Continued from page 1

The country’s food imports have grown as the government has seized farmland, and periodic shortages of foods such as milk, beef and sugar have emerged in recent years.

People at a state-supported farming commune on the outskirts of Caracas say they have been waiting for a new well to water crops for more than a year since the first one went dry.

While production has declined, the public sector has swelled from about 1.4 million workers in 1999 to about 2.4 million in 2010, according to government figures.

“They don’t have the capacity to manage any company,” said Rafael Davila Guaricuco, a 34-year-old port crane operator. “They’re destroying everything.”

That is precisely the perception Mr. Chavez tries to fight in his speeches.

“The bourgeoisie is trying to convince Venezuelans that the path to socialism isn’t viable, that all businesses in socialism go bust. It’s the opposite,” Mr. Chavez said.

He pitches cut-rate prices at subsidized state-run supermarkets like a salesman and touts a successful state-run dairy factory, cooking-oil plant and the nationalized telephone company.

State-run markets are part of Mr. Chavez’s attempts to counter 31 percent inflation that has been battering the country alongside a recession that shrank the economy 5.8 percent in the first quarter. Venezuela is the only South American country with a shrinking economy, according to the latest figures available.

Tensions are growing between Mr. Chavez and business leaders, who blame his policies for prompting a sharp drop in investment.

Mr. Chavez’s finance and communication ministers didn’t respond to e-mails seeking comment about his efforts toward socialism.

Since 2007, Mr. Chavez has nationalized and expropriated companies in sectors he deems strategic, including the oil industry, cement, telecommunications, electricity, steel and food. But economists note that those businesses make up a relatively modest share of the economy.

And the balance between public and private sectors remains nearly identical to when Mr. Chavez took office, in part because the private sector grew faster than the government between 2003 and 2006, when the economy was booming.

Last year, the private sector accounted for 70 percent of gross domestic product, including 11 percent in taxes paid on products, according to Central Bank estimates. The public sector was 30 percent, a slightly smaller share than when Mr. Chavez was elected in 2008.

By international standards, Venezuela has long had a large public sector because it includes the oil industry. By comparison, the public sector in Sweden accounts for 25 percent of GDP and in United States less than 14 percent.

Mr. Chavez could have moved more quickly toward bigger state control while the economy was growing, but he had other priorities, including consolidating his political power after a 2002 coup that ousted him for two days.

Story Continues →