Hugo Chavez, Venezuela’s president is moving his socialist agenda into a new phase by turning some expropriated companies into government-financed operations, jointly run by the state and worker cooperatives. Some business leaders fear the corporate initiative is a backdoor attempt to lead the country down the path followed by Cuba’s Fidel Castro, Mr. Chavez’s friend and mentor.
Chavez also is promoting the idea to privately owned companies with promises of government loans. Under the plan, companies are supposed to share profits with employee cooperatives and give them seats on their boards, in exchange for working capital from the government. Companies also are expected to change their board procedures to guarantee workers a say, and devote a portion of profits to social programs in nearby communities.
Christophe Nicoli, head of the local unit of Lafarge said recently that he worries co-management could hurt Lafarge’s suppliers and small-scale clients. Lafarge will limit investment to US$5 million a year, the minimum needed to keep cement operations at current levels, until construction picks up. "A possible co-management law is a cause for concern. The government has to manage this carefully," Mr. Nicoli says.
How far Mr. Chavez will push his socialist agenda is an open question, but recent polls show many Venezuelans reject the Cuban model. The president says his government isn’t out to copy Cuba’s communist system or violate private-property rights. But he has vowed to create a new socialist system for the 21st century.