CARACAS, Friday November 26, 2010 | Update
A total of 234 companies seized so far this year in Venezuela

Businessmen warn that radicalization is to worsen Venezuela’s economic situation

Expropriations affect investment climate (File photo)
Friday November 26, 2010  10:47 AM

Alarms are ringing loud in the business sector. According to the Venezuelan Confederation of Industries (Conindustria), 234 companies have been expropriated so far this year.

"The private sector is seriously deteriorated, public policies implemented in the last few years have been steadily destroying jobs," said Carlos Larrazábal, president of Conindustria.

The data do not include government's seizures in the agricultural sector. However, these figures confirm the intensification of the expropriation policy in the past two years. According to estimates released by Conindustria, the State took over 56 companies between 2002 and 2008; in 2009 it seized 131 firms, and expropriations have doubled in 2010.

In this sense, Larrazábal said that the radicalization of economic policies, as announced by Hugo Chávez, will worsen the economy. "The radicalization of the process, as some have threatened, is going to complicate the investment climate and at the end of the day Venezuelans will continue to pay the consequences."
Fernando Morgado, the President of the Venezuelan Council of Trade and Services (Consecomercio) agreed with Larrazábal and said that there are no signs of recovery, in the short term.

"Nothing suggests that things will improve. We are totally convinced that uncertainty will continue to limit investments," Morgado said in the framework of the World Trade Day, organized by Consecomercio.

The businessman added that Venezuela's economy since 1999 to date can be described as a "lost decade." Millions of acres have been "unduly seized"; the manufacturing sector has "fallen on hard times" and basic industries have been brought to a "standstill." These aspects have shaped a "hopeless" outlook.

The business leader urged the authorities to take steps to reverse the economic downturn, such as easing controls, encouraging production, and the elimination of exchange controls, as well as respect for private property.

"The challenge is to defend economic freedoms... we should be ready for the worst," Morgado said.

Noel Álvarez, the president of the Federation of Trade and Industry Chambers (Fedecámaras), said that the government is "harassing" the business sector and stated that the Constitution is violated whenever the government expropriates a company.

Translated by Gerardo Cárdenas

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