Venezuela Chavez nationalizes iron companies

[cali]

Source: Reuters


Fri May 22, 2009 12:16am EDT CARACAS, May 21 (Reuters) - President Hugo Chavez on Thursday ordered the nationalization of iron companies that include Japanese capital, part of a drive to build a socialist state in the OPEC nation.

Chavez, who has already nationalized many of Venezuela's largest industries, named iron briquette makers with Japanese investors among the companies to pass into state hands.

"Nationalize the iron briquette sector, there is nothing to discuss," Chavez said to euphoric union members during a televised speech in which he also announced a wage rise for thousands of workers and a cut in management salaries.

Iron companies Comsigua, Orinoco Iron, Matesi are affected by the announcement along with the local unit of transnational Tenaris (TENA.BA)(TS.N)(TENR.MI) steel pipes for the oil industry.

<snip>



Read more: http://www.reuters.com/article/bondsNews/idUSSP47538420090522

[aquart]

1. He's having a high old time, isn't he?

[The Croquist]

2. Is there else left to nationalize?

I mean, it's only May. What is he going to do for the rest of the year?

[proteus_lives]

11. Oh, there's plenty left.

Children's bicycles, pens, spare tires, that Chinese restaurant that Hugo really likes. Every single woman's phone number and negative comments about the government.

Challenge Hugo to Venezuela's hottest new game show, Nationalize It! Hosted by Regis.

[Igel]

13. Land.

Then you can force everybody who owned it--"wrongly," of course--to do as you will. Not only does government decide what food is made, but what is grown and who grows it.

I'm not sure he'll go that far. It's been shown to be a disaster so many times it would be surprising if he did it. On the other hand, it's Chavez, so the one or two examples where it wasn't an unmitigated disaster will be taken as the rule. I must temper my optimism.

[SKKY]

30. "I'm not sure he'll go that far." I think he'll go that far, and farther...

...has he shown any restraint in his nationalization binge? I can't find it in me to give him the benefit of the doubt, with what he's done so far.

[Judi Lynn]

3. Iron and steel were both nationalized by Venezuela in 1975 and 1976.

Heard about that small detail long ago. Here's a quick reference:

~snip~
Nationalization Measures

Toward the end of the decade, the political life of the nation gained some tranquillity. In December 1968, Rafael Caldera Rodríguez, leader of COPEI, won a narrow election victory over Leoni. Caldera was inaugurated in March 1969; it was the first time in the 140-year history of Venezuela that the ruling party had peacefully handed over power to the opposition. Despite his narrow support, Caldera governed effectively and virtually eliminated the guerrilla and terrorist activities of the late 1960s. Economically, he pursued a policy of nationalizing foreign enterprises. In 1973 Venezuela joined the increasingly effective Andean Common Market.

Political activity was brisk in 1973 as the presidential elections neared. In May the congress ratified a constitutional amendment barring the candidacy of former President Pérez Jiménez. In the December elections, the winner was Carlos Andrés Pérez, the leader of the AD. He attempted to improve relations with Venezuela's neighbors but took an increasingly independent line from the United States. He expressed open hostility to the military dictatorship in Chile and resumed diplomatic relations with Cuba. Pérez nationalized the iron and steel industry in 1975 and the oil industry in 1976.

http://www.internationaleducationmedia.com/venezuela/

~~~~~~~~~

The 1973 presidential election was won by Carlos Andrés Pérez Rodríguez of the Democratic Action party. That same year Venezuela joined the Andean Group (later the Andean Community), an economic association of Latin American nations. In 1976, Venezuela nationalized its foreign-owned oil and iron companies.

http://www.answers.com/topic/venezuela

~~~~~~~~~

~snip~
By the mid-1970s, the nation's enormous oil wealth allowed the government to provide significant aid to industry, especially in the form of subsidized credit. Public-sector participation in industry expanded considerably with the nationalization of iron and steel in 1975 and petroleum in 1976. But after the country had exhausted its reserves from the two oil booms of the 1970s, it was forced to reexamine its industrial policies. Although Venezuela's level of industrialization was impressive by Latin American standards, industry was generally inefficient and productivity low. In 1990 Venezuelan industry faced the difficult task of moving beyond local markets and trying to compete in the international market.

By the end of the 1980s, the structure of manufacturing continued to be dominated by thousands of small firms in the private sector and a few hundred large, mainly public-sector, enterprises. In 1988 large firms employed 64 percent of the sector's workforce and supplied 78 percent of its output. Most smaller firms were family owned. Unlike many Latin American countries, capacity utilization among large, state firms was generally better than in the private sector. Caracas was the home of just under half of all industry, but it provided only 36 percent of its jobs and 26 percent of the country's manufactured goods. By contrast, the Guayana region, with only 3 percent of the country's industrial firms, produced 10 percent of all manufactured goods.

http://www.country-data.com/cgi-bin/query/r-14556.html

[slackmaster]

25. That's very interesting

Thanks for always being quick with the facts, Judi Lynn.

