Venezuela adamantly refuses to acknowledge value of lands

Improvements only will count.

On January 13, during the presentation of the 2011 Report of the Venezuelan President's Office, congresswoman María Corina Machado noted that "expropriation is robbery," in default of compensation in some cases. In this regard, President Hugo Chávez replied that his government is not ready to pay for the value of the land, but for the improvements, as "these lands always belonged to the nation."

"They wanted us to pay them per hectare," the president explained on Sunday during a telephone conversation aired on state-run TV channel Venezolana de Televisión. He added that the owners of seized lands "never managed to prove that they were their owners."

"The people were the expropriated ones here. They (apparent owners) had those lands as a result of the historical dispossession of our people," he asserted.

According to President Chávez, documents were forged; "looting was legalized." Therefore, in his view, his government has acknowledged the payment of improvements only. "Expropriations are within the framework of the Constitution."

On the rise

Since 2004, when the government embarked on requisition, more than three million hectares have been attached.

Based on the numbers handled by the Venezuelan Confederation of Industries (Conindustria), over the past seven years the government has levied more than 1,087 private businesses. Within this term, last year recorded the largest amount of seizures at 497.

Conindustria data point to 32% of expropriated businesses from the agricultural sector; 42% in the building area; 19% from the oil industry and 4.7% form part of trade and services.

Think-tank Econoalítica estimates the cost of appropriations at USD 22 billion.

Most emblematic cases include the nationalization of cement makers in 2008. Recently, the Venezuelan government closed this case upon payment of USD 600 million for 75% of Cemex's interest in Venezuela.

There are also the charges faced by Venezuela for nationalization in 2007 of oil projects involving Conoco Phillips and ExxonMobil. Under a recent arbitral award, the latter is entitled to receive USD 907 million.

enmarcano@eluniversal.com

Translated by Conchita Delgado