Nicolas Maduro has claimed the state-owned oil company PDVSA as an example of “maximum socialist efficiency.” Its production trends tell a much different story, but Reuters notices another kind of output that portends even more economic disaster for Venezuela. Working conditions have deteriorated to the point where workers have lined up to quit, only to be told that their resignations won’t be accepted:
What’s going on is that thousands of oil workers are fleeing the state-run oil firm under the watch of its new military commander, who has quickly alienated the firm’s embattled upper echelon and its rank-and-file, according to union leaders, a half-dozen current PDVSA workers, a dozen former PDVSA workers and a half-dozen executives at foreign companies operating in Venezuela.
Some PDVSA offices now have lines outside with dozens of workers waiting to quit. In at least one administrative office in Zulia state, human resources staff quit processing out the quitters, hanging a sign, “we do not accept resignations,” an oil worker there told Reuters.
Official workforce statistics have become a closely guarded secret, but a dozen sources told Reuters that many thousands of workers had quit so far this year – an acceleration of an already troubling outflow last year.
About 25,000 workers resigned between the start of January 2017 and the end of January 2018, said union leader and government critic Ivan Freites, citing internal company data. That figure comes out of a workforce last officially reported by PDVSA at 146,000 in 2016.
The exodus flows from every level of PDVSA, but it’s the educated flight that might matter most in the long run. Professionals at PDVSA no longer earn enough to feed their families, but they also have skills and knowledge that will allow them to flee to other countries in South America and start over. The Venezuelan education system is no longer capable of producing professionals; in a country that can no longer feed itself, baccalaureate degrees are a low priority, let alone doctorates in engineering and law.
The flight of workers at other levels present more acute issues, and not just in production. Without enough people to service the equipment, the job’s getting more dangerous too:
Jobs at PDVSA were once coveted for their generous salaries and benefits, including cheap credit for housing. Now, many PDVSA workers can’t feed their families on wages that amount to a handful of U.S. dollars a month. …
In the Orinoco Belt, some drilling rigs are working only intermittently for lack of crews, said two sources there. In PDVSA’s refineries, several small fires have broken out because there are no longer enough supervisors, two sources in the northern Paraguana peninsula said. Lack of personnel in export terminals have forced some ports to cut back working hours, according to two shippers and one trader.
One would think under these circumstances that Maduro might try to bolster morale within PDVSA. And he’s tried, in the usual dictatorial beatings-will-continue manner:
Maduro has overseen the arrest of dozens of high-level PDVSA executives since late last year, sometimes at the Caracas headquarters as shocked employees looked on. Workers now feel watched by supervisors and are loathe to make any business decision out of fear they will later be accused of corruption, the sources said.
This, of course, is straight out of F. A. Hayek’s The Road to Serfdom. Socialism and its central command of a national economy create impossible economic contradictions. When failure inevitably results, the socialists in charge cannot admit that socialism itself is the problem, so they accuse others of corruption or incompetence and find ever-more-ruthless replacements to solve the problem. It’s not a coincidence that the man running PDVSA is a major general who had been previously a housing minister for Maduro, and it’s also no coincidence that his predecessors got arrested for “graft.”
Quevedo’s game plan could have come right out of Hayek’s warnings:
A stiff official who rose through the National Guard, Quevedo fired many long-term employees upon arrival and urged remaining ones to denounce any of their colleagues who oppose Maduro. He tapped soldiers for top roles, giving the oil firm the atmosphere of a “barrack,” two company sources said.
“The military guys arrive calling the engineers thieves and saboteurs,” said a Venezuelan oil executive at a private company who frequently works with PDVSA.
Hey, who wouldn’t want to work at PDVSA under those conditions? Small wonder that Venezuelans are exercising the only effective vote they have — voting with their feet. Even that small breath of freedom will likely depart soon. Closing the HR offices is just the first step; soon, Quevedo and Maduro will declare that workers have no right to quit their job and deprive the glorious Socialist revolution of their skills. They’ll be forced to work at PDVSA at starvation wages. Just imagine what that will do for production.
Hey, Hayek didn’t call it The Road to Serfdom by accident.
Reuters also notes that PDVSA is being propped up mainly by three international firms: Russia’s Rosneft, China’s CNPC, and … Chevron, based in California. All three are reportedly concerned over the flight of workers from the PDVSA paradise. One has to wonder why Chevron’s still sticking around at all. Maybe they should explain that.