With the national oil company in Venzuela projecting worldwide revenues of $85 billion this year, President HUgo Chávez has become the world's richest petro-socialist with plans to spend the bounty on the poor.
While the government says the oil bounty is being spent on the poor, critics and even planners loyal to Chávez are worried about how wisely the money is being spent.
Some say the money is being wasted on short-term programs to boost Chávez's popularity rather than long-term growth and others are of the opinion that without firm regulation, a good portion of the windfall could be lost to corruption, and that nt enough is being saved for when the oil prices fall.
An immense amount of oil money is being spent on subsidizing food costs, giving free schooling, vocational training, aid to needy mothers, soup kitchens, free eye operations and distance-learning university degrees.
State-owned oil company, PDVSA, will pay the government about $30 billion in taxes and royalties this year, of which nearly $19 billion is allocted for social spending.
Chávez created a Fund for National Development which has already drawn $10.2 billion from the Central Bank's reserves and will draw billions more at year's end. PDVSA is also depositing about $100 million a week to the fund in addition to its tax payments. 70 percent of this money has been allocated for infrastructure projects and 25 percent for social spending.
But the government has not established any rules for the use of supervision, control and auditing of the fund. There is no check on where the allocated amount is being spent. Recently the Ministry of Finance announced that the fund money would be used to purchase Russian machine guns.
Additionally, the Fund's method of taking "excess" foreign reserves from the Central Band reserves could lead to currency instability.
Jose Rojas, former miniser of finance and former vice prseident of PDVSA feels that the government should be redistributing wealth through tax policy, while using oil money to "create real growth via better productivity and higher employment... otherwise you're just spending money."
While some believe that the investments in education, health and infrastucture will have a lasting effect on the standard of living, skeptics say the anti-poverty programs are not sustainable solutions and will vanish when the oil money is gone.
The purchasing power of the poor may have increased without a proportionate increase in the standard of living.
Despite the fact that even supporters of Chávez confess that the socal programs are not working as they should, the common man seems to believe that as long as Chávez is in power, things can get better.
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