Plan Chávez allows little leeway to private companies

The plan to be implemented by Venezuela's President Hugo Chávez is reelected for 2013-2019 virtually disregards the role of the private sector in the economy and underscores the need for "a radical suppression of the logic of capital that may be implemented step by step." For such purpose, "socialist enterprises" and "social ownership" will be spurred.

The project does not mention the large private capital. It just plans to "develop a system of incentives to encourage private small and medium-sized enterprises." It also sets the objective of funding by private banks "under the guidance of the Bolivarian government."

The main goal is the "development of social property on basic and strategic factors and means of production."

Social ownership, according to the draft constitutional reform denied in 2007 in a referendum, yet introduced by President Chávez in the practice, is defined as "that which belongs to the people as a whole and to future generations." It may be direct allocated by the State to communes or cities- or indirect exercised by the State on behalf of the community.

"Under the proposed system, the private sector will exist only in those areas admitted by the government to survive not because it deems them as strategic, and it will bolster the SMEs, provided that they follow its orders and controls," explained Ronald Balza, and economist and professor with Central University of Venezuela (UCV).

"This plan should be viewed together with the antitrust law, which does not view the State as a monopoly, that is, I can seize a large company for deeming it a monopoly and take hold of it to turn it into socialist," he added.

The project is set to establish "30,000 direct social property companies to transform raw materials."

vsalmeron@eluniversal.com

Translated by Conchita Delgado