New ministers are sworn in by Venezuela's President Hugo Chavez, unseen, in Caracas, Monday, Jan. 8, 2007. On the wall a picture of Chavez next to a quote from one of his speeches.(AP Photo/Leslie Mazoch)
Posted on 01/09/2007 9:09:53 AM PST by Cincinatus' Wife
BOGOTA, COLOMBIA — Delivering on campaign pledges to move Venezuela toward socialism, President Hugo Chavez announced plans Monday to nationalize the country's telephone and electricity sectors and hinted that he would seek a majority stake in so-called heavy oil projects in the Orinoco River basin.
"We are heading toward socialism, and nothing and no one can prevent it," Chavez said at a ceremony in Caracas to swear in new Cabinet members.
Since the late 1990s, Houston-based ConocoPhillips, Exxon Mobil, Chevron Texaco and other firms have invested more than $17 billion into four major ventures in the vital Orinoco basin of eastern Venezuela. The projects refine deposits of tarlike heavy oil into commercial crude.
Deposits of heavy oil and bitumen, which is used to make boiler fuel, could be as high as 270 billion barrels. By contrast, the country's proven reserves of conventional oil stand at 77 billion barrels.
Venezuela's state-run energy company, known as PDVSA, holds stakes ranging from 30 percent to 49 percent in the Orinoco projects.
Chavez said Monday that "in the Orinoco region, international companies control and dominate the refining processes of heavy crude. That has to be passed on to Venezuela."
Like other oil-rich nations in times of high energy prices, Venezuela, the world's fifth-largest petroleum supplier, has been moving to take a greater share of profits. The government has already raised taxes on the Orinoco projects from 34 percent to 50 percent and hiked royalties to 33.3 percent.
Still, most foreign-owned energy companies have gone along with the new rules to preserve their access to the country's oil, since many major deposits elsewhere in the world have been put off-limits by the host countries. The biggest customer for Venezuelan oil is the United States.
Chavez asked the National Assembly, which his allies control, to give him powers to carry out many of his proposals by executive decree.
Utilities to be nationalized The companies that apparently would be nationalized include two utilities that were privatized in the 1990s. They are Electricidad de Caracas, which provides power to the capital, and C.A. Nacional Telefonos de Venezuela, known as CANTV, the country's largest publicly traded company.
The New York Stock Exchange halted trading in CANTV's shares. Arlington, Va.-based AES Corp. owns the electric company.
Chavez also pledged to seek an end to the autonomy of the Central Bank and to rename the country the Socialist Republic of Venezuela.
Critics described Monday's announcement as an effort by Chavez to seize greater control of the country and to follow the lead of his hero, Cuba's Fidel Castro, who nationalized major industries shortly after he took power in 1959.
Last week, Chavez cracked down on a frequent media critic, deciding not to renew the license of the country's largest and oldest television network, RCTV. The move drew criticism from the secretary-general of the Organization of American States, Jose Miguel Insulza.
Supporters said that Chavez — who, they point out, was re-elected with 61 percent of the vote and will be inaugurated for a third term on Wednesday — is simply fulfilling campaign promises to his mostly poor supporters.
"Chavez talked about this all during his campaign," said Mark Weisbrot, a specialist in Latin American economies at the Center for Economic and Political Research in Washington. "This is democracy."
john.otis@chron.com
New ministers are sworn in by Venezuela's President Hugo Chavez, unseen, in Caracas, Monday, Jan. 8, 2007. On the wall a picture of Chavez next to a quote from one of his speeches.(AP Photo/Leslie Mazoch)
In a way, he's right........This is the reality of a true democracy.........
Chavez is a communist, too bad we didn't take him out while we still had a chance.
The only upside that I see here is that given socialism and the Venezuelan incompetence at operating anything, the production cost of Venezuelan crude oil will be well above the world price---
Nationalizing industries worked so well everywhere else, I'm sure it'll work for Chavez, too. (\sarc)
War is peace, love is hate, and ignorance is strength.
Long live Big Brother.
>> Chavez asked the National Assembly, which his allies control, to give him powers to carry out many of his proposals by executive decree.
History repeats itself. Adolf Hitler and his National Socialist (Nazi) party essentially did the same thing in the Reichstag with the Enabling Act in 1933.
Chilling.
Okay liberals, here's your chance. Pay close attention to what happens in Venezuela. It'll seem great at first because there's still some money left. But that will soon dry up and everything will get (and stay) far worse than before.
Somewhere along the lines the media has to be controlled with an iron fist (can't let the disaster become apparent). And the real fun - the killing - begins. Anyone that disagrees, tries to leave, disobeys, etc.
"The only upside that I see here is that given socialism and the Venezuelan incompetence at operating anything, the production cost of Venezuelan crude oil will be well above the world price---"
And we are the biggest consumer of it.
coming to a town near you soon.
Venezuelan crude will still sell at the world price and the loss will be absorbed by the Venezuelans who put him in office--
The Venezuelans invited them in because they needed the investment capital, and the technology, to develop this area. The Orinoco Basin has enormous reserves, but its extra-heavy stuff, its not the good stuff everyone is used to dealing with. Chavez himself has re-assured them several times in order to get them to stay and increase their investments. Now he will pocket the fruit of their labor.
With $17 billion invested, they are hostage to their investment, and Chavez knows it.
The US government isn't going to intervene to help a private company, and Chavez knows that too.
In another era, companies in a similar situation would be talking quietly, behind the scenes, to anyone they could find who would be sympathetic to their plight, military officers, spooks, young firebrands on the make, and with that kind of money on the line, who could blame them? If some jerk was going to steal $17 billion from you, what would you be prepared to do to protect it?
Lemme see if I understand the cycle:
Capitalists produce wealth. Demogogue comes in and nationalizes the wealth. Wealth disappears. Country spirals into poverty. Demogogue overthrown. IMF comes in to bail out country. Demands privatization of public companies. Capitalists come back and produce wealth. Demogogue comes in...
Etc. Etc.
I have to disagree.
It's true that pure democracy can lead to socialism--- that's why Aristotle referred to "vulgar democracy" as "rule of the poor".
But that's not what's happening in Venezuela, where the necessary conditions for democracy have been stripped away by Chavez, who, is not a democrat, pure or otherwise. That's why for as long as he could, he fought the legality of the referendum on him before winning it through dubious means.
Contrary to those on FR who continually repeat that the United States is a republic and not a democracy, it's in point of fact both and always has been (as most of them actually know), and with the expansion of the franchise to men regardless of the status of their holdings, blacks, women, has only become more democratic--- which is a good thing, considering the harm the expansion of the power of our least democratic branch, the United States Supreme Court, has done in the last one hundred years alone.
What Chavez is doing is FAR from "true democracy".
So how much longer until Venezuela's agriculture gets ruined by bad weather? From what I read in the papers, bad weather only affects socialist countries.
If they weren't divorced from reality, they wouldn't be liberals. That is other than those who simply see liberalism as a facade used to gain power.
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