The New York Times
April 24, 208
Venezuela's president, Hugo Chávez, is in political trouble. He is clearly hoping that a new expropriation spree will fire up his supporters, at least long enough to keep his allies from suffering heavy defeats in November's state and municipal elections.
In recent weeks, he ordered the nationalization of the foreign-owned cement industry and the country's biggest steel company. He also nationalized one of Venezuela's biggest milk producers, its largest cold storage and distribution company and several sugar plantations.
It is hard to know whether Mr. Chávez will get the full political bang that he is seeking. His popularity has fallen steadily since December when voters rejected his proposed constitutional reform that would have allowed him to stand indefinitely for re-election. If nothing else, the nationalizations will allow his government to use cheap milk and cement to bolster his support among Venezuela's poor.
What is certain is that the country's economy will suffer. Mr. Chavez's cronies have proved that they don't have the skill — or the honesty — to run these businesses. Bungled management is responsible for a decline in production at the state-run oil company Petróleos de Venezuela, known as Pdvsa. The expropriations, added to exchange controls and price controls, are holding back much needed private investment. Even soaring oil prices aren't helping. High global food prices and unfettered government spending have pushed annual inflation well past 20 percent, while price controls are producing shortages of basic foods.
Last year, Mr. Chávez forced foreign oil companies to give up control of oil fields in eastern Venezuela, and he nationalized the country's largest telecommunications company and the electricity company serving the capital, Caracas. These new expropriations were another attempt to grab control of all of Venzuela's economic and political life while providing more opportunities for patronage and corruption.
Venezuela's voters have already shown that they can see through such manipulations. Mr. Chávez lost last year's referendum because students, business leaders, members of the usually ineffectual opposition and some former supporters were willing to work together.
They have an opportunity to deal another blow for democracy in this November's elections. The vast majority of Venezuela's state governors and mayors are Chávez supporters. Defeating them at the polls would send a clear message that Venezuelans are truly fed up with Mr. Chávez's incompetent and authoritarian ways.