A leader who starves his people has no qualms stealing your company
Read Venezuelan American Leadership Council President, Martin Rodil's op-ed piece featured by the Hill.
When General Motor's factory was seized Wednesday by the dictatorial Venezuelan regime of Nicolas Maduro, some of us were not surprised.
On April 5, I warned in The Hill, that more state sponsored pillaging was on its way. Former President Hugo Chavez started a process to expropriate a nation, and Maduro is finishing it off. Americans are far from immune.
Individual Venezuelan businessmen are well aware of this policy, having seen their private enterprises —and decades of successes — snatched away from them by greedy, corrupt and inefficient Chavista officials.
American companies really should start to learn these simple lessons. In 2006, Chavez went after both ExxonMobil and ConocoPhillips, among other U.S. companies, forcing them to reduce their ownership stakes if they wanted to continue working in the Orinoco Belt's extra-heavy crude area.
Twenty-five different companies have now taken the socialist dictatorship to an arbitration panel sponsored by the World Bank over the very issues of illegal expropriation and nationalization. Since 2003, there have been over 1,200 expropriations by Chavez and Maduro!
As I noted earlier this month, these confiscations are not only illegal, but they further impoverish the Venezuelan people. PDVSA, the Venezuelan state oil company, is exhibit A of this disastrous policy. Chavez fired over 20,000 employees at PDVSA between 2002-2003 to take complete control of the company. Scores of talented executives and experienced employees found themselves on the street.
At the time, PDVSA was producing 2.76 million barrels a day. Today, the company can hardly keep up with the market, producing fewer than 2 million barrels a day and struggling to pay its massive debts to creditors and service providers.
Likewise, Sidor, a Venezuela steelmaker company, was nationalized in 2008. Back in 2007, it was producing 4.3 million tons of liquid steel annually. Yet, in less than a decade, it is out of business. It was recently reported that its workers, instead of producing steel, were growing sunflowers and vegetables on the company premises to fight the country's ongoing food crisis.
While the government hides numbers, those same press reports suggest that only 11,300 tons of liquid steel were produced in January. At that pace, 2017 will end with an annual output of just 3 percent of its installed capacity; the lowest since the company opened in 1963 — state-sanctioned inefficiency.
The car industry in Venezuela has been falling to pieces for some time. With no access to dollars, demand is strangled and supply is expensive. Yet, foreign companies, including American automakers, have been turning a blind eye to the economic collapse, the humanitarian crisis and the creation of a purer "socialist" economy. It is a classic example of burying one's head in the sand.
The last week should stand as a warning to all foreign interests in Venezuela. Pro-democracy protests in the hundreds of thousands against poverty and oppression were met with violence and further oppression. This is a corrupt, terror-peddling regime which massacres and starves its own people. Another nine brave young innocent democracy protesters were brutally murdered this week.
A country that kills its own people, has no problem stealing your business.
Martin Rodil is the president of the Washington-based Venezuelan American Leadership Council and a frequent contributor to The Hill.