Monday, June 12, 2006

Hugo Chavez, Perhaps Facing Fiscal Crisis, Threatens Venezuela's Private Sector

At Publius Pundit, and also reposted at VCrisis, a report of a demand by Hugo Chavez for the private sector repatriate $10,000,000,000 that has been moved out of Venezuela since his reign began. It begins with this report from the EFE News Service:

"I ask you to bring back the $10 billion you took out over the last 10 years and invest it in this country. If you don't we will have to take measures after our victory on Dec. 3," Chavez said at a ceremony in Maracaibo, 700 kilometers (435 miles) west of Caracas.

Like the author at Publius Pundit, A.M. Mora y Leon, I think it likely that Chavez is facing a fiscal crisis and needs the hard currency such a repatriation would provide. A.M. Mora y Leon reaches and additional, frightening conclusion:
I am very fearful of this, because although Chavista social programs disgust most people by creating a permanent welfare class, Zimbabwe-style or Cuba-style expropriations are quite another thing, and there are people who might fight back, as happened in El Salvador and in Colombia, the classic death-squad-war scenario. Wars over land are always the most violent and bitter.

I would only add that dictators like Mr. Chavez have the advantage that very little prosperity is needed to sustain them. It may be that Chavez needs the money to fund his grandiose social programs, but he is probably cunning enough to maintain himself in power without the full benefit of that cash. Leftist dictatorship is the result of politics becoming and end in itself. Maintaining his political superiority perhaps requires fewer financial resources than Publius Pundit imagines. It is possible that Venezuela will devolve into civil war; it is also possible that Chavez is shrewd enough to avoid that pitfall, and instead will slowly strangle sources of opposition until only his gangster regime remains.

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