Arcadia Foundation

What do a steel company, urban development projects and golf courses all have in common? They are three of the latest targets of Hugo Chávez’s nationalization drive – and part of his plan for renewed popularity.

The background is a severe shortage of decent housing: over 2m homes are needed, by some counts, in a country of 28m people. Half of the population live in chaotic shanty towns, and they need change.

Faced with such problems, Hugo Chávez’s first instinct is often to declare, “Expropriate it!”. That’s now the fate of Sidetur, the steel company which controls 87 per cent of the domestic market for steel rods essential for building houses. It has been overcharging, or worse still hoarding or even exporting the rods at still higher prices, Chávez said in his Aló Presidente television show on Sunday, ordering its expropriation. Under state control, the rods will cost less and be more available, thus boosting construction, goes his argument.

Continued, as excerpted from the Financial Times ‘Beyond BRICs’ Blog:

Likewise, a whole raft of incomplete urban residential development projects have been expropriated. The government accuses the construction companies of overcharging, charging in advance, demanding exorbitant interest rates, and so on. “We are obliged to protect the middle class. The middle class must feel protected by the Bolivarian revolution and this government,” said Chávez on Aló Presidente.

As for the golf courses, they can be expropriated too, the president added. Indeed, they are his perfect targets: the stomping ground of the “squalid” bourgeoisie, arch-enemies of the revolution, and ideal construction sites.

In their defence, the construction companies can point to the constraints on new construction: high inflation, red tape, official corruption, and the scarcity of building materials and foreign currency. Many others will be sceptical that state control will alleviate such factors.

The housing crisis has not got much better during Chávez’s almost 12 years in office – and, with Sunday’s presidential outbursts, it might now get worse.

Comments