Venezuela: nationalization threat opens rift with Argentina

Argentine President Néstor Kirchner made a telephone call over the weekend to his Venezuelan counterpart Hugo Chávez, asking him not to nationalize Sidor, Venezuela’s biggest steel mill. The head of Argentina’s Techint Group, which owns Sidor, is ex­pected to fly to Caracas next week for urgent talks with Chávez.

Chávez said May 5 that Sidor would not be allowed to make any more exports until it meets Venezuela’s domestic needs, and threatened to expropriate the company if it resists. Sidor’s parent company, Ternium SA, is part of Argentina’s Techint Group. Chávez said he has summoned Ternium chairman Paolo Rocca from Buenos Aires for talks.

“We’re going to pass a law, Rocca. We’re going to force you to supply, first and foremost, the Venezuelan domestic market before you take [the steel] to other countries,” Chávez said at a news conference. “If you don’t agree, give it to me. I’ll grab your company. Give it to me, and I’ll pay you what it’s worth. I won’t rob you.”

“I think we should work on a different model with Latin American business owners,” Chávez said, calling for them to “operate differently … at least here in Venezuela.” The commments come on the heels of his threats to nationalize Venezuela’s banks. Since launching a nationalization drive in January, Chavez has already moved to take greater state control of telecommunications, electricity companies and the oil sector.

Earlier on Saturday—which Chávez noted was Karl Marx’s birthday—the Venezuelan leader drove a red Volkswagen bug to a poor Caracas barrio where he officially registered with a movement to create a single, pro-Chavez ruling party: the United Socialist Party of Venezuela.

“If any rich person wants to become a member of the United Socialist Party of Venezuela, he will be welcome but he must begin by setting aside his wealth to the fight against misery,” Chávez said as he repeatedly invoked Marx and Trotsky. He also blasted Venezuela’s Communist Party and other allies who have resisted joining the single party, calling them dogmatic opponents of his revolution.

Reports of the Kirchner phone call first appeared in Argentine dailies La Nación and Clarín. The Financial Times writes: “Although Mr Kirchner is not a political protégé of Mr Chávez in the mould of the presidents of Bolivia and Ecuador, he is one of his closest allies in the region. The two recently sealed a joint oil exploration deal in Venezuela. In March, Mr Kirchner allowed Mr Chávez to use Argentina for a rally attacking US president George W. Bush, who was visiting neighbouring Uruguay.” (El Universal, Venezuela; AP, FT, May 7)

Techint, now facing a corruption scandal in Argentina, has also faced controversy in Peru.

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