Monday, November 8, 2010
Venezuela Nationalizing
This article isn't totally economics related but since we have been talking about socialist economies I thought it was interesting... The article says that at the end of October Hugo Chavez announced the nationalization of the American owned bottle manufacturing company Owens Illinois without following the required procedures. Chavez is quoted enforcing his declaration of "the elimination of capitalism" but the article also says that the public is against his nationalist reforms. I wonder how long Chavez will be able to maintain power if his constituents disagree with him, as well as the international community...
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3 comments:
The first thing I thought of when I read the topic was Iran... and, how its leader in the early 1950s, Mohammed Mossadegh, nationalized the British Petroleum country and was eventually forced out of office by a US inspired coup. I doubt that will happen to Chavez, but... he's certainly a much more threatening leader than Mossadegh was.
How long can Chavez stay in power? It appears as if corrupted legislature elections will allow him to stay in power for as long as he wants. Chavez has become a symbol and role model for developing countries fighting against economic liberalization and privatization. It seems some, or even a majority, of the Venezuelan people are beginning to get fed up with Chavez's nationalist policies. They have seen the negative effects of socialist elements and may be ready for something different. Unfortunately, that something (economic liberalization) carries plenty of negatives with it, including more economic inequality.
I think there are several factors at play against Chavez despite his support in the legislature. Last time Venezuela faced hard times it went to companies to buy back natural resources so the government could make money. Latin America also has a tradition of finding a way to get rid of "despotic" leaders, although in some cases it takes time. If people's needs are continually not being met they might be louder about their discontents. While the United States is not in any position to sponsor a coup, we do have a significant amount of power on the international scene. All of these factors against Chavez could be hard to face.
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