Chavez plunges down socialist path

Marketplace Staff Jan 9, 2007


MARK AUSTIN THOMAS: Venezuelan President Hugo Chavez is planning to nationalize the country’s largest phone company and utilities. He’s leaving little doubt about his pledge to take his country on a more radical path toward socialism, and that could spell trouble for investors as Louis Hamann reports.

LOUIS HAMANN: Hugo Chavez says he plans to nationalize both the country’s main telecommunications company as well as its largest private utility.

This move is likely to affect foreign investors.

CANTV, the main provider of phone, mobile and Internet services in Venezuela is also the country’s largest publicly-traded company. Its investors include some big names, like Deutsche Bank, UBS and Morgan Stanley.

As for nationalizing the electric utility, that could spell bad news for AES Corporation. The U.S.-based power company owns a majority stake in Venezuela’s largest private utility.

Some analysts warn this is merely a glimpse of what Chavez has in store for the next six years.

He is also considering nationalizing some of the country’s most lucrative oil projects and wants to strip the Central Bank of its autonomy.

In Rio de Janeiro, I’m Louis Hamann for Marketplace.

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