| Chávez Seizes Greater Economic Power |
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Caracas, May 18.— Faced with shortages of foods, building materials and other staples, President Hugo Chávez is intensifying state control of the Venezuelan economy through a new wave of takeovers of private companies and the creation of government-controlled ventures with allies like Cuba and Iran.  The moves come just months after voters rejected a referendum to give the president sweeping constitutional power over the economy and public institutions, leading to new accusations that Mr. Chávez is more interested in consolidating power than in fixing Venezuela’s problems. And while he has argued that aggressive action against the private sector is needed to correct social injustices and fight soaring inflation, his critics say his moves are instead compounding those troubles. One significant measure is foreign investment, which has hit record levels in several other Latin American countries but has fallen in Venezuela. As foreign interests reacted to Mr. Chávez’s socialist-inspired changes, including nationalizations last year of major electricity, telephone and oil companies, outside investment dropped to just $500 million in 2007. In contrast, Peru, with a population comparable to Venezuela’s 27 million, received $5.4 billion in foreign investment last year. Still, Mr. Chávez is pressing ahead with the takeovers of companies big and small. These include Sidor, a large, Argentine-controlled steel maker; cement companies owned by Mexican, Swiss and French investors; more than 30 sugar plantations; a large dairy products company; and a sprawling cattle estate on the southern plains. Mr. Chávez has avoided outright confiscation of private companies by offering some compensation, but the terms of these deals are growing increasingly contentious, with the president threatening to withhold payments ... [ full text ] |
