Chávez’s War on Private Property Destroys Venezuelan Mining Sector
April 26, 2010
A new survey from the Fraser Institute, a Canadian think tank, gives the Venezuelan government an abysmal rating regarding its handling of the mining industry and appeal to foreign investors.
The annual Survey of Mining Companies takes the opinions of mining and exploration companies and translates them into hard data to assess how governments’ public policies affect their respective mining industries.
The survey ranks Venezuela dead last of the 72 countries measured, outpacing developing states such as the Democratic Republic of Congo and Honduras. Venezuela’s public policy potential measured 6.9 out of 100. Ecuador was second worse, clocking in at 10.5.
President Hugo Chávez’s fervently anti-private property policies appear to have heavily influenced Venezuela’s standing within the international mining community. One respondent of the survey noted that, “in Venezuela, if you actually succeed in making progress with a project, Hugo Chávez will simply nationalize it.”
The statistics reflect that there simply is little incentive for mining businesses to invest in Venezuela. The South American country led by Chávez finished dead last or second-to-last among 72 countries in the following individual categories:
- Uncertainty concerning the administration, interpretation, and enforcement of existing regulations
- Regulatory duplication and inconsistencies
- Taxation regime
- Political stability
- Labor regulations
- Security (due to threat of attack by terrorists, guerilla groups, etc.)
A copy of the survey can be found here.