Venezuelans might well ask, 'Where has the money gone?'

Venezuelans to decide whether Hugo Chávez, who has enjoyed unprecedented benefits from the oil effect, deserves a fourth term.

Hugo Chavez, the Venezuelan president, in power for almost 14 years, is vying for a fourth term in office. Juan Barreto / AFP

It is said Venezuela does not have good or bad presidents, just presidents who serve at times of high or low oil prices.

Venezuelans vote on Sunday to decide whether Hugo Chávez, who has enjoyed unprecedented benefits from the oil effect, deserves a fourth term.

Such historic elections in Venezuela seem to come around every decade. In 1978, with the first oil boom dissolving amid a welter of misspending and corruption, the dominant party Acción Democrática lost the presidency and congress. The hero of the 1970s, Carlos Andrés Pérez, returned in 1989 to lead a surprise - and bitterly divisive - austerity package. And in 1998, the former coup leader Mr Chávez began realising his vision of "Bolívarian Socialism", and working within Opec to drive up oil prices.

Opinion polls on Sunday's vote vary wildly, some showing Mr Chávez more than 10 points ahead of the centrist challenger Henrique Capriles, others putting them level. But there are suggestions even in the Caracas barrio of Catia, a Chávista hotbed, that he may gain less than half the vote.

Since Mr Chávez took office, major Latin American economies have grown 3 to 5 per cent per year. Despite the oil boom bringing US$1 trillion (Dh3.67tn) of revenues since 1999, Venezuelan growth was only 2.8 per cent annually, the lowest of any Opec country except Libya. Mr Chávez's supporters point to improved social conditions for the poor; his opponents to high inflation, shortages of basic goods and a murder rate that has soared with some 17,000 people killed last year.

The state oil company PDVSA lost many of its best employees when they were dismissed after an attempted coup and then general strike during 2002 to 2003. PDVSA has been burdened with social duties including teaching reading in the barrios. In 2010, 40,000 tonnes of food, meant for distribution to the poor by a PDVSA subsidiary, were allowed to rot away in a corruption scandal.

PDVSA's number of employees has tripled since 2003, while its oil production has fallen more than a tenth. A huge explosion at the Amuay refinery in August, blamed on poor maintenance, killed at least 50 people. What was once the best national oil company in Latin America has become a bloated, political vehicle.

The outcome of Venezuela's election has major implications for global oil markets. Continued rule by Mr Chávez will mean PDVSA's continued slow crumbling. He is suffering from cancer, reported by some to be terminal, and if he were to become too ill to govern, deadlock might result as his lacklustre lieutenants jockey for power. Falling oil prices and dwindling production could bring on a Venezuelan debt crisis.

Mr Capriles, in contrast, would seek to attract foreign investment and turn around Venezuela's production. As in the 1990s, expanded output from the Orinoco belt and a recovery in mature fields could challenge Opec unity, especially if coinciding with rapid growth in Iraq. Left-leaning governments in Bolivia and its fellow Opec member Ecuador would face the loss of a major patron; they might also have to rethink their dislike of private oil companies.

But consequently, lower oil prices would mean stiff headwinds for a Capriles administration. He might be challenged by a surviving Chávista bloc, with strikes and protests disrupting oil output. Mr Capriles was one of the first opposition leaders to understand why Mr Chávez came to power: because of the corruption of the ruling elite, and the desperate poverty of most Venezuelans. As the president, he would have to forge a tricky compromise of fiscal responsibility with social justice.

If victorious, Mr Capriles may have the unforgiving task of ruling at a time of low oil prices.

But for now, he could do worse than to harness the slogan of 1978's victorious opposition: "Where has the money gone?"

Robin Mills is the head of consulting at Manaar Energy, and the author of The Myth of the Oil Crisis and Capturing Carbon