The recent nationalizations of strategic sectors in Venezuela are frightening away foreign companies and turning the country into South America's worst destination for foreign investment, analysts say. President Hugo Chavez's decision to take over electricity, oil, steelmaking, cement and telephone enterprises over the past year may strengthen the 'revolutionary' drive towards building a socialist nation, but it also drives off multinationals which have the funds to boost economic activity. Several groups, notably US energy companies ExxonMobil and ConocoPhilips, have simply abandoned operations there. Others, such as cement makers LaFarge of France and Holcim of Switzerland, have quietly accepted discounted compensation for their expropriated Venezuelan subsidiaries. On Monday, Venezuela's government said it was resuming negotiations with the Mexican cement group Cemex in an effort to reach a settlement over its seized subsidiary. The state domination of the country's economy -- which also extends to controls on prices and foreign currency exchanges that limit corporate competition and profitability -- is severely dampening investment from outside, the analysts say. 'Foreign investment should be at least three percent of gross domestic product, around six billion dollars. We're only at 10 percent of that figure,' one economist, Orlando Ochoa, told AFP. According to the UN Conference on Trade and Development (UNCTAD), direct foreign investment in Venezeula amounted to 400 million dollars last year -- the lowest amount recorded for any country in South America.
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