The United States and Venezuela: More Than Just A Gun Show

Hugo Chávez’s presidency has prompted a growing concern over a country to which little attention was previously paid.
Nevertheless, as Chairman Eliot L. Engel of the House Foreign Affairs
Subcommittee on the Western Hemisphere described it, “There is plenty
of passion surrounding the Venezuela policy debate.” Venezuela was once
known solely for its oil deposits and compliant trade relations with
the United States; Washington’s interest in the country was largely
limited to the narrow, oil-driven economic ties between the two
countries. Only when Chávez became the leader of what was beginning to
become an important trading partner and threatened to destabilize a
status-quo that was not in Venezuela’s favor, did the United States
express much concern over the well-being of the latter’s population.
The sudden intense concern that then followed seems directly tied to
the U.S.’s economic interests, glazed over by a revival of a heavy dose
of Cold War-era ideology.

The commercial ties between the U.S. and Venezuela are deep if not
broad. Venezuela is one of the largest Latin American investors in the
U.S. and one of its top four foreign oil suppliers. In 2007, bilateral
trade between the countries totaled U.S. $50 billion, consisting of $10
billion in U.S. exports and $40 billion coming from Venezuela. The U.S
is Venezuela’s most important trading partner, representing about 22
per cent of its imports and approximately 60 per cent of Venezuelan
exports. Ninety-five per cent of Venezuelan oil is exported to the
U.S., establishing it as Venezuela’s principal energy client. Venezuela
is the U.S.’s second largest Latin American trading partner, purchasing
U.S. machinery, transportation equipment, agricultural commodities, and
auto parts. Thus, the rhetorical battles between the two nations
carried very little heft due to the importance of the petroleum trade
relationship to their mutual economic stability.

The Chávez Rhetoric
Since Chávez took office in 1998, his fighting words have contributed
heavily to forging an inevitably hostile path for U.S.-Venezuelan
relations. While Chávez tarnished his credibility in the eyes of White
House policy makers, it was mainly Washington’s negative reaction to
his commitment to a socialist path and his insisting on regional
authority for all of Latin America that made the conflict inevitable.
Chávez is principally known for his “anti-empire” remarks and his
demands that Washington end its interventionism. Further, he has
consistently railed against the Bush administration’s strong-armed
practices. On a number of occasions, he has accused the U.S. of
infiltration, invasion, and assassination plots. Chávez claims that the
U.S.-led invasions of Afghanistan and Iraq are evidence of the “Empire”
arrogantly flexing its muscles. For this reason, he insists that any
improvement of relations with Washington will have to wait for the next
administration. In fact, he argues that the U.S.’s professed embrace of
market economies and Venezuela’s private sector is aimed at protecting
corporations and traditional elites from his efforts to make
decision-making more responsive to the nation’s poor majority.

Venezuela’s antagonism towards the U.S. has escalated since the
April 2002 attempted coup against Chávez, which the U.S. allegedly
backed. In January 2006, the Chávez government expelled a militant
attaché from the U.S. embassy in Caracas, claiming that he had been
spying on the Venezuelan armed forces; Washington was quick to respond
that the accusation was concocted. In May 2008, a U.S. fighter plane
“inadvertently” violated Venezuelan airspace due to an acknowledged
navigation error. Despite U.S. air-traffickers contacting the
Venezuelan tower to report the accidental incursion while it was
occurring, Venezuelan Defense Minister Gustavo Reyes Rangel
characterized the action as “deliberate on the part of the North
American Navy… It is nothing but another link in the chain of
provocations in which they are trying to involve our country.” When the
U.S. later accused Chávez of collaborating with the FARC in June 2008,
Chávez replied that it was a ploy by Washington to spread violence and
disunity in the Andes.

