WASHINGTON (AFP) — Former Federal Reserve chairman Alan Greenspan sharply criticized Latin American populist politics of the kind practiced by Venezuelan President Hugo Chavez in his memoirs out Monday.
"Economic populism makes large promises without considering how to finance them," wrote the former US official in his memoir "The Age of Turbulence: Adventures in a New World," released on Monday.
In a chapter dedicated to Latin America, Greenspan, who headed the US central bank from 1987 to 2006, writes that the region went from one crisis to the next from the 1970s to 1990s.
"The best evidence that populism is primarily an emotional response and not one based on ideas is that populism does not seem to recede in the face of repeated failures," he writes.
As an example Greenspan, 81, mentions Chavez, who has tense relations with the United States, and compares him to Zimbabwe's leader Robert Mugabe.
"Hugo Chavez, who became Venezuela's president in 1999, is following Mugabe's example. He is ravishing and politicizing Venezuela's once-proud oil industry -- the second largest in the world half a century ago," Greenspan says.
Greenspan compared the situation in Zimbabwe with what is going on with the state-run oil consortium, PDVSA, where Chavez "replaced most of the government-owned oil company's nonpolitical technicians with cronies of his regime."
Greenspan notes that the production of crude went from 3.2 million barrels per day in 2000 to 2.4 million barrels per day in 2007, "yet fortune has smiled on Chavez."
"His policies would have bankrupted most any other nation. But since he became president, world oil demand has engendered a near quadrupling of crude oil prices and has, at least for now, bailed him out."
Greenspan warns however, that "fortune may not smile on him forever," noting that two-thirds of the revenue from Venezuelan oil sales comes from exports to Chavez's foe, the United States.
Looking at what he called past mistakes, Greenspan focused on the late Argentine president Juan Domingo Peron and Argentine Peronism.
"Argentina lost ground in international economic comparisons, especially during the autocratic regime of Juan Peron," he says.
"Even in the post-Peron regime of well intentioned Raul Alfonsin failed to stem the explosive inflation and stagnation of the heavily regulated Argentine economy."
Peron was president of Argentina three times: 1946-52, 1952-55 and 1973-74. Argentine President Nestor Kirchner and his wife, Cristina Fernandez -- currently running in the October 28 presidential election -- are members of Peron's old party.
Greenspan has caused a stir by alleging in the memoir, in an uncharacteristically direct manner, that "the Iraq war is largely about oil."
"I'm saddened that it is politically inconvenient to acknowledge what everyone knows -- the Iraq war is largely about oil," he wrote.
Greenspan's memoir appears 18 months after he left the Fed, with the US economy at a crossroads and ahead of a critical central bank meeting under the chairmanship of his successor, Ben Bernanke.
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