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Much ado about oil

Venezuela’s feisty president, Hugo Chávez, is a vocal critic of corporate-led globalization and a major thorn in the side of Washington. He may have few admirers in the Bush Administration but in Caracas he governs with a solid majority, while across Latin America he has strong support from other like-minded governments.

Aside from Cuban leader, Fidel Castro, Chávez has befriended Bolivia’s Evo Morales, Ecuador’s Rafael Correa and Nicaragua’s Daniel Ortega – as well as the leaders of Brazil, Argentina and Uruguay. Beyond Latin America, Chávez has developed close relationships with Vietnam, Libya, Syria, Iran, the Russian Federation and China.

In March this year, Venezuela signed a joint venture agreement with China’s National Petroleum Corporation to develop oil in the Junin-4 bloc of Venezuela’s Orinoco Oil Belt. After the signing, Chávez noted that ‘Venezuela wants to become a reliable, growing source of oil supply for China’. Last year, the country exported 300,000 barrels a day to China; this year’s target is 500,000 barrels. The March meeting was the latest round of contact between China and Venezuela, which peaked when Chávez visited Beijing in June 2006 to meet with President Hu Jintao.

The previous month Chávez flew to Moscow to firm up a major arms purchase from the Russian Federation. Also of note was Chávez’s trip last June to Belarus. In return, a Belarusian delegation, headed by State Secretary Viktor Sheyman, visited Venezuela. Twenty-two declarations were signed, including another joint venture oil project in the Orinoco basin.

Friendly relations have also developed with Vietnam. Chávez twice met with President Nguyen Minh Triet – once in August when the Venezuelan leader travelled to Vietnam, and then again when both leaders attended the Non-Aligned Movement Summit in Havana in September. A Venezuelan delegation, headed by deputy foreign minister Hely Vladimir Villegas, returned the visit in March. The most important outcome of this event, according to an article by Thai Press Reports, was that Venezuela affirmed its support for Vietnam to become a non-permanent member of the UN Security Council for the 2008-09 term. Venezuela may attempt to become a non-permanent member, too, and is already courting potential support from its new friends.

Chávez has also cosied up to several governments in the Middle East not known for their pro-US sentiments – namely Syria, Iran and Libya. The Venezuelan President travelled to Damascus last August, where he met President Bashar al-Assad. In November the two governments – along with Iran – signed a preliminary agreement to construct a $1.5-billion, 140,000-barrel-a-day oil refinery in Syria.

Chávez also met long-time Libyan leader Muammar al Qadhafi on a visit to Tripoli in May 2006. Chávez had met Qadhafi four times previously and their friendship is well known. The Libyan leader has presented Chávez with the Qadhafi Human Rights Prize, while Chávez often quotes Qadhafi’s Green Book in his speeches. Both are leading members of OPEC – the Organization of Petroleum Exporting Countries.

With regard to Iran, several new initiatives have occurred during the Chávez presidency, the most symbolic being a weekly Caracas-Tehran flight, with a stopover in Damascus. The Venezuelan state-controlled airline Conviasa and Iran’s national carrier, Iran Air, will operate the flights. ‘Mr Chávez is much loved in our country and our people want to come here to get to know this land,’ said Iran’s ambassador to Venezuela, Abdullah Zifan, when the flights were announced.

Chávez has been working hard to firm up arms deals from non-Western sources. In 2006, he startled the world by announcing a massive $3-billion weapons purchase from Moscow: 100,000 Kalashnikov assault rifles (type AK-103), 24 Sukhoi (SU-30) fighter jets and 53 military helicopters. The first two jets were delivered last December to the Luis del Valle Garcia Air Base.

There is also a continuous two-way flow of military personnel between Caracas and Moscow. Venezuelan pilots are already taking flight instruction classes from Russian teachers, while Russian technicians instruct local mechanics on how to service the newly purchased equipment. And a Kalashnikov assembly plant is planned for Venezuela’s Aragua State: production of 50,000 automatic rifles a year is expected by 2010.

Reports indicate that Venezuela is also interested in Russia’s Antonov transport planes (which will replace its US-made C-130s) as well as three Amur-class submarines. Earlier this year Venezuela announced it would buy up to 12 TOR-M1 anti-aircraft defence missile systems from Moscow – at an estimated cost of $290 million.

Military technology has also come from other suppliers. In November 2005, Caracas signed a 1.2 million-euro deal with Madrid for eight patrol boats for the Venezuelan navy. And in February 2007, the Spanish daily _El País_ reported that Madrid had sold the Venezuelan armed forces ammunition for light weapons costing 3.2 million euros.

Belarus is another important arms vendor. The Eastern European nation will supply night vision devices to the Venezuelan army. President Chávez has declared that ‘every single rifle in the Venezuelan army’ will be fitted with these upgrades. The German Press Agency (Deutsche Presse-Agentur) reports that since the Venezuelan army has around 34,000 troops the potential value of the night scope deal could be as high as $24 million. In addition, Belarus has offered Caracas an arms package that includes anti-aircraft missiles. Belarusian officials have in their arsenal modernized Soviet-era medium and short-range missile systems as well as the newly developed TRK missile system.

