I look at the example of the energy industry in Venezuela.
In 1999, Venezuela elected faux-populist and faux-socialist Hugo Chavez as its president. At that time, Venezuela had a thriving and highly profitable oil and gas industry, and its national oil company, PDVSA, was on a par with big international oil company majors.
Chavez set about changing the Constitution and economy to benefit himself and his followers, including taking oil revenues and “redistributing” them and other assets. The opposition, including the vast majority of PDVSA management and professionals, objected. Long story short, in late 2002, Chavez took advantage of a national work stoppage to take over PDVSA. He purged all non-Chavista management and employees, running them out of the country. Those left were the hacks, grifters, embittered failures, and low-level true-believers who had no idea how to run a multi-national energy company. Production began to decline almost immediately.
Chavez subsequently expropriated or forced restructure of the interests of the international oil companies who had invested money, expertise, and technology in Venezuela. They eventually left the country. Practically the only international companies left are the state-owned Russian and Chinese national oil companies.
Now, annual production is a fraction of what it once was, and fields with substantial proved reserves are undeveloped, shut-in, or severely restricted due to lack of investment, equipment, and technology. PDVSA, and Venezuela itself, are effectively bankrupt. Much of PDVSA’s remaining assets are pledged to the Russians.
But, hey, what could go wrong here.
