In 2011, an arbitration panel ordered the country to pay Exxon $908 million. But it’s not like Chavez isn’t shelling out any cash. “France’s Total SA and Norway’s StatoilHydro ASA received about $1 billion in compensation after reducing their holdings,” notes the New York Times.

In 2008, Chavez introduced a windfall tax of 50 per cent for prices over $70 per barrel, and 60 per cent on oil over $100. The president is committed to directing a significant share of oil profits to Venezuelans-who just happen to be sitting on top of the nation’s reserves. His populism has made him wildly popular with the nation’s poor and massively unpopular with the nation’s rich.

Meanwhile, Harper is much appreciated by foreign oil companies and our nation’s comprador class, even though royalties in Alberta’s tar sands have been among the lowest in the world for years. The petroleum taxes, royalties and revenue-sharing in the petroleum industry in Canada are less than a third of those in Norway, says Canadian nationalist Mel Hurtig.

“No other in the world would have been stupid enough to have agreed to the mandatory sharing and ridiculous pricing provisions of NAFTA,” the former publisher observed in his 2008 book The Truth About Canada.

In a recent talk at SFU Harbourside campus sponsored by the Tyee, author Andrew Nikiforuk noted, “If you go to any petrostate one thing you learn very quickly is that oil money can preserve the shelf life of a political party long beyond its expiration date.” The author indicates his own home province, Alberta, which has been ruled by the Progressive Conservative party for 45 years. Similarly, the Republican Party has ruled Texas for 26 years and the PRI in Mexico had a seven-decade reign. Petrostates are often characterized by official secrecy, low taxes, slashed social services and an aggressive disregard for the environment.

“Where taxation is absent, populations tend to be politically inactive, relatively obedient and surprisingly loyal,” says Nikiforuk, saying this perfectly describes his fellow Albertans.

Alberta Premier Alison Redford does not represent her voting constituents, but rather the resource sector. The democratically corrosive influence of transnational energy extractors goes right to the top in Canada, finding its peak in the PMO. In contrast, Chavez stands out like a sore thumb in the geopolitical scene. Socialist leaders rarely get into power in petrostates, but it happens.

After examining the evidence, even those not favourably disposed to socialism in Canada might agree that when it comes to autocrats, this country could use a bit more Chavez and a lot less Harper. But no “northern Bolivarian” is likely to emerge and have a crack at national leadership until we see a supremely pissed off, nation-wide, wide awake electorate. With Canada’s massive foreign ownership, captured media, and tepid political parties, that doesn’t seem likely. But if the history of Venezuela is any indication it’s not impossible.

The Vancouver Courier, October 25, 2012

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