[paulk]

28. so did you think it was a good thing when Perez did it?

I know you're not his biggest fan...

[ohio2007]

35. so the Japanese asset seizing was done 35 years ago ? why report it now ?

BTW

How many months left to Rule by Decree ?

[Tejas]

4. memo to past and present Chavez cheerleaders;

I told you so!


"Chavez can do no wrong, he hates George Bush so he is golden, he is not a dictator, I want to name my baby after him".........

[WriteDown]

7. That's freakin'

hilarious. :)

[bitchkitty]

33. How so? n/t

[Vidar]

8. He could do wrong: he could sell out the people to the corporations

as both parties do in the US. Happily, Chavez doesn't show any sign of doing that.

[Overseas]

27. Here here ! I agree.

And I just wish we could calm down and allow the Venezuelans to try a different form of government for a while.

Brutal "free market" (cash + warfare dominated) capitalism is an unsustainable model. We will need to introduce some socialistic management to run our industries with a dwindling international supply of critical natural resources. Overt and covert destabilization of foreign governments is an expensive and ecologically damaging model of how to manage securing those resources.

I don't want our government to cooperate with corporations in continuing the cash-dominated, overt & covert warfare-supported system we have used to maintain our dominance in the international "free market".

Therefore, I hope we can just leave Venezuela alone to get on with it. Of course, we can comment about their moves, but I'd love to see a bit more balanced coverage of the reasons in support of their actions. I believe some of their nationalization efforts have been temporary.

It has been US policy for years to covertly and overtly destabilize governments in Latin America that try to redress the imbalances between the rich and poor. I hope we can learn to leave them alone to try and develop new ways to balance social needs of the poorest citizens with the entrepreneurial spirit we all have. Maybe they can devise ways to improve living conditions for their poorest citizens while still maintaining international trade. They may just prefer more multi-lateral trade agreements, rather than blanket plans like NAFTA that allow trade to be dominated by those with the most money and military might.

With the climate crisis approaching dangerous tipping points, we will need more ideas of how to restructure our economies to minimize pollution rapidly. Maybe the more socialistic countries will provide useful models to make sure that dwindling resources aren't monopolized by those with the most cash, but can be shared just a bit more equitably with more of the population. Achieving a bit more balance in that will go a long way toward sustaining international trade.

[HelenWheels]

5. The US should follow his lead

and nationalize the banks.

[cali]

6. which banks?

all of them?

[The Croquist]

9. Theres just one problem with that...

It's that damn fifth Amendment:

Amendment V - Trial and Punishment, Compensation for Takings.

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

Fortunately Chavez doesn't have to worry about that.

[conspirator]

12. It all depends on how you define "private property"

By this definition:
Property that was amassed by slave level exploitation of the working class, illegal killing of natives to steal their land, illegal monopoly and price manipulation practices, and other forms of "legal" theft that are within the "law" just because the laws were rigged by the privileged who ruled Venezuela in the past to be perpetuate their status.

Then HELL it should be taken not only without compensation but with punishment

[The Croquist]

16. I define it as things that are owned by individuals

By a definition such as yours anyone can make any excuse for taking anything from anybody. Once you destroy property rights you have effectively destroyed the incentive to achieve and without that incentive failure is inevitable.

How is Zimbabwe doing these days?

[Dreamer Tatum]

18. Banks in the US are owned by shareholders

Period, paragraph.

How's about we bust down your door and take YOUR stuff?

[conspirator]

20. Yeah. And the banks and their shareholders do so much for us. fuck em nt

[Dreamer Tatum]

22. What do I, as a Citi shareholder, owe you? nt

[conspirator]

23. Nothing. But don't talk about laws and moral because the banks and

federal reserve are outlaws according to the laws of nature, because they print money out of thin air, thus creating artificial inflation. And they take advantage of weak people whenever they can.
If I had the power to seize your assets, I would, without any moral concerns, and so should Hugo continue his crusade.

[Dreamer Tatum]

24. What a coincidence - I'd seize yours, too!

Wow...how about that. Two people with the EXACT SAME self-righteous indignation!

[The Croquist]

26. How legal and moral of you

It's people like you that make the Second Amendment necessary.

[HelenWheels]

14. Well, then we can take the banks

as we bought and paid for them with the bailout money.

[The Croquist]

15. In many but not all cases you are correct

The biggest problem with that is that we over paid.

But most banks in the country are getting by with no help. Seizing them is unconstitutional.

