Does the Death of Chavez Have Any Impact on New York Businesses?

by Fred Abramson on March 6, 2013 · 0 comments

Hugo Chavez died yesterday. I have always expressed an in intense interest in the study of other cultures. My love for all things Latin American began when I was a young youth in sixth grade.  My parents were avid New York Times readers and the Times was delivered daily to our home.

My daily habit of  reading the New York Times also commenced when I was twelve. At that time, I made sure to read any articles about Latin America. I became fascinated with Brasilia which looked so modern. I thought that South America represented the future.

The Latin America of today falls short of my sixth grade vision. Some Latin American countries have enjoyed economic success since Chavez was brought to power, such as modern Brazil.  But there has been no huge influx of Brazilian businesses here in New York. Google “Brazil Tech Startups” and  the lead article is from four months ago. In NYC e have Little Brazil located on 46th between 5th and 6th. But the small business community hasn’t done much to branch out. Nevertheless Brazil is a growing economy, dependent on its people for economic prosperity.

In contrast, Chavez’ Venezuela was a country of contradictions. When Chavez democratically took power, the main source of revenue in Venezuela was oil.  Most of the profits of the petrochemical industry went into the pockets of United States oil multinationals and a small number of the ruling elite. The rest of the country was left dirt poor.

Chavez came to power running on a platform of redistribution of the oil wealth to the poor. With the dissolution of the Soviet Union, Fidel Castro needed another source of subsidies to fuel his socialist “paradise.”  The charismatic Chavez was in sympatico with Fidel.  Chavez gained his ideology through the teachings of Castro. In return, Venezuela provided copious amounts of oil to Cuba. This allowed Cuba to maintain its “socialist” lifestyle while the poor of Caracas lived in abandoned high rises. See Jon Lee Anderson’s epic article on the high rise slum in located in Caracas in the New Yorker.

In the near term any leader would be better than Hugo Chavez for New York small businesses. The country is wholly dependent on foreign revenue generated by oil (an awe inspiring 95%.) The entrepreneurial class is negligible. Chavez’ anti-American stance certainly discouraged American investment. The hope is for a democratically elected leader who is willing divert resources from Cuba into encouraging Caracas entrepreneurs.

After Chavez, CNN says that there is a power vacuum.  Will the ideology of the Chavez revolution live on without its charming leader. Will Rosanne Barr, Oliver Stone and Sean Penn continue to visit? Can Caracas further reduce the distance between rich and poor while encouraging people to actually work? I wouldn’t bet on it.

The Law Office of Frederic R. Abramson represents businesses and individuals in New York. Feel free to call me at 212-233-0666




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