New Venezuelan Oil Tax to Fund Public Health Care Programs

[Joanne98]

, March 25, 2008 (venezuelanalysis.com)— Venezuelan President Hugo Chávez announced a new tax on extraordinary oil profits Monday, the revenue of which will help fund the expansion of health care programs known as the Barrio Adentro “missions,” which bring health care to marginalized communities with the help of Cuban doctors.

“I have decided to apply a new tax on unexpected profits for Barrio Adentro III,” Chávez declared during a visit to the University Hospital in Maracaibo, on the shores of oil-rich Lake Maracaibo.

The president pointed out that soaring oil prices, which have topped $110 per barrel this year, allow oil companies to extract unbudgeted profits which reflect “no extraordinary effort,” investment, or improvement in production efficiency by the companies. He said he had considered taxing these profits for several years, and studied the ideas of Joseph Stiglitz, the former Chief Economist of the World Bank, on the subject.

During his visit to Maracaibo, Chávez inaugurated 11 new surgery rooms and an intensive care facility fully equipped with 431 pieces of cutting edge medical technology in the public hospital. Similar remodeling is planned for 130 other public hospitals across the country during the coming surge financed by the new oil tax, the amount of which is yet to be specified.

http://www.venezuelanalysis.com/news/3299

[David__77]

1. I really hope that the Venezuelans move forward with industrialization.

Venezuela needs to develop a comprehensive, self-reliant national economy. That doesn't mean producing EVERYTHING domestically, but it does mean at least partially mitigating the nation's economic vulnerability to foreign powers by expanding industrial production. Public works projects, too, should figure high on the list of priorities. The country has done well in social services, education, and expanding its self-defense capacity, but needs more effort in the economic realm.