Randomly Noted

Venezuela boss Hugo Chavez has struck again: now he’s threatening to seize Toyota Motor’s Venezuelan vehicle assembly plant if the Japanese auto maker doesn’t make a “rustic” car poor people in the country can afford to buy. The “Chinese,” he said, can produce a people’s car if Toyota fails to comply. This Chavism comes as the country’s power supply is so woeful that earlier this week the president had to order factories and shopping malls to cut electricity usage by 20%. Chavez has tended to expropriate or threaten to grab foreign oil assets. His attacks on foreign non-oil assets have tended to target small potatoes – such as coffee production plants. By shifting his sites to giant Toyota, Chavez takes his particular brand of economically ruinous populism to a new level. So, here’s a question: If you’re a foreign firm, do you invest in Venezuela or shift your money elsewhere? When China does something despotic, overseas investors adjust but persevere, knowing they can’t afford not to bet their futures on China’s vast, increasingly affluent population as well as its still-cheap labor force. Venezuela’s much smaller and less crucial; the Toyota gambit will hurt foreign direct investment.