Hugo Chavez, the president of Venezuela, told his Brazilian counterpart, Luiz Inácio Lula da Silva, that Brazilian corporations are safe from the current nationalization process in his oil-rich country. The two presidents met on Tuesday, May 26, in Bahia. to discuss Mercosur, energy, finances and regional integration.
"We're in a nationalization phase of corporations in Venezuela, except those which are Brazilian," said Chavez during the bilateral meeting at closed doors, but which was overheard by journalists who were waiting outside, because of the open network of microphones ready for the announced press conference.
Chavez also added a touch of humour to the meeting saying he tried to convince Brazilian construction and public works contractor tycoon Emilio Odebrecht to become a docialist, but the businessman refused.
"I tried to talk Don Emilio into joining the socialist crusade, but he laughed and said no," pointed out Chavez.
The Venezuelan president also talked about the recent nationalization of steel manufactured goods companies including several from the Argentine-Italian Technit group. He supported his decision arguing that Techint was shipping Venezuelan steel to Mexico for the manufacture of steel tubes which were then sold to the Venezuelan oil company PDVSA at very high prices.
Chavez also suggested that Venezuela has sufficient resources to continue with the nationalization program.
"We have been asked if we have the sufficient resources to keep up with nationalizations. Yes, we do. One side says we should invest in other areas, but so far they have been profitable investments which will continue to strengthen the economy. We're not dumping money," said the Venezuelan leader during the press conference.
Nationalizations will continue "according to our possibilities, because our priority is social investments and protecting jobs," he added. "Venezuela's international reserves are three times those of ten years ago, and with the kind of investments we've done we've managed to rapidly recover the funding. Such is the case with the telecommunications companies: we recovered our investment in two years."
Furthermore "nationalizations so far are equivalent to US$ 10 billion which left Venezuela every year and now they remain in the country."
Chavez also sent a message of support to Argentine president Cristina Fernandez de Kirchner who has been seriously criticized for not defending the interests of Argentine corporations nationalized in Venezuela.
"I want to send my best regards to Argentine president Cristina who is being criticized with the purpose of attacking her and our relation. Certain media is obsessed in demonizing relations with Venezuela," said Chavez.
"We have nationalized some corporations in Venezuela from strategic sectors, and now they are accusing Cristina of not defending Argentine interests." On the contrary said Chavez, they should be grateful "because her mediation helped achieve the purchase contracts of those companies."
The Argentine Industries Union, UIA, is furious with the Kirchner administration for not having intervened to impede the nationalization of Argentine interests in Venezuela and is now demanding that "Venezuela be excluded from Mercosur."
Argentine manufacturers also fear that following the June mid term elections if the Kirchners manage to survive with a reasonable presence in Congress they could be tempted to advance in "strategic" sectors of the economy, as has been done with airlines, post office, public utility companies and the private pensions' funds among others.
UIA, the Argentina's powerful Industrial Union urged Argentina's government to revise the possibility of integrating Venezuela as a member of the Mercosur, "after the reiterating actions which have implied the nationalization of companies in Venezuela."
"The basic conditions for a country to be incorporated to the Mercosur include to accept the coordination of macroeconomic policies and the values of gradualism, flexibility and balance, key to regional integrity," the UIA statement added.
The decisions systematically adopted by the Venezuelan government are contradictory to these conditions, highlighting a position of absolute asymmetry in respect to what is offered by the rest of the Mercosur countries, putting at risk the process of regional integration, and representing a substantial change with respect to the circumstances under which the Argentine Congress approved the inclusion of Venezuela in the Mercosur block, underlines UIA.
Last week Chavez announced the nationalization of several companies related to the production of iron and steel among which Tavsa, Matesi and Comsigua, with a majority stake from the Argentine-Italian group Techint.
Lawmakers from Argentina and Uruguay have already approved the Venezuelan Mercosur-incorporation request, which dates back to 2006, but both Brazil and Paraguay are still pending and there is a considerable resistance to the Chavez regime.
UIA underscores that "recent statements from President Hugo Chávez with respect to the exclusion of Brazilian companies from the nationalization process overseen by his government, far from promoting integration, seem to foment the divide between the countries that make up the block."
The release finally states that UIA has received requests from the entities that represent companies from Mercosur member countries "to evaluate actions that tend to respond to this situation and to continue with the process of integration, an essential condition for our development."
In this regard, "an urgent meeting of the Industrial Mercosur Council in Montevideo has been called for."