Blaine Sheldon's blog

Political scientist Gustavo Coronel, an oil expert and former member of the Venezuelan congress, believes the plummeting petroleum payouts will seal the fate of Hugo Chávez's Bolivarian dreams, thanks to the Venezuelan leader's habitual failure to invest in any form of state infrastructure.

Speaking at the Andes colloquium organized by the George Washington University and the Strategic Studies Insitute, Coronel explained just how deep mismanagement runs within the state-run oil sector. This threw me for a bit of a loop:

"Under Chávez the company [PDVSA] has lost about 500,000 barrels per day of production capacity, which amounts to a loss of income of about $30 to $50 million a day, depending on the price."

Ouch. Today, a barrel of crude petroleum is at a mere $39 on the Venezuelan market, down from soaring highs of roughly $145 earlier in 2008. To Coronel, this reality merely exacerbates the "termites" that have been eating the regime from within.

Coronel outlined three steps Chávez will now be forced to take, which may ultimately lead to his downfall:

1. Cutting his vast handouts to Venezuela's poor constituents, thus isolating his key demographic.
2. Eliminating/reducing foreign aid to sympathetic governments, who remain essential for his regional opposition to the United States..
3. Devaluing the Bolivar, inflicting further economic woe upon an economy already reeling from stark inflation and lack of foreign investment.

Having taken these steps, Coronel predicts Chávez will not only lose a constitutional referendum that would permit indefinite reelection -- similar to the failed attempt to ratify the country's constitution by popular vote in December 2007 -- but also fizzle well before his current term runs out in 2012.

Whenever he's suffered setbacks in the past, Chávez has always promised to accept the situation 'Por ahora' (For now). Save a petro rally, por ahora might be a while.

Photo: JUAN BARRETO/AFP/Getty Images

U.S. Army soldiers carry shotguns as they walk along a corridor separating what they deem to be the most extreme and dangerous detainees held inside the Camp Bucca detention center located near the Kuwait-Iraq border on May 19, 2008.

SEOUL, SOUTH KOREA - MAY 14: South Korean Capital Defence Command soldiers take part in an anti-terrorism exercise at their Seoul military camp on May 14, 2008 in Seoul, South Korea.

I'm not thinking to cut my beard, because I'm accustomed to my beard and my beard means many things to my country. When we have fulfilled our promise of good government I will cut my beard."

— Castro in 1959, interviewed by CBS's Edward Murrow

An Afghan laborer makes sweets at a traditional candy factory in the old city of Kabul, on Jan. 30, 2008. It is estimated that as much as 80 percent of Afghanistan's economic activity is undertaken by similarly informal workers.

Japan Maritime Self Defense Force (JMSDF) personnel wearing protective body gear guard a landing strip as a helicopter carries VIPs at JMSDF Yokosuka Base on January 24, 2008 in Yokosuka, Kanagawa, Japan.

BERLIN, GERMANY- German-born Turk Murat Kurnaz, a former detainee at the U.S.-run Guantanamo Bay prison, as he waits for the beginning of his hearing at the German Parliament in Berlin to give evidence at a parliamentary inquiry.

PATRICK BAZ/AFP/Getty Images

A US officer with the 101st Airborne Division learns Arabic at a combat outpost in the northern Iraqi town of Baiji, near the oil city of Kirkuk.