The Venezuelan state owes USD 16.55 billion, out of which USD 7.25 are owed to oil companies involved in projects in the Orinoco Oil Belt that were nationalized (File photo)

Economy
The expropriation policy the Venezuelan government kicked off a few years ago continues, and it has been the tool to dismantle a production model that was primarily based on private capital.

The first stage of the Simón Bolívar National Project, also known as the First Socialist Plan, will end in three years. And the government has reinforced policies aimed at replacing traditional private property with social production enterprises (EPS). In the First Socialist Plan, such institutions are termed "the germ and path to the 21st century socialism."

President Hugo Chávez said on Sunday that private property is not intrinsically bad, at least small properties.

"Large properties must be state-owned; they must be social ownership. We must put an end to oligopolies, monopolies, the concentration of ownership in a few hands, that is, the bourgeois property," said the Venezuelan head of state during his weekly Aló Presidente broadcast.

Chávez added that his administration wants people to become owners. Chávez handed land titles to a group of community councils in the state of Aragua (central Venezuela). He warned the members of the councils that they could not dispose of the properties, or at least not sell them.

Abelardo Daza, an economist and professor at the Institute of Higher Education in Business Administration (IESA), believes that a vital element of Chávez's development project is the intervention of production activities. "The question is whether this is an end in itself," he says. He did not rule out the possibility that productivity of the nationalized companies will deteriorate gradually.

"There are sectors that show a serious deterioration compared to the results obtained in the previous administration. There has been some evidence. Results cannot be seen immediately," he said.

Daza stressed that the forecasts concerning the deterioration of seized companies are based on what has occurred in the past. He mentioned state-run telecommunications company Cantv. "The company was nationalized 10 years ago. Deterioration is not automatic. Besides, this (nationalization) process has been in place for three and half years."

According to estimates of Venezuelan research firm Ecoanalítica, nationalizations have cost USD 25.22 billion, but the government has only recognized so far a little more than a third of those debts. The cost of the seizures of Agroisleña, Venoco and Fertinitro is not included.

The Venezuelan state owes USD 16.55 billion, out of which USD 7.25 are owed to oil companies involved in projects in the Orinoco Oil Belt that were nationalized.

http://english.eluniversal.com/2010/10/12/en_eco_esp_expropriations-disma_12A4594971.shtml