Expropriation

all the facts and news in Venezuela on Expropriation and how it influences all decisions made by Hugo Chavez as president implications for Expropriation of the Venezuelan people

Sep
4
2013
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ICYMI: Blackouts Hit Nearly Half of Venezuela

Wall Street Journal
September 3, 2013
By Kejal Vyas

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Courtesy of: AFP

CARACAS—A failure in a transmission line cut power across much of Venezuela on Tuesday, leading the government to blame unidentified saboteurs for the widespread disruption.

Electricity outages struck parts of at least 11 of Venezuela’s 23 states in the early afternoon, mostly in the central and western regions, as well as the capital city, Electricity Development Vice Minister Franco Silva said in comments carried on state television.

Information Minister Delcy Rodríguez said in an address about five hours after the initial outage that power had been restored to several states, adding electricity was in the process of coming back online in the oil-rich western states of Zulia and Táchira, and the greater Caracas area.

A shaky power grid remains a thorn in the side of energy-rich Venezuela, leading critics of the current government to point the finger at mismanagement at state-run utility companies. Authorities have periodically turned to power rationing and levied additional surcharges and penalties on heavy electricity users.

Ms. Rodríguez said “complete restoration of this important service will be done in a progressive manner” without specifying how long it would take.

Messages posted on the Twitter account of President Nicolás Maduro said that the power grid was attacked by unnamed enemies of the government.

“It’s evident that behind [the blackout] is the hand of those that want to weaken our country,” said one post. Mr. Maduro didn’t offer evidence to back up his allegations. Calls seeking further comment from officials weren’t immediately returned.

While the government’s detractors accuse authorities of misappropriating investments into the country’s electricity network and falling behind growing consumer demand, the late leader Hugo Chávez often blamed conspirators against his self-styled socialist “Bolivarian revolution.” Mr. Chávez died in March following a nearly two year battle with cancer. Mr. Chávez nationalized much of the electricity sector in 2007.

In recent weeks, his successor Mr. Maduro has disclosed details of various other alleged plots against Venezuela, including several alleged assassination attempts against his life supposedly masterminded by agents of the U.S. and Colombian governments. Critics accuse him of fabricating plots in a bid to boost support.

Venezuela opposition leader Henrique Capriles, who lost April elections to replace Mr. Chávez, said the power failure underscored mismanagement at state companies. “The blackout today demonstrates one more time the terrible incapacity of this government,” Mr. Capriles said in a post on his official Twitter account. “Now they’ll come up with another story to try to cover up the failure.”

In Caracas, the blackouts briefly hit some key government buildings, including the Energy Ministry, which is also the headquarters of state oil company Petróleos de Venezuela, or PdVSA.

In a statement, Oil Minister Rafael Ramírez said refining and production operations in Venezuela’s vital oil industry were unaffected.

The sprawling capital city was furthered tangled by knotted traffic, disrupted subway service and severed water supplies, as several treatment plants went down, authorities said. Power shortfalls and outages are more common in the interior of the country of 29 million residents, while more rarely reaching Caracas.

Between 2009 and 2010, a drought cut production at Venezuela’s hydroelectric facilities that accounted for some 70% of the country’s power. The country has since had to divert more of its crude oil production and imports gas from Colombia to fulfill its own domestic power needs.

To read this article at The Wall Street Journal, please click here.

 
May
13
2013
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With the Economy in Dire Straits, Maduro Scapegoats a Beloved Venezuelan Company

pan0.jpg.520.360.thumb e1368469039817 With the Economy in Dire Straits, Maduro Scapegoats a Beloved Venezuelan Company

Courtesy of: El Universal

Nicolás Maduro and his socialist government cannot claim that they were not warned. Economists have long predicted that a Venezuelan economy propped up by excessive borrowing and an unsustainably high oil market would collapse spectacularly. Hugo Chávez, his cancer kept at bay just long enough to secure reelection, spent enough borrowed money in his final months to postpone the crash until Maduro had taken control. But the reckoning was inevitable. Now Maduro, eager for a scapegoat, is intensifying his attacks on the private sector, taking aim at Venezuelans’ most beloved company: Empresas Polar.

Polar is a pillar of the Venezuelan economy, producing staple goods from cornflour to household supplies and the nation’s most popular beer. Maduro issued his latest threat against the company on Saturday, when he accused the company of economic “sabotage” and demanded company President Lorenzo Mendoza to appear before the government to “explain the situation.” It was the latest in a series of escalating rhetoric against Polar, and a disturbing sign that Maduro refuses to learn the lessons inflicted on Venezuelans by years of failed socialist policies. Mendoza is scheduled meet with Vice-president Jorge Arreaza on Monday and with Maduro on Tuesday.

In a press conference held on Monday before the scheduled meetings, Mendoza addressed Maduro’s statements. He noted that Polar’s cornflour brand, PAN, operates at 100 percent capacity, but has only a 48 percent stake in the Venezuelan market, making it impossible to meet the country’s full demand. Thus far this year, Polar has produced 10 percent – 15,000 tons – more than last year. The remaining 52 percent of the market is comprised primarily of government-owned businesses, which are producing at less than 40 percent of their capacity. In response to Maduro’s accusation of “hoarding,” Mendoza stressed that Polar simply cannot hoard products to begin with since every step of the production and distribution process is regulated by government overseers.

