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-- Venezuela: Chavez to shut down opposition TV
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| Originally posted by MisterOpus1 Nationalizing the resources versus nationalizing private industries has different means to the same end, do they not? |
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| Ch�vez Moves New Socialism To Faster Track Venezuela Leader Vows To Nationalize Telecom, Electricity Giants By DAVID LUHNOW and JOS� DE C�RDOBA in Mexico City and RA�L GALLEGOS in Caracas January 9, 2007 2:17 p.m.; Page A1 Venezuelan President Hugo Ch�vez took a big step toward what he calls "21st-century socialism" by vowing to nationalize the country's biggest telecommunications and electricity companies, both controlled by U.S. firms. He also said he would throw out the country's commercial code and strip the central bank of all remaining traces of its autonomy. The moves by Mr. Ch�vez, a populist who won a landslide re-election last month, are the latest in a flurry of actions to tighten his grip on power and use his country's oil riches to create a model of development different from the market-oriented economics that have dominated Latin America and much of the developing world for the past two decades. POWER PLAY � The News: Hugo Ch�vez plans to nationalize Venezuela's biggest telecom and electricity companies, both controlled by U.S. concerns. � What's at Stake: Whether Mr. Ch�vez turns the world's fifth-biggest oil exporter into a Cuba-style socialist state. � The Bottom Line: Few developing nations are likely to follow oil-rich Venezuela's example. Some Venezuelans fear that Mr. Ch�vez, a close ally and disciple of Cuba's ailing dictator, Fidel Castro, is reshaping Venezuela along Cuban lines, with the state controlling economic and political power. The Venezuelan leader has denied the comparison in the past, but critics said his latest moves belie the denial. "Let's call a spade a spade. This is communism," said Eric Ekvall, a political analyst in Caracas. "He's clearly saying the state should own the means of production." Mr. Ch�vez, whom the ailing Cuban leader sees as the successor to his revolutionary mantle in Latin America, used a speech yesterday to his new cabinet members to flaunt his ties to Mr. Castro. He ended his speech using the Cuban's signature sign-off: "Fatherland or death, we will triumph!" Mr. Ch�vez's longtime ally, former Vice President Jos� Vicente Rangel, chimed in at the ceremony with another signature Castro phrase: "Always towards victory, Comandante!" MORE ON CHAVEZ [Hugo Chavez] Chavez � Page One: Anti-Americans Are on the March1 12/09/06 � Chavez Calls Bush 'the Devil'2 09/21/06 Years after the collapse of Soviet communism and the embrace of free-markets by countries around the world, Mr. Ch�vez is taking this Andean nation of 26 million in the other direction, greatly expanding the role of government in the economy. In the past few years, he has claimed a greater share of the country's giant oil industry for the state. But he has stopped shy of going directly after other major private industry, until now. Although he revealed no details, Mr. Ch�vez said he would nationalize the country's largest publicly traded private company, Compania Nacional de Tel�fonos de Venezuela, known as CANTV. The company, privatized in 1991, is controlled by the U.S. telecom giant Verizon Communications Inc. He also vowed to nationalize Electricidad de Caracas, controlled by Arlington, Va.-based AES Corp. The choice of two U.S.-controlled companies will surely not be missed elsewhere in Latin America, where Mr. Ch�vez has struggled to convince nations to follow his lead and not Washington's. [Chavez and Rodriguez]3 AP/Wide World Photo Venezuela's President Hugo Chavez, left, and new Vice President Jorge Rodriguez attended a the swearing ceremony in Caracas Monday. Since Mr. Ch�vez took office in 1999, he has engaged in vigorous verbal combat with Bush administration officials, going as far as to compare Mr. Bush to the devil in an appearance last year at the United Nations. But despite all the rhetorical flourishes, the two countries are bound at the hip. Venezuela remains the U.S.'s fourth largest oil supplier and the U.S. is by far Venezuela's most important trading partner. Neither seems ready to cut that economic tie. Washington has tried of late to avoid being drawn into the fray. Yesterday, there was no official reaction by U.S. government officials to Mr. Ch�vez's announcement. Mr. Ch�vez offered no details of how the nationalization would proceed or whether shareholders in the private companies would receive market value for their stakes. As one of the world's top 10 oil-producing nations and founding member of the Organization of Petroleum Exporting Countries, Venezuela is flush with cash from high oil prices and could easily pay compensation. In a statement, Verizon said it wasn't aware of the details of the government's plan and couldn't issue a comment. It had agreed to a 60-day extension -- through Feb. 28 -- of its agreement to sell its 28.5% stake in CANTV to Mexico's America M�vil, the mobile-phone company