A new round of Venezuelan nationalization.

To no one's surprise, Venezuela's President has taken the last step and announced complete withdrawal from relationships with the International Monetary Fund (IMF) and the World Bank. According to an April 30, 2007 Associated Press (AP) report, the announcement was, "a largely symbolic move because the nation has already paid off its debts to the lending institutions."

The IMF closed its offices in Venezuela late last year.

One problem, according to a May 3, 2007 story published by the Financial Times (London) is that "most sovereign debt" [government bonds] contains a clause requiring a country to be a member of the IMF. This means holders of Venezuelan bonds-if they were sufficiently worried-could "accelerate" repayment of the government's debt.

Two things are not likely to happen. Withdrawal from the World Bank and the IMF is not likely to cause any economic harm. And bond holders are not likely to want their money back because Venezuela's cash position is so favorable-due, of course, to the rising price of oil.

Oil, too, was the subject of international unease at the beginning of May 2007 when Venezuela completed the seizure of foreign oil interests in the country. Specifically, Venezuela took control of claims in what is an area containing, ostensibly, the world's largest reserves of oil.

Additional nationalization efforts were directed, as well, at Venezuela's utilities with the government buying the country's largest producer of electricity, and taking over a major provider of telephone service.

And then there are Venezuela's banks. The government is threatening to nationalize Venezuela's banks, and the President immediately began work on legislation that would force banks to lend cheaply to national industry-or be nationalized.

According to a separate May 4, 2007 Financial Times (London) report, bank nationalization would undercut the country's social programs. The Times quoted an analyst with a New York research firm who sketched out Venezuela's bank nationalization difficulties. "There is a symbiosis between Chavez's 21st century socialist revolution and hard-nosed capitalism via the banks that would be difficult for him to break in the short or even medium term," said the analyst.

Other analysts quoted in the Times story said that if nationalization were carried out, the Venezuelan economy would be seriously destabilized.

The seeming impossibility of bank nationalization is small comfort for Venezuelan consumers because the actual nationalizations, rising inflation, and a perceptible lack of development in Venezuela's retail sector (according to a November 2006 Euromonitor report) promote a high level of uncertainty-itself a substantially destructive economic force.

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