- The Washington Times - Monday, January 19, 2009


The plunge in global oil prices has prompted fresh criticism of Venezuelan President Hugo Chavez for spending more than $50 billion on neighboring nations.

Since Mr. Chavez took power in 1998, beneficiaries have included Cuba and later Bolivia, Ecuador and Nicaragua, where Chavez allies were elected president.

But with oil prices hovering about $40 a barrel compared with last year’s peak of about $150, Mr. Chavez’s pricey foreign policy faces fresh criticism at home.

Julio Borges, a senior lawmaker of the First Justice Party, which has generally followed a moderate line in opposing Mr. Chavez, said the president has spent or promised $53 billion to regional allies.

“This is an astronomical figure, which has no justification because we are not talking about humanitarian assistance, but of political favors and projects in other countries, which generate employment and benefits there instead of here in Venezuela,” said Mr. Borges who said his estimates came from government records.

Mr. Chavez has made no secret of the aid and subsidies dispensed to close allies such as the Castro brothers in Cuba, President Evo Morales of Bolivia and Nicaraguan President Daniel Ortega.

In Cuba, for example, Mr. Chavez signed a series of agreements in to develop energy, farming and finance in late 2007, totaling at least $7 billion, according to Cuba’s state-run Granma media.

More recent estimates put the total given or promised to Cuba at nearly $20 billion. Argentina has received more than $8 billion, Bolivia nearly $7 billion, Ecuador and Brazil more than $5 billion each, and Nicaragua nearly $5 billion, according to estimates by the Venezuelan newspaper Universal.

Venezuela is the world’s fifth-largest oil producer with energy exports accounting for 95 percent of its foreign currency revenues, estimated at about $40 billion.

High oil prices have enabled Mr. Chavez to leverage an effort to minimize U.S. influence in the region. Though he has expressed hope for better relations with the Obama administration, remarks by Mr. Chavez on Sunday appeared to belie those expectations.

“I hope I am wrong, but I believe [Barack] Obama brings the same stench, to not say another word,” Mr. Chavez said at a political rally Sunday. It was an apparent reference to outgoing President Bush.

“If Obama as president of the United States does not obey the orders of the empire, they will kill him, like they killed Kennedy, like they killed Martin Luther King, or Lincoln, who freed the blacks and paid with his life.”

Finance Minister Ali Rodriquez said Venezuela’s reserves should be “sufficient to cope with any crisis.”

Government records cited by Mr. Borges cover initiativessuch as the purchase of Argentine and Bolivian government bonds and the construction of oil refineries in Cuba and Nicaragua.

The money spent was more than enough to “build millions of new living units that are needed to end the country’s huge housing deficit. This would have generated 7 million jobs,” Mr. Borges said.

Mr. Chavez has nationalized Venezuela’s largest phone company, electric utilities and oil projects. Critics point out that few new jobs have been created during his decade in office.

Analysts warn that Venezuela’s diminishing foreign reserves, the global economic crisis and inflation at home could jeopardize Mr. Chavez’s ability to remain in power and lead to a disastrous economic crisis.

“The constant drop in the oil barrel price would not only generate an extremely grave economic situation in Venezuela this year, but also sweep away Mr. Chavez’s pretensions to maintain himself in power indefinitely,” said Venezuelan economist Jose Toro Hardy who formerly served on the board of PDVSA, the state-run oil holding.

Venezuela already suffers from the highest inflation rate in Latin America, about 30 percent, and Mr. Hardy predicted prices could climb by 40 percent this year.

Venezuelans will vote in a national referendum Feb. 13 to end term limits - a measure that would allow Mr. Chavez to seek re-election indefinitely.

Voters rejected a similar measure in December 2007.

Sign up for Daily Newsletters

Manage Newsletters

Copyright © 2020 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.


Click to Read More and View Comments

Click to Hide