Chavez threatens to pull out of World Bank arbitration
Venezuelan president Hugo Chavez returned this week to his regular television show, Aló Presidente. In the course of the program, Chavez threatened to pull out of a World Bank-affiliated arbitration forum (the International Center for the Settlement of Investment Disputes, known as ICSID) that has before it more than a dozen cases against Venezuela, most ...
Venezuelan president Hugo Chavez returned this week to his regular television show, Aló Presidente. In the course of the program, Chavez threatened to pull out of a World Bank-affiliated arbitration forum (the International Center for the Settlement of Investment Disputes, known as ICSID) that has before it more than a dozen cases against Venezuela, most having to do with alleged expropriation of private assets. As the FT's Benedict Mander notes, Chavez's threat wasn't unprecedented:
Venezuelan president Hugo Chavez returned this week to his regular television show, Aló Presidente. In the course of the program, Chavez threatened to pull out of a World Bank-affiliated arbitration forum (the International Center for the Settlement of Investment Disputes, known as ICSID) that has before it more than a dozen cases against Venezuela, most having to do with alleged expropriation of private assets. As the FT‘s Benedict Mander notes, Chavez’s threat wasn’t unprecedented:
Although Chávez has threatened to withdraw from the ICSID several times in the past, first in 2007, he has never been quite so unequivocal. “I’ll say it once and for all: we will not recognise any ruling by the ICSID,” he told the thrilled audience of his first Aló Presidente show for the past seven months, much of which he has spent recovering in Cuba (he now claims to be completely cured).
Cooler heads in Caracas are likely remonstrating with Chavez right now. Withdrawing from ICSID won’t stop the cases that are underway and it won’t protect Venezuela from enforcement of any eventual decisions against the government. But a withdrawal might well rupture a host of investment treaties and scupper private-sector initiatives that even Chavez’s government knows it needs.
More: A reader expands on the schizophrenic Venezuelan policy:
What amazes me is that nobody in the Venezuelan government seems to be able to put two and two together and understand that this kind of outburst is one part of the reason foreign partners are leery of making the needed investment.
Long story short: Venezuela’s policy towards the Orinoco Faja runs on parallel tracks – on one track, you’re trying to sign investment deals to bring in foreign majors, on another track, you’re denouncing foreign majors that seek compensation after you’ve broken your investment deals with them as imperialists and plotters.
David Bosco is a professor at Indiana University’s Hamilton Lugar School of Global and International Studies. He is the author of The Poseidon Project: The Struggle to Govern the World’s Oceans. Twitter: @multilateralist
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