The bitter low down

It's an embarrassment of socialist riches (elsewhere known as perverse incentives) today;

Venezuela is among the countries with least respect for property rights, the International Property Rights Index (IPRI) 2013 showed.

Based on the report, Venezuela ranked 127 out of 131 nations included in the survey, as low as Haiti and Burundi.

So this tale of woe on the Venezuelan aluminum industry should be no surprise;

Not only are aluminum basic industries bankrupt, they are mortgaged to [Swiss commodities trader] Glencore. The 2010 electricity crisis forced the industry to shut down entire sections of the production line, making getting out of debt increasingly difficult. Transformation from bauxite to alumina, for instance, plummeted in six years from almost 2 million tons a year to around 807,000.

Against this background, Bauxilum [Venezuelan state owned, and bankrupt] still owes Glencore more than 3 million tons of alumina, the equivalent of the entire production of almost four years at today's production levels.

The contracts are currently suspended because of force majeure, but the state-owned companies still owe part of the USD 540 million advance they received at the time of the signature of the contracts. ....

Very few in the industry dare speaking of the Glencore contracts. They became a taboo subject after late President Hugo Chávez came up with the idea of the Socialist Guayana Plan 2009-2019, aimed at transforming raw materials in Venezuela. Transition to socialism included the so-called ‘downstream development.' A vision of a promising, bright future for the Guayana region has been held for the last 60 years, but in reality, dependency from transnational companies is today greater than ever.

El mal que el hombre socialista hace vida después de ...