Threatening U.S. Interests
Based on Chávez’s seeming indifference regarding the pursuit of
amicable relations with Washington, it wasn’t clear whether it was a
matter of bark or bite when it came to his threatening gestures to U.S.
interests in his country. While his rhetoric was decidedly bite, his
actions generally were bark. The populist leader’s socialist rhetoric,
his spirited anti-Americanism, his clashes with the Venezuelan elite,
his efforts to build alliances with his left-leaning neighbor and even
with distant U.S. perceived rogue nations like North Korea and Iran,
and his resolve to strengthen OPEC as an economic power inevitably
eroded relations between the two countries. Not only did he nationalize
the majority of holdings of such major U.S. corporations like Exxon
Mobile and Conoco Phillips, but he also ended intelligence liaison
relationships and shut down military and anti-drug cooperation with the
U.S. in an attempt to show his disdain for the “empire” and its
imperialistic footprints.

In addition to these measures, U.S. political figures, especially
among the ranks of Washington Republicans, particularly condemned
Chávez’s alleged unwillingness to cooperate in the fight against
drug-trafficking. In fact, this was far from the case. In 2005, the
Venezuelan National Guard removed its experienced members from the U.S.
Prosecutor’s Drug Task Force and Caracas ended formal cooperation with
the U.S. Drug Enforcement Administration (DEA) after accusing it of
domestic espionage. As a result, DEA agents have found it increasingly
difficult to obtain entry visas into Venezuela. The last was a clear
gesture on Chávez’s part to make cooperation between the two countries
more burdensome. Due to these circumstances, the White House officially
has “determined that the Government of Venezuela has ‘failed
demonstrably’ in meeting its obligations under international
counter-narcotics agreements and U.S. domestic counter-narcotics
requirements.” The State Department has stated that its occasional
efforts to improve relations in other areas that are mutually
beneficial, such as energy and commerce, have been consistently cast
off by Chávez—a contention which Caracas is quick to reject.

The Enemy of My Enemy is My Friend
As was previously mentioned, Chávez has persistently pursued alliances
aimed at diluting the U.S.’s international authority. Not only is
Venezuela intent on diversifying its oil clientele to reduce dependence
on the U.S. market, but it also has pressed OPEC to back policies that
have restricted production and increased oil prices on the world
market. In August 2000, as OPEC’s leader through rotation, Chávez
became the first head of state to meet with the late Saddam Hussein
since the Gulf War, an action that many deemed as an act of defiance of
U.S. policy. Following Colombia’s March 1, 2008 incursion into
Ecuadorian territory to raid a FARC camp, Chávez vehemently criticized
President Uribe’s infringement upon Ecuador’s sovereignty, taking issue
with the U.S.’s most important ally in South America. Additionally,
Hugo Chávez’s significant trade relations, and his general closeness
with Havana has undermined Washington’s attempts to isolate the island
and coerce the Castro brothers to democratize according to a
U.S.-drafted script. His ties with the Castro regime represent one face
of his struggle toward Latin American integration consistent with his
idea of “21st Century Socialism.” As such, he has become one of the
main leaders of the leftist resurgence in Latin America, whose main
goal is to reduce the U.S.’s longtime influence and interventionism in
Latin America’s domestic affairs, while defiantly creating new
regional, economic, political and military bodies outside of
Washington’s orb.

Chavez’s relationship with the President of Iran, Mahmoud
Ahmadinejad, is especially aggravating to the United States. Washington
perceives this heightened effort on the part of the Iranians as an
attempt by Tehran to deliberately infiltrate and engage a region
traditionally under Washington’s watch. As founding members of OPEC,
Iran and Venezuela have constantly engaged in dialogue regarding oil
pricing and sales and production policies since 1960. Under Chávez,
moreover, there have been broadened relations with the Islamic country
on such issues as culture and information technology, largely as a
demonstration of the Venezuelan leader’s opposition to the U.S.-led
invasion of Iraq.

Venezuela has repeatedly supported the development of peaceful
nuclear technology and requested the help of countries like Iran in
assisting to lay the groundwork in order to inaugurate nuclear research
in Caracas. Considering Washington’s hard-line stance against Tehran’s
uranium enrichment program, Venezuela’s benign attitude towards Iran,
with whom it has 181 agreements, in effect, signifies a carefully
planned attack against U.S. foreign policy interests.

