Business, Finance & Economics

Chavez makes another grab


Venezuelans shave their heads in solidarity with Chavez.


Juan Barreto

Hugo Chavez just grabbed some more land.

According to El Universal, the Venezuelan president just took over 34,595 acres of land in central Venezuela.

He threw in some pig farms, too, for agrotourism, the government said.

“We have to seize lands from there to here, through all these valleys, to fight large estates,” Chavez said. 

Chavez is known for his tendencies to nationalize private enterprises, ostensibly for the good of the state. It also appears to be a kind of game. He likes to appear on television, pointing at things and shouting, "Expropriate it!" to cheers from the audience. 

Read more: Chavez eyes luxury yachts

It's a populist move, of course, in a country that still has high levels of poverty. Chavez is an artful populist. When it was revealed the president had cancer and had shaved his head as he underwent chemotherapy, supporters turned out to see hi, their heads shorn in solidarity.

The president is also facing reelection in 2012. He's almost certain to win, but it can't hurt to garner a little more popular support with a fresh round of expropriations.

That’s made it difficult for foreign investors, who come into Venezuela knowing they could lose it all on Chavez’s whim. Arbitration only works as long as the government’s willing to compromise. It usually isn’t.

The World Bank’s International Finance Corp.’s latest report on the ease of doing business in various countries ranks Venezuela pretty far down on the list, and well below the regional average.  

But let’s be honest. As long as Venezuela still has oil, investors will keep coming. The U.S. is still a major buyer of Venezuelan oil, even as the two countries regard each other with disdain. 

Venezuelan exports to the United States were U.S. $28.1 billion, which accounts for about 42 percent of total Venezuelan exports, according to the U.S. State Department.  

So Chavez keeps taking what he likes. Wonder what’s next?