Venezuela's president nationalizes more private companies

June 2, 2009

According to an original Reuters report, Venezuela's President Hugo Chavez is moving his Bolivarian Revolution forward by nationalizing more private companies and clamping down against his opponents.

Some oil service companies were nationalized earlier this month along with other sectors like banking, cement and steel. Cited by Reuters, Chavez said on Saturday "We are proceeding and will continue to proceed with nationalizations of strategic sectors." According to The Financial Post, expropriation of oil service companies follows their dispute with Petróleos de Venezuela (PDVSA), the State-owned oil company. Past election victories since 1997 have strengthened Chavez's control and popularity (with more than 60% approval rating). He won a February referendum amending the constitution and letting him stay in power until he is not re-elected. Chavez, cited by Reuters, told party activists in April "I've said it before and I repeat, we must keep up the offensive, bulldozing the counter-revolution."

But the financial crisis, especially the low oil prices for the last months, has crippled his social revolution. During the last years, Chavez relied on high oil prices to push his social agenda. With the shortening of cash, Chavez cannot use oil revenues anymore to finance his budget. This wave of expropriation and the conflicts with oil service companies seems to reflect a desperate move to tackle the crisis, despite Chavez's words that the country is "well-equipped to weather the global recession."