Iran, a major oil producer, has promised tens of millions of dollars
worth of economic assistance to pro-Chávez governments in the region
such as those of Nicaragua, Ecuador, and Bolivia. These recently
enhanced relations have been solidified in the opening of direct
flights between Caracas and Tehran. According to the Department of
State, Iranians arriving in Venezuela undergo extremely lax customs
checks and an easy-pass process for those desiring to obtain Venezuelan
citizenship.

In an even more controversial move, Venezuela and Tehran are now
engaging in two banking ventures that many believe will allow Iran to
evade U.S.-led sanctions aimed at strangling the Iranian financial
structure and its access to outside capital. These sanctions are aimed
at undermining its support of what the U.S. and much of the
international community see as international terrorism and nuclear
proliferation. The first such bilateral venture was the creation of the
Banco Internacional de Desarrollo established in Caracas in
September 2007. This financial institution’s funding was authorized
within 72 hours, even though the process normally takes months. The
second joint venture occurred in May 2008 with the creation of a
binational bank, Banco Binacional Irani-Venezuela, to which
each country will contribute $600 million. The Venezuelan National
Assembly also authorized the formation of an investment fund called Fondo Binacional Venezuela-Irán, with a influx of U.S. $500 million from each respective country.

Considering Iran’s abiding hostility towards the West, and the
United States in particular, it is understandable that some in this
country would fear the close relationship between Venezuela and Iran as
being unnatural. According to State Department sources, these banks
will not only allow both counties to freely move funds with little
accountability, but their officers will enjoy legal immunity in
Venezuela. Noting the obscurity and scant public information often
characterizing such ventures, U.S. State Department officials have
claimed that these institutions will not be required to uphold normally
rigorous transparency standards required of such bodies. As Norman A.
Bailey from the Institute for Global Economic Growth pointed out in a
testimony before a Congressional hearing, if hostilities were to break
out between the United States and Iran, its presence in the Western
Hemisphere would be to Iran’s advantage. Hardliners in the Bush
administration, and those close to it, who favor including Venezuela on
its state-sponsored terrorist list believe that doing so would make the
U.S. better prepared to ward off hostile blows coming from Caracas.

Cold War: A Sequel?
Most recently, the Venezuelan president traveled to Moscow to formalize
the “Alianza Estratégica,” a military and defense arrangement deemed
necessary by Chávez in order to “guarantee Venezuela’s sovereignty,
which is now threatened by the United States.” Though it may seem that
there is some evidence of U.S. offensive plans against Venezuela, it
seems highly unlikely that Washington would even consider taking such
an explosive step after its failed coup attempt against Chávez in 2002
which it abetted, and the near-universal, international criticism
elicited by its unilateral decision to invade Iraq. Washington’s public
response was merely to voice its belief that Venezuela’s stepped-up
pace of arms purchasing from Spain, China and Russia goes beyond any
reasonable defensive needs. Precisely due to the tense relations
between the two countries, Venezuela’s desire to build up its military
capacity faster than any apparent legitimate need, makes the U.S.
government more than a little apprehensive. Yet, Caracas can argue in
return that being on the wrong side of the barrel with the world’s sole
surviving superpower is somewhat disconcerting.

The “Alianza Estratégica” with Russia was accompanied by a
series of agreements regarding trade, weapons purchases, coordinated
energy policies, oil exploration, and the expansion of joint financial
services. The two countries are expected to reach several additional
understandings in the near future in which the South American country
will buy up to U.S. $2 billion worth of Russian military hardware in an
attempt to modernize its military as part of its U.S. $2.6 billion
defense budget. When the U.S. stopped supplying weapons to Venezuela in
2006, it was Russia which filled the void and began to sell military
supplies and weapons to Chávez, while furnishing a capacity for
training of military personnel. However, Russian-Venezuelan relations
are going beyond the military arena. Just last year, bilateral trade
between both countries already had reached U.S. $1.1 billion, double
that of 2006. In addition, the state-run Venezuelan oil company has
signed deals with three different Russian energy companies.

