Saturday, June 21, 2008

Cementing a relationship Part 3

After all the debate about nationalization in Venezuela, I decided to keep up with the cement industry because there was so much confusion surrounding it. Here’s the last installment from May.

Hugo Chávez wanted to decree that the cement companies negotiate a takeover (with the state holding a 60% stake) within 60 days or face expropriation. He requested that the Supreme Court rule on the question of whether the decree would constitute an organic law. Article 302 of the constitution stipulates that only organic law brings industries of national interest into the possession of the state. Here is the relevant part of the constitution:

El Estado se reserva, mediante la ley orgánica respectiva, y por razones de conveniencia nacional, la actividad petrolera y otras industrias, explotaciones, servicios y bienes de interés público y de carácter estratégico. El Estado promoverá la manufactura nacional de materias primas provenientes de la explotación de los recursos naturales no renovables, con el fin de asimilar, crear e innovar tecnologías, generar empleo y crecimiento económico, y crear riqueza y bienestar para el pueblo.

Not surprisingly, the Supreme Court ruled in his favor a few days ago. Soon thereafter, the decree was officially printed in the Gaceta Oficial and the 60 day clock started ticking.

There is no explanation for why this happened now, though the most logical conclusion is that the cement companies are fighting it tooth and nail and therefore are trying to find weaknesses in the government's legal foundation. Chávez is getting tired of waiting, so the decree polishes up his legal case and speeds up the process.


Anonymous,  8:43 PM  

You seem to be missing a key piece here. Chavez wants to use the cement industry to create a new kind of company to counterbalance (his own words) transnational companies. He calls them "grandnational" companies , which comes from "grand nation" in contrast to "trans-nation". The first of such companies will be done together with Iran, in precisely the cement industry.

So he expropriates the Mexicans, changes the legislation to justify it, arguing national interest, and then invites the Iranians to take over and on top of it he laughs at his own people by coming up with the grand-national concept to justify the way he is just benefiting his personal allies.

Don't believe it? Watch it:

Greg Weeks 7:27 AM  

Do the Iranians get a greater stake than the Mexicans are being offered?

Anonymous,  11:24 AM  

No one knows. Probably Chavez himself doesn't know (I mean it). These things are decided by Chavez then announced, written into law and forgotten because something crazier happens the day after.

Paul 1:34 PM  

"These things are decided by Chavez then announced, written into law and forgotten because something crazier happens the day after."

Ha, that is hilarious. Best summation of Chavismo I've heard yet.

Boli-Nica 11:06 PM  

Chavez on "Alo Presidente" has talked about how he is a fan of central planning. But the Soviets at least had people w/brains cooking up master plans, setting budgets, deadlines & production targets. At least they could base their lies on some data.
Chavez is centrally un-planned improvisation.

Anonymous,  7:06 PM  

Can anyone name any nationalization plan, ever, where the stolen property is distributed to the people? As opposed to the government keeping it all, or a dictator (like Chavez) making it his personal property?

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