Privatization and nationalization: Two models of state capitalism
US leaders might ponder the lessons of Venezuela and Iran.
Iran and Venezuela share many similarities. Recent political revolutions have brought in anti-US governments. They are Opec’s two most powerful price hawks, and they are increasing their links through industry and a shared bank.
Their similarities and links, however, are in opposition to one big difference in their economic policies: Iran is privatizing assets as fast as Venezuela is nationalizing them.
The latest nationalizations in Venezuela include one of the country’s biggest banks, which was owned by Santander. Cemex, a formerly Mexican-owned cement company is also now controlled by the state. In Iran, even parts of the national oil, gas and petrochemicals companies are soon to be up for sale. A foreign investor might even buy a stake that would partly control the national Iranian telecommunications company. The government is to sell most of the biggest banks in Iran too.
The youth of Venezuela’s revolution – still less than 10 years old – might be part of the reason for this contrast. But Iran’s election of Mahmoud Ahmedinajad was in some ways a reaffirmation of the values of the Islamic revolution, in reaction to the reformist, more conciliatory tendencies of the previous decade.
Iran is not the only country where a resurgence of capitalism has come with a decidedly statish tinge: think China, or the US’s darlings on the other side of the Gulf.