The nearly 30 percent rise in the price of oil and other raw materials over the past month raises a big question:

Will commodity-dependent populist governments in Venezuela, Argentina, Bolivia and Ecuador get a second wind?

They are certainly hoping for that to happen.

The question came to my mind last week during an interview with Alicia Bárcena, the head of the United Nations Economic Commission for Latin America and the Caribbean (ECLAC).

While predicting a 40 percent drop in foreign investments in Latin America this year, she mentioned that many countries will benefit from a rise in prices of their major commodity exports.

According to ECLAC's estimates:

-- Average oil prices have risen 65 percent over the first five months this year. But oil prices are still about 50 percent below their peak of mid-2008.

-- Soybean prices rose 15 percent over the first four months this year, but are still 28 percent below their peak of mid-2008.

-- Copper prices have risen 43 percent over the first five months this year, but are still 55 percent below their mid-2008 peak prices.

-- While the current rise in the region's commodity prices may continue because of an increase in China's purchases and growing expectations of a world economic recovery soon, annual prices of oil and copper are likely to be "considerably lower" in 2009 than in 2008. Prices of soybeans this year will be below their 2008 average prices, but not by much.

How will the latest commodity price increases affect Latin American petro-populist and soybean-dependent governments?

I asked several independent economists.

Most said that Venezuela, which depends on oil for more than 91 percent of its exports, and Ecuador, which relies on oil for 62 of its exports, will be by far the most affected by the recent commodity price fluctuations.

Most agreed that the latest surge in raw material prices will give them a respite, but disagreed on whether it will be enough to save them from economic collapse.

Alberto Bernal, research director for Bulltick Capital Markets, estimates that oil prices will end at $75 a barrel this year and $85 a barrel next year.

With these prices, Venezuela will somehow muddle through because it can always devalue its currency to pay its internal debts.

But Ecuador, which uses the U.S. dollar as its currency, can't devalue, he said.

"I'm much more worried about Ecuador than about Venezuela," Bernal said. "Of course, Ecuador could abandon the U.S. dollar, but that would amount to causing all Ecuadoreans to lose their dollar-denominated bank deposits."

Ricardo Hausmann, head of Harvard University's Center for International Development, is highly pessimistic about both Venezuela and Ecuador. He pointed out that Venezuela's oil production is falling rapidly because of the disastrous management of the PDVSA state oil company, lack of investments in new refineries and a crackdown on foreign oil companies.

In addition, the government is maintaining huge subsidies on gasoline prices.

A gallon goes for 12 cents in Venezuela, less than a liter bottle of water. These gasoline prices are increasingly harder to sustain as the country's oil export income declines, he said. Hausmann predicts Venezuela's oil export income will drop by 18 billion this year.

"Before the latest rise in oil prices, Venezuela was like a car running at 200 miles an hour toward a wall," Hausmann said. "Now, it's like a car running at 150 miles an hour toward a wall."

My opinion:

The recent rise in commodity prices will give some short-term oxygen to the struggling economies of Venezuela, Ecuador, Argentina and Bolivia, but won't help them much. Unlike other commodity exporting countries, such as Brazil, Chile and Peru, they have spent well beyond their means, and won't have access to foreign loans to reactivate their economies once the world economy starts recovering.

So it's not surprising that Venezuela's narcissist-Leninist President Hugo Chávez -- who spoke for nearly eight hours on television Thursday as part of what he announced would be a four-day-long national address -- is radicalizing his regime, persecuting the opposition governors and mayors who won elections last year and asking his judiciary to close down the Globovision television station.

Chávez knows that he has to cut the massive domestic subsidies he announced when oil prices were at more than twice their present levels, and is turning his government into an elected dictatorship to stay in power indefinitely.

Far from a second wind, the latest surge in oil prices will be a sustained breeze at best.

Latin America Foreign Investment Outlook Grim
Andres Oppenheimer

A new United Nations report predicts a 40 percent drop in foreign investments in Latin America this year. I hope I'm wrong about this, but the fall in foreign funds may be even steeper.

Will Colombia's President Uribe Run Again?
Latin American Current Events, News & Affairs - Andres Oppenheimer

After Tuesday's vote in the Colombian Senate many well-placed Colombians tell me they are convinced that President Álvaro Uribe is serious about running in 2010.

Many Believe End of Argentina's 'K' Era Nears
Latin American Current Events, News & Affairs - Andres Oppenheimer

Seven weeks before Argentina's much-awaited June 28 legislative elections, there is a growing consensus that populist President Cristina Fernández de Kirchner will lose her majority in Congress, and that there will be major political changes in this country.

Brazil, China & India Can Mitigate Global Crisis
Global Economic Viewpoint

Brazil, India and even China will not be able, by themselves, to correct the dysfunctions that produced the global crisis. But it is true that the economic power of these three countries can mitigate its negative consequences. ...

(c) 2009, The Miami Herald DISTRIBUTED BY TRIBUNE MEDIA SERVICES