Venezuela and Bolivia to Cooperate on Coca and Gas

Venezuelan President Hugo Chávez and Bolivian President Evo Morales signed several trade deals in the field of agriculture and energy last week. Chávez warned Morales for coup plans by the USA.

Caracas, Venezuela, May 29,2006—The new left-wing alliance of Venezuelaand Bolivia, supported by Cuba, took some important steps forward lastweek in Bolivia.In the coca-region of Chapare, Bolivian President Morales and VenezuelanPresident Chávez, accompanied by Cuban vice-President Carlos Lage, signedseveral trade deals in the fields of agriculture and energy. During his visitPresident Chávez accused by the US Embassy in the Bolivian capital of planninga coup against President Morales. Last week, US President Bush already spokeout his fears for an "eroding democracy" in Boliviaand Venezuela.Morales, who last week described the cooperation between his country and Venezuela and Cuba as "the axis of the good,"agreed on Chávez’s warnings about a possible coup. The Venezuelan leader proposedto increase military cooperation between the two countries and made an appealto set up a military structure similar to the NATO for Latin America.

Chávez doesnot only want to improve military cooperation in the region. After announcingthe withdrawal by Venezuelafrom the Community of Andean Nations (CAN) last month, Chávez announced onSunday that he is willing to consider the proposal for the creation of aso-called Bolivarian Andean Confederation (CBA), a proposal made recently byre-elected Colombian President Àlvaro Uribe. Despite the fundamentallydifferent opinions about free trade between the USA on the one hand and LatinAmerican countries on the other, Uribe had made the proposal out of respect forHugo Chávez. Chávez, a clear opponent of bilateral free trade agreementsbetween the USA and Colombia and Peru, is the driving force behind the ALBA,the "Bolivarian Alternative for America" and the so-called Trade Agreement ofthe People (TCP), which was signed last April in the Cuban capital of Havanna.

The mainreason for Chávez’s visit to Boliviawas the signing of several trade agreements. Both heads of state signed dealsto industrialise the production of soy, milk, tea, coffee and coca. "We willmake clear that coca is not cocaine," said Morales. Morales furtherannounced a radical land reform in Bolivia, to be based upon the same ideas asthe "war on latifundismo," which Chávez already started last year in Venezuela.In both countries, roughly 90 percent of arable land is owned by less than tenpercent of the population.

In thefield of energy cooperation, Venezuelaannounced it would provide Boliviawith 200,000 barrels of diesel per month for preferential prices. In reactionto comments by the Venezuelan opposition, Chávez said that "Bolivia willpay for the diesel, we will not give away anything for free. The money willhowever not be paid directly to us. The roughly 100 million Dollars will stayin a special fund, located in Bolivia.From this fund, we will create a Bank of the South."

Accordingto Chávez, this money will be available for Bolivian farmers. "The farmers willpay their loan back in cash or with their products. I hope that the farmerswill produce soy of good quality. The value of the products is more importantthan the monetary value. We will destroy the dogmas of capitalism. Our model ofsocialism is based on solidarity."

Venezuela and Bolivia agreed on an alliancebetween Venezuelan state oil company PDVSA and the Bolivian oil firm YPFB. Venezuela willinvest roughly $1.5 billion in the Bolivian oil- and gas industry, whichwas nationalized by President Morales in the beginning of May. Bolivia has the second largest gas reserves inLatin America, only to be topped by Venezuela. PDVSA will exploit newgas- and oilfields in Bolivia,and invest in the petrochemical industry.

Not only Venezuela came to agreements with Bolivia. Cubais involved in improving Bolivia`s health and educational system, just as itwas during the last years in Venezuela. Boliviais already enjoying similar literacy programs as poor Venezuelans wereenjoying during the last years, with the aim of eradicating illiteracy in Bolivia in thenext two to three years. Hundreds of Cuban doctors have arrived to Bolivia aswell, in order to provide primary health care to the poorest, just as tens ofthousands of Cuban doctors are already doing in Venezuela`s Mission BarroAdentro.