Chávez Watch: Chávez can’t pay

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Chávez Watch: Chávez can’t pay

The Venezuelan government has started to delay payments to contractors and oil service companies, indicating that the collapse in oil prices is finally taking its toll on president Hugo Chávez’s wallet.

In mid-March, Brazilian construction company Odebrecht said it was slowing work on the Caracas metro because the government had not paid some bills.

Chavez’s nationalization drive is also eating into the coffers. According to the Caracas consulting company Ecoanalitica, the Venezuelan government owes $10.2 billion for companies it has taken over, including Banco de Venezuela, which was owned by Santander and Holcim Venezuela, a subsidiary of global cement company Holcim. Despite these debts, Chávez continues to seize companies. In March, US-owned Cargill had a rice plant taken and Dublin-based Smurfit Kappa had its operations nationalized. Chávez also threatened to expropriate Venezuela’s biggest private company, Empresas Polar, and pay for it with paper instead of cash.

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