Maybe Iran can teach us something


The World Economic Forum came out with its new “Global Competitiveness Report 2012-2013.” As you might expect, news for Venezuela are dismal (well, dismal if you think this ranking means anything.)

We are the second least competitive economy in the hemisphere, outdone only by Haiti. Overall, we are ranked 126th out of 144th countries surveyed. But something in the ranking jumped out at me: the rankings of energy exporters.

  • Qatar is ranked 11
  • Norway is ranked 15
  • Saudi Arabia is ranked 18
  • The UAE are ranked 24
  • Oman is ranked 32
  • Kuwait is ranked 37
  • Indonesia is ranked 50
  • Iran is ranked 66

You got it … freakin’ IRAN, with sanctions and the threat of war looming, is ranked 66th!

Now, I haven’t gone over the methodology for this thing, but I do know this makes headlines and is taken seriously by at least some segment of society, so we can’t simply discard it.

The usual rap is that energy exporters tend to be bogged down by red tape, overvalued currencies, voracious governments, and high taxes, all of which discourages investment and cripples the non-oil sector. It’s the resource curse, right? Maybe not so much: turns out many energy exporters are highly competitive.

Perhaps chavistas start asking advice on competitiveness in our bilateral agreements with Iran.

HT: Jota.

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  1. So what? Maldonado won.
    Now really, Two ranks down since past year. I have been following this report during the four past years and the only sensation left is sadness. Every year Venezuela has managed to lower his ranks and I feel the apathy in the atmosphere. One friend of mine said something clever. The comment was something like this: “You don’t obtain this results stepping aside and let the country go by itself. You obtain this result by proactively and methodically encourage this behavior”
    We fell from rank 98 in the 07-08 report to 126 this year. Way to go. Bravo.
    If we look the report with a little more detail, we’ll see that our institutions and goods markets are ranked as the worst in the world.
    Also we have to pick the numbers with a little precaution. “Higher education and training” is ranked 68. This should be a good news, but if we see the “most problematic factors for doing bussinss” we found among them “Inadequately educated workforce” and “Poor ethic in national labor force”, I know they aren’t the principals factors but there they are. So with our rank 68 in education, finding educated workers is a problem.
    I always show this report to my friends, and in the vast majority of them the response that I obtain is “méh”.

  2. Slightly OT: I can’t get over the WEF’s motto. Grandiose much?!

    How about “Committed to Stimulating Aggregate Demand for Foie Gras and Fancy Davos Hotel Rooms”?!

    On topic: Competitiveness, gas prices, health care…the crazy thing is that, if you set aside the theocratic lunacy, Iran seems like a reasonably well governed country. We never copy the good parts…

  3. Well, Iran is a mess. But, there are messes (Iran’s) and messes (Venezuela’s). Iran has a pretty effective higher educational system, and a high technical capacity in those circles. There is a history to this: not just that the oil industry has a long history and from this one gets a lcertain amount of ancillary technical and productive capacity. Venezuela had the same. Before about a dozen years ago, it was the most likely state in northern South America, the Caribbean and Central America to develop a serious manufacturing sector. The proliferation o fsmall scale manufacturing ancillary to oil was a good beginning (relatively speaking to others …Brazil and Mexico were the only competitors in the immediate region.)

    However, like happened after the Bolshevik revolution in 1917, essentially the entire educatied/professional classbrea up the old institutions 9which is often necessary) but is rather similar to what happened in extremely socially/politically polarized Venezuela after 1999: the professional/tech caste turned against the revolution, rebelled (the oil paro/strike of 2002, and the failed coup of 2003 against the Chavez presidency, etc.), and then left the country (and still are leaving the country).–as also happened in Russia

    Iran also had mass exodus of skilled professionals both before and after the revolution (esp. in the Iran-Iraq war). However, the core of petroleum production management and engineering remained — while Venezuela lost its similar oil strata.

