CARACAS, Friday August 27, 2010 | Update
The government expropriating strategy goes ahead with the alleged need for “strategic sectors.” Thus far, the only quantifiable data are the Official Gazettes with presidential decrees (File photo)
The first half of the year, the Executive Office has already stricken a record of 16 completed expropriations, twofold the total number of 2008 and somewhat more than in 2007.
Out of 48 seizures under presidential decrees between January 2007 and June 2010, 10 occurred in 2007 and seven in 2008. However, there was a really upward trend in 2009-2010, based on a research undertaken by the Press and Society Institute.
In addition to nationalization, through which the State has taken hold of foreign companies which used to make some business in Venezuela, such as telecommunications utility Cantv and Banco de Venezuela, expropriations have been another way where assets, property and the very legal status of private corporations have been put in the hands of government agencies in order -they say- to develop strategic sectors.
"Let us go for it, land for peasants!" President Hugo Chávez uttered these words in his TV and radio show Aló Presidente (Hello, President!), in August 2004. At that time, he promised to crack down on large estate, in compliance with the Law on Lands and Agrarian Development, on behalf of the country's sovereignty and independence.
Such an appeal triggered the expropriations meant to end with idle or wastelands. The practice was implemented little by little and escalated upon the release in 2007 of the Simón Bolívar National Blueprint - The First Socialist Plan. The document set the strategies for domestic economic and social development in 2007-2013.
One of the premises of this plan is: "The State will retain the total control of production activities of a strategic value towards the country's development and multilateral development, in line with the needs and production capabilities of the social individual." As a matter of fact, it seems that the State's voracity increased with the first bites, to such an extent that something more than idle lands started to be expropriated."
What is the meaning of "strategic"?
Based on the facts, agribusiness sectors, namely coffee, sugar, rice, fishery, fruits, milk and beef, as well as cement makers, tubes manufacturers, steel, iron, plots of land for construction, oil drills, supermarkets and hotels, are of a strategic value. Companies related to these sectors are included in the list of expropriations conducted from June 2007 to July 2010, thereby widening the window of "priority" areas.
Legal instruments, such as the Law of the Institute for Defense of People in the Access to Goods and Services (Indepabis), have established the possibility that several sectors could be classified as public or social interest.
The priority is clearly the agricultural sector. Out of the total of seizures, almost half went to the Ministry of Agriculture and Lands, either directly or through agencies attached to it.
Out of 23 seized lands and companies which went to the State to further agricultural development, most of them are located outside the capital city, in the states of Zulia, Carabobo, Mérida, Barinas, Portuguesa, Apure, Yaracuy, Táchira, Sucre, Monagas and Guárico.
This is part of the upward trend of expropriations over the past few years. In 2009-2010, 69.6 percent of the expropriations that finally went to the Ministry of Agriculture and Lands were carried out.
Some other strategic sectors have emerged as priority, but to a lesser extent. They include industries, oil and infrastructure.
Out of the total number of companies subject to presidential decrees on forced procurement, 10.4 percent ended up in the hands of the Ministry of Basic Industries and Mining; 8.3 percent for the Ministry of Energy and Petroleum and 8.3 percent for the Ministry of Infrastructure.
In May 2010, think-tank Ecoanalítica estimated that since 2006, the cost of nationalization amounted to USD 23.3 billion, including seized Hilton Hotels and French-Colombian retail chain Éxito hypermarkets. However, it did not include plots of land, sugar mills or the industrial estates in the cities of Barquisimeto and Maracaibo.
The following month, the Venezuelan-American Chamber of Industry and Commerce (Venamcham) denounced that out of 44 expropriated corporations belonging to its group, only six have received payment. While the law provides for "fair indemnification," lack of payment has been one of the main complaints of the affected parties.
No matter debts have not been honored, expropriations keep on moving. The onset will appear soon in terms of jobs, corporate production and supermarket shelves.
Translated by Conchita Delgado
SPECIAL ARTICLE FOR EL UNIVERSAL
02:57 PM. HEAVY RAINS. Venezuelan Executive Vice-President Elias Jaua reported that the government is designing plans to support farmers, cattlemen and peasants of the state of Mérida who have been hit by heavy rains that have caused crop losses.