Friday, May 5, 2006

Venezuela, Nicaragua and the US

Most of the attention on foreign policy lately has been on the Middle East, for obvious reasons.  But the US is also playing the heavy with another major oil producer, Venezuela.

My own impression of Hugo Chávez is that he's leading a genuinely democratic movement.  I suppose it's obligatory to say that some of his methods are questionable.   But the opposition is clearly centered in the most affluent classes.  And from what I can see, their methods have been considerably less democratic than anything Chávez has been doing the last few years.

I don't exactly know what to make of this news in Chávez plays oil card in Nicaragua by Tim Rogers Christian Science Monitor 05/05/06:

Venezuela's populist president Hugo Chávez has been accused of using his country's oil wealth to help elect like-minded leaders in Bolivia, Peru, Mexico, and Nicaragua. But there's been little evidence, until now.

A cooperation agreement signed last week between Nicaragua's Sandinista leader - and longtime US nemesis - Daniel Ortega and Mr. Chávez is being touted by many here as an initiative to sell oil to Nicaragua on credit, allowing the country to invest more in poverty-fighting projects. Critics call it a blatant attempt to buy the Nov. 5 presidential election for Mr. Ortega. ...

But the deal struck between Chávez and Ortega comes during a grinding energy crisis, and before a pivotal election that could see another leftist leader come to power in the region. In the past year, energy shortages here have led to power-rationing blackouts and transportation strikes. Under the agreement, Venezuela will accept 60 percent of payment within 90 days of shipment, while the remaining 40 percent will be paid off over 25 years at 1 percent interest, including a two-year grace period.

The deal could be one of the most important real-world applications to date of the Bolivarian Alternative for the Americas (ALBA), a Latin American integration initiative started a year ago by Cuba and Venezuela to counter US efforts to promote hemispheric free-trade integration. ALBA promotes the principles of social and economic justice, but so far is known more for its symbolism than concrete action.

Yet the pact is gaining steam, with newly elected Bolivian President Evo Morales signing on to ALBA in Havana this past weekend to much fanfare. On Monday, Mr. Morales also sent shockwaves throughout the energy sector when he announced that he would nationalize Bolivia's gas reserves, the second largest in the region.

But I do know that it's a big mistake to treat the Chávez government, and other recently-elected "left" government in Latin American like in Bolivia, governments that don't want to run their countries and economies according to the failed "Washington Consensus", as inevitable enemies.  It's reckless and foolish.

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