In 2005, Caracas acquired from China several 3-D, long-range JYL-1 radar systems for command of military air operations. Venezuela has turned to nations like Russia, China and Belarus for weaponry because there are few other willing suppliers. The US suspended the sale of spare parts for Venezuela’s American-made F-16s in 2005. Meanwhile, Spain cancelled a $620-million order to Venezuela for 12 transport aircraft due to US pressure.

The truth is, Chávez is much more concerned about uniting his Latin American neighbours than fighting them

Chávez’s critics argue that he has committed significant blunders in both foreign policy and national security matters. One of these was his comparison of Israel to Nazi Germany in an August 2006 interview with the Al-Jazeera TV station. Chávez called Israel’s air strikes against Hezbollah in Lebanon an ‘unjustified aggression that is being carried out in the style of Hitler, in a fascist fashion’. The Venezuelan leader then recalled his ambassador to Israel. While Chávez has a reputation as a gifted orator, self-censorship is clearly not his strength.

Another issue that has hurt Chávez’s international standing is his alleged sympathy for the leftist rebel movement FARC (Revolutionary Armed Forces of Colombia). Little wonder that Bogotá is upset by Venezuela’s purchase of the 100,000 Kalashnikov rifles and the rifle manufacturing plant. The obvious question is: why would Venezuela need so many rifles when it has only 55,000 troops (including 24,000 paramilitary troops responsible for internal security)? In both Washington and Bogotá the fear is that some of those rifles may find their way into the hands of the FARC. At a recent press conference in Washington, Colombian foreign minister Fernando Araújo accused Chávez of being ‘the ideological leader of the guerrillas in Colombia’.

As a sovereign state Venezuela has every right to formulate the foreign policy of its choice – including relations with human rights violators and despotic governments. Washington may not agree with Chávez, but there is a certain amount of hypocrisy in the position of the Bush Administration. The US has no problem dealing with chronic human right violators like China or North Korea when it suits American interests. Even Libya, once a pariah state, has now been removed from the US list of countries sponsoring terrorism.

From this point of view, Chávez is simply looking for allies who share his common interests and preferences. In the end, oil has become the firmest glue between Venezuela and other countries and that is what proves most worrisome for Washington.

Venezuela’s purchases of military equipment should be seen as part of a wider modernization process now taking place across South America. Much has been written about the purchase of Sukhoi jet fighters and Kalashnikovs. However, little has been said in the US about Chile buying F-16C fighter jets, state-of-the-art Leopard tanks and Humvees – which Peru, Bolivia and Argentina have noted with concern. Chávez’s decision to approach Russia for new military equipment is obviously linked to Washington’s refusal to supply spare parts or to help upgrade Venezuela’s ageing fleet of US-supplied F-16 jets. The country has 22 F-16s but only 8 are currently in working order. It was inevitable that Venezuela would turn to Russia, a country that holds no reservations about selling military hardware to any nation with enough cash.

Venezuela is spending more on weapons than other countries in the region but there is no indication Chávez is about to attack his neighbours. It would be ludicrous to believe the country would launch an attack on the US, shooting at Stealth bombers with rifles. And any aggression against Brazil, nearby Caribbean islands or Guyana (with which Venezuela has a longstanding disputed border) would be condemned internationally. More critically, Chávez would lose the credibility he has painstakingly managed to build with his neighbours – which is the last thing he wants. The truth is, he’s much more concerned about uniting his Latin American neighbours than fighting them. Part of his plan to foster economic unity includes building a massive new gas pipeline to the continent’s Southern Cone.

The only possible conflict zone could be Colombia. Relations between Caracas and Bogotá have been tense historically and they’ve been particularly strained during the Chávez and Uribe administrations. In 1987, the countries almost went to war when a Colombian warship was spotted in Venezuelan waters. Today, however, conflict is unlikely. Colombia can’t afford to fight a two-front war – one against the Venezuelan military and the other against leftwing insurgents. At the same time, politically speaking, Chávez could hardly afford to launch an offensive where he would appear to be the aggressor. As a former army officer with bitter memories of the failed April 2002 coup, he understands the need for a contented military. That is the main reason he is upgrading Venezuela’s military – even if there are no logical immediate enemies.

At the same time the country’s foreign policy, based on befriending nations like Syria and Iran, should not be regarded as some kind of potentially dangerous international cabal. The centre of Chávez’s foreign policy is oil, whose earnings he in part uses to befriend oil-producing nations as well as major oil importers like China. In spite of whatever provocative statements the Venezuelan leader may make during his trips to Tripoli, Tehran or Minsk, he understands that to earn the petrodollars needed to update his country’s military he needs a stable economic environment. And that will only come with major oil clients like the US not roiling the waters.

This is an edited version of an article originally prepared by *Alex Sánchez Nieto* for the Council on Hemispheric Affairs. For more information see: www.coha.org/

New Internationalist issue 402 magazine cover This article is from the July 2007 issue of New Internationalist.
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