Government eats itself

Juan Cristobal says: – The Chávez administration has been gobbling up everything in sight at such a pace, it’s actually nationalizing itself now!

The Banco Industrial de Venezuela (BIV) was Venezuela’s original state-owned bank: one of the few holdovers of the puntofijista Import Substitution Industrialization strategies of the 1960s and 70s to remain in state hands through the 90s. The BIV has a long, dysfunctional track record. It hasn’t made a profit since the Welsers were around.

So in the latest display of chavista coprophagia, the government has decided to “intervene” it, which basically means taking control of the BIV.

What’s not really clear is why the government has to go through this whole convoluted rigamarole to intervene a bank it already owns.

In fact, whatever ails the bank is the government’s own fault. So it’s not clear what this “intervention” is really after, other than the latest round of chavista musical chairs, quítate tú pa’ ponerme yo.

It can’t be the BIV’s losses and its severe under-capitalization that prompted this. If making a loss was the kind of thing to trigger an “intervention”, every state owned company in the coiuntry would be “intervened.” Besides, this profit-and-loss stuff is so unrevolutionary to begin with

There has to be something else at play here. Perhaps the government is setting the stage to merge the BIV with the Banco de Venezuela, once Chávez gets his fat, dirty paws on it. Perhaps this is the first step to justify a massive nationalization of the banking sector. Or perhaps somebody in the BIV wasn’t giving loans to the right people and this is a way to send a strong signal.

Whatever it is, it makes no sense in the real world. But this is the Chávez government we’re talking about, so it makes perfect sense.