President Chavez’ economic and financial advisers understand the significance of an adverse arbitration award; the Canadians concerns would search the world for Venezuelan assets to use to satisfy their awards. The Canadian government would use its sovereign power and resources to aid the companies in their efforts to secure compensation. The British Central Bank would not ignore a proper request from Canada to seize and hold Venezuela gold under its control to satisfy these awards. President Chavez’ request for the return of his country’s gold is not part of a grand strategy to further a socialist idea; he is trying to make Venezuela judgment proof. Hugo Chavez has no intention of compensating the Canadian companies (or others) for having expropriated their interests. He is taking without paying. The nationalization of the gold mining industry only serves to bolster the impression that President Chavez is continuing the fight against imperialist interests. Venezuela’s centralized; disorganized and inefficient state apparatus cannot manage the gold mining industry so that it produces a profit. The suggestion that he nationalized this industry to prevent illegal mining and exportation of gold is absurd. Venezuela does not have an effective state apparatus for preventing illegal mining, which is not undertaken on a grand scale.

Before publishing this post I met with a Venezuela couple. They both received post-graduate degrees from well known universities in Venezuela. I asked them to meet me for coffee so that we could discuss President Chavez’ actions that are the subject of this post. My friends wasted not time in setting the parameters for our informal discussion. Though they do not approve of President Chavez’ boisterous rhetoric, they reminded me that it was the Venezuelan government that requested the return of its gold and nationalized the gold mining industry. They reminded me that Hugo Chavez is the head of the government and not the government itself. They suggested that if I wanted to understand Venezuelan politics I had to accept this tenet. According to them most Westerns do not appreciate the passion that Hugo Chavez evokes among Venezuelans. Most Venezuelans believe that President Chavez is attempting to redistribute the wealth in favor of the poorer citizens. This redistribution of wealth cannot take place unless they (Venezuelans) control and own their country’s resources and industries. Regardless of the economic and political consequences of President Chavez’ decisions and actions the Venezuelan pueblo consistently supports their leader, albeit for the wrong reasons.

My friends believe that Hugo Chavez’ time has come and passed. I agree with their assessment. A change in leadership is necessary if Venezuela is going to rejoin the world community. With an abundance of natural recourses and a population that wants to work Venezuela should derive real benefits from its participation in globalization. We must persuade Venezuelans that change is in their best interests. This will be easier said than done. To promote this change we must focus our polemics not on President Chavez but on the people of Venezuela, who will ultimately pay the price for their president’s expropriations and questionable economic policies.