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Chávez' government conducts survey aimed at new confiscations

Uncertain fate for industries

In the event that the Venezuelan government completed plans to "rescue" industrial concerns presently closed, President Hugo Chávez' administration could manage 10 percent of the manufacture sector currently privately owned

According to President Hugo Chávez, there are 700 companies inoperative that could be expropriated (Photo: Archive)


Following President Hugo Chávez' government move to conduct a survey to determine the operational status of all the industrial concerns in Venezuela, and amidst implementation of Chávez' so-called 21st century socialism -which is mostly based on co-management-, the future of the domestic traditional manufacturing sector is uncertain.

Chávez himself has claimed he has a list comprising some 1,149 companies that have been fully or partially closed, and said these concerns could be expropriated or rescued with financial aid from the government.

In this list, 700 companies are completely closed down, and their expropriation is being pondered.

Figures disclosed by the National Council of Industries (Conindustria) show that there are 6,787 industrial concerns currently operating in Venezuela. If the government actually confiscated 700 companies, it could manage 10.3 percent of the country's industrial sector.

Impending survey

Government officials have already announced that a survey will be conducted next month to determine the real operational situation of enterprises nationwide. The fate of many companies will depend on the results of this study.

Many entrepreneurs fear that the government may punish industries that are not operating at 100 percent capacity, as it is the case for farms.

Under the Lands Law, the National Lands Institute can determine idle lands and order their confiscation, following a statutory technical report and in accordance with the law.

It is noteworthy that one of the estates recently seized in southwestern Barinas state has fully productive areas, according to their owners. Nevertheless, the government has argued that some other areas were dismantled or are closed down. Further, the Agriculture and Land minister has not ruled out the possibility to confiscate such areas on the grounds of "social justice."

Last July 17, during his weekly radio and TV show "Hello, President!", Chávez warned: "It is an obstacle to see companies closed in Venezuela, regardless the reasons. It is just like idle lands. This is a message for businesspeople whose industrial concerns have trouble to operate or are operating at half speed: we want you to work at full speed."

According to the latest conjuncture survey by Conindustria, in the second quarter of 2005, most companies were operating at 56.7 percent of capacity, which is "half speed" under Chávez' terminology.

This study also showed that investment remained unchanged as compared to 2004. Entrepreneurs have only investment plans intended to preserve existing operations. Only a few plan to expand production capacity.

Translated by Maryflor Suárez R.

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