economy of venezuela
That has prompted The Wall Street Journal and other pundits to forecast nothing less than economic doom for Venezuela in 2013.
But when it comes to poorly run South American countries, Cristina Fernandez de Kirchner is someone that could easily give Chavez a run for his money.
As Argentina's president, Fernandez de Kirchner is a master of economically inept policies in her own right.
So who will win this race to the bottom?
Let's examine which one of these losers will run out of money first, starting with Venezuela's Chavez.
After all, when it comes to wealth destruction, Chavez has had a pretty big head start. He was elected in 1998, while Fernandez's husband was first elected president in 2003 (she succeeded him as president in 2007; he died in 2009.)
What's more, the wealth destruction in Venezuela did not begin with Chavez. The Conference Board Total Economy Database shows that Venezuelan productivity was more than 20% lower in 1998 than it had been in 1970.
In fact, I did a study on the potential for Venezuelan corporate finance for a client bank back in 1990 and came to the conclusion that there was very little potential for it.
Other than the oil company PdVSA, there were very few corporations in Venezuela for which one could imagine doing corporate finance deals of any substance. There were a few local monopolies like the tobacco company, but essentially all business activity beyond the mom-and-pop store level centered round the oil sector.
That same thing was not true in Argentina.