(OPE-L) Venezuela Says Economy to Move Away From Capitalism

From: glevy@PRATT.EDU
Date: Fri Sep 03 2004 - 09:05:05 EDT

(Bloomberg News Service is owned by the Republican Party Mayor
of New York City./JL)

Bloomberg - August 27, 2004

Venezuela Says Economy to Move Away From Capitalism

by Alex Kennedy

CARACAS--Aug. 27 (Bloomberg) -- Venezuelan President Hugo Chavez said  the
country's economy must move away from capitalism and eliminate
land holdings.

Chavez, who won a recall vote against him on Aug. 15, said the
businessmen should help the government change the world's fifth-
oil supplier into a ``humanist" economy from a ``neo-liberal" one.

``I call on private businessmen to work together with us to build the  new
economy, transforming the capitalist economic model into a social,
humanist and equality economy," Chavez said during a televised speech  in
Caracas. ``The time has come to accelerate the transformation. The
revolution has just begun."

Chavez, 50, who counts Cuban President Fidel Castro among his
said in his weekly address to the nation on Aug. 8 that the
referendum on
whether to remove him from office was an attempt by the U.S. -- which
purchases 60 percent of Venezuela's oil exports -- to replace him  with a
pro-American government.

The former lieutenant colonel survived a two-day coup attempt in 2002  and
two-month national strike last year aimed at ousting him.

Chavez said he plans to apply more rigorously the country's Land Law,
which allows the government to confiscate unused land.

``We have to eliminate large land holdings in Venezuela," Chavez
``What we've done so far has been very, very superficial."

The government may seek to replace some central bank directors in  order to
have more control over the bank, which is the only major institution  in
the country that has remained ``somewhat independent" of Chavez, said
Miguel Octavio, executive director of Caracas brokerage BBO Financial


``Everybody expects Chavez to get tougher and deepen the revolution,"
Octavio said in a telephone interview. ``Chavez has to walk a fine  line
though, since oil people are willing to invest here as long as Chavez
doesn't get too scary."

The economy grew 23 percent in the first half as oil production
from the strike that cost $10 billion, according to the government.  Oil
sales account for about half of government income and 80 percent of  exports.

Talks between the government and businessmen, such as the meeting
yesterday between Finance Minister Tobias Nobrega and the Venezuelan
American Chamber of Commerce, are unlikely to improve relations
because of
a mutual mistrust, Octavio said.

`Whatever It Wants'

``The government is going to do whatever it wants," Octavio said.  ``The
private sector just doesn't trust him."

Carlos Fernandez, the previous president of Venezuela's largest
organization, the Federation of Chambers of Commerce and Industry,  was
arrested for treason last year after leading the strike that cut oil
output as much as 95 percent. He fled the country when a judge freed  him
after a month under house arrest.

The organization's leader before Fernandez, Pedro Carmona, replaced  Chavez
as president for less than a day during the failed coup and afterward  was
granted asylum in Colombia.

``When I talk about dialogue, let no one be mistaken," Chavez said.  ``The
dialogue is to advance, to implement the constitution."

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