Socialist red eclipses Coke's hue

By Rory Carroll

It happens to be Coca Cola's colour, but the red banners draped outside a distribution plant in west Caracas offer the company no comfort.

That red belongs to President Hugo Chavez and Venezuela's socialist revolution.

Nor can the company feel sheltered by the high walls surrounding the site. Every metre has been painted with murals depicting historic scenes of indigenous tribes and patriots expelling foreign interlopers with axes and swords.

The soft drinks giant, a symbol of America and globalisation, is feeling the edge of what Chavez calls "21st century socialism": extended state control over the economy and over private companies.

The President has threatened to oust Coca-Cola delivery trucks from this plot of land in Catia, a slum in the capital, to make way for housing for the poor.

"We have to accelerate the transition to socialism," he said.

It is the latest initiative in a sweeping campaign of evictions, expropriations and nationalisations launched since Chavez won a referendum last month abolishing term limits. The former tank commander has declared a new phase in his decade-long effort to transform his South American state into a leftist beacon and challenger to United States-led capitalist hegemony.

"By going after big symbols like Coca-Cola, he is sending a message he will take on anyone," said Luis Vicente Leon, director of the polling firm Datanalisis.

In addition to consolidating power, the President was lining up to blame the private sector for Venezuela's looming economic crunch, he said.

In recent weeks, the Government has seized a rice plant belonging to Cargill, the US food multinational; two plants owned by Empresas Polar, Venezuela's largest private company and a eucalyptus plantation owned by the Irish paper-packaging giant Smurfit Kappa.

Troops and civilian government supporters have also taken control of several big private farms. The Government hopes to boost production of scarce staples, such as white rice, and tame runaway inflation with price controls. Earlier bouts of nationalisation focused on other "strategic" sectors such as oil, steel, cement and telecommunications.

The measures are popular with Venezuelans, who accuse private enterprises of profiteering.

There is an element of theatre to Venezuela's socialist drive. The media-savvy President thunders against a company, troops seize property, the revolution garners wide attention. But Cargill and Smurfit Kappa, for instance, have dozens of unaffected sites and are likely to be compensated for the ones that have been seized.

Venezuela remains a nation of baseball-obsessed, beer-loving materialists. Billboards for cosmetic surgery, bank loans and satellite TV programmes, such as the Playboy Mansion series and 24, loom over highways.

Author and analyst Steve Ellner said he did not think the intention was to eliminate all capitalist enterprise. "If the Venezuelan Government can achieve some kind of modus vivendi in which it can implement nationalist and popular measures but, at the same time, get the private sector to co-operate, he may well tolerate private large-scale ownership."

However, other analysts warn of a meltdown caused by plunging oil revenues. Last year, oil accounted for 93 per cent of government export income and half its overall income.

Headlines about expropriations had spooked foreign investors, said Jose Guerra, a former central bank director. "Frankly, I don't see why anybody would invest in Venezuela."

And abandoned fields and derelict factories are providing a testament to mismanagement by worker-run co-operatives.

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