Expropriations Darken Venezuela

Investor's Business Daily ^ | 9 Jan 2006 | Editorial staff

[Kitten Festival]

Democracy: Hugo Chavez's call to expropriate Venezuela's internationally held telephone and electrical firms is more than just an ambitious leader's bid to escalate socialism. It signals far worse actions ahead.

Chavez's questionable re-election as president last month has emboldened him to imbue Venezuela with "21st-century socialism" as swiftly as possible, and news of expropriations seems to be a hard turning point toward dictatorship.

Chavez didn't just announce a plan to expropriate the electrical company, 85% owned by U.S.-based AES, and CanTV, the internationally traded telecom. He also said he'd redefine all business contracts, confiscate four heavy-oil investments, take over the central bank and call on his rubber-stamp assembly to grant him the right to rule by decree for "just one year."

The confiscations are part of a long string of broken contracts, especially against U.S. oil companies, in the past few years. But there's something new and disturbing about the expropriations of the two electronics firms.

That was evident enough in the market reaction. ADRs of CanTV plunged 26% in New York, the stock was halted in Caracas after a 20% collapse and the rest of the Caracas exchange suffered its biggest decline since Chavez took office in 1998.

Meanwhile, the controlled currency market telegraphed real fear in the illicit open exchanges. The black market rate for exchanging Venezuelan currency to dollars doubled overnight, signaling that local capital is fleeing.

Chavez's choice of industries to expropriate is clearly strategic. A dual attack on phones and electricity is a sly effort to silence the electronic media, and with it all public scrutiny of the regime.

[TexanToTheCore]

Say goodnight to the Venezuelan economy, Gracie......

[muawiyah]

Same thought ~ reading that I wondered who would sell Venezuela repair parts in the future as their electrical system turns to trash.

Chavez wants to turn out the lights for good ~

[OldPossum]

From the tone of the opening paragraphs of the article it appears that Venezuela may be going the route of Cuba.

The people, largely those looking for freebies from their government, voted in this man, now they will get what's coming to them. They'll get the government they deserve.

[Paladin2]

Wouldn't it be faster to return to the 7th century by converting to Islam?

[AdvisorB]

All your property are belong to us.

[technomage]

Chavez's questionable re-election

Not according to his best friend Jimmuh al-Carter.

[muawiyah]

Not really. The Moslems of that period rode camels and horses ~ today's camels require ~ nay DEMAND ~ well lighted stalls in the evening, and the freshest of grass and weed stubble.

Without electricity the camels would be unhappy.

[Argus]

Robbery Under Law.

Chavez will wreck his country's economy, then blame the US. What was once a fairly prosperous (for South America) place will go the way of Zimbabwe.

[Centurion2000]

Chavez didn't just announce a plan to expropriate the electrical company, 85% owned by U.S.-based AES, and CanTV, the internationally traded telecom. He also said he'd redefine all business contracts, confiscate four heavy-oil investments, take over the central bank and call on his rubber-stamp assembly to grant him the right to rule by decree for "just one year."

Well he just scared whatever capital was available in his country away. Hope he likes being pi$$ - poor.

[The Duke]

...call to expropriate Venezuela's internationally held telephone and electrical firms... "Hey...I resemble that remark!"

[yankeedame]

Well he just scared whatever capital was available in his country away. Hope he likes being pi$$ - poor.

Are you kidding?? He won't be, those closest to him in power won't be, and the senior military sure won't be. As for the rest? "***PPHHFFTT*** Let them eat cake."

[Kitten Festival]

LOL!

[nascarnation]

with old Fidel fadin' fast and Cuba on the cusp of becoming the Vegas of the Carribean, somebody gotta do the commie thing, LOL.

I do feel sorry for the people of Venezuela even if they voted him in, they will regret their experiment in statism.

[blam]

"The black market rate for exchanging Venezuelan currency to dollars doubled overnight, signaling that local capital is fleeing."

The big/smart money is already gone.

[allen08gop]

They are still coming to Panama.

[livius]

I think it's been dark for awhile now - and a lot of folks in VZ realized this. Miami is stuffed with rich Venezuelans now. It's a great loss to VZ, because these are not rich druggies, like some other Latin Americans who settled in Florida. These are smart, young, well-off capitalist types who live well but honestly, travel, buy art, decorate their homes, send their kids to good schools - in short, they're a boost to Miami and will have an impact on it and on the US. VZ used to be one of the bright spots, but Hugo has sure changed that.

[Gay State Conservative]

Those with the ability to leave have already done so...or will do so in the very near future.

[Radio_Silence]

I know this is no surprise, but I had to look at what the Dummies have to say about this and they are ecstatic.

It is extremely troubling to me that there are people in this country that think Chavez and his budding dictatorship are a good thing that should be emulated.

[Gay State Conservative]

Same thought ~ reading that I wondered who would sell Venezuela repair parts in the future as their electrical system turns to trash.

Don't kid yourself.There's not a country in Central or South America,Europe or Asia that would sell parts/machines embargoed by the US.