
Bloomberg | Dec 1, 2007
By Guillermo Parra-Bernal and Steven Bodzin
Dec. 1 (Bloomberg) — Venezuelan President Hugo Chavez, facing a close vote in a referendum tomorrow to change the constitution, stepped up attacks against the U.S., Spanish banks and the media in an offensive aimed at winning over voters.
Chavez told tens of thousands of supporters in Caracas he is prepared to stay in power until 2050 if voters pass his proposal, which includes eliminating presidential term limits. He vowed to seize Spanish banks and expel journalists from the country to defend his goal of turning Venezuela into a socialist state.
“I swear to God and to my mother that if I have to take up an assault rifle to defend my country, I will again,” Chavez, 53, said to a cheering crowd at the referendum campaign’s final rally last night. “Our victory this Sunday is a defeat to our enemy, the North American empire.”
By portraying Venezuela’s economic independence and his so- called socialist revolution as being under siege, Chavez is seeking to motivate undecided supporters to approve the referendum, said David Scott Palmer, a professor of political science and international relations at Boston University.
“Chavez sees a tightening electoral situation for Sunday and this explains the invective and the increase in conspiracy theories involving various foreign actors,” Palmer said in a telephone interview.
Today, Chavez said he would shut down oil exports to the U.S. if it interferes in tomorrow’s vote. That would send the price of oil to $200 a barrel, he told foreign journalists at a Caracas press conference.
Venezuelans at `Crossroads’
Chavez’s rhetoric may tone down with a victory on Sunday, while a defeat may provoke him to make good on pledges to nationalize banks controlled by Spanish lenders, said Miguel Octavio Vegas, executive director of Caracas-based brokerage Bbo Servicios Financieros.
Chavez, who was first elected in 1998, says modifications to the constitution are needed to further his socialist revolution, which he says will transfer power to citizens and help redistribute income from soaring oil prices. The proposed changes include cutting the workday to six hours from eight, nationalizing the gas and coal industries, and ending central bank independence.
The proposal has divided Venezuelans, and some pollsters say the outcome of the referendum is too close to call a year after Chavez won re-election with 63 percent support.
U.S. Plots
About 100,000 opponents of the referendum rallied in Caracas on Nov. 29, according to estimates by opposition leaders including the First Justice political party. Estimates of the turnout by Chavez’s supporters last night weren’t immediately available.
“There’s a lot at stake in this election for citizens and for the government,” said Marjorie Hernandez, a Latin America economist for HSBC Holdings Plc. in New York. “It’s no surprise to anyone that Venezuelans are at crossroads over this ballot.”
Chavez said the U.S. had written a plan to destabilize the country during and after this weekend’s referendum. He didn’t give details. Foreign Minister Nicolas Maduro said earlier this week he may kick out a U.S. embassy worker over the document.
“We reject and are disappointed by the allegations from the Venezuelan government that we are involved in any kind of conspiracy to affect the outcome of the referendum on Sunday,” said Jennifer Rahimi, a spokeswoman at the U.S. embassy in Caracas. “We reject that there’s any kind of conspiracy.”
Threats to Media
Chavez said he’ll shut down local news channel Globovision and expel foreign journalists if they “break rules” in their coverage of the referendum.
Spanish King Juan Carlos can prevent Chavez from moving against Spanish investments in Venezuela by apologizing for remarks made last month, Chavez said. The king told Chavez to “shut up” during the Ibero-American summit in Santiago on Nov. 10.
After his threat to nationalize private banks last night, Chavez went to an event where he used money from public-sector banks to offer low-interest loans and mortgages to business owners and renters.
Venezuelans were alienated by sales of state assets to foreign companies in the 1990s and may be won over by Chavez’s pro-nationalization speech, HSBC’s Hernandez said. In January, Chavez nationalized the oil and electricity industries and the country’s biggest phone company.
`Gauging My Options’
“I am gauging my options,” Chavez said in the rally, referring to the lenders controlled by Spanish financial groups. “It wouldn’t cost me a penny taking them over again and putting them at the service of my people.”
Cesar Aristimuno, a Caracas-based banking analyst, said a seizure of the units of Banco Santander SA and Banco Bilbao Vizcaya Argentaria SA, Spain’s two biggest banks, might fulfill Chavez’s goal of using credit to spread his socialist revolution more rapidly in low-income urban and rural communities.
BBVA’s Banco Provincial SA and Santander’s Banco de Venezuela SA make up for a third of the system’s profits and 20 percent of outstanding loans, according to government data.
“For many Venezuelans, nationalism equals nationalizations regardless of the efficiency,” Aristimuno, president of Aristimuno Herrera & Asociados, said in an interview. “A decision depends of course on the result of this referendum.”
In a Nov. 29 report, Moody’s Investors Service said Chavez’s constitutional plans may pave the way for a nationalization of the industry, which has posted record profits in the three of the past four years.
Madrid-based spokesmen for Santander and BBVA declined to comment on Chavez’s remarks.
. . .
Related
Hugo Chavez Announces New World Order
Chavez calls for a socialist New World Order