US slams Chavez nationalization plan

WASHINGTON, Jan 9 (Reuters) The United States today criticized Venezuelan President Hugo Chavez's planned nationalization of utilities and telecommunications companies and said any US firms affected by it must be compensated.

''We've seen Chavez's statement. We've also seen the results of nationalization in other places, and in general these types of actions do not produce economic benefits as expected,'' said Gordon Johndroe, spokesman for the the White House National Security Council.

Washington made clear its objections after Chavez, known for his fiery anti-US rhetoric, made a speech yesterday unveiling a new nationalization drive for Venezuela, the fourth-biggest oil exporter to the United States.

Chavez, in power since 1999 and a close ally of Cuban President Fidel Castro, said he would nationalize Venezuela's largest telecommunications firms and unspecified power companies.

''If any US companies are affected, we would expect them to be promptly and fairly compensated,'' Johndroe said.

The US State Department joined in criticism of Chavez, whose confiscations in the past have focused on land, distributing private estates, sometimes foreign-owned, to poor farmers.

''The proposals that he has made concerning nationalization are a well-worn path that history has shown does not usually benefit the population of the country in question,'' said State Department spokesman Sean McCormack of Chavez's latest plans.

''At this point, if there is in fact a follow-through on nationalization there is an accepted international practice in foreign companies being compensated at fair-market value for the assets that have been nationalized,'' McCormack said.

''We would expect Venezuela to follow through on all of its contractual obligations,'' he added.

In yesterday's speech, Chavez called Jose Miguel Insulza, secretary-general of the Organization of American States, an ''asshole'' and urged him to resign after he criticized a decision by Chavez not to renew the license of an opposition television channel.

Chavez has previously called President George W Bush ''the devil'' and McCormack said his latest comments about Insulza were ''rather unfortunate''.

''They are certainly not constructive in building greater understanding and mutual respect in the region,'' he said.

REUTERS BDP BST2303