Sunday, January 14, 2007

What Venezuelans voted for: a coward who is the bully of the school yard

Since it is Sunday and this blog is supposedly into lower intensity (though recent events justified a revival of sorts) I have found these couple of editorials from Veneconomy which are worth posting for your reading pleasure (forgive me a lame Sunday irony). The first one addresses, in English, the point that the Chavez alleged show of force of these past few days are in fact a mark of an inherent weakness of his rule. No government elected with 63% of the vote will rush into such sort of imposition when it has at least 1.5 solid years of easy governance ahead. That Chavez chose the hurried and bullying way is, and I agree 100% with Veneconomy, a sign that Chavez doubts his own skills, the ability of the people that accompany him or the stability of oil prices and Venezuelan revenues. That does not mean we are going get rid of Chavez anytime soon, it only means even more misery than expected in our future.

The second article, well, it is an excellent analysis that Alexandra Beech published in Veneconomy and that I suppose she was too modest to announce in here. So I obliged.

What's the President afraid of?

Paradoxically, when, on January 8, President Hugo Chavez made his announcements that will take Venezuela to a communist-style totalitarianism where all the power is concentrated in his hands, rather than strength and confidence, the Head of State demonstrated considerable weakness and a lack of faith in his own leadership.

On January 8, on the occasion of the swearing-in of his new cabinet, President Chavez announced the nationalization (i.e. passing over to the hands of the State) of all companies privatized to date, starting off this run of absolute control with CANTV.

But the President didn't stop there, he went even further in his eagerness for control and, on the pretext of "sovereignty, national security and strategic reasons", to which only he is privy, he will sweep up in the nationalizing boom all the telephone companies, the companies in the electricity sector (including La Electricidad de Caracas, an emblem of Venezuelan private enterprise since its beginnings in 1895), and the Orinoco Belt crude upgraders, which came into being as mixed enterprises with the participation of foreign partners. And perhaps the most disconcerting aspect of these announcements is that they are apparently going to nationalize the national gas companies founded under the Gaseous Hydrocarbons Law promoted by President Chavez and approved by Parliament in 1999. That same year, the Head of State also passed an Investment Promotion and Protection Law, which stipulates that no legislation or regulation passed subsequently would be able to alter the basic terms under which investments were made in Venezuela. The intention of this law was, precisely, to generate confidence and attract new investment to the country.

Now, suddenly and in one fell swoop, he is going to change all the rules of legal certainty on domestic and foreign investors who have built up productive companies that provide optimum services and jobs in the interests of taking over more and more power. Contrary to what it is intended to show, in VenEconomy's opinion, this reveals a singular lack of confidence in his leadership.

There is no logical reason whatsoever for undertaking this nationalizing race, bearing in mind that: a) the Constitution and the laws of the Republic fully define and demarcate the field of action of private companies; b) the agencies for correcting and sanctioning any departure from these laws are under his command; and c) any unregulated aspect can be corrected immediately in a National Assembly made up totally of members who support the regime. The only possible justification would be a total lack of confidence in his powers of conviction at some future date and his wanting to grab all the power now so as to avoid the danger of any type of opposition, from any source.

Note from the blogger: What can I add to this? Chavez waited for his opportunity until he coudl take our lunch money.




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