Venezuela government to seize factory after US firm pulls out

12 Jul 16

Venezuela’s government has announced it will seize a factory whose owner, the US personal care company Kimberly-Clark Corp, said it could no longer operate due to the nation’s economic crisis.

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Empty shelves in a Venezuelan supermarket.

Shelves are empty in Venezuelan supermarkets as an increasingly dire economic crisis grips the country and leads to widespread shortages of basic goods.

 

The South American nation’s labour minister Oswaldo Vera said the government would take over operations at the plant, now in the hands of 971 workers.

President Nicolás Maduro said his government would support the workers with public funds and criticised Kimberly-Clark’s role in what he claims is an international plot to sabotage Venezuela’s economy and topple his socialist government.

Kimberly-Clark, whose products include nappies and tissues, said it was appropriate to halt its two-decade long operations. The firm said it was unable to obtain raw materials or hard currency, while soaring inflation in Venezuela further exacerbated the situation.

“If the Venezuelan government takes control of Kimberly-Clark facilities and operations, it will be responsible for the wellbeing of workers and the physical assets, equipment and machinery in the facilities going forward,” it said in a statement.

A number of other multinational corporations, including Procter & Gamble and General Mills, have also scaled back their operations in Venezuela amid an increasingly dire economic situation.

Despite sitting on the largest oil reserves in the world, the OPEC nation’s economy has been in decline since 2014, boasts the world’s highest inflation and is plagued by widespread shortages of basic goods.

The government announced last month it would begin distributing food directly to families in the capital Caracas as food shortages brought hungry protestors out in droves every day.

In May, Maduro declared a state of emergency to give him more powers to deal with the spiralling economy, sent into a deeper crash amid the slump in oil prices.

But critics argue that almost two decades worth of failed socialist economic policies are the main factor in Venezuela’s decline.

A coalition of opposition parties, hailing from across the political spectrum, are seeking a recall of the increasingly unpopular leader.

But Maduro claims he and his government are the target of an “economic war” waged with US backing.  

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