Chavez Says Venezuela Will Expropriate Closed Enterprises

Venezuela’s President Chavez holding up a cacao seed during his weekly television program Aló Presidente. Credit: Prensa Presidencial

Caracas, Venezuela, July 18, 2005—Venezuela’s President Chavez announced that all closed businesses will be evaluated as to whether they should be expropriated and reopened under worker control. Chavez made the announcement Sunday, during his weekly television program Aló Presidente.

According to Chavez, the government already has a list of 136 closed businesses that appear to be ideal candidates for expropriation, which are currently being evaluated. “We have discovered 700 closed enterprises. That cannot be,” said Chavez.  “It is against the national constitution that there are closed businesses in Venezuela. This is just as with idle [agricultural] land,” he added.

Chavez made the announcement during the inauguration of the Agro-industrial Cooperative Cacao Union, which was a business that had been closed for nine years and was re-opened by workers with the help of a credit from the Venezuelan government.

Chavez explained that this cacao processing cooperative would be part of the Venezuela state’s Social Production Enterprises (EPS – Empresas de Producción Social), which will help bring about the socialism of the 21st century. According to Chavez, all state-owned enterprises would be turned into Social Production Enterprises, whose goal would be to create three types of EPS units: of communal production, of communal service, and of communal distribution. In all three types solidarity, cooperation, complementarity, and equity must predominate.

Examples of enterprises that should be turned into EPS are Cadafe (the electrical company), Hidroven (the water company), the Metro, Conviasa (the state airline). The state-owned oil company PDVSA is an enterprise that that has already undergone the transition from capitalist enterprise to social production enterprise, said Chavez. Except for PDVSA nearly all of Venezuela’s state-owned enterprises are regular capitalist enterprises. “All productive spaces of the state must be transformed so as to create units of production and communal services,” explained Chavez.

Expropriations to advance this program would, however, be only a last resort. Agreements with current owners would first be attempted, so that the enterprises might reopen as social production enterprises with government support. Agreements could be reached, “always when the owners are willing to improve the enterprise, to promote worker participation, and to involve them in the distribution of the products, as well as to make them participants in the benefits [of the enterprise],” said Chavez.

If this is not possible, the enterprise would be expropriated, as has already happened with several bankrupt enterprises, such as the paper factory Invepal and the valve-making factory Inveval. According to Venezuelan law, owners of expropriated businesses receive full market value for their expropriated business.