When looking at a foreign country's gross domestic product, it's worth asking how the figure is calculated, since not everyone plays by American rules.
Consider oil-rich Venezuela. Its central bank reported Tuesday that the country's economy shrank 4.5% in the third quarter, according to a blog by Daniel Molinski in The Wall Street Journal. It continues:
" 'We simply can't permit that they continue calculating GDP with the old capitalist method,' President [Hugo] Chavez said in a televised speech before members of his socialist party. 'It's harmful.' ...
" ... [Chavez] said the weak economic growth numbers are mostly the result of 'capitalist calculations' that don't give proper credit to economic activity in a socialist setting."
Chavez also acknowledged oil's role. If you're thinking of investing in Venezuela or already own shares in energy companies that do business there -- like Total (NYSE:TOT), Chevron (NYSE:CVX), Statoil (NYSE:STO), or BP (NYSE:BP) -- you have to ask yourself what the president's comments mean.
Scroll down and sound off in the comments box about whether there's likely to be a refiguring of GDP that takes better account of socialist programs, and what that might mean for the economy and foreign companies.
