Venezuela's Chavez To Create 200 'Socialist Companies'
By Raul Gallegos
Dow Jones
June 18, 2007
http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20070618%5cACQDJON200706181353DOWJONESDJONLINE000463.htm&;
Venezuela President Hugo Chavez announced this weekend that he will
launch 200 new state-owned "socialist companies" to produce a host
of goods ranging from oil pipelines to kitchen appliances.
Chavez's latest program, which he calls "Socialist Factory 2007,"
fits the hallmark of the South American president, who has already
created a number of state-owned companies to compete with the
private sector in almost every area of the economy.
"We've worked in this plan for socialist factories for a while...(to
produce) refrigerators, kitchen appliances, oil pipelines,
electricity and gas," Chavez said during his televised show "Hello
President," also listing plans for factories to make cement,
bicycles, wheelchairs, paper and cardboard.
Among the new enterprises, the state will create 88 food companies;
48 construction materials and tool companies; 19 glass, plastics and
rubber products companies; 10 transport companies; and 10 recycling
service firms.
In addition, Chavez will launch eight electric equipment companies
and four construction firms to help him push ahead with his promise
of building affordable housing for the poor.
For years, the leftist president has enthusiastically spent money to
revamp old or create new state-run enterprises. Since he took
office, his administration has built a new airline and a telecom
company CVG Telecom, as well as a tractor assembly plant and a
computer assembly plant, built jointly with Iran and China, respectively.
The idea behind all this, the president has insisted, is to make
Venezuela independent from foreign suppliers.
Economists and private sector leaders have often warned that
Chavez's spending is reckless and will ultimately hurt Venezuela's
private sector, already besieged by heavy government regulation. But
Chavez dismisses all criticism from his opponents as short-sightedness.
"Why can't we manufacture these products? Who said we can't?" Chavez
said. " We're working on many fronts at the same time."
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Michael A. Lebowitz
Professor Emeritus
Economics Department
Simon Fraser University
Burnaby, B.C., Canada V5A 1S6
Office Fax: (604) 291-5944
Home: Phone (604) 689-9510