controlled by billionaire Carlos Slim, for $676.6 million. On the New York Stock Exchange, CANTV shares fell 14% to $16.84 before trading was halted shortly after 3 p.m. Eastern time. People familiar with the matter said Verizon had known since August that Mr. Ch�vez was considering nationalizing the company. They said the company was hopeful it might still reach an agreement with the fiery leader allowing the sale to proceed. A spokesman for Mr. Slim had no comment. AES spokesman Robin Pence said the company had no comment. Mr. Ch�vez also is consolidating power in the political arena. Soon after the recent election, he unveiled plans to join his coalition of some 20 center and leftist parties into a single party controlled by him called the United Venezuelan Socialist Party -- a move some analysts say leads the country down the road to a single-party state. Yesterday, he said he would ask Congress for special powers to pass bills by decree. In recent years, Mr. Ch�vez has rewritten the constitution and stacked the Supreme Court with loyalists. Venezuela's Congress, entirely made up of supporters to Mr. Ch�vez after the opposition didn't field candidates, plans to amend the constitution again to allow him indefinite re-election. In addition, Mr. Ch�vez is going after one of the few institutions he doesn't control -- the media. He recently said he would yank the broadcast license of one of the country's oldest TV broadcasters and most outspoken critics of his policies, RCTV. Yesterday, Mr. Ch�vez repeatedly called the secretary-general of the Organization of American States, Jos� Miguel Insulza, an "idiot" for condemning the Venezuelan's decision not to renew the channel's license. Since the price of oil began to rise a few years ago, many countries from Russia to Nigeria have reclaimed a bigger share of their energy industries to cash in. But Venezuela appears to be going further. Daniel Yergin, chairman of Cambridge Energy Research Associates, a U.S. oil-industry consulting firm, says Mr. Ch�vez's move represents "a return to another era: the 1970s," when it was commonplace for developing nations to own utilities and energy companies and manage them inefficiently. Venezuelans had mixed reactions to the news. Nieves de Marquez, 53 years old, a hotel receptionist, applauded Mr. Ch�vez's move. "I've always criticized CANTV's high pricing. They also fired a lot of people when they privatized the company and some never got their severance." But others remembered the days when the government managed the phone company. Phone lines were hard to come by, and service was lousy -- it sometimes took less time to drive across town to talk to an acquaintance than to get a dial tone. Analysts worry that Mr. Ch�vez isn't finished and will use his latest inauguration tomorrow to announce new measures, including increasing the government's role over private education. Last week, he tapped his brother Ad�n, the former Venezuelan envoy to Havana, as education minister. In Caracas, Jos� Barcia, an economist for Metroeconomica consulting firm, said he expects Mr. Ch�vez to make moves against other industries as well as private property such as commercial farms. Mr. Ch�vez's antimarket politics have spawned some imitators, whom he has supported rhetorically and often with loans and subsidies. In Ecuador, newly elected President Rafael Correa also wants a new constitution and a big hike in the government's take from Ecuador's oil industry. In Nicaragua, where former Sandinista leader and Ch�vez ally Daniel Ortega is slated to assume the presidency this week, Venezuela's ambassador said Mr. Ch�vez planned to announce a big aid agreement on Thursday which could eventually make the impoverished central American country the most important recipient of Venezuelan aid, outstripping Bolivia and Cuba. But Venezuela's oil riches may make it a special case when it comes to buying out big companies. In Bolivia, President Evo Morales began to nationalize the country's natural-gas industry, but he has struggled to carry out his plan because his impoverished country lacks money and expertise. Meanwhile, more moderate leftist politicians such as Brazil's Luiz In�cio Lula da Silva and Chile's Michelle Bachelet have ignored Mr. Ch�vez' attempt to turn back the clock on the free market. During his speech, Mr. Ch�vez also suggested he would further expand the state's role in the oil industry, taking a harder line with major oil firms that operate in the country's Orinoco region, where companies upgrade tarlike oil deposits into lighter grades of crude. Those include BP PLC, Exxon Mobil Corp., Chevron Corp., ConocoPhillips, and Total SA and Statoil ASA. Until now Venezuelan oil officials have said that companies operating in the Orinoco region would have to give the state at least a 51% stake in upstream oil operations, but would allow its foreign partners to maintain control of multibillion-dollar upgraders that convert the tar oil. Yesterday, Mr. Ch�vez said the upgrading side of the business must also pass on to the state. "International companies have the control and domination of the process of upgrading heavy crudes from the Orinoco. That