[lostnfound]

31. Ven. govt paid $1 billion for a bank to nationalize it: that's "just compensation"

isn't it? The question for steel and iron is, will this be a purchase or an expropriation? For some reason most of the scary articles on Chavez and his nationalization drive don't mention any price being paid, but the rag known as the Wall Street Journal listed the price of a recent bank nationalization.

How is it different from eminent domain?

http://online.wsj.com/article/SB124304353444249249.html
Venezuelan President Hugo Chávez capped his latest spate of nationalizations with a deal to buy the local unit of Spain's Banco Santander SA.

Venezuela agreed to pay $1.05 billion for the unit, a deal that appeared to please Banco Santander investors.

[The Croquist]

32. Actually it's not

1.05 billion sounds like a lot of money but it needs to be put in context. Just because there are a lot of zeros doesn't mean anything. A boatload of people are part owners in that bank.

If I offer to buy your house for $300,000.00 but the government gives you $200,000.00 and takes it would you consider that a good deal?

The government announced its intention to buy the bank after word surfaced that the Spanish group was discussing the sale of its local unit with a Venezuelan private bank for as much as $1.4 billion.

According to your source they had a better offer on the table. 1.4 billion was probably a low ball offer because investing in Venezuela is speculative at best. I wouldn't invest a dime in that country.

Venezuela agreed to pay $1.05 billion for the unit, a deal that appeared to please Banco Santander investors.

I'm not surprised that the investors were pleased. They were afraid that he would offer them a lot less.

Venezuela agreed to pay significantly more than recent expectations of $600 million to $800 million.

The point is that Chavez is nothing more then a thief. In this case he only stole about 395 million instead of the expected 595 - 795 million.

What a guy.

[lostnfound]

37. The same argument could be made about many cases of eminent domain

in the U.S.

It is not uncommon for people whose property is being acquired by the government in the United States to 1) inflate the stated market price by floating offers from third parties and 2) to complain that the amount being paid is less than market value.

I'm not impressed by "a whole lot of zeroes". One billion is a medium sized contract in my world.

The process in reverse -- privatization of public assets -- occurs all too frequently these days; is there much of an outcry when public assets are sold off at firesale prices? What constitutes a "thief"? I woudn't jump to conclusions about the fairness or unfairness of this particular deal without knowing more facts.

[UTUSN]

10. K&R #1 for the daily Huguito doo-doo

[iamthebandfanman]

17. starting to look like hes going for all

or broke.

[ronnie624]

19. The Chavez detractors have been 'predicting' the future for years

with no success. Chavez is doing exactly what he has said he is going to do, which is create a socialist state, always within the framework of Venezuelan law. Did you think he was just bullshitting?

[IDFbunny]

21. He makes his own laws. Does exactly what he wants, how he wants.

[ohio2007]

36. People accidently voted "NO" to his power play and he ordered them back to the polls to get it right

..or is it "They had to get it LEFT"?

Nothing more here going on then a Mugabe with oil.
Hugo's enemies will be dealt with in the same way after Rule By Decree expires ?
eom

[SKKY]

29. And I bet dollars to donuts that he'll appoint a member of his family...

...to "watch over things".

[ohio2007]

34. They are already fully vetted you know.......nepotism has nothing to do with running a well oiled

train wreck

[ohio2007]

38. Argintina hopes Hugo will give a "fair price" to its steel companies for taking their investments

Argentina advocates "fair price" for firms nationalized in Venezuela

Hugo Chávez announced last Thursday in Caracas the nationalization of five steel companies, including Tavsa and Matesi
Economy
The government of Argentina said on Monday that "it will make every possible effort" to guarantee that fair prices are paid for three iron companies owned by Argentinean steel group Techint that were nationalized in Venezuela.

"In the event that nationalizations are completed, our government will make every possible effort to get a fair price and defend Argentinean investments in Venezuela," the Minister of the Interior, Florencio Randazzo, said.

snip


Chávez announced last Thursday in Caracas the nationalization of five steel companies, including Tavsa and Matesi. Techint is a majority shareholder in both firms, whereas it holds a minority stake in the Guayana Steel Complex.

Techint officers said that Venezuela's move surprised the board of directors and has led to widespread rejection from Argentinean business associations and even from the General Labor Confederation (CGT), the largest labor union in Argentina.

Argentina's Foreign Minister, Jorge Taiana, talked on Saturday with his Venezuelan counterpart, Nicolás Maduro, and explained the position of Argentina with regard to this issue, official sources said without providing further details, EFE reported.

http://english.eluniversal.com/2009/05/25/en_eco_esp_argentina-advocates_25A2346323.shtml

I thought Hugo only stole from the yankee gringo in order to give to the poor suffering from the high inflation rates ?

It looks Argintina must be brought down a notch or two also.