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LATIN AMERICA |
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Chavez
Snatches Venezuela Hotel in Latest Takeover
By Jeremy Morgan, Latin American Herald
Tribune
CARACAS President Hugo Chavez went back on
the takeover trail Tuesday, publishing a
decree nationalizing a Hilton hotel on
Margarita Island in Nueva Esparta,
Venezuela's holiday playground state.
Chavez justified his move on the Hilton
Margarita Hotel and Suites and the Marina,
by claiming that the premises -- including
all the assets inside and outside -- were
required to carry out an urgently-needed
"social development" project in the tourism
sector in Nueva Esparta. The decree, set out
in the Gazeta Oficial on Tuesday, said both
centers would be transferred to the
state-owned tourism company, Venetur.
Hilton Margarita Hotel and Suites has 260
individual guest rooms, 154 suites for
time-share occupation, and 56 luxury suites,
as well as a casino, shops, restaurants,
bars and offices.
No indication of the likely cost of either
takeover or even whether there would be
compensation was given by the government in
the tersely-worded decree.
The Hilton was owned by a local company but
managed by Hilton Worldwide.
The takeovers were the latest step in a
nationalization spree which has been gaining
pace in recent years. To date, the list of
nationalized companies has included large
names in telecommunications and other
sectors deemed to be of a "strategic"
importance to the economy.
The takeover splurge has, not surprisingly,
swept into the all-important oil sector --
which accounts for about half the economy
and around four-fifths of hard currency
export earnings -- cement, steel,
agricultural land, banking, mining, and the
food processing industry.
In many, but not necessarily all, of the
takeovers, the target companies have
belonged to large multinational companies of
foreign origin. By no means have all the
takeovers yet been settled with the former
owners, and in some cases the two sides seem
nowhere nearer reaching terms on
compensation than they were when Chavez
unleashed his thunderbolts.
In oil, for instance, ExxonMobil and
ConocoPhillips are both resorting to legal
action in international courts and tribunals
over compensation for their billions of
dollars of investments in heavy oil fields
in the Orinoco Basin. While some of the
other Orinoco oil companies went along with
Chavez' demand for a 60 percent stake and
majority state control of all fields in the
Basin, some of them are also still waiting
actually to receive any money, although the
Latin American Herald Tribune has learned
that some of the debt to foreign firms, such
as Italian ENI, was recently paid with full
tankers of oil.
Similarly, compensation remains at issue in
the cement industry, one of Chavez's earlier
targets. In all, three of the world's
largest cement companies were affected --
Cemex of Mexico, the biggest cement company
in the Americas, Hilcom of Switzerland and
Lafarge of France.
The government recently announced that it
had agreed with Lafarge on a first
installment to be paid to the company in
exchange for its interests in two companies
in Venezuela. But there's no sign even of
movement towards progress with the other two
cement producers. On the contrary,
unconfirmed reports talk of both Cemex and
Holcim heading towards international legal
action or arbitration.
Neither did Tuesday's hotel takeover mark
the first time that Chavez's ever-widening
takeover radar has locked on to the hotel
sector. Earlier this decade, he also
cancelled the management contract with
Hilton on the Caracas Hilton, in what was
seen was a populist move because of the
hotel's location in the capital near to the
halls of his government and its evocation of
North American Big Business and perceptions
of executive privilege.
The impression that the Hilton takeover was
primarily if not exclusively motivated by
political considerations gained weight when
it was renamed the Hotel Alba, after the
Bolivarian Alternative for the Americas
(ALBA). ALBA was set up by Chavez early this
decade as a rival to then United States
President George W Bush's Free Trade
Agreement for the Americas (AFTA).
Chavez saw AFTA has yet another attempt by
the United States to extend what he saw (and
still does see) as its execessive influence
or "hegemony" in the Western Hemisphere. In
the end, AFTA failed to come to fruition as
other Latin American leaders of Chavez's
populist, nationalist ilk also rang alarm
bells.
Washington desisted from pursuing the plan,
opting instead for a policy of doing
unilateral free trade deals with Latin
American countries interested in doing so.
Chavez has shown no more favor towards this
initiative than he did towards AFTA,
lambasting Colombian President Alvaro Uribe
-- an old sparring partner on a whole range
of issues -- as a traitor to the Latin
American cause for doing so.
Apparently by coincidence, in the Libertador
municipality of west Caracas, pro-Chavez
Mayor Jorge Rodrėguez announced that he had
signed a decree giving his authority direct
control of 12 municipal markets. The
"functions" of the markets would be
regulated by officials, he said, because the
markets had to be "at the service of the
people."
Rodrėguez, a former vice president appointed
by Chāvez as well as supposedly independent
electoral body CNE head, is a key figure in
the president's ruling United Socialist
Party of Venezuela (PSUV). |
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