In Venezuela, gas was nationalized in 1971, and oil was nationalized in 2001. A lot has happened since then, including a recent drop in the price of oil. With a such a large time frame, a number of factors might better explain the current crisis in Venezuela. If we were in a recession right now and someone tried to blame it on 9/11, I think you would be more than little skeptical.
Do you not understand that Chavez nationalized a TON OF OTHER SHIT? And that’s largely why none of those other industries exist any more?
Below are the main nationalizations under Chavez:
- In 2007, Chavez’s government took a majority stake in four oil projects in the vast Orinoco heavy crude belt worth an estimated $30 billion in total.
Exxon Mobil Corp and ConocoPhillips quit the country as a result and filed arbitration claims. Late last year, an arbitration panel ordered Venezuela to pay Exxon $908 million, though a larger case is still ongoing.
France’s Total SA and Norway’s StatoilHydro ASA received about $1 billion in compensation after reducing their holdings. Britain’s BP Plc and America’s Chevron Corp remained as minority partners.
- In 2008, Chavez’s administration implemented a windfall tax of 50 percent for prices over $70 per barrel, and 60 percent on oil over $100. Oil reached $147 that year, but soon slumped.
- In 2009, Chavez seized a major gas injection project belonging to Williams Cos Inc and a range of assets from local service companies. This year, the energy minister said the government would pay $420 million to Williams and one of its U.S. partners, Exterran Holdings, for the takeover.
- In June 2010, the government seized 11 oil rigs from Oklahoma-based Helmerich & Payne Inc.
- In 2009, Chavez nationalized a rice mill operated by a local unit of U.S. food giant Cargill Inc.
- In October 2010, Venezuela nationalized Fertinitro, one of the world’s biggest producers of nitrogen fertilizer, as well as Agroislena, a major local agricultural supply company. It also said it would take control of nearly 200,000 hectares (494,000 acres) of land owned by British meat company Vestey Foods.
- Vestey had already filed for arbitration over the earlier takeover of a ranch. Chavez said the latest deal with Vestey was a “friendly agreement.”
- In 2005, Chavez began implementing a 2001 law letting the state expropriate unproductive farms or seize land without proper titles. He has redistributed millions of acres deemed idle to boost food production and ease rural poverty.
- Chavez’s government has repeatedly threatened to seize Empresas Polar, Venezuela’s biggest employer and largest brewer and food processor.
- In June 2010, Venezuela took over the mid-sized bank Banco Federal, citing liquidity problems and risk of fraud. The bank was closely linked to anti-government TV station Globovision.
- In 2009, Chavez paid $1 billion for Banco de Venezuela, a division of Spanish bank Grupo Santander.
- The government has closed a dozen small banks since November 2009 for what it said were operational irregularities. Some were reopened as state-run firms. Brokerages have also been closed and some employees jailed. Chavez has vowed to nationalize any bank that fails to meet government lending guidelines or is in financial trouble.
- In October 2010, Chavez ordered the takeover of the local operations of Owens Illinois Inc, which describes itself as the world’s largest glass container maker.
- Chavez in April 2008 announced the government takeover of the cement sector, targeting Switzerland’s Holcim Ltd, France’s Lafarge SA, and Mexico’s Cemex SAB de CV.
- Chavez has considered bringing mining more firmly into state hands, and in 2009 the mining ministry seized Gold Reserve Inc’s Brisas project, which sits on one of Latin America’s largest gold veins. Gold Reserve immediately filed for arbitration with ICSID.
- In August 2011, Chavez said he was nationalizing the gold industry. Toronto-listed Rusoro Mining Ltd, owned by Russia’s Agapov family, was the only large gold miner operating in Venezuela, and this year it filed for arbitration.
- The government paid $2 billion in 2009 for Argentine-led Ternium SA’s stake in Venezuela’s largest steel mill.
- In 2007, the nation’s largest telecommunications company CANTV was nationalized after the government bought out the U.S.-based Verizon Communications Inc’s 28.5 percent stake for $572 million. Analysts said Verizon received fair compensations for its assets.
- In 2007, Venezuela expropriated the assets of U.S.-based AES Corp in Electricidad de Caracas, the nation’s largest private power producer. The government paid AES $740 million for its 82 percent stake in the company. Analysts described the deal as fair for AES.
- In September 2011, the government nationalized a local ferry company, Conferry, which operates from the mainland to the resort island of Margarita. Conferry is owned by a wealthy family and began operating in 1959.
- In October 2011, Chavez said his government would seize private homes on the Los Roques archipelago in the Caribbean and use them for state-run tourism. The islands are among the nation’s favorite and most expensive tourist spots, with pristine white beaches and coral reefs that teem with sea life.
And that isn’t all of it. That’s just the highlight reel from an article written in 2012.
Now, I realize the right has been predicting doom and gloom for a long time. That doesn’t mean they are right when a catastrophe finally happens.
It does in fact mean that they are right when exactly what they predicted would happen, does in fact happen, pretty much exactly as they predicted.
And that’s what happened.
On some level here, if you refuse to acknowledge reality and realize the repercussions of actions after you actually witness them, then you are being totally irrational. This is no longer an academic discussion of potentialities. This is simply historical fact at this point. And if you refuse to acknowledge it, then you are just being an ideologue who is doomed to repeat those mistakes again.
The extreme left likewise predicts the fall of capitalism, that doesn’t mean their theories are right when the housing market fails.
That’s because capitalism didn’t fall. That’s the difference here.
When comparing the effects of nationalization to the effects of oil prices, it’s helpful to look at other measures. Are there are other heavily oil-dependent economies that that find themselves in a similar economic crisis? Certainly so, from Saudi Arabia to Russia to Alaska. Even Norway is now facing a possible recession.
No man, you are wrong. None of those other places have had their currency devalued to the point of being worthless. Here’s a graph of the exchange rate:
And even so, you’re using other examples of nations with hugely nationalized industry as examples of other places things are bad. So lulz to that?
How about other effects of nationalization in Venezuela? Are memories of 2001 still scaring off business and preventing foreign direct investment? No, in fact foreign direct investment in Venezuela was at an all time high in 2013.
WTF are you talking about? You realize that Chavez died in 2013, right? And at that point, Venezuela was ranked top of the Global Misery Index for the second year in a row? It was ranked 180 out of 185 in terms of countries to do business in. They had widespread shortages of everything, including basic medical supplies, so tons of folks died of things which could have been prevented. Venezuela’s economy was DESTROYED by 2013. They were consistently pretty much terrible for foreign investments under Chavez.