"Oil trader's work during '02 strike pays off handsomely"
Mike
By Ian James
ASSOCIATED PRESS
Published November 21, 2006
CARACAS, Venezuela
Arturo Sarmiento, 35, rides in a chauffeured BMW, recently bought a
television station and has profited handsomely by trading Venezuelan
oil.
He concedes that one factor behind his success was a decision to
keep doing business as an oil trader with President Hugo Chavez's
government during a strike that nearly paralyzed the state oil company
four years ago.
Mr. Sarmiento says he was a strike buster out of principle,
thinking it was a criminal attempt at regime change -- and his decision
has brought dividends.
"Other people were striking, and I was working," said Mr.
Sarmiento, adding that for a time "you'd become almost a social pariah
if you dared work with the Chavez government."
But nowadays, Mr. Sarmiento and many other entrepreneurs are making
deals and prospering, even as Mr. Chavez says he is leading Venezuela
toward socialism and away from capitalism. A new well-connected
business class, ranging from shipping executives to bond traders, has
seen opportunities in a shifting political landscape and is
flourishing.
"I think when you get societal changes, then spaces become open for
new emerging actors," said Mr. Sarmiento, who has been trading in oil
since 1999. "Venezuela has always been fluid. Right now it's going
through a major flux."
Some anti-Chavez businesspeople have called Mr. Sarmiento a sellout
and an opportunist. But even some wealthy opponents of the president
seem to be putting their economic interests before politics.
An infusion of petrodollars into the economy has fed a boom in
sales of items, including cars and cell phones, while banks enjoy
unprecedented profits and demand for government bonds issued this month
outstrips supply by 9 to 1. Economic growth is expected to reach 9
percent this year.
Mr. Chavez, who leads in the polls before the Dec. 3 elections, has
sporadic meetings with top business leaders. He assures them he is no
enemy of the private sector.
"Business is being done. If there are some who refuse to do it,
well, they're losing opportunities," said Miguel Angel Perez Abad, who
heads the pro-Chavez business group Fedeindustria.
Mr. Perez Abad, who distributes propane bought from the state oil
company, said he knows many Chavez opponents who are quietly doing
business with the government, which is flush with oil profits and a
dominant force in the growing economy.
A watershed conflict between business owners and Mr. Chavez came in
a two-month strike called by the opposition in late 2002. It began in
the oil industry as an effort to oust Mr. Chavez and soon spread,
causing shortages of products, including milk and cooking oil.
Mr. Sarmiento helped import gasoline into Venezuela during the
strike, and continued doing business with the state oil company
Petroleos de Venezuela SA after the protest ended. Mr. Chavez crushed
the protest in early 2003 by firing nearly half the oil workers and
managers.
Like most successful entrepreneurs, Mr. Sarmiento has been at the
right place at the right time. Before he began buying and selling oil,
he did a brisk business importing Scotch whisky, a natural market
because Venezuelans are among its top consumers.
Mr. Sarmiento was sent by his family to boarding school in Britain
when he was 11. His father, a former army officer who was head of the
civilian guard during President Carlos Andres Perez's time, wanted his
son to have the best education available.
Among the Venezuelan well-to-do, though, Mr. Sarmiento was
ostracized by some for daring to work with the government during the
strike. "Even friendships -- it brought them to an end because I was an
enemy to their political cause," he recalled.
Many wealthy entrepreneurs remain among Mr. Chavez's most vehement
opponents.
The top presidential challenger in next month's election,
politician Manuel Rosales, argues that Mr. Chavez is hurting the
economy in the long run, and promises a business-friendly approach to
attract investment.
Mr. Sarmiento insists he keeps out of politics, though he builds
close links to the government while representing large oil
corporations. He has met Mr. Chavez during talks on key projects. "He's
an impressive gentleman, and I think he has got good intentions," the
oil trader said.
Mr. Sarmiento thinks popular support for Mr. Chavez stems from his
efforts to help the poor, and he says Mr. Chavez's plans for
"21st-century socialism" -- an evolving philosophy promising a more
egalitarian society -- should have positive effects.
Others say Mr. Chavez poses a serious threat to the private sector.
Flavio Fridegotto, a leader of the Fedecamaras business federation,
said the government is "strangling business" with new regulations and
political uncertainty. "Who's going to invest when there's a threat of
communism?" said Mr. Fridegotto, adding that many expect Mr. Chavez to
grow more radical if he wins another term.