should become property of the Venezuelan state," he said. But so far, Mr. Ch�vez's power grabs have weakened the Venezuelan oil industry, once the pride of this nation. He ended a tradition of allowing state-run oil company Petr�leos de Venezuela SA to run itself like a professional company rather than a source of government patronage and sinecures. Mr. Ch�vez has used the firm to fund numerous social programs that have left the company short on investment. As a result, oil output has fallen sharply, leaving the country vulnerable to a downturn in prices. Mr. Ch�vez's free spending may ultimately undermine his expansion plans. Some analysts say that if the price of oil drops well below $50 a barrel, Venezuela could have a harder time paying its domestic and international commitments. Already, the country's policies last year generated 17% inflation. Venezuela's move is unlikely to rattle investors in other developing countries, say market watchers. "Luckily Ch�vez is one of a kind," says Don Hanna, head of emerging-market economic analysis at Citigroup in New York. Mr. Hanna says he doesn't think Venezuela's nationalization moves have any ramifications for the larger markets in the region such as Brazil and Mexico. Fund managers say that there could be some impact on countries viewed as aligned with Mr. Ch�vez's economic philosophy, such as Bolivia and, to a lesser degree, Ecuador. Venezuela's nationalizations could push businesspeople or multinationals to reconsider their investments in those countries, says Carlos Asilis, a portfolio manager at Vega Plus Capital Partners in Miami. |
Star-Traveller do you support Chavez's efforts to hurt his
domestic opposition and their criticism of his policies?
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| Originally posted by Shakka For the record, I am not pro-nationalization of anything. But in the context of this discussion and how natural resources vs. private infrastructure are different, there is a difference. Natural resources have always been present and were not created by any one individual or corporation--it's hard to say who "owns" the resource, so it's much more palatable to "nationalize" and use the income for the benefit of the entire state. With infrastructure, however, somebody (several somebodies to be fair) made the investment, took the risk, raised the capital, innovated, etc and created something where there was nothing. Nationalization of that property amounts to nothing more than drive-by theft by a regime using its monopoly powers of force. It is taking something that was clearly created by someone else without compensating the innovator. It's not that dissimilar to the leftist vs. rightist debate on whether wealth is something created by the people or whether it is something owned and distributed by the state. |
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| And no, I don't think it necessarily serves a similar end. The end it serves has very much to do with the intentions of the dictator. I hardly think Chavez qualifies as an altruist, though he's doing a good job convincing the underserved, moronic masses that he has their best interests at heart. BTW, what is the end of which you speak? Stripping the individual of his rights to self-actualization? |
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| Originally posted by MisterOpus1 A bit of a sidenote - I believe Putin is doing some very similar measures to further nationalize his resources, is he not? If so, is there a similar concern for his actions? |
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| Back to the point - I'm curious as to what you think is appropriate for energy resources and regulation that has occurred over the past coupla decades in terms of privatizing our resources. While I would never advocate or support the extremist socialist position such as Chavez, I also cannot support the total privatization factor on the opposite side of the spectrum that many Rand-lovers advocate. I wish I could, but the abuse of such power especially in terms of privatizing energy resources is too well documented to ignore. It seems to be a fine line drawn on where we should decifer on a utilitarian perspective of resources to which nationalization could benefit the population better as a whole versus the privatization of those resources that may not necessarily benefit the population across the board better. |
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| One other thought I have I think is worth considering - in regards to the populations between Saudi Arabia and Venenzuela. Which part of the poverty-stricken part of that population is benefitting from the policies of the government more? Again I'm not condoning Chavez' policies of kicking out the private corps here, but I am curious as to which country has a better stance of well-being (i.e. which country has a lower poverty level) versus the other. |
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| If any of these thoughts are incoherent, I apologize. I haven't had Scotch for over a month, and it's starting to kick my ass....... |
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