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B Y R OM I N A C OL M E N A R E S ( W ‘ 1 2)

NATIONALIZATION IN VENEZUELA:

In September of this year, Chavez’s political opponent, MUD, rallied together and obtained 47.17% of the popular vote in mid-term elections.

CHAVEZ & THE AGRICULTURAL SECTOR V enezuelan President Hugo Chavez

adverse effects on the entire industry, with

began his October 4th Sunday

food production dropping and preferential

TV program “Aló Presidente” with

interest rates to farmers rising due to

relatively little fanfare. Little did the world

government mismanagement. Venezuela may

know what was about to happen.

be forced to import food to avoid shortages.

“Agroisleña is expropriated, time is up

But while Agroisleña will have profound

for this Agroisleña. I will call the owners and

consequences for the economy, it is hardly

tell them to talk to the Ministry. Agroisleña

an unprecedented case. Chavez already

is public property, property of the nation.”

controls

With

that

unilateral

proclamation,

the

country’s

agricultural

food distribution, the supermarket chains MERCAL, PDVAL, and BICENTENARIO. 75%

placed under the direct control of the

of coffee and 45% of corn flour produce is

government. Constitutional protections and

done by government entities, while 4 of the

compensation to the expatriated owners were

top 10 sugar companies have been taken

not mentioned. These are realities that the

over. In effect, the government has a heavy

Venezuelan businessman has gotten used to

hand in almost all stages of food harvesting.

most

important

in the past decade; but they may soon come

Chavez, who has overstayed the legal amount of presidential term limits, came

to a sudden halt.

111210 hq.indd 32

imports,

supplier was seized from its board and

Vene-zuela’s

32

food

agricultural land, and the main channels of

Agroisleña is Venezuela’s leading farm

into power in 1998 with a relatively modest

supplier, providing the country’s farmers

nationalization agenda. Over time, his position

with the vast majority of their agricultural

has seen a sharp transformation and grown

equipment. It is also their major supplier of

increasingly pervasive. The government seized

credit, giving low interest loans to more than

around 3 million hectares of land, while the

18,000 low-income farmers. The expulsion

total amount of private enterprises shrank from

of its management board and government

11,000 to 4,000. The past 5 years have seen over

takeover of its operations will likely have

200 nationalizations in Venezuela, including:

I N T E R N AT I O N A L B U S I N E S S R E V I E W

FA L L 2 0 1 0

11/27/2010 3:13:11 PM

Profile for Daniel Hellwig

International Business Review - Fall 2015  

Fall edition of the IBR magazine at the Wharton School.

International Business Review - Fall 2015  

Fall edition of the IBR magazine at the Wharton School.

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