Venezuela’s Chávez Riding High, But Difficulties May Lie Ahead

Buoyed by record high oil prices, Venezuelan President Hugo Chávez forged new alliances with a number of countries in the Caribbean and South America over the last year, projected an image of regional opposition to Washington, and while the Venezuelan economy grew at a brisk pace for the second year in a row, his party and its allies consolidated their hold over the country's elected public posts at all levels.

CARACAS, Dec 27 (IPS) – Buoyed by record high oil prices, Venezuelan President Hugo Chávez forged new alliances with a number of countries in the Caribbean and South America over the last year, projected an image of regional opposition to Washington, and while the Venezuelan economy grew at a brisk pace for the second year in a row, his party and its allies consolidated their hold over the country’s elected public posts at all levels.

In addition, he celebrated the recent electoral victory of leftist indigenous leader Evo Morales in Bolivia as part of a further shift to the left in South America.

But he clashed with conservative Mexican President Vicente Fox, at the forefront of a confrontation between North and South America, and his fiery leftist rhetoric failed to prevent a dismal turnout in the Dec. 4 legislative elections.

Chávez “has made progress on the two pillars of his international policy: a peaceful ‘revolution’ to change the political colour of South America, with a shift to the left, and the accumulation of forces to shore up a multipolar world, opposed to the United States,” said political scientist Alberto Garrido, a professor of postgraduate studies at the University of Los Andes.

“The conflict with the United States has brought together political and social movements in Latin America, and now governments as well, which have in their hands an explosive cocktail: the largest reserves of oil and gas in the region, combined with revolutionary policies,” Garrido told IPS, specifically referring to Venezuela and Bolivia.

Morales, the leader of Bolivia’s coca farmers association and an outspoken critic of the United States, won the Dec. 18 presidential elections in his country in an unprecedented first-round victory.

The United States, meanwhile, approved 725 million dollars in financing in fiscal year 2005 for the Andean Counterdrug Initiative, to “strengthen democracy, regional stability, and economic development.”

The U.S. strategy extends Plan Colombia, an antidrug and counterinsurgency initiative, to the rest of the Andean region.

But the United States’ main ally in the region, right-wing President Álvaro Uribe, has increasingly found himself isolated in a region turning towards left-leaning governments, including the administrations in Brazil, Argentina, Uruguay, Chile, Venezuela, and as of January, Bolivia.

Nevertheless, Caracas and Bogotá have been forging closer political ties and economic agreements, “which could change in mid-2006, once Uribe is reelected,” said former Colombian ambassador Fernando Gerbasi.

The year is coming to an end with a record total in trade between the two neighbours: three billion dollars, with a two-to-one trade balance in favour of Bogotá.

Venezuela plans to purchase a Colombian petrochemical company, and a gas pipeline will link the two countries, as part of a larger future project involving an oil pipeline running from northwestern Venezuela to the Pacific coastline.

The Chávez administration also promoted the creation of Petrocaribe, an alliance under which Venezuela will provide 198,000 barrels a day of oil to 13 Caribbean nations with “soft” financing for up to 40 percent of the bill. In addition, Caracas will accept payment in the form of products or services.

Farther south, Venezuela purchased more than 1.3 billion dollars in debt bonds in Argentina and agreed to sell that country fuel, invest in a refinery, and produce and repair ships, all of which will be partially or totally paid for with agricultural or manufactured products.

Venezuela also signed agreements with Paraguay and Uruguay to supply fuel and invest in the upgrading of refineries, while in Brazil it agreed to build a refinery in the northeast, as part of an association between the state-run oil giants Petroleos de Venezuela (PDVSA) and Petrobras.

Chávez and Argentine President Néstor Kirchner discussed the construction of a gas pipeline stretching from the Caribbean Sea to the Río de la Plata (River Plate), which “will also involve Bolivia,” Venezuelan Energy Minister Rafael Ramírez commented to IPS.

“For an entire century, imperialism assigned us the role of supplier of oil, and we will continue exporting to the United States, but we are diversifying our markets,” said Ramírez.

