Hugo Chavez announced plans on Monday to nationalize companies in Venezuela’s telecommunications and power industries, saying: “All that was privatized, let it be nationalized.” The recently re-elected president has ramped up efforts to transform Venezuela into a socialist society, while at the same time consolidating his power.
New York Times:
Mr. Chavez, who will be sworn in Wednesday to another six-year term, announced his plans at the swearing-in of his new cabinet to a cheering crowd of supporters, sending a chilling message to foreign investors.
American corporations, including Verizon Communications, have large stakes in Venezuela’s largest telecommunications company, CANTV, and its biggest publicly traded electricity company, Electricidad de Caracas.
“Let it be nationalized,” Mr. Chavez said of CANTV. “All that was privatized, let it be nationalized.”
Financial markets appeared to be caught off-guard by Mr. Chavez’s announcement, as speculators reacted with a sell-off of assets that would be affected by the decision. Shares in CANTV plunged 14 percent in New York trading. Venezuela’s currency, the bolivar, fell as much as 20 percent in black market trading [in Caracas] on Monday, traders said.
The announcement was the latest in a series of bold steps Mr. Chavez has taken since his re-election in December to consolidate his power and move Venezuela toward what he calls a socialist revolution. Mr. Chavez said he would also seek a “revolutionary enabling law” from Congress that would allow him to approve bills by decree, as well as a measure stripping the central bank of its autonomy.