http://www.economist.com/world/americas/displaystory.cfm?story_id=13278245
HARD on the heels of winning a referendum to abolish term limits last month, Hugo Chávez, Venezuela’s president, is trying to fend off economic worries by taking on the private sector, especially companies in the politically sensitive food and farming industries.
First to feel the impact were rice processors. A rice plant belonging to Cargill, an American company, was seized for allegedly violating the “food security” law. Two plants owned by Empresas Polar, Venezuela’s largest private conglomerate, were taken over “temporarily” to enforce production of price-controlled rice. Like other companies, Polar argues that controls force it to sell at a loss. It has been selling flavoured varieties of rice, hitherto unregulated. Mr Chávez rejects this argument, and threatened to expropriate all Polar’s businesses (which include brewing) and to pay compensation in bonds rather than cash.
Rice is a staple for Venezuelans, but it has recently been scarce. The government claims there is no shortage. But rice producers say output has fallen because there is no incentive to invest in either factories or farms. They point out that the government itself supplies around half the market, and complain that its imports are undermining their businesses.
The government has also taken over two other factories, one making pasta and the other a tuna-canner. Other factories producing staple foods are being inspected, and ordered to concentrate on making price-controlled goods. Owners fear that will force them into bankruptcy. Several farms have been taken over by troops and civilian supporters of the government. Elías Jaua, the agriculture minister, says the government seeks “hegemony” in food and farming. “Against the logic of capitalism”, declared Mr Chávez, “let us construct a new logic, that of socialism.”
The government’s finances have been weakened by the collapse in the price of oil, which last year provided over 90% of Venezuela’s export earnings. It is haunted by the events of 20 years ago, after oil prices had again fallen, in which food shortages and bungled austerity measures prompted riots and looting, and hundreds of people were killed by troops. Mr Chávez claims these events as the starting-point of his “revolution”.
Originally posted by generalissimoChavez will always have someone to blame other than his policies.
http://www.economist.com/world/americas/displaystory.cfm?story_id=13278245
HARD on the heels of winning a referendum to abolish term limits last month, Hugo Chávez, Venezuela’s president, is trying to fend off economic worries by taking on the private sector, especially companies in the politically sensitive food and farming industries.
Firs ...[text shortened]... were killed by troops. Mr Chávez claims these events as the starting-point of his “revolution”.
And there will always be plenty who'll believe him.
Chavez is doing a lot of the price control stuff that was all the rage in the US back in the 70s -- but we found that price controls lead mainly to shortages and long lines (no one really wants to remember those gas lines) -- and at the end of the day, it just made the original situation worse.
While Chavez is mostly a power-mad blowhard, I think the guy really does believe that these price controls can or should work -- and that any failure can be attributed to "evil imperialists" or something like that. I think he really does want to be some sort of economic saviour for the lower classes -- but all he has are simple kindergarten "answers" to complex problems.
Originally posted by generalissimoYou read the economist??! No wonder you're like this then!
http://www.economist.com/world/americas/displaystory.cfm?story_id=13278245
HARD on the heels of winning a referendum to abolish term limits last month, Hugo Chávez, Venezuela’s president, is trying to fend off economic worries by taking on the private sector, especially companies in the politically sensitive food and farming industries.
Firs ...[text shortened]... were killed by troops. Mr Chávez claims these events as the starting-point of his “revolution”.