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Brazilian companies free of nationalization spree, promises Chavez

Wednesday, May 27th 2009 - 12:05 UTC
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Plenty of funds to keep taking over strategic sectors of the Venezuelan economy Plenty of funds to keep taking over strategic sectors of the Venezuelan economy

Venezuelan president Hugo Chavez told his Brazilian peer Lula da Silva that Brazilian corporations are safe from the current nationalization process in his oil-rich country. The two presidents met on Tuesday in Bahia to discuss Mercosur, energy, finances and regional integration.

“We’re in a nationalization phase of corporations in Venezuela, except those which are Brazilian” said Chavez during the bilateral meeting at closed doors but which was overheard by journalists who were waiting outside, because of the open network of microphones ready for the announced press conference.

Chavez also added a touch of humour to the meeting saying he tried to convince Brazilian construction and public works contractor tycoon Emilio Odebrecht to become a Socialist, but the businessman refused.

“I tried to talk Don Emilio into joining the Socialist crusade, but he laughed and said no”, pointed out Chavez.

The Venezuelan president alto talked about the recent nationalization of steel manufactured goods companies including several from the Argentine-Italian Technit group. He supported his decision arguing that Techint was shipping Venezuelan steel to Mexico for the manufacture of steel tubes which were then sold to the Venezuelan oil company PDVSA at very high prices.

Chavez also suggested that Venezuela has sufficient resources to continue with the nationalization program.

“We have been asked if we have the sufficient resources to keep up with nationalizations. Yes, we do. One side says we should invest in other areas, but so far they have been profitable investments which will continue to strengthen the economy. We’re not dumping money”, said the Venezuelan leader during the press conference.

Nationalizations will continue “according to our possibilities, because our priority in social investments and protecting jobs” he added. “Venezuela’s international reserves are three times those of ten years ago, and with the kind of investments we’ve done we’ve managed to rapidly recover the funding. Such is the case with the telecommunications companies: we recovered our investment in two years”.

Furthermore “nationalizations so far are equivalent to ten billion US dollars which left Venezuela every year and now they remain in the country”.

Chavez also sent a message of support to Argentine president Cristina Fernandez de Kirchner who has been seriously criticized for not defending the interests of Argentine corporations nationalized in Venezuela.

“I want to send my best regards to Argentine president Cristina who is being criticized with the purpose of attacking her and our relation. Certain media is obsessed in demonizing relations with Venezuela”, said Chavez.

“We have nationalized some corporations in Venezuela from strategic sectors, and now they are accusing Cristina of not defending Argentine interests”. On the contrary said Chavez, they should be grateful “because her mediation helped achieve the purchase contracts of those companies”.

The Argentine Industries Union, UIA, is furious with the Kirchner administration for not having intervened to impede the nationalization of Argentine interests in Venezuela and is now demanding that “Venezuela be excluded from Mercosur”.

Argentine manufacturers also fear that following the June mid term elections if the Kirchners manage to survive with a reasonable presence in Congress they could be tempted to advance in “strategic” sectors of the economy, as has been done with airlines, post office, public utility companies and the private pensions’ funds among others.

Categories: Investments, Argentina, Brazil.

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  • Bubba

    “Presidents Luiz Inacio Lula da Silva of Brazil and Hugo Chávez of Venezuela expressed confidence on Tuesday that the obstacles holding up major deals between their respective state oil companies will be resolved within the next three months.” When Braspetro replaced the PDVSA management Venezuela could export 2,203,000 barrels per day. One year later, 1,900,000 per day. If I were Chavez I too would want some rebates, even if it is stealing investments made in good faith and by invitation.

    May 30th, 2009 - 12:48 pm 0
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