Monthly Archives: November 2010

Nov
10
2010
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In case you missed it… Articles Roundup Week of 11/8/10

From the latest expropriations to reports of a failing economy rampant with inflation, here’s a roundup of Venezuela in the news:

 

 

In Venezuela, a New Wave of Foreigners, New York Times

On this booming continent, oil-rich Venezuela is the exception: South America’s only shrinking economy this year. Officials are rationing hard currency. Government takeovers of private businesses are increasing. One prominent financial analyst recently had just two words of advice for investors here: “Run away.”

 

Venezuela growth hit by state seizures, UPI

Venezuela, the only Latin American nation still in recession in the last quarter of 2010, risks fresh blows to its growth prospects in 2011 after a spate of new nationalizations hitting key resource industries.

 

Venezuela’s Chavez targets freedom of press: watchdog, AFP

Venezuelan President Hugo Chavez tries to control ideas and restrict news with techniques that recall Cold War-era eastern Europe or Cuba, the Inter-American Press Association said Sunday.

 

Venezuelan Government Nationalizes Transport and Textile Firms, Venezuela Analysis

Over the weekend, Venezuelan Vice President Elias Jaua announced the nationalization of one transportation company and one textile company. Meanwhile, workers at TAUROGAS occupied the gas company’s central distribution center on Saturday and demanded its immediate nationalization.

Otra vez contra Polar, EL UNIVERSAL

Haber perdido las elecciones de septiembre ha exacerbado el mal humor de Miraflores, y para quien guarda tanto odio en su corazón esta es una oportunidad que no va a despreciar. No se buscará Chávez alguien pequeño a quien jorobar. Una vez más tiene en la mira a las Empresas Polar.

Aumentan los precios del café, arroz y harina de maíz, Noticias 24

Según un reporte de Unión Radio, la harina de maíz precocida deberá venderse en 3,37 bolívares, el precio para los diferentes tipos de arroz quedó entre 3,94 y 4,46 bolívares, y el café verde tendrá un tope de 747,00 “pagado al productor”. El ajuste salió publicado en gaceta.

Venezuela: a different kind of food crisis, Financial Times

Many people worry that a global food shortage will soon be upon us. It comes down to a basic mismatch between supply and demand: farmers may simply not be able to supply enough food to satisfy rapidly rising global demand.

Pollster: Venezuelan government weighs adoption of orthodox Marxist model, EL UNIVERSAL

Luis Vicente León, the director of polling firm Datanálisis, thinks that the Venezuelan Executive Office is trying to make a “display of force. ”The economic analyst reported that 70 percent of the population rejects expropriations (Photo: V. Alcázares). In the post-election political scenario, the new balance of power has led President Hugo Chávez to set a strategy based on the display of force to strengthen the public’s perception of Chávez’s invincibility.

Oficializan adquisición de varias empresas del sector lácteo, EL UNIVERSAL

Los bienes a los cuales se les aplicará la medida son: Transporte Aser, M.G. Transporte, Transporte RJ, Mundo Servicios 2009 y Transporte Machico, para la ejecución de la obra “aseguramiento de a capacidad de transporte y distribución de productos lácteos para el pueblo”. ( The acquisition of several companies in the dairy industry has been made official. Companies: Transporte Aser, M.G. Transporte, Transporte RJ, Mundo Servicios 2009 and Transporte Machico)

 
Nov
9
2010
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Venezuela: A Different Kind of Food Crisis

Financial Times

November 9, 2010

Many people worry that a global food shortage will soon be upon us. It comes down to a basic mismatch between supply and demand: farmers may simply not be able to supply enough food to satisfy rapidly rising global demand.

In Venezuela, where food shortages have been a sporadic problem for a few years now, it’s a bit more complicated than that. That is, this fertile country with vast tracts of land lying unused is perfectly capable of producing more. There are a number of reasons why it doesn’t. One of the more important ones is the government’s insistence on maintaining strict price controls on a number of basic foodstuffs.

Occasionally the government agrees to raise price caps, as it did on Monday. The problem is that it does this so infrequently and clumsily that even though the regulated prices of corn flour and rice were lifted by 24 per cent and 22 per cent respectively, producers still complained that they are being forced to sell their produce at a loss.

Prices for corn flour, for example, have been fixed for the last 14 months, but accumulated inflation from January to October this year has reached 23 per cent, according to figures released on Tuesday (that compares to 20.7 per cent during the same period last year).

The result of such policies? Some producers are forced out of business, others sell on the black market, still others just export their produce at a higher price, while probably most just assume the loss and bump up the prices of other products to make up for it (thus leaving them less to invest in boosting future production). One way or another, all of these consequences aggravate shortages or inflation.

Apart from importing food to make up for the resulting lack (the majority of food consumed by Venezuelans is imported), often the government ends up expropriating businesses that it finds to have been “hoarding” or “speculating” – but the government’s track record at running nationalised businesses is patchy at best. Its penchant for intervening in businesses has the added effect of scaring companies away from making new investments lest they should be taken over too.

Venezuela’s President Hugo Chávez likes to talk about “food sovereignty”, and often assures Venezuelans that their country will one day become self-sufficient, and even a net exporter of food. True, it could, but it’s doubtful he’s going the right way about it.

 
Nov
4
2010
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Venezuela Among Worst Countries in the World for Business

November 4

President Hugo Chávez’s expropriation binges of domestic and international companies alike are among the factors destroying Venezuela’s reputation as a place to do business, according to a study from the World Bank.

The 2011 Doing Business Report ranks Venezuela 172nd out of 183 countries sampled in terms of places to do business, behind Iraq (#166) and Afghanistan (#167). It also represents a two-spot drop from last year’s rankings.

The World Bank’s ranking puts Venezuela last among all North and South American countries. Factoring into Venezuela’s standing were its poor record on granting credit (#176) and protecting investors (#179).

The World Bank has been routinely critical of President Chávez’s economic policies, having predicted a 2% GDP drop in 2011 while all but two other Latin American countries were forecasted to see economic growth.