As economists have noted, the shortages and inflation Maduro blames on the private sector are in fact caused by the government’s own policies. Rampant expropriations, price controls and other heavy-handed policies have harmed business and left farmland idle, sapping more than 11 percent from the country’s gross domestic product between 2005 and 2010.

Inflation is soaring, the nation’s debt continues to mount, and a currency devaluation has crippled Venezuelan’s purchasing power. As What’s Next contributor Joel Hirst observed, the economic crisis has left Maduro in the “awkward position of blaming Venezuela’s hobbled private sector for the failure of his own socialist policies.” The Central Bank’s scarcity index for Venezuela, which measures the percentage of goods unavailable in the market, rose to its highest number since it began tracking in April, 2009.

The facts, of course, could not be clearer. The company persevered under the yoke of Chávez’s policies, and continues to provide the goods Venezuelans need even as government controls force Polar and other companies to operate at a loss. These private companies are Venezuela’s best hope for brighter economic days; Maduro, in a desperate bid to save his own political skin, has chosen to marginalize them even further. It is ordinary Venezuelans, however, who will suffer the consequences.

 
Apr
10
2013
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ICYMI: Draft Law in Venezuela Is the Private Sector’s Death Knell

Joel Hirst is a democracy activist and a Principal at Cordoba Group International. He is a regular What’s Next Venezuela contributor.

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Courtesy of: The New York Times

The Huffington Post
April 8, 2013
By Joel Hirst

On April 4, acting Venezuelan President Nicolas Maduro announced he had uncovered a “conspiracy” to destabilize the government in order to lend support to his opponent in the upcoming elections, Miranda Governor Henrique Capriles Radonski.

Maduro told supporters the plot was undertaken by Empresas Polar, a global food and beverage manufacturer and processor that happens to be one of the largest and best known brands in Venezuela. Maduro alleged that Polar has plotted to create a situation of “unrest, shortages, hoarding and speculation.”

He ended his comments with an overt threat, telling Polar that “everything in life has its time.”

For Venezuelans, this is just a typical day of anti-capitalist bombast from a leader working hard to channel recently deceased President Chávez. But a new legislative proposal quickly moving through that country’s National Assembly gives new force to that country’s ‘socialist’ government’s war on the private sector.

Venezuela’s proposed Law Against Monopolies and Other Similar Practices grants the government the broad discretion and unchecked power to single out and nationalize the few remaining large companies in the country — a sanction for what the Venezuelan government calls anti-competitive behavior. Assembly leaders have announced the law will move through the assembly with “parliamentary urgency.” A procedural vote was already held and the common committee review will be expedited.

While the world remains fixated on President Hugo Chávez’s recent death, and the upcoming presidential election to chose his successor, this so-called monopoly law continues to progress slowly through the Assembly. Passage would legitimize the government’s extensive and arbitrary power over the Venezuelan private sector.

The bill departs from internationally accepted terms for anti-competitive behavior focused on market share, instead calling for a vague definition of an entity’s “economic space,” an amorphous term whose meaning the government will then define according to their own agenda. If passed, Chávez’s successor will be granted unprecedented power over the private sector — even more than was wielded by President Chavez and his arbitrary nationalizations.

The proposed law creates a new commission, the National Superintendent Against Monopolies and Similar Practices (SUNAM), to be chaired by a presidential appointee. SUNAM would have the power to confiscate resources and materials at will. Moreover, it states that any company in violation of the new law can be expropriated. Because the SUNAM would lack oversight, this law would subject so-called “illegal” businesses to an arbitrary state takeover with no chance for appeal or independent review. Any attempt to challenge expropriations would die inside Venezuela’s judiciary, which is completely controlled by the executive.

Though the bill has progressed largely under the radar, experts and the political opposition have taken notice and are denouncing the law. Vestalia Sampedro, a Deputy in the Venezuelan National Assembly,states that the law will only further extend the government’s control over the economy, extending the socialism that has not worked. Jorge Botti, the President of the Venezuelan Federation of Chambers of Commerce notes that the bill’s broad language means that even small businesses who succeeded by developing quality products and successful marketing strategies may not escape the government’s reach.

And all the while, the Venezuelan economy continues to worsen. The number of private companies in Venezuela has already declined by 36 percent from 1998. Price controls and the recent currency devaluation have worsened already-high unemployment, crippled Venezuelans’ purchasing power and exacerbated the shortages that now plague the country. Venezuelans already struggle to find basic necessities like chicken and corn. These economic policies have crippled vital industries like medical care as well. As of January, pharmaceutical shortages stood at 40 percent — a number which will only rise if the government acts on proposals to enforce price controls on medications as well. And with legislation like this monopoly law in the pipeline, few private investors would even consider bringing their capital to Venezuela.

While expropriations in Venezuela have become so common that they rarely even make news, in point of fact they are still illegal and unconstitutional. With the passage of this legislation, while remaining unconstitutional they would become ‘legal’ (a paradox that only those who follow Venezuela closely understand). Should acting President Maduro win, this would leave the country’s private sector in danger of extinction. Venezuela’s companies are already needlessly harassed and intimidated by the government, and the country’s economy has suffered as a result. This law, which the Assembly hopes to pass while the world looks the other way, would make matters far worse.

To read this article at the Huffington Post, please click here.