Sunday, August 10, 2008

Chavez Continues Nationalization Drive

The Venezuelan president tightens his control on business and society.
August 9, 2008 - by Fausta Wertz

Last Thursday, Chavez announced he was nationalizing Banco de Venezuela, a subsidiary of Spain’s Banco de Santander. Banco de Venezuela is the country’s third-largest bank.

While accounting for only a small fraction of Banco de Santander’s profits, Banco de Venezuela — which had been privatized a few years ago — is Venezuela’s fourth-largest lender. It owns a network of branches that Chavez can use for politically motivated loans and for distributing welfare payments and cash subsidies to his core constituency: the Venezuelan poor. It gives Chavez an important means for the (re)distribution of wealth and widening the state control over the financial services industry.

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