Monthly Archives: November 2010

Nov
19
2010
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In case you missed it…Articles Roundup Week of 11/15

Not much is well in Venezuela: The economy continues its downward spiral, banks are in trouble, and alleged drug traffickers and guerrilla leaders are being harbored and/or promoted by President Chávez…oh, and the citizenry at large is facing serious food shortages. Chávez’s “21st Century Socialism” agenda is doing wonders – NOT – for the country, as seen by the latest headlines out of Caracas.

Recession continues in Venezuela; GDP tumbles 0.4 percent El Universal

Despite rising oil prices recovering by 35 percent in the last nine months, the Venezuelan economy has not emerged from recession, according to data released by the Central Bank of Venezuela (BCV). The data shows that Venezuela’s GDP shrank 0.4 percent in the third quarter of the year and throughout the first nine months of 2010, it has slumped at 2.4 percent.

Towards state socialism: A wave of nationalisation promises scarcity and decline The Economist

Owners of property, large or small, sleep uneasily in Venezuela these days. After the opposition narrowly won a majority of the vote in a legislative election in September, Hugo Chávez, the country’s leftist president, has been on a nationalisation spree, seizing everything from steel companies and bottle makers to housing schemes.

Venezuelan Congress devises a socialist financial system El Universal

The socialist production model promoted by the Venezuelan government requires a financial system which can be adapted to that plan and the National Assembly has paved the way to reach that goal and consolidate the “new financial architecture.”

Colombia: Suspected drug lord will be sent to Venezuela, not U.S. CNN

Colombian President Juan Manuel Santos said Tuesday a high-level drug-trafficking suspect wanted in the United States will be extradited instead to Venezuela, which also has asked that he be turned over to authorities in that country.

Venezuela podría detener y extraditar a Colombia a varios guerrilleros de las FARC Noticias 24

Altas fuentes de la Presidencia de la República de Colombia habrían asegurado que el presidente Hugo Chávez se comprometió con las autoridades colombianas a extraditar a un grupo de guerrilleros que se encuentran en Venezuela. Aunque no se ha confirmado el número de subversivos que enviará Chávez, trascendió que son de las filas de FARC y el ELN, según reseña el diario “El Espectador”.

Chávez backs general who is on drugs list The Wall Street Journal

President Hugo Chávez said he will on Tuesday promote to the rank of “General in Chief” a controversial top general who is on a U.S. blacklist for alleged drugs and arms trafficking.

Governo Chávez agora determina dieta dos venezuelanos AFP

O governo do presidente Hugo Chávez entrou com força na dieta dos venezuelanos, ao assumir o controle de várias empresas para conseguir a “soberania alimentar”, uma opção questionada por empresários que temem uma invasão do Estado em um campo gerido pela iniciativa privada.

Venezuela’s top food company plans major investments despite takeover threats Associated Press

Pablo Baraybar, director of Alimentos Polar, the Venezuelan corporation’s food division, gestures during an interview with the Associated Press in his office in Caracas, Venezuela, Tuesday Nov. 16, 2010. Venezuelan President Hugo Chavez threatened to “go after” Polar earlier this year, calling it a monopoly and accusing it of evading government price controls on basic foodstuffs.

‘Las sanciones tardías y torpes del Gobierno a la construcción serán el hundimiento y no la solución’ Noticias 24

En su editorial de este miércoles, Teodoro Petkoff se pregunta ¿quién responde por el fracaso de la política habitacional del gobierno?, mientras asegura que la reacción del Presidente “tardía y torpe” de sancionar a los constructores con la expropiación, significará el hundimiento de la industria inmobiliaria y no una verdadera solución al problema.

Owens-Illinois predicts lengthy legal battle with Chavez over plant takeovers Food Production Daily

O-I has forecast a long legal fight with the Venezuelan government over its decision to take over its glass packaging operations in the country, with a major issue likely to be the price the company receives for the plants.  The US-based giant told FoodProductionDaily.com the situation remains uncertain and that it had been talking to officials from the South American regime in a bid to ensure continuity of supply of glass bottles and jars into the domestic food and beverage sectors.

