World News

Chavez ups leftist drive with private sector attack

CARACAS (Reuters) - Venezuelan President Hugo Chavez accelerated his socialist revolution on Monday, seeking increased powers from Congress, nationalizing firms and promising to strip the central bank of its autonomy.

The anti-U.S. leader, a close ally of Iran and Cuba, has pledged to deepen his centralizing reforms, and Monday’s fiery speech was his strongest step in that direction since his landslide re-election last month. He refutes opposition charges that such moves will create a Cuban-style one-party state.

Chavez said he would submit a “revolutionary enabling law” to legislators through which he would be able to pass bills by decree to rush through socialist economic packages. The measure is expected to sail through Congress, dominated by Chavez supporters after the opposition boycotted the 2005 election.

“We are making the final revisions so we can send it to the National Assembly in the next few days to request special powers,” he said at the swearing-in of the OPEC heavyweight’s cabinet ministers.

Chavez, in power since 1999, said he would nationalize telecommunications firm CANTV, Venezuela’s largest telecommunications firm, and unspecified energy companies in the fourth biggest oil exporter to the United States.

He will be sworn in on Wednesday for a third term that will last through 2013.

Chavez skirmished with CANTV earlier this year, saying he would nationalize the firm unless it adjusted its pension payments to match the minimum wage.

Venezuelan bonds fell by more than 1 percent.

“These disconcerting policy announcements represent a clear turn into deeper nationalist and interventionist policies, which can lead to further erosion of business confidence and the country’s macro and institutional fundamentals,” economist Alberto Ramos said in a Goldman Sachs research note.

Chavez’s confiscations in the past have focused on land, distributing private estates, sometimes foreign-owned, to poor farmers.


Chavez also said the heavy crude projects of the Orinoco Belt would become state property, referring to plants that process tarry eastern Venezuelan crude oil into fuel.

These Orinoco projects are in the hands of foreign companies such as Chevron, ExxonMobil, BP, Statoil and Conoco Phillips and Venezuela has been pushing to have a majority stake in them. It was not immediately clear if Chavez was suggesting something stronger with his call that they become state property.

Chavez said central bank autonomy could not continue and called the institution’s independence “disastrous.”

“The central bank must not be autonomous, that is a neoliberal idea,” he said.

Chavez has met resistance from central bank directors who object to the leftist president dipping into state coffers for lavish social spending of oil wealth, which wins him supporters but stokes rampant inflation.

The president has also sparred with the central bank over the calculation of Venezuelan’s 17-percent annual inflation. He wants data included from state-subsidized stores that would douse the runaway figures.

Chavez is pulling the disparate parties that make up his government into a single one, sparking accusations that he is seeking a Communist-style system. He denies the charge, saying he will always allow opposition.

But giving ammunition to those who say he is centralizing the state, he has said only those loyal to his movement can serve in the army or work in the giant state oil company.

His decision last month not to renew the license of an opposition television channel has also drawn widespread international condemnation that he will not muzzle voices that do not sign up to his reforms.