The United States’ Role
Not only has Washington denounced Venezuela’s failure to cooperate with
the U.S. in counternarcotics efforts, it also had “rescinded
Venezuela’s eligibility to purchase most types of U.S. weapons and
weapons systems; closed Venezuela’s Military Acquisition Office in
Florida; arrested unauthorized Venezuelan agents; denied Venezuela
access to Export-Import Bank financing and Overseas Private Insurance
Corporation coverage; designated several Venezuelan nationals under
Executive Order 13224 and the Narcotics Kingpin Act for its support
provided to Hezbollah and for trafficking illicit drugs.” These
measures were enacted in an effort to compel Chávez to submit to U.S.
definitions of democracy because, as Washington perceives the
situation, U.S. interests will best be served under a free enterprise
economic system. The problem is that, rather than making a serious case
against Venezuela, Washington has had a good deal of success in
pragmatically making its charges stick, even though specialists see the
White House’s dictum as nothing less than political propaganda meant to
advance Washington’s ideological propensities, and not necessarily
rescind accords.

The Case Against the U.S.
United States actions have precipitated an aggressive response by
Chávez. There is a clear cause-effect relationship between Washington’s
strictures and its harsh language directed towards Caracas’ hostility
toward the U.S. The hypocrisy with which the Bush Administration has
handled its relations with Venezuela has massively contributed to a
lack of cooperation and dialogue between the two countries. For
example, when Venezuela asked the U.S. to extradite Venezuelan citizen
Luis Posada Carriles in 2005 for the alleged bombing of a Cuban air
passenger liner in 1976, Washington adamantly refused, saying that he
would be denied a fair trial there. The Bush Administration claims to
act under the moral confines of a fair and just democracy serviced by
an egalitarian legal system and yet, by refusing to extradite, has
patently obstructed justice by politicizing its decision.

As a Venezuelan citizen, Posada Carriles should be held accountable
to the laws of his country for a crime purportedly committed in his
country. While the United States insists that Venezuela’s relationship
with Iran can be deemed as facilitating terrorist activity, it operates
under a specious double-standard by harboring this world-class
Venezuelan terrorist. While some U.S. officials would like to label
Venezuela a terrorist state, one must ask what Caracas has done to
warrant such an appellation. U.S. efforts to steer the direction of
Chávez’s policies have not only failed, but, in some instances, have
provided the Venezuelan government with further examples of U.S.
interventionism in hemispheric hot spots, rather than seeking
constructive bridges to reconcile a string of discordant strategies.

U.S. government officials continue to devise strategies about how to
deal with the “Chávez problem.” In a Subcommittee hearing on July 17,
Representative Connie Mack, a Republican extremist on Latin American
issues, voiced the opinion of many Bush administration officials when
he cited Venezuela’s questionable relationship with the Iranian
government as sufficient reason to put Venezuela on the very
controversial state-sponsored terrorist list compiled by the State
Department. Chávez has repeatedly deemed such a threat as a U.S.
attempt to destabilize his government and has, in fact, dared the U.S.
to take this action by saying, “Let them make that list and shove it in
their pocket…We shouldn’t forget for an instant that we’re in a battle
against North American imperialism.”

On the other hand, more enlightened U.S. officials like Assistant
Secretary of State Shannon, the country’s chief Latin Americanist, have
insisted along with Subcommittee Chairman Engel at a House hearing,
that it is necessary to maintain diplomatic ties with Chávez through
patience and dialogue. At the July 17 Subcommittee hearing,
Representative William Delahunt (D-MA) discussed the need to respect
the sovereign rights of a country like Venezuela, whose citizens
democratically voted to elect their leader; failure to do so would be
viewed as an insult to the intelligence of ordinary Venezuelans. As the
world’s surviving superpower, the United States at times thoughtlessly
delegitimizes countries with which it does not share the same ideology.
However, the Bush administration fails to adequately realize that
different countries have different cultures and can express conflicting
values. The fact remains that even though he has sponsored many
controversial measures and often has resorted to impolite rhetoric,
Chávez’s era in power has been almost entirely legitimate and benign.
Including Venezuela on a self-serving U.S. terrorist list would be a
sorely misguided move, as well as a counterproductive measure due to
the strong existing economic and social ties between both countries.

