Les Jones

Economics > Chavez's Venezuela Going Through Socialist Spiral

From AP News:

Chavez had previously announced the government's intention to take a majority stake by May 1 in four heavy oil-upgrading projects run by British Petroleum PLC, Exxon Mobil Corp. (XOM), Chevron Corp. (CVX), ConocoPhillips (COP) Co., Total SA (TOT) and Statoil ASA. (STO)

He said Monday that has decreed a law to proceed with the nationalizations that will see state oil company Petroleos de Venezuela SA, or PDVSA, taking at least a 60 percent stake in the projects.

"The privatization of oil in Venezuela has come to an end," he said on his weekday radio show, "Hello, President.""This marks the true nationalization of oil in Venezuela."

By May 1, "we will occupy these fields" and have the national flag flying on them, he said.

Chavez is also threatening to nationalize supermarkets as basic foods become scarce:

Despite its status as Latin America's fastest-growing economy, Venezuela faces shortages of basic foods. Beef, chicken, sugar, milk and coffee mysteriously have disappeared from supermarket shelves for weeks, sometimes months.

The scarcities come at a crucial juncture for President Hugo Chavez. A fierce critic of unbridled capitalism, Chavez is moving the country toward socialism and stepping up state control over the economy. Yet many critics blame his price controls and other government meddling for the shortages.

"The biggest lesson in all this is that you can't manage the economy by government decree," said Noel Alvarez, president of the Venezuelan Council on Commerce and Services.

UPDATE: And Chavez's socialist policies are causing a drop in Venezuala's food supply.