Chavez’s Grab at Severance Benefits Roils Venezuelan Workers
Venezuelan President Hugo Chávez, who can usually count on a well-honed populist touch, may have made a misstep recently as he prepares to rewrite the country’s labor law in May.
Among the various revisions the leftist leader is considering, his proposal to expand government control over severance benefits has roiled the country’s workers, in the public and private sectors, and sent Venezuelan officials backpedaling.
The details of Mr. Chavez’s plans are sketchy but would involve pulling the rainy day money from individual trust accounts in banks and creating a state-managed fund.
As you may recall, Argentina’s Cristina Fernandez did something similar a few years ago.
But Chavez is taking it one step further,
The president would also issue new debt, dubbed “Petrorinoco” bonds and due in 2036, to pay for an increase of the benefit to the public sector that has been pending for more than a decade. Government workers, who are owed an estimated $18 billion, would be required to hold the bond for two years and then have the option to sell it in the local exchange.
The immediate reaction?
But workers, fearful of coming changes, aren’t waiting for clarity, and have started to line up at banks to empty as much as they can of their severance accounts and have threatened to turn against Chavez at the ballot box in presidential elections this fall.
If he lives that long.