MercoPress. South Atlantic News Agency

Venezuela invites private sector with joint ventures

Venezuelan president Hugo Chávez said foreign investors have no longer “any room in the country” because they are only interested in making money and transferring earnings overseas. However, he invited private companies to joint ventures in “non strategic” areas of the economy.

"The only purpose of capitalism has always been to obtain the most profits, that is why company owners take away overseas the money that belongs to the Venezuelan people, which our sovereign motherland" said Chavez during a rally with workers from the Argentine steel foundry Ternium-Sidor recently nationalized. Chavez criticized the multinational corporations adding that they are the ones "which really run the capitalist world, more than governments, legal systems, congresses and peoples". Chávez in the last few years has been nationalizing companies from the oil, electricity, steel and cement sectors which he describes as "strategic". But in spite of criticism he said he encourages Venezuela's private sector to work with his government to create new businesses and factories that would produce consumer goods. "My administration is open to joint ventures with private companies in "non-strategic" areas of the economy. Cooperation should spur growth", he underlined. The Venezuelan president is expected to unveil a set of new economic measures this week including possibly a new Finance minister according to the Caracas press. In spite of booming oil prices, growth is down to a four year low of 4.8% in the first quarter (8.8% in 2007) and annual inflation reached an annualized 29.3% in April. The Venezuelan Central Bank said last Monday soaring global food costs and looser price controls by the government had driven food and non-alcoholic beverage prices up a startling 6.1% in May. "In this period, we have been adjusting some prices that were regulated in categories that influence the price index" Planning Minister Haiman El Troudi said, adding that a 30% hike to public sector and minimum wages last month also made an impact. Domestic production has not kept up with consumer demand in Venezuela. The oil-strengthened Bolivar currency makes imports relatively cheap, but imported foods have this year grown more expensive. The government relaxed controls on goods such as beef, chicken and pre-cooked corn flour -- a staple of the Venezuelan diet -- after farmers said the regulations were to blame for sporadic shortages of basic products that hit Chavez's popularity.