It’s Becoming Clear that Chavistas Can’t Run Businesses Very Well
We don’t look often enough at our South American neighbors…at least in most of the mainstream media anyway. I always appreciate the insights of Mary Anastasia O’Grady, who in tonight’s WSJ chronicled Hugo Chavez’ dismantling of the country’s coffee business. It’s just one of many industries that the Bolivarians have decided need to be owned by the state. Nearly all of the business have fared much worse under state control.
Once, writes O’Grady, coffee was plentiful in Venezuela, and was in fact an export. But when price controls were clamped down on the commodity, it became a wiser business move to sell it unregulated neighboring Colombia, so a shortage happened in Venezuela. Then Chavez decided to zero in on the top grower and roaster in the country, Fama de America. They sent the military into invade their plants and eventually took all of their plants away. They offered 10% of the value as a token payment.
All over the country are business owners waiting for more trouble to come from the government, while Chavez touts his new alliances with Iran and with Russia. Recent news is that youth as young as 12 are being recruited to work as propagandists for the state, and property confiscations are increasing. Chavez is desperate and doing the things that dictators do when they’re cornered. It won’t be that long.
May 4, 2010 @ 7:30 pm
I thought that would have been clear when he revalued the currency. Instead of tackling inflation or rebuilding flagging industries, he decided to drop a few zeros at the end of their currency. Doesn’t make sense. When you take this into account of his aggression toward foreign investment (especially in the much needed oil industry) and his nationalisation of other companies you have a recipe for a badly mismanaged economic system. Oh well, he can always blame another minister and fire him…for the 1000th time.