Political Risk Latin America Blog @PolRiskLatam

Chávez cozies up to private sector ahead of key vote

Posted in News and Articles, Political Risk by politicalrisklatam on September 14, 2010

by Finacial Times, September  13th, 2010.

Never mind the fact that just a few months ago Hugo Chávez declared “war” on the business community. The compensation agreement with Holcim announced today, following a similar deal reached with Casino recently, suggests that Venezuela’s socialist leader is making an effort to show that he does care about the private sector after all.

If so, the reason is clear enough: there are crucial legislative elections later this month, and it looks like the result will be close – so every vote counts. And Chávez knows that many Venezuelans hold their right to private property dearly.

Indeed, the latest survey by local pollster Hinterlaces shows that 64 per cent of Venezuelans disapprove of the way the government runs the economy, largely characterised by nationalisations and intervention in the private sector (in fact, private business is the sector in the country with the third-highest approval rating, after universities and the church, according to the poll).

Still, the government’s treatment of the private sector is erratic. Mexican cement group Cemex must be asking itself where it went wrong. In 2008 Chavez nationalised the entire cement sector, valued at about $2bn, and agreements have now been reached with both Holcim and Lafarge. (continue reading… )

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