Venezuela Signs New Economic Agreements in Argentina

Beginning a tour of several South American nations this week, Venezuelan President Hugo Chavez arrived to Argentina yesterday to formalize several economic agreements between Venezuela and Argentina.

Mérida, August 7, 2007 (— Beginning a tour of several South American nations this week, Venezuelan President Hugo Chavez arrived to Argentina yesterday to formalize several economic agreements between Venezuela and Argentina. Chavez said that projects to build new industry in Venezuela as well as supply Venezuelan gas to Argentina have the intention of diversifying the economies and increasing regional integration.

President Chavez met with his counterpart, Argentinean president Nestor Kirchner, today, to sign an energy agreement between the countries. The agreement is to jointly construct over the next two years a liquid natural gas refinery in Argentina to refine gas supplied from Venezuela. Chavez said the gas would go by sea to Argentina but assured that they will "continue working on the construction of the Gas Pipeline of the South," a multinational project to bring Venezuelan gas to Brazil and Argentina, which has been put on hold recently.

The two leaders also signed an agreement to create a South American oil company, named Petrosuramerica, made up of companies from both nations. According to officials, the purpose of the joint company would be to develop joint projects to complement the two nations’ economies. Chavez gave as an example the joint projects being carried out between Argentina and Venezuela in Venezuela’s Orinoco River Basin.

"With the advances of Argentina in petrochemicals, along with the Venezuelan material initiatives, we can convert South America into a world power in petrochemicals," said Chavez.

Later, President Chavez met with the Argentinean National Institute of Industrial Technology (INTI), where he signed several new cooperative agreements to develop industry in Venezuela with Argentinean technology and expertise. INTI is a body created by the Argentinean government to support the development of national industry and technology. Venezuela, together with INTI, plans to build 56 factories in Venezuela in 21 different sectors, from food productions, to metals and wood industries, to the production of electric motors.

Each factory will require an investment of 3 to 10 million dollars and the training of Venezuelan professionals will be led by INTI. This new step in the Venezuela-Argentina union comes as a result of the industrial technology transfer agreements signed between Chávez and Kirchner last February.

The president of INTI, Enrique Martinez, emphasized that the cooperative agreements not only intend to bring a transfer of technology and expertise to Venezuela, but also the development of a unique Venezuelan economic model. According to Martinez, the industrial agreements between Venezuela and Argentina are not simple economic agreements, but agreements based on solidarity between the countries.

"It’s not about a sales agreement on the part of the INTI," he said, "but rather the construction of a distinct cooperative model where business owners are encouraged to transfer technology based on the fact that once there is more production and consumption in a friendly country, in Argentina the same tendency will follow and both countries will increase wealth and benefits for the population."

Martinez also announced that the cooperative project between Venezuela and Argentina in the area of milk production will begin this month. The agreement was signed in July and will include a joint project for the production of milk in Venezuela financed between Sancor, an Argentinean cooperative, and the Venezuelan Social and Economic Development Bank.

Chavez emphasized the importance of these economic agreements with Argentina as a part of regional unity, diversification of the economy, as well as national economic sovereignty.

"We have to accelerate the process of unity in South America," he said. "That is what we are building, that is the road to freedom, only united will we be truly free."

Chavez announced yesterday the purchase of another US$ 1 billion of Argentinean debt in two stages of US$ 500 million. The first stage will form a part of the third release of the Bono del Sur (Bonds of the South), a bond offered jointly by Argentina and Venezuela.

In this way Venezuela has converted itself into one of the main sources of financing for the Argentinean government since 2005. Chavez emphasized that this is part of the construction of an alternative financial system in Latin America, embodied by the Bank of the South project, which will bring the region "toward our financial independence, freeing us from the perverse chains of the International Monetary Fund," he said.

"This reflects that now we don’t need the IMF or any of the financial bodies that are managed by North American imperialism," said Chavez to reporters in Buenos Aires.

With the help of Argentina, Chavez assured that Venezuela would be able to develop industry and diversify its economy in order to get away from "the oil sultanate economic model."