Chavez to annex idle companies

CARACAS – Venezuelan President Hugo Chavez has vowed to expropriate as many as 700 failed companies and more than a thousand others operating below full capacity.

“If (company) owners don’t want to open those (failed) companies we will have to expropriate them and open them ourselves,” Chavez said on Sunday during his televised call-in show ‘Alo Presidente’. The president said he had a list of companies that are totally or partly idle and warned owners that ceasing operations goes against the constitution.He said he could confiscate as many as 1 149 companies for operating below capacity.Chavez noted that expropriation would be a last recourse to bring those companies back to life and said capitalism is to blame for those companies going under.So far this year, the government has confiscated the assets of a failed paper company and a valve company.In both cases the mostly pro-Chavez congress voted to declare these assets “of public interest” to pave the way for a state-led takeover.During Chavez’s earlier time in office, political upheaval led to the closing of thousands of companies.In most recent years, however, companies cite low labour market flexibility and capital as well as price controls as difficulties doing business in the country.And Chavez’s leftist rhetoric also scares off investment, critics claim.The Chavez government has also pushed temporary seizures of what it considers “idle” land in agriculture-ready areas.Under the land law designed and approved by the Chavez government, the state can seize land if it’s deemed idle or if its ownership status is in question.Owners are then given a production schedule and must follow it or face eventual expropriation.Land in urban areas is also at risk of expropriation to make way for low-cost housing developments.Chavez has called for the creation of a new socialist system for the 21st century in the Andean country.- Nampa-APThe president said he had a list of companies that are totally or partly idle and warned owners that ceasing operations goes against the constitution.He said he could confiscate as many as 1 149 companies for operating below capacity.Chavez noted that expropriation would be a last recourse to bring those companies back to life and said capitalism is to blame for those companies going under.So far this year, the government has confiscated the assets of a failed paper company and a valve company.In both cases the mostly pro-Chavez congress voted to declare these assets “of public interest” to pave the way for a state-led takeover.During Chavez’s earlier time in office, political upheaval led to the closing of thousands of companies.In most recent years, however, companies cite low labour market flexibility and capital as well as price controls as difficulties doing business in the country.And Chavez’s leftist rhetoric also scares off investment, critics claim.The Chavez government has also pushed temporary seizures of what it considers “idle” land in agriculture-ready areas.Under the land law designed and approved by the Chavez government, the state can seize land if it’s deemed idle or if its ownership status is in question.Owners are then given a production schedule and must follow it or face eventual expropriation.Land in urban areas is also at risk of expropriation to make way for low-cost housing developments.Chavez has called for the creation of a new socialist system for the 21st century in the Andean country.- Nampa-AP