Chávez calls US-based Citgo refining, marketing brand ‘bad business’ PennEnergy

According to a report from Reuters, Venezuelan President Hugo Chávez has called Citgo, the Venezuela-owned, US-based refining and marketing company, “bad business.”

 
Nov
17
2010
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El Encantado Humboldt

By Francisco Toro

There’s a particular perversity to the story of El Encantado Humboldt – the large, nearly finished housing development in Caracas chavismo decided to expropriate last week. More than 1,500 apartment owners now find themselves in legal limbo and very much at risk of losing their just-purchased homes as the government deliberates on whether other families “need them more”. At a mediation session earlier this week called by the consumer protection agency Indepabis to address the dispute, only pro-expropriations community groups were allowed to participate, with the owners’ association physically barred from the event.

Once again, the government finds itself in the odd position of acting forcefully to protect people of outrages that the alleged victims do not recognize. For instance, pro-government community groups allege that the buildings were not built to code, a pretext the owners would have contested had they been included in the discussion. And chavista officials alleged that the developer acted abusively and coercively in dealing with buyers – another allegation roundly refuted by the vast majority of Encantado Humboldt buyers. In effect, the government’s claim to the mantle of defender of the downtrodden is undermined by nothing so much as the supposedly downtrodden’s actual views. What El Encantado Humboldt’s owners do know is that the measure to expropriate the development has slammed the breaks on all mortgage negotiations surrounding the development, and made it impossible to sign final ownership papers.

The expropriation of El Encantado Humboldt is perverse on a number of levels. For years, as Chávez rhetoric became increasingly radicalized, the government tried to assuage middle class fears saying they were only interested in Big Capital – pointing at the commanding heights of the economy (as though the oil industry hadn’t already been nationalized for a generation when they took over.)

Concerns that a process that starts out targeting big capital can very easily degenerate into a generalized assault on all private property were routinely dismissed as fear-mongering or denounced as “part of an orchestrated campaign to discredit the revolutionary government.” Only reactionary cranks could believe Chávez would want to take your apartment, right?

Turns out in revolutionary times, yesterday’s shrill paranoid fears have a way of turning into tomorrow’s headline with unsettling frequency. While the ownership structure in the housing development is not entirely clear, what this sordid little episode makes clear is that the government does very much intend to extend its reach into the housing sector. Within a year or two, it’s easy to see this kind of thing becoming routine, just the way things are now. And the one-time reassurance about how the government would never ever in a zillion years consider this sort of thing? Bien gracias.

What’s most alarming about this case, though, is the way it showcases, yet again, the government’s tin-ear for the role of incentives in policy-making.

It’s easy enough to see the chilling effect this kind of measure is likely to have on investment in the construction sector: with this precedent in the books, who’s going to want to risk (or lend) a substantial sum for private housing construction? Nobody, obviously.

The government doesn’t seem to grasp that Pottery Barn rules apply: You Break It, You Own It. Having sapped private enterprise of the confidence it takes to invest in the housing sector, the only entity left to step into the breach is the government. But, for the Nth time, the government’s plan seems to be to undermine a private solution to a problem without accepting any responsibility for adopting a public one in its place.

 
Nov
17
2010
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Chávez dice que no habrá compensación para los desarrolladores de apartamentos expropiados, asciende a controvertido general

Durante su programa semanal “Aló Presidente”, el presidente venezolano, Hugo Chávez, declaró que las recientes expropiaciones de viviendas son “especiales” y que los dueños no serán compensados.

Según un informe de Ecoanalítica publicado en mayo, el costo de las nacionalizaciones realizadas por el presidente Chávez desde el 2006 alcanza los $23,300 millones. El informe estima que de dicha suma, el gobierno venezolano sólo ha pagado $14,650 millones, lo que equivale a un 38% de dicha deuda.

En otro frente, el Presidente Chávez también anunció en su programa dominical que elevaría al cargo de “General en Jefe” al General Henry Rangel Silva, cuyo nombre aparece en una lista del gobierno de EE.UU. de presuntos narcotraficantes. El anuncio se produce días después que Rangel Silva dijera públicamente que no aceptaría una victoria de la oposición en 2012.