Chavez’ new folly: To nationalize Colombian companies in Venezuela

March 6, 2008

Chavez threatened tonight to nationalize all Colombian companies in Venezuela, “rescuing” some of them and shutting down the gas pipeline from the Perija peninsula. He also said he would start looking at alternatives for the imports that come from Colombia. He asked his Ministers to make a “list” of all the companies and put them on a map.

Let’s analyze the irrationality of it all:

—First and foremost, this is all over the Colombian Government murdering a terrorist member of guerrilla group FARC, which ahs been trying to overthrow the Colombian Government for decades. Moreover, the man was a murderer.

—Second, recall there is a judge in the UK deciding tonight whether to freeze or not PDVSA’s assets worldwide. ExxonMobil’s argument has been that PDVSA and the Venezuelan Government acted in bad faith. PDVSA’s lawyers argued that PDVSA and Venezuela had acted in good faith and intended to honor the debt, which they fix at their own preconceived value. How do you think this judge is going to react to a vague threat of nationalization of all private Colombian companies by the President of Venezuela?

—Third, a Government which can barely provide food for its inhabitants after controlling borders, foreign exchange, imports, exports, will now start looking for replacements for all those imports from Colombian as if the almost US$ 1 billion in auto parts that comes from Colombian was not associated at established business relationships. To begin with, most auto factories in Venezuela will shut down in three or four days. As simple as that.

—Fourth, while we really do not import as much food from Colombia, recall there are widespread shortages of foodstuffs already. This will not help.

—Five, these incompetent Ministers will now waste their time making an inventory and by the time they give it to Chavez he is likely to have forgotten about it, much like so many of his “live” improvised ideas over the last nine years.

—Six, the gas pipeline from Colombia is minor in terms of the country’s gas volume used (10%), but the city of Maracaibo depends on this. Cut it off and it will have to be replaced with expensive diesel or fuel oil.

Clearly, the main man is losing it and very fast. In the end he will hurt his constituents the most at a time that he can least afford it.
The whole thing is so nutty that I am starting to get optimistic…things will unravel very fast at this pace, as predicted.

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