Venezuela: Government intervenes into banks, agribusiness

Issue 

Officials from the Venezuelan National Land Institute, supported by the National Guard, took over 31 farms across the country on November 23, totalling 19,000 hectares of farmland. The government said the landowners did not have legal titles or were not putting the land to adequate use.

The La Milagrosa property in Zulia state was among those occupied. It was owned by opposition leader and ex-presidential candidate, Manuel Rosales, who fled to Peru early this year in order to avoid corruption charges.

The 2001 Land Law allows the government to take over lands deemed idle or not adequately used, in order to promote national food production. Venezuela, which imports the majority of its food, is seeking to become self-sufficient through developing its agriculture industry and promoting farmer cooperatives.

However, business group Fedecamaras, which lead a failed coup against President Hugo Chavez in 2002, denounced what it called illegal farm takeovers in central Guarico state. Fedecamaras described the interventions as an "attack on private property."

Agricultural minister Elias Jaua said the measures were part of a "recuperation" policy of "unproductive land" whose ownership has not been legally verified.

Jaua said the government is looking into 12 more properties in Zulia to see if they are productive.

The La Milagrosa property will become part of the Florentino Socialist Production Company, which involves 149 peasants who are supported by the state-owned Venezuelan Agricultural Corporation.

The biggest single property recovered by the government was more than 2000 idle hectares in Guarico. The government said agricultural production will be reactivated on the property and incorporated into a national strategic plan for food production.

Jaua said the government's goal was to recover 300,000 hectares of unproductive land by the end of the year.

An estimated 2.5 million hectares of land have been recovered since President Hugo Chavez took office and the 2001 Land Law was passed.

In response, more than 200 peasant activists have been assassinated since 2001 by suspected mercenaries contracted by large landowners resisting land reform.

On November 20, the government also announced its intervention into four small, but linked banks not complying with administrative norms. The main shareholder, Ricardo Fernandez, has been arrested.

Fernandez is known as a supporter of the Chavez government.

The four banks form one financial group, Grupo Financiero Bolivar, and control less than 10% of market.

Finance minister Ali Rodriguez said the banks repeatedly failed to comply with administrative norms. Specifically, they increased capital without specifying the origin of the funds and they had not allocated sufficient credits to certain sectors as directed by law.

Superintendent of banks Edgar Hernandez said the interventionist measures were aimed at protecting the banks' clients.

Fernandez was arrested on November 20 under the law against organised crime and the general banking and financial institutions law.

Fernandez is known as the "Tsar of the Mercal", the government-run subsidised food market, because he put his network of more than 3000 cargo trucks at the service of the government to distribute food during the petrol strikes in 2002.

He also owns two companies that provide wheat and other products to the Mercals. He owns more than 40 companies all up.

Some sources described him as "the only businessman Chavez will answer his phone for". He has been called part of the "Bolibourgeoisie" — meaning capitalists who support and benefit from the Bolivarian revolution that is attacking the privileges of the traditional elite and promoting pro-poor economic development.

Speaking at the Venezuelan United Socialist Party (PSUV) Congress on November 21, Chavez said that any private bank that breaks the law would be taken over.

[Compiled from articles published at Venezuelanalysis.com.]

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