Venezuela Strengthens Alliance with Belarus, Initiates Bilateral Relations with Ukraine

Mérida, October 18^th 2010 (Venezuelanalysis.com) – As part of an eight-nation diplomatic tour, Venezuela’s President Hugo Chavez visited Belarus’s state-owned housing, agricultural, and manufacturing complexes over the weekend and promised to secure Belarus’s oil supply for 200 years. Chavez also met with Ukrainian President Viktor Yanukovych to formally launch bilateral diplomatic relations.

During the two-day visit to Belarus, Venezuela agreed to send the former Soviet nation 30 million metric tons of oil over the next three years. “The Venezuelan people are proud to be sending our oil to Belarus,” Chavez declared, offering to supply Belarusian refineries “enough oil for another 200 years.”

Belarus and Venezuela expanded a joint venture to extract an estimated 1.2 to 1.3 million metric tons of crude oil per year from Venezuela’s Orinoco Oil Belt, one of the world’s largest oil reserves. Also, Venezuela’s state oil company, PDVSA, signed a memorandum of understanding with Belarus’s state company Belorusneft to create a joint venture called Servicio BeloVenezolana to perform drilling and repair services on Venezuelan oil wells.  

Bilateral oil deals between the two countries began in 2007. Venezuela, a member of the Organization of Petroleum Exporting Countries, was seeking to diversify the countries to which it exported oil. Belarus was seeking to compensate for a drop in subsidized Russian oil imports following diplomatic conflicts with Moscow.

In accordance with Venezuelan law, Venezuela must hold a 60% or greater stake in joint ventures, a policy that the Chavez government says is to assure sovereignty over Venezuela’s natural resources and economic development.

In addition to the oil deals, Belarus and Venezuela discussed their ongoing plans to build thousands of homes to help alleviate a housing shortage in Venezuela. President Chavez, accompanied by the Venezuelan ministers for housing, science and technology, oil, and agriculture among others, toured a public housing complex in Minsk that was equipped with health care facilities, gardens, recreational areas, and disability access to its apartment towers.

Later, Chavez visited the state-owned Belarusian industrial transport vehicle manufacturers, Belaz and MAZ, and announced a new joint venture to build a truck factory in Venezuela’s Barinas state.  

“Nobody has a truck plant in Latin America, not even our brother country Brazil, but we will branch out to Latin America. We will have a factory for large trucks, the most modern in the world,” said Chavez. “Next week, Venezuelan technicians will arrive in Belarus to receive training,” he wrote in his Twitter account.

In addition, Chavez said the two governments signed an agreement to create mixed companies to produce textiles and shoes in Venezuela. “Venezuela imported a total of 35 million pairs of shoes in 2008 and 2009,” Chavez declared. “We can manufacture them there [in Venezuela]… We must transfer technology,” said the president.

Also during the visit, Belarus purchased 20 tons of coffee from the Venezuelan state-owned company, Cafe Venezuela, and the Venezuelan delegation toured a state-owned Belarusian agricultural company called Agragorodok Dziarzhynski. The company employs 2,700 workers and produces 30,000 tons of chicken and also produces a variety of other foods including beef, sausages, grains and cereals, seeds, fish and dairy products, 40% of which is distributed and marketed by a state-owned food company.

President Chavez complimented Belarus for how it has dealt with the global economic crisis over the past two years. “Despite the great difficulties Europe has gone through in recent years, strongly impacted by the capitalist crisis, where in some countries unemployment has reached almost 20%, here in Belarus unemployment is zero… Employment and the standard of living, education, and health have been maintained. The country continues to move forward,” Chavez said.

In recent years, the Chavez government has attempted to decrease his nation’s dependence on oil exports and manufactured imports by devaluing the currency, increasing public investments in the productive sector, and setting up a state-owned food chain. Venezuela calls its form of import substitution “endogenous development,” which is part of its broader project to construct “21^st Century Socialism.”

Venezuela has signed a plethora of bilateral deals with countries across Europe, Africa, Latin America, and Asia in order to construct what it calls a “pluri-polar world” that is not dominated by any major superpower.

President Lukashenko, whose government has seen a weakening of political and economic relations with its primary trading partner, Russia, has enthusiastically welcomed Venezuela’s invitations to do business. “In recent times we have done a lot in the spheres of petrochemicals, gas, agriculture, and food, but we do not want to stop. To advance, we must move forward with the supply of goods to Latin America and locate the Venezuelan products in other countries,” said Lukashenko on Saturday.

Venezuela and Belarus initiated bilateral diplomatic relations in 2006 and have signed dozens of agreements in the areas of agriculture, energy, petrochemicals, manufacturing, finance, and technology. Belarusian trucks, tractors, and other machinery are currently used in Venezuela’s oil and agricultural fields and industrial areas. Belarusian President Alexander Lukashenko visited Venezuela in 2007 and in March of this year.

President Chavez also held bilateral talks with Ukrainian President Viktor Yanukovych on Monday. Each country agreed to set up an embassy in the other, and Ukrainian and Venezuelan officials discussed the prospects of expanding bilateral trade in the way Belarus and Venezuela have done in recent years.

“Much time has been lost in our bilateral relations,” said President Yanukovych in a press conference with President Chavez on Monday afternoon. “Our bilateral relations have a great future.”

Chavez said Ukraine is a key part of a new multi-polar world. “[Venezuela’s] Bolivarian Revolution is democratic and peaceful and is building a new path of independence, sovereignty, and integral human development,” said Chavez. “We do not want the tutelage of any foreign power. The sovereignty of nations and republics lies in the people… Our peoples were victims of a bipolar and later a unipolar world. What we want is a multi-polar world, and Ukraine has an immense role to play,” said the Venezuelan president.

The first official summit of Venezuelan and Ukrainian bilateral working commissions is scheduled to take place in Caracas in November, followed by another meeting in Ukraine that same month.

Ukraine currently transports Venezuelan oil by rail from the Black Sea to Belarus. Monday’s visit was Chavez’s first to the former Soviet nation. Chavez toured the Ukrainian state-owned airplane manufacturer Antonov.

In early October, the Venezuelan Justice Ministry agreed to extradite two Ukrainians who were convicted for smuggling 128 kilograms of cocaine in Venezuela in 2007 and sentenced to nine years in prison.

Before visiting Belarus and Ukraine, Chavez visited Russia where he signed a deal to construct Venezuela’s first nuclear power plant with Russian assistance. Chavez will now visit Iran, Syria, Libya, Algeria, and Portugal before returning to Venezuela.