Chavez pushes nationalisation

The Venezuelan president says he will also strip the central bank of autonomy.

    Chavez won a big victory in last month's election and has vowed to further nationalise the economy [AP]
    The opposition says Chavez is seeking to create a Cuban-style single-party state, a charge he denies. He said he would submit a "revolutionary enabling law" to legislators through which he would be able to pass bills by decree to accelerate economic reform.
    "We are making the final revisions so we can send it to the National Assembly in the next few days to request special powers," he said in a speech at the swearing-in of new cabinet ministers.
    'State property'
    Continuing his nationalising rhetoric, Chavez said the heavy crude projects of the Orinoco Belt would become "state property", referring to plants that process heavy crude oil from the Orinoco region in eastern Venezuela to make it suitable for refining into fuel.
    These Orinoco projects involve foreign companies such as Chevron, ExxonMobil, BP, Statoi and Conoco Phillips. Venezuela has been pushing to have a majority stake in these projects and it was not immediately clear whether Chavez was suggesting something stronger with his call for them to become state property.
    Venezuela is the fourth biggest oil exporter to the US. Some analysts believe that nationalisation of such projects could be damaging to the economy.
    Confidence erosion
    Alberto Ramos, an economist at Goldman Sachs research, said: "These disconcerting policy announcements represent a clear turn into deeper nationalist and interventionist policies, which can lead to further erosion of business confidence and the country's macro and institutional fundamentals."
    Chavez said that central bank autonomy could not continue and called the institution's independence "disastrous." "The central bank must not be autonomous, that is a neoliberal idea," he said.
    Chavez has met resistance from central bank directors who object to the leftist president dipping into state coffers for generous social spending of oil wealth, which wins him supporters but stokes inflation.

    SOURCE: Agencies


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