VenEconomy // Whipping them into submission

VenEconomy: One of the traits of the Hugo Chavez administration is its tendency to confuse imposing its will and terrorizing whoever says it nay with governing and managing a country on the basis of consensus.

For some time now, the President has been conducting a campaign of threatening the bankers, as he has done over these past 12 years with farmers, builders, academia, workers, politicians, and anyone else he feels like. He is no longer satisfied with having the banks struggling to cope with compulsory loan portfolio quotas or the drastic restrictions introduced by the amendment to the Banks and Financial Institutions Act. And it would seem that his latest unilateral decision to pardon the debts of all agricultural producers in areas affected by the heavy rains at the end of 2010 has not sufficed to assuage him either, much less the latest blow that he is about to deal the banks, based on his warning that they had better straighten up and fly right because "I'm going to take out Bs.F.15 million for housing loans (…) on the terms imposed by the government and not by the swindling mafias," when announcing yet another promise to build 150,000 housing units in 2011 at a cost of Bs.F.30 billion.

During the same event, and faced with evidence of the pernicious effects that these latest arbitrary measures will have for the banks, this Wednesday afternoon, the President indulged in an embarrassing fit of arrogance when he threatened to nationalize Banco Provincial, an affiliate of the Spanish Banco Bilbao Viscaya Argentaria (BBVA).

This display of brute force by the President was given during an event on the housing problem, broadcast nationwide by all radio and television stations. After hearing a complaint by a group of people who said they had been affected because Banco Provincial denied them a loan for a housing project in San Jose del Avila, the President asked to talk to the bank's president, Pedro Rodriguez, over the phone. When he got Rodriguez on the line, without allowing anyone to hear the banker's clarifications and answers, and totally ignoring them, Chavez yelled at him, to the astonishment of listeners and viewers, making three more than unfortunate remarks:

"If Banco Provincial, which you preside, is not prepared to comply with presidential laws and decrees, you can start to hand the bank over to me." "Tell me how much it costs. I'm not going to argue with you." And last of all, "It's not for sale, but you know that I can perfectly well expropriate it."

It is not known whether the people making the complaint were in the right or not, much less whether they met the legal requirements for obtaining a mortgage or whether the project is viable or not. It could be that everything is in order and aboveboard. But even if it is not, Banco Provincial will have no other choice but to assume the risk of financing this project or run the greater risk of being expropriated or nationalized.

The big boss has already cracked his dictatorial whip in the belief that he wields unlimited power.