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March 2007

Chavez expands nationalisation agenda

An article from Vietnam's English language newspaper 'Vietnam News' on Venezuela's programme of public ownership.

With President Hugo Chavez’s recent decision to take control of food distributors, Venezuela is further pushing its nationalisation programme.

Chavez’s government announced a decree last week giving officials the power to take control of food distributors caught hoarding or halting supply, a move aimed at easing severe shortages of meats, milk and sugar in Venezuela’s supermarkets.

The president says he will nationalise any privately-owned supermarkets and food storage facilities caught hoarding supplies or violating price controls imposed on basic goods.

"If they remain committed to violating the interests of the people, the constitution, the laws, I’m going to take the food storage units, corner stores, supermarkets and nationalise them," Chavez said.

Privately-owned supermarkets suspended sales of beef, milk and sugar in recent weeks after one chain was temporarily shut down for pricing meat above government-set levels.

Since early 2003, Chavez began regulating prices for 400 basic products as a way to counter inflation and protect the poor. Producers say that price controls have left them unable to make their businesses profitable, despite subsidies for producers and the government’s recent elimination of value added tax on basic goods.

Strategic hold

Controlling the food supply sector and taking a firmer hold of strategic economic sectors are part of an intensive programme of nationalisation that the Chavez administration has pursued.

Since being re-elected in December last year, Chavez has moved to quickly buy out private interests in leading electricity and telephone companies. The president moved closed to achieving his target when the all-Chavista National Assembly gave him authority to enact sweeping measures by decree and accelerate the country’s socialist transformation.

The government has taken over oil and gas fields, giant cattle ranches, power utilities and Venezuela’s number one telecommunications firm.

Last week, Chavez put up US$1.4 billion to take over US companies’ assets in a push to exert increasing state control over Venezuela, an OPEC nation.

Like big oil-producing Ecuador, Bolivia and Russia, Venezuela is to renegotiate deals with international corporations so that it can have tighter control over its strategic oil and gas reserves.

Venezuela has set a May 1 deadline for completion of renegotiation deals on the country’s Orinoco oil region with stakeholders such as Exxon Mobil, Chevron, Conoco Phillips, Statoil and BP corporations. Venezuelan Oil Minister Rafael Ramirez says the state will seize fields operated by foreign companies in Orinoco if the May deadline is missed.

Renegotiating contracts with foreign energy corporations is set to bring a greater share of the revenue from natural resources for Venezuela. The state-run oil firm PDVSA – Petroleos de Venezuela SA – has gained 51 per cent control over oil enterprises, with the remaining 49 per cent under the control of predominantly foreign private capital.

With superabundant petro dollars, President Chavez has in the past years steered his country towards a socialist society in which generous social and welfare spending has brought about a better life for the majority poor and working class in Venezuela. It is the votes of the majority workers and poor that ensured Chavez’s electoral victories in 1998, 2000, and most recently, a second-term re-election last December.

Marco Antonio Esteban writes in the Monthly Review magazine that Venezuela is trying its best to avoid becoming a colony or protectorate of the US. He writes that when the left takes power and is supported by the people, it must neutralise global capitalism’s bases in the country, so that global capital cannot undermine national interests with the aid of the country’s more powerful and favoured social classes.

For that, Esteban says, it is essential to take advantage of the endorsement of the majority that the government has acquired and immediately erect popular power structures, nationalise the main means of production, expropriate big monopolies and fortunes, uproot the influence of multinationals, democratise companies and the mass media, clean up the police and the secret services, create a popular army, universalise health and education at all levels, and set up a revolutionary judiciary.

Chavez seems to be taking these steps to build his country.

‘Year of engagement’

With Latin America’s politics and economy shifting further towards the left, the United States is paying more attention to consolidating its interests in the South American region. It is no accident that White House officials have dubbed 2007 the "year of engagement" with Latin America.

The White House confirms that President George W Bush is scheduled to travel to Brazil, Uruguay, Colombia, Guatemala and Mexico in the second week of March. Although American officials say Bush’s foreign tour will underscore Washington’s commitment to democratic governments in the region, analysts believe it is an effort to counter the spreading influence of Venezuela’s Chavez.

It has become conventional wisdom that the Bush administration’s fixation on Iraq and the Middle East has left Latin America largely ignored. The White House’s mission now is to "catch up and see what we can salvage", says David Fleischer, a political scientist at the University of Brasilia.

From  Vietnam News