Invested Development (Week 2)

During class last Wednesday we discussed the "Paradox of Plenty." Oil rich countries such as Venezuela have tremendous income from the sale of their oil, but fail to take advantage of the natural resource to build a better infrastructure for their nation's economy.  The known success cases are Sweden and Alaska, who have put regulations on the amount of petro dollars they spend each year and bank the rest.  Additionally, these two success cases leave most oil construction work/risks to the oil companies.  Unfortunately most oil rich countries don't have the luxury Sweden and Alaska have.. people may be starving, oil may already be a government run industry within their country.  I was particularly interested in Venezuela's case, because they attempted serious investment in their automotive industry (which failed).  Realizing it's not likely this simple, why can't countries tie their oil export along with their other exports?  For instance, if Venezuela had sold their automobiles together with their oil at a discounted price could it have spurred the success of their automotive industry?  The higher level of technology an export is the more stable it's sale price is going to be.  If Venezuela had instead (of automotives) invested all those petro dollars into their country's IT department, would their export of human resource IT be devalued today?  Perhaps they could've invested in high level manufacturing.  Dr. Bowman discussed the reason S. Korea and Japan were able to develop.. asserting that the United State's special interest that they succeed greatly aided them.  Could Venezuala of coerced an oil-hungry state such as the United States to take special interest in them?  What is being done today?  This article:  http://colorado.indymedia.org/newswire/display/12537/index.php asserts that Venezuela is making an enemy of the U.S.  "In October 2005, Chavez announced that Venezuela was ready to move the country’s foreign-exchange holdings out of the dollar and into the euro.[2]"  Attempting to undermine the U.S. dollar will definitely hurt relations between the U.S. and Venezuela.  However, diversifying exchange holdings could breed market stability for Venezuela.  Time will tell.