Caracas, 10 February 2010, (venezuelanalysis.com) – The Venezuelan government has moved to close and expropriate the historic La Francia building, alleged to be a centre for illegal gold and money trading, near the southwest corner of Plaza Bolivar in downtown Caracas, following orders by Venezuelan President Hugo Chavez during his weekly television show Alo Presidente last Sunday.
In addition to La Francia, Chavez also ordered the expropriation of five other commercial buildings, some of which were already vacant, bordering Plaza Bolivar as part of a plan to recover the historic centre of the city.
La Francia, where about 90 jewellery stores are located, is notorious for its scores of unauthorised brokers and agents who trawl the surrounding streets offering to buy and sell dollars, euros, gold and illegally mined gemstones. Tourists frequently report being robbed or swindled by the money traders.
Milena Bravo, rector of the University of the Oriente (UDO), which has owned La Francia since 1969 and receives BsF 300 000 per month in rent from the tenants protested the government measure arguing it was illegal. However, Venezuelan law allows for expropriations with compensation in the interests of “public utility.”
In turn, Mayor of the central Caracas district of Libertador, Jorge Rodriguez, challenged the rector to explain the dilapidated state of La Francia, which is classified as a heritage building and to clarify what the building was being used for, pointing out that many of the tenants did not have legal title or leases, or licences to be carrying out the activities they were involved in.
National Assembly deputy, Adel El Zabayar, alleged that the activities in La Francia have a “strong influence on what we call the parallel foreign exchange market, from there begins the source of speculation the purpose of which is sabotage.”
Venezuela introduced foreign exchange controls in 2003 after a politically motivated oil industry lockout and capital strike that attempted to overthrow the democratically elected Chavez and saw billions of dollars flow out of the country. Since then Venezuela has experienced billions of dollars in illegal capital flight through the parallel market, where the dollar currently trades at 1.5 times the official rate.
Noel Álvarez, the current president of Venezuela’s business chamber FEDECAMARAS, which led a failed coup against Chavez in 2002, said business sectors had declared an “emergency” following the measure which they described as an attack on private property.
A scuffle also broke out between some bystanders supporting the measure and some workers concerned about losing their jobs as the mayoralty of Libertador took control of the building on Tuesday. Approximately 1,500 employees are estimated to work in the building.
However, Rodriguez assured that a census of the workers was being carried out and steps would be taken in order to guarantee job security. “That same Sunday I gave the instruction to the director of urban control of the mayoralty of Caracas in order to carry out a census of workers and invite them to a meeting in order to achieve all the necessary agreements,” he told state television channel VTV.