Tag Archives: Economy

Oct
6
2010
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Chavez orders shakeup at Caracas airport

This article was originally posted Reuters Africa

Venezuela’s Hugo Chavez ordered on Tuesday the “intervention” of Caracas’ international airport to make it a profit-making business for his socialist government.

The term usual refers in Venezuela to the state takeover of a privately-run business, but in this case Chavez appeared to be referring purely to a change in management as the airport is already run by a body under the Ministry of Transport.

“It’s a big airport, how come it does not make a profit?” Chavez said of the Maiquetia airport, which lies on the coast just outside the Venezuelan capital Caracas.

“Cuba’s Jose Marti airport gives the Cuban government $100 million each year for its operations, planes coming and going. But Maiquetia gives no profits,” he added in a TV address.

“I’ve told the new (transport) minister to intervene the Maiquetia international airport.”

Chavez gave no more details of the problems at the airport that he wanted to root out, but said the measure was necessary to maximize income for the Venezuelan state.

“We need to take control of those airports because we need to look after the economy. We can’t keep depending on oil.”

Chavez has promised to “accelerate” and “radicalize” his socialist reforms despite a parliamentary election last week that weakened his grip on the National Assembly and gave the opposition nearly half of all the votes cast.

Earlier on Tuesday, his government decreed the expropriation of land belonging to the Spanish-Venezuelan agricultural company Agroislena as announced by Chavez at the weekend.

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Sep
14
2010
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VenEconomy: The Second Delivery

This article was originally posted by The Latin American Herald Tribune

National sovereignty is one of Hugo Chávez’s favorite subjects in his constant diatribes. It has served as a pretext for passing draconian laws, persecuting, and even sending to prison any political adversary he takes a fancy to.

Ironically, because of this revolutionary fixation, the Chávez administration is the one that has most undermined Venezuela’s sovereignty; in the first place by handing over sensitive areas such as the country’s security and defense, the identification of its citizens and the registration of their property, health, and education to the Castros’ communist Cuba.

And even more ironically, the havoc caused by its bad public policies, in particularly as regards the economy, has pushed the loss of sovereignty to critical levels. Just like the drug addict who sells his soul to pay for his addiction, the Chávez administration is mortgaging the country to obtain the funding it needs to sustain its regime.

But Chávez has come across a stumbling block on this path, as the traditional international markets are becoming increasingly reluctant to lend Venezuela money, and if they do it will be in smaller amounts and at high rates of interest. One example is the Bono Global Amortizable 2022, which reached the market with a yield of 16% at maturity, in other words a junk bond that will be an obstacle for future borrowings.

But there is always profit for those willing to fish in troubled waters, and in this case the winner is the communist People’s Republic of China, which is now coming to the “rescue” of the Bolivarian revolution, at a high price, of course.

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Sep
13
2010
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Chávez cozies up to private sector ahead of key vote

This article was originally posted by The Financial Times

Never mind the fact that just a few months ago Hugo Chávez declared “war” on the business community. The compensation agreement with Holcim announced today, following a similar deal reached with Casino recently, suggests that Venezuela’s socialist leader is making an effort to show that he does care about the private sector after all.

If so, the reason is clear enough: there are crucial legislative elections later this month, and it looks like the result will be close – so every vote counts. And Chávez knows that many Venezuelans hold their right to private property dearly.

Indeed, the latest survey by local pollster Hinterlaces shows that 64 per cent of Venezuelans disapprove of the way the government runs the economy, largely characterised by nationalisations and intervention in the private sector (in fact, private business is the sector in the country with the third-highest approval rating, after universities and the church, according to the poll).

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