Socio-Economic Status 2005

http://www.nytimes.com/packages/html/national/20050515_CLASS_GRAPHIC/index_01.html

(no subject)

NYT: Chávez Reopens Oil Bids to West as Prices Plunge.

The parallels between Petróleos de Venezuela, Venezuela's oil monopoly, and GAZPROM, Russian gas and oil monopoly, are striking:

In the past year, with higher oil prices paving the way, Mr. Chávez also vastly expanded Petróleos de Venezuela’s power, inextricably linking it to his political program. He directed the oil company to build roads, import and distribute food, build docks and shipyards and set up a light-bulb factory. He even expanded it into areas like milk production, soybean farming and the training of athletes after a weak performance at the Beijing Olympics.
Petróleos de Venezuela has also carried out nationalizations in other industries, absorbing companies like Electricidad de Caracas, the utility serving this city of five million.
 

In a similar fashion, Gasprom got into banking, media, utilities, and other industries far removed from its core business. Its strategy seems to be driven by Putin's power-grab agenda, rather than business or economic considerations. As the state of Russian economy turns ugly, the complexity of Gasprom holdings becomes a burden and a distraction. The gas war with Ukraine is  a good example of how the head of Russian government gets involved into a commercial conflict and cannot separate his state and business interests. By doing this, he not only loses valuable international political capital, but also neglects critical issues that other Russian industries face as they enter a period of economic uncertainty.