After waging a successful campaign to lift term limits in February, Venezuelan President Hugo Chávez is on a rampage. He recently sent the military to take control of all the nation’s rice processing plants. According to the National Election Board, the change in the country’s Constitution was approved by 54.3 percent of the population. But despite his narrow margin of victory, Chávez plans to proceed with his imposition of socialism on the nation, and can now potentially run for president indefinitely.

Chávez, who is up for reelection in 2012, is furious at the rice industry for refusing to produce rice at prices set by the government. Chávez complained that prices were high despite increased production by government-owned rice farms because “some companies are refusing to follow the government’s rules.” According to Chávez, there is no excuse for shortages. The government farms even got new machinery. "I have ordered the immediate intervention in all those sectors of agro-industry, intervention by the revolutionary government,” he announced on national television. "This government is here to protect the people, not the bourgeoisie or the rich." He also threatened to nationalize other firms if they interfered with the supply of grain. "I will expropriate them, I have no problem with that, and I'll pay them with bonds,” he said without mentioning any specific firms. “Don't count on me paying with hard cash." Some firms could even be taken over without compensation. A decree issued last year allows Chávez to jail the owners of companies for “hoarding” food.

His threats should be taken seriously. In his weekly Hello President program after winning the referendum on term limits, Chávez emphasized the need to strengthen and consolidate the socialist gains in the 21st century. He has already taken over a large share of the private sector, ranging from Mexican cement giant Cemex and the cement industry to electricity companies and other utilities to telecommunications and even a bank. The government technically still owes billions for all the assets it seized. He uses the vast profits from the nation’s oil exports to further his agenda as well, subsidizing fuel for Venezuelans and expanding government programs. Foreign oil firms were forced into joint ventures. Aiming to control the effects of runaway inflation, he has also imposed price controls on everything from pasta and cooking oil to milk. 

“This is a process of the state absorbing different distribution and production chains that they consider strategic,” explained economist Carlos Machado Allison from the Caracas business school Instituto de Estudios Superiores de Administracion. “This will only exacerbate food inflation and drive the little private investment that’s left away.” Among the firms processing rice in Venezuela is U.S.-based Cargill, one of the largest privately owned companies in the world. Officials from the Ministry of Agriculture confirmed that Venezuelan giant Polar had already been seized and that production was being supervised by the government.

“It has become customary for the Chávez administration to launch new offensives after each election,” according to VenEconomy, a consulting firm that provides financial, political, and economic data. It seems Chávez is using his narrow “mandate” to press forward with the government takeover of the economy. "With today's victory, we start the third cycle of the Bolivarian revolution, from 2009 to 2019," Chávez explained after winning the right to run for office again. But his revolution is already showing its fruits: shortages, poverty, more government and less freedom. What Chávez really means is he will continue doing his best to give out free goodies — the source of much of his political support. But with oil prices back down after reaching record heights last year, Chávez’s coffers are no longer bursting with oil money.

Perhaps the inflation and the most recent onslaught of state force will cause Venezuelans to think twice before casting their vote for Chávez again. The results of his policies are becoming increasingly obvious as time goes on. So, it is to be hoped that the Venezuelan people will wake up before Chávez and the government entirely destroy the economy and turn it into another Cuba. Who knows what Chávez would do if he won yet another election or referendum.

Photo: AP Images 


    
 
 

TrackBack URI for this entry

Comments (3)

Subscribe to this comment's feed

Travis Schuster said:

... Dear freind

March 09, 2009

Travis Schuster said:

... Dear Mr Alex Newman I was just curious why not only Chavez in Venezuela is winning election after election and at least most of his referendoms but others are winning as well. Left of center Lula Dasilva in Brazil,election and re-elected in landslide,Morales of Bolivia,elected re-elected and parliment gains,Lugo of Paraguay elected,COrea in Eucador,Ortega in Nicaragua along with Sanidinista victories of the FSLN.Argentina and Chile have left of center leaders.Tell me tommorow will the FLMN candidnate lose, you want to bet me, I bet you the FLMN Socialist candidate wins in EL Salvador, but that goes to my question,how do you explain all these left of center leaders not only getting elected, increasing numbers in parliment, but getting re-elected in landslides?Even in Peru and Mexico the Socialist candidate barely lost.Why didn't those free market policies work????????????????????????????????We should answer that first then pick on CHavez.Travis

March 09, 2009

JFM said:

... Travis: Don't confuse the results of elections with "what works." Few people in the U.S. realize why we are a wealthy nation. People in many parts of the world will select a socialist/communist who is promising free gifts over the much more complex and hard to understand "free market." Milton Friedman used to say that the natural state of mankind is to live in tyranny and misery. Because people naturally choose the dictator who promises things. It's hard to understand how this mysterious "free market" can possibly work. But it does and the free market is the only or at least the best source of wealth ever. The reasons why people choose to abandon freedom and choose poverty and misery is a complex question worthy of thought.

March 18, 2009