Around Christmas 1975, Illich Ramírez Sánchez, (a) Charlie, in Vienna commanded a bloody terrorist attack against the headquarters of the Organization of the Petroleum Exporting Countries (OPEC). A few days later, on New Year’s Day 1976, his compatriot, Carlos Andrés Pérez, nationalized the Venezuelan oil industry.
The weeks and months that followed the launch of the state-owned Petróleos de Venezuela and the appearance of an elusive and bloody Venezuelan gunman in an episode of Arab terrorism remain in the memory of my generation as the prolonged big Bang of a myth of origins.
The primordial era of “Saudi Venezuela” was beginning: the dysfunctional populist petro-state that today appears as an archetype in all bibliography on the subject.
All of this was happening in the middle of boom of hitherto unthinkable prices that followed the oil embargo against the West, agreed in late 1973 by the Arab nations of OPEC in retaliation for the support given to Israel during the Yom Kippur war.
The boom generated a colossal transfer of wealth never before recorded in peacetime: overnight, the price of each barrel of the Venezuelan crude oil basket went from 2.70 US dollars per barrel to 9.76 dollars. By 1979 it was already around $ 17.
Only in the first year —from 1973 to 1974—, 10 billion dollars entered the Venezuelan Treasury, a sum then inconceivable for a nation of twelve million inhabitants.
Thus, the bonanza accompanied the first government of Carlos Andrés Pérez (1973-78) since its inauguration and reached its peak in 1976 when no one could have imagined the gigantic looting of public resources— more than $ 800 billion between 1998 and 2017– nor the humanitarian and migratory catastrophe that today, almost half a century later, is beating down on Venezuela. Nobody, absolutely nobody.
With the exception of Dr. Juan Pablo Pérez Alfonzo, the so-called “father of OPEC,” whom Terry Lynn Karl, a young student of the Master’s degree in Political Science at Stanford University, visited in Caracas in the middle of that year.
They talked one afternoon at Pérez Alfonzo’s house, built in a semi-wooded and shady area on the slopes of Ávila, the 2,000-meter-high mountain that separates the Caracas valley from the Caribbean Sea. The carcass of a broken and rusty car stood out in the garden, embedded in a promontory of bromeliads, like an outdoor concept art installation.
The car was an English-made Singer, a compact, solid 1950s model. Pérez Alfonzo, an attorney of exceptional brilliance, was famously austere, denouncing Detroit’s “planned obsolescence” and believing that a car should last a lifetime. For this reason, after the seventy years, he still had a Mercedes Benz acquired in the 30s.
He had bought the Singer with his savings during his exile in Mexico in the 1950s, and after the dictatorship of General Pérez Jiménez fell in 1958 and prepared to return with his family to Caracas, Pérez Alfonzo did not want to leave him behind. At the end of that year, Rómulo Betancourt, his close friend for more than thirty years, won the presidency of Venezuela in free elections and appointed him minister of oil.
During part of his exile, spent in Washington and dedicated to the private practice, Pérez Alfonzo had studied in depth the practices of a singular American public entity, unique in its kind: the Texas Railways Commission.
The regulatory doctrine of the TRC allowed the independent Texas oil companies, organized since the 1930s as a cartel of producers, to agree on production quotas and control the volume of supply, supporting prices. The TRC was thus able to successfully confront the monopolistic practices of John D. Rockefeller’s Standard Oil. The experience of the TRC, passed through Pérez Alfonso’s excellent tax screening, constitutes the essence of the proposal that the Venezuelan made in 1959 to his soul mate, Abdullah Tariki, Saudi Arabian oil minister. It is much more complicated than all this, but that’s the story.
The comings and goings of Pérez Alfonzo to the Middle East and other countries, the prolonged meetings with his collaborators, on the eve of the creation of OPEC, made it difficult for many months for the port authorities to notify the minister of the arrival of the Singer in early 1959 When he finally found out, he was very busy and, against his wishes, had no choice but to send a trusted chauffeur for him. In his haste, the driver unforgivably forgot to check the water and oil levels and melted the engine, although not without remedy, it seemed.
However, all the mechanics, all the importers of spare parts to whom he went said the same thing: “of course it can be fixed, of course it can be rebuilt, the spare parts can be ordered from England, but why better not get rid of that scrap and you buy a new car, doctor? An American car ”. Finally, he gave up on having it repaired and put the Singer to rust in the garden as an allegory of the indolence and mannerism of his compatriots.
When the jokes that were made at the cost of his proverbial frugality reached his ears, the doctor, who was also a vegetarian, outlined a tolerant smile. One of them particularly delighted him: it was said in Caracas that he was so “pichirre” – stingy – that he took his children to the park to see the other children eat ice cream. “Yes, I must be the only Calvinist in the country,” he nodded once, to a foreign journalist.
The doctor had withdrawn, more than ten years ago, from any public function to dedicate himself to study and promotion, in free seminars held at his home around a ping-pong table, the apocalyptic warnings of the Club of Rome issued in The limits of growth or the notion of “conviviality” put into vogue by the Austrian Iván Illich. A trip to China encouraged him to sponsor an agrarian commune in eastern Venezuela.
His detractors, and even people close to him, unanimously warned Terry Karl that the father of OPEC was no longer even the shadow of the pragmatic and shrewd lawyer whose ideas, embodied in OPEC, had forever changed the world economy based on fossil fuels. Poor Pérez Alfonzo “was crazy,” they insisted.
Long ago, the political class had joined the detractional campaign of the transnationals in a conspiracy of no intellectuals who even today points out him as the delusional nationalist to whom “the flute sounded” before becoming hippy.
Terry Karl, the young American visitor, was then working on an arduous doctoral thesis on the oil-producing cartel and was surprised when Pérez Alfonzo told her: “Forget OPEC, young man. It is an extremely boring subject. Study better what oil does to our countries. What is doing to us. Look around you! Twenty years from now we will be broke ”.
Karl accepted the suggestion, redid his plans and undertook an investigation whose result, after a few years, was a fundamental book, an essential physiology of the petro-state, undoubtedly a contemporary classic: The paradox of plenty: oil booms and petrostates. (University of California Press, 1998). There is no Spanish translation yet.
Dr. Pérez Alfonzo died in 1979. In 1983 came the first major devaluation. In 1989 bloody riots and looting broke out in the Caracazo. In 1999 the Chávez era began, riding on the boom longest in the entire history of the oil “civilization”. At the end of last September, a study by the Andrés Bello Catholic University (UCAB) showed that poverty already covers 94.5% of the country’s population.
The chronicles of the Indies say that the Venezuelan aborigines called “devil’s shit” what flowed from the natural sources of oil. “Sinking in the devil’s excrement”, (1976), titled the madman of OPEC his latest book.
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