Chavez-Brand Socialism -- Good for Business? Asks BusinessWeek
Socialism has its perks, according to BusinessWeek.
âItâs a bit like the âŚ French Revolution,â Smith quoted Venezuelan American Chamber of Commerce President Edmond J. Saade. âPower to the people, death to nobility.â
Of course, many Venezuelans are fleeing the country, and businessmen who stay behind are watching their businesses crumble. And inflation is rising at a whopping 18 percent per year. But thatâs in the last few paragraphs of Smithâs article.
One Venezuelan businessman, who feared government retaliation if he gave the press his name, reported âhis company has shrunk to just 100 employees from 300 since ChĂĄvez came to power in 1999, and sales have fallen by half,â Smith wrote.
The media have had a bizarre fascination with the Venezuelan dictator over the last few months, as the Business & Media Institute has documented. BusinessWeek managed to put a new spin on it by suggesting Chavezâs ways are partly good for business.
According to the story, ChĂĄvez has been able to take oil revenue and spend $13.3 billion on wealth redistribution. âThe poor, 58 percent of all Venezuelans, have seen their meager household incomes more than double since 2004 thanks to cash stipends, subsidized food and scholarships from the governmentâs social-development programs,â wrote Smith.
But Venezuela under ChĂĄvez is hardly a model for the world to follow. On a scale of 1 to 7, The 2007 Freedom House âFreedom in the Worldâ report gave Venezuela a 4 on both civil liberties and political rights. (To put that in perspective, North Korea received a 7 in both categories and the United States received a 1).
The BusinessWeek story didnât discuss human rights hardships in the country; nor did it discuss how ChĂĄvezâs âBolivarian Revolutionâ has impacted poverty in the nation.
In 2002, prior to ChĂĄvezâs rise to power, Venezuela was ranked 55th overall in the world by the United Nationsâ Human Development Index â a rating system that provides a comparative measure of life expectancy, literacy, education, and standard of living among the nations of the world. By 2006, Venezuela had fallen to 72nd and was outranked by its neighbors Colombia (70) and Brazil (69). (The U.S. was ranked 7th in the study.)
The countryâs quality of life has declined. And Chavez has seized private business assets for his own state use, which Smith stated: âChĂĄvez has already forced global oil giants, phone carriers, and power companies to hand over control of key assets. Now he says he might nationalize banks, hospitals, and steel companies.â
But Smithâs article pointed out that ChĂĄvezâs socialist programs are requiring the government to make huge purchases from American-based companies, including Coca-Cola (NYSE: KOF) and Ford Motor Co. (NYSE: F). âCompanies are chafing under the fiery socialist. But in some respects, business has never been better,â the article said.