Chavez threatens theft of Colombia companies assets

Reuters:

Colombian stock prices sank on Thursday after Venezuelan President Hugo Chavez threatened to take over assets of Colombian companies located in the neighboring country.

Colombia's benchmark IGBC index .IGBC fell about 1 percent to 8,915.85. Food company Nacional de Chocolates NCH.CN, which has operations in Venezuela, led the sell-off with a share price loss of 4.86 percent to 13,700 pesos.

...

"We're going to make a map ... of the Colombian businesses here in Venezuela. We could nationalize some, take them over, we aren't interested in Colombian investments here," Chavez said on Wednesday at a joint news conference in Caracas with Ecuador President Rafael Correa.

Chavez made similar threats against Spanish companies in a diplomatic confrontation with that country last year, but the reprisals never materialized.

...

Chavez may be in the Mugabe school of unintelligent leadership and ignorance of economics. He has already created a food shortage in Venezuela by trying to repeal the laws of supply and demand. Now he will be further shrinking the supply of food products in Venezuela. He is using the threat of theft of assets as he has against domestic suppliers. His ignorance of market dynamics appears to be complete.

The Christian Science Monitor notes that his popularity in Venezuela is in decline. "Many also say the president too often meddles in international affairs while problems mount at home. For them, Chávez's move this week to deploy troops to the border with Colombia – which is slowing the flow of key goods during milk and meat shortages – is a case in point." It appears that his actions are having the opposite effect of distracting the population from his incompetence on the economy.