Eliminating Misconceptions and Barriers to Improvement
Venezuela has long been plagued with the same widespread poverty and
huge disparate income gap as is often found in many Latin American
countries. When Chávez came onto the political scene, he began to show
those at the bottom of the income ladder that it was possible for them
to improve their living standards. He was able to convince a clear
majority of his fellow citizens that progressive change was possible,
and, at least for the time being, the majority of Venezuelans decided
that they no longer would settle for the status quo.

Director of The Carter Center’s Americas Program, Jennifer McCoy
stated, “We need to understand the hunger for recognition and inclusion
by populations marginalized from economic and political power.
Procedural democracy is not a priority for many in this situation.
Having greater control and participation in the forces that determine
their daily lives is.” Thus, while many in the U.S. government complain
that the erosion of the separation of powers in today’s Venezuela is a
violation of the country’s fundamental tenents of democracy, it should
also understand that the country has experienced a vastly different
history and, thus the current situation there responds to different
needs. Sometimes the need to eat will overwhelm the need for government
checks and balances and other constitutional prescriptions, as seen
from the perspective of the average citizen living at the poverty line.

Chávez’s Tasks
Despite the enmity between the two countries, the harsh rhetoric and
the clashing ideologies have had little impact on U.S.-Venezuelan
economic relations. They have to a great extent, damaged Venezuela’s
credibility and trustworthiness in the eyes of some countries, which
has frustratingly proved to be of no particular benefit to the U.S. In
a break from tradition, the U.S. has been unable to effectively
intervene in Venezuelan affairs or deter the socialization of the
country due to its lack of leverage over a number of resource-rich
nations in the immediate region, and its own singular dependence on
Venezuelan oil. Thus, Chávez has never been under extreme pressure to
accommodate the U.S. However, it seems that the tide might be changing.
The Venezuelan state is presently facing a complicated and challenging
domestic situation. The failure of the December 2007 constitutional
reform, Chávez’s difficulties in consolidating his political party’s
power, the emergence of a semi-effective civil society, and the
upcoming Venezuelan November local elections have created a number of
political obstacles for the populist leader. These challenges are
reflected in the recent food shortages, rising crime rates, declining
medical care, and deteriorating physical infrastructure. This evolving
situation has forced Chávez to, for the first time in years, express
some willingness to improve relations with the U.S., which has the
technical capabilities to provide significant aid to Venezuela in these
and many other areas.

At this pivotal point in the Chávez presidency, the next U.S.
administration should seek to more actively transform its relations
with Venezuela in a constructive direction. The current policy has been
dominated by barnyard exchanges that have contributed to bilateral
tensions and suspicions that have resulted in perpetuating aggressive
attitudes on both sides. However, Assistant Secretary of State Shannon
has indicated the possible beginning of the end of the U.S. hard-line
approach to the country by stating, “We [are] committed to a positive
relationship with the people of Venezuela and have the patience and the
persistence necessary to manage our challenging relationship.” Placing
Venezuela on the state-sponsored terrorist list, as threatened by such
hard-line policymakers as Representative Mack, would only prove
detrimental to both countries’ economic and geo-political interests.
Only through diplomacy and basic respect can the U.S. attempt to
overhaul the image of an American empire in the eyes of Chávez and so
much of Latin America. The fact that most Latin American countries have
refused to take sides, even when one side is the global giant, makes it
all the more evident that hostility towards Chávez’s Venezuela has not
and is likely to not work in Washington’s interests; a more diplomatic
approach is likely to prove more effective in bringing the desired
results to both countries. The U.S. must be patient and understand that
prevailing tensions will only dissipate when Chávez feels confident
enough to sit down and talk with one of Washington’s senior officials,
under no limiting preconditions or attitudes of condencension the room.