In addition, Venezuela’s application to become the fifth full member of the MERCOSUR (Southern Common Market) trade bloc – made up of Argentina, Brazil, Paraguay and Uruguay – was accepted this month, although the full admission process will take some time to complete.

At the early November Summit of the Americas in Mar del Plata, Argentina, Chávez and his MERCOSUR partners joined together to oppose a Mexico-led proposal to resume the negotiations for the U.S.-sponsored Free Trade Area of the Americas (FTAA).

Fox, who assumed the role of spokesman for the 29 governments in the hemisphere that supported the initiative, criticised Chávez for taking part in both the Summit and the parallel “counter-summit” organised by civil society.

The Venezuelan leader responded by calling Fox a “puppy of the empire” and accusing him of “kneeling down to Washington.” The diplomatic row escalated to the point that the two countries’ ambassadors were recalled, and Venezuela and Mexico, the two oil powers in Latin America, effectively assumed the role of champions of two opposing positions.

In the “global offensive” that Garrido says Chávez is carrying out, Venezuela made overtures to Russia, Spain and China this year, purchasing two billion dollars in weapons and agreeing to supply up to 300,000 barrels a day of oil to Beijing. In addition, Venezuela backed Iran’s insistence on its right to develop a nuclear power industry.

This South American country of 26.5 million people has even begun to sell heating oil at discount prices, through the Venezuelan-owned Citgo gas stations, in low-income communities in Chicago, New York and Boston.

But not everyone in Venezuela is pleased with that initiative. “Chávez should not be giving away our oil abroad while there are needs at home,” Esther de Quintero, standing next to her small food stand in downtown Caracas, told IPS. “The president should first take care of the poor at home, and if there is anything left over, then he can help others.”

The Colombian magazine Semana declared Chávez “man of the year” because “he modified the political map of the subcontinent, distributed his oil wealth in every direction, challenged the United States, and went from being perceived as a tropical clown to the Latin American leader with the greatest global influence.”

The Venezuelan economy grew nine percent, the highest rate in the region according to the Economic Commission for Latin America and the Caribbean (ECLAC), while the country’s social and economic indicators improved, as well as its human rights record, according to non-governmental organisations.

Consumption climbed, with record sales in new vehicles: 204,000 between January and November 2005, 73,000 more than in the same period in 2004, the Statistics Institute reported.

And the government’s social initiatives have benefited millions of poor in this oil-rich nation. These have included an adult literacy drive, job training and microcredit programmes, soup kitchens and a chain of shops selling subsidised foodstuffs, and campaigns that have brought health care and dental coverage to slum neighbourhoods.

On the political front, Chávez’s party and its allies, which already hold almost all of the country’s regional governments and most of the city governments, won all 167 seats in Congress in the Dec. 4 legislative elections.

The opposition parties, which polls indicated were about to take a thrashing, decided to pull out just before the elections, which were marked by torrential rains and record high abstention of 75 percent.

Although the opposition charged lack of transparency, the army of Organisation of American States (OAS) and European Union election observers declared the vote legitimate.

In August 2004, six million out of 10 million voters who took part in a presidential recall referendum organised by the opposition supported Chávez. And the latest polls, carried out by opposition-affiliated polling firms in May, showed that support for the leftist president remained higher than 70 percent.

However, only three million voters came out early this month to support his followers in the legislature.

“I believe we have reached a turning-point, and that the peak moment of success of the (government’s) Boliviarian social project coincided with the moment at which society is most fed up with politics,” said sociologist Tulio Hernández, in an attempt to explain the low turnout.

Chávez’s initiatives “had never been so solid, in the sense of having control over elected offices at all levels, or so shaky, in the sense that so few people came out to vote in the parliamentary elections,” he added.

In Hernández’s view, “it is impossible for Chávez to enjoy greater success. That means that what inevitably lies ahead is a decline, and we’ll see how those in power deal with that.”

During a Christmas Eve celebration with the residents of a poor neighbourhood on the outskirts of Caracas, Chávez, who has been in power since 1999, reiterated his aim to win 10 million votes – out of a total of 14.5 potential voters – in next year’s December 2006 presidential elections.