Hugo Chavez recently devalued (he rebranded this as "revalued") the Venezuelan currency. This rose prices of imports. He threatened to seize and nationalize any store that tried to raise prices in now more expensive imported goods. Well, stores tried to raise prices and Hugo has begun nationalizations in the retail sector starting with a small French retail chain.
Chavez announced on Sunday the imminent expropriation of Exito, owned by Casino Guichard Perrachon SA of Saint-Etienne, France and Almacenes Exito SA of Medellin, Colombia, for what he described as repeated instances of raising prices in defiance of government regulation.
The French firm holds 67 percent of Exito.
Last week, the leftist government closed 70 individual Exito and Cada stores for 24 hours, accusing them of increasing prices after a devaluation of the bolivar.
The country's central bank has estimated that the economy shrank 2.9% in 2009.
And according to the International Monetary Fund, Venezuela is set to be the region's worst performer in 2010, with a projected contraction of 0.4% in a year when Latin America as a whole is expected to grow by 4%.
Without oil to export Venezuela's economy would collapse.
Oil, as ever, is still the mainstay of the Venezuelan economy.
In fact, it is responsible for more than 90% of the country's foreign currency inflows and 50% of government revenues.
Venezuela's declining oil production has continued downward beyond the time range of this graph. Notice the increase in consumption. Gasoline prices are subsidized and cheap in Venezuela. So soaring consumption is further cutting into oil available for export to earn foreign currency.
The government oil company can't afford to develop enough production to arrest the decline. Hugo seized oil fields developed by ConocoPhillips and ExxonMobil among others. So most foreign oil companies aren't going to invest there. Hugo fired a lot of the technically skilled national oil company employees and then hired lots of supporters.
It is pretty easy to predict more decay. But Hugo has cracked down on inflation and brought it down to a mere 25.1%.
Annual inflation in Venezuela was 25.1 percent last year, down from 30.9 percent in 2008.
A severe drought has forced Venezuela President Hugo Chavez to ration electricity in South America's top oil exporter, but underinvestment and shortsighted planning during an economic boom are as much to blame as the weather.
Those games they call 'PlayStation' are poison. Some games teach you to kill. They once put my face on a game, 'you've got to find Chavez to kill him'.
He sees cigarettes, drugs and alcohol as the capitalist road to hell.
Games, said Chavez, "promote the need for cigarettes, drugs and alcohol," adding "That's capitalism, the road to hell."
Chavez has chosen the socialist road to hell.
Hugo thinks the US is going to occupy Haiti. Um, what would be the motive? I fail to see how the place could possibly pay for the cost of occupation. Though, to be fair, neither do Iraq or Afghanistan.
“I read that 3,000 soldiers are arriving, Marines armed as if they were going to war,” Chavez said. “They are occupying Haiti undercover.”
Marines armed as if they were going to war? I would hope so. Port au Prince was a dangerous place before the earthquake.
|Share |||By Randall Parker at 2010 January 18 08:55 PM Socialism, Capitalism|