    Also, unlike the Bolsheviks and the Ayatollahs, the Chavistas were unprepared for power, and had ho disciplined party or similar organization, and no coherent ideology; in general Chavez had good abilities to smash up the old institutions — which is often necessary after a revolution) but no idea how to take control of the nations other institutions and to quickly retrain an entire class of experts to run the economy and the state, and bring about an real industrial revolution (Recall: only 20-25 years later 1917, the Bolsheviks were producing better tanks and aircraft than the second-most-advanced capitalist power of the day, Germany, which they defeated and occupied by 1945!..

    (My slightly windbag side point here is that the failure of Chavismo is hardly an artifact of their being ‘leftists’. Both extremely conservative/religious revolutions (e.g., Iran) and leftist/socialist ones (e.g., Russia) clearly have outperformed Venezuela in development of production, technology and science after their revolutions.

    In much-praised Brazil, with its big advances in development and ‘competitiveness’ in the last decade adn more, note tht Lula, first, came to power n the heels of some definite advances in coherent building of state institutions by his predecessor, but, most importantly, he came to power with a coherent, disciplined (and in Brazil!!) unity party of the Left. But, this was not an overnight wonder, like the military grouping around Chavez patching together rapidly the Bolivarian Movement, uniting left parties and a god deal of progressive intellectuals. No, Lula’s group started UNDER A DICTATORSHIP. Nonetheless, they managed to survive and force the military to eventually recognize them as a legal party. The party (really a coalition of many very desperate left tendencies and groups that nonetheless maintained a PARTY discipline) fought for over two decades to gain, first local town alcalde offices, find new ways to govern without corruption and collect taxes, involving the middle-class professionals and intellectuals together with workers and barrio residents, and then gain regional offices, federal legislature offices, and THEN and only THEN, the presidency..They were ready, and organized, with long experience n how to govern, to take over a very weak state machinery. But, their cadre were able to give it a coherent backbone and unity of purpose.

    Neither the Right nor the Left in Venezuela have accomplished this (not since Betancourt?).

    CAP’s neo-liberal ‘shock’ paqueta was a revolution FROM THE TOP that was not previously prepared for among the masses or the elites. And, both turned against it. Chavez’ coming to power was somewhat better prepared, but he and his movement were not tested by years of struggle in strikes and elections, and in governing local and regional offices for years beforehand. And, the result is striking!

    Aside: Also, …Iran had to fight a a war for ten years against Iraq. Nothing like a full-fledged battle to see if your ideas of organization and your production and technology are competent. You have a great incentive to fix it quickly.

    Anyway, Iran is a mess. It is extremely corrupt and business there is infested with competing, and violent capitalist, military and religious factions. It is in a state where it can more easily build a small, focused uranium-enrichment project than find the thousands of trained engineers and workers and the cash it would take to re-build its failed refineries and enhance production in its flagging oil and gas fields. As far as I know, Iran’s NIOC has NEVER opened any significant new oil field on its own since the Revolution of 1979 … Yet, it is ahead of Venezuela in ‘competitiveness’, yes. That seems accurate.

  4. I personally believe that Chavez shot himself in the foot twice! First time round when he fired the highly experienced oil engineers, sending them off to PDVSA’s competitors. Second time round was his labor force apartheid (Lista Tascon). Let’s face it, most of those on that list are better prepared to take a country forward that those who refrained from signing.

    A friend has a saying which I find to be quite accurate: “No existe Chavista inteligente y honrado. Si es Chavista honrado, no es inteligente y si es Chavista inteligente no es honrada”. In English, “ You will never find an intelligent and honest Chavista. If he’s honest, he’s not intelligent and if he’s intelligent he most definitely will not be honest.

    With that in mind, those running Venezuela are either daft or corrupt. No sane employer would hire staff with those traits.

    Perhaps running Venezuela into the ground was part of his plan and he didn’t shoot himself in the foot at all!


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