CHAVEZ'S BIG SPLURGE: BUYING FEW REAL FRIENDS.

This is an article that appeared in Human Events, August 22, 2007

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Hugo Chavez’s Big Splurge: Buying Few Real Friends.
by Gustavo Coronel
Posted: 08/22/2007

Working hard to become the world leader of an anti-American crusade, Venezuelan President Hugo Chavez has been using Venezuelan oil income as a weapon both directly and indirectly, threatening to cut off oil shipments to the U.S. while leading the charge for higher oil prices within OPEC.
In the 1970s Venezuela saw its oil income tripled within one year. The president of Venezuela at the time, Carlos Andres Perez, promised “to manage abundance with a philosophy of austerity.” Yet, these sensible words were quickly replaced by an orgy of public spending that ended up with the country submerged in debt and corruption, owing billions of dollars to international banks.
Thirty years later Venezuela is experiencing another oil price windfall receiving close to $200 billion in oil income since 2000. But is the money is not being better utilized than in the 1970s? During the last five-to-six years, Hugo Chavez has squandered, given away or promised more than $60 billion to foreign governments and organizations in order to promote his global crusade against the United States, including:• $200 million in subsidized fuels to the U.S. “poor” supplied through Citgo under the coordination of Joseph Kennedy, Jr., as well as diverse political propaganda schemes such as the financing of a study to “clean” the Hudson River;• Almost $10 billion in oil subsidies to Fidel Castro’s Cuba; • $2.2 billion in oil subsidies to Central America and the Caribbean;• $6 billion to Kirchner’s Argentina, mostly in acquisition of junk bonds that have become a major source of Venezuelan government corruption;• $3.5 billion promised for a refinery in Brazil, as well as one million dollars to support a samba dancing school during Rio’s carnival;• $5 billion pledged for an oil refinery in Ecuador;• $500 million to build a refinery in Nicaragua and $20 million in subsidized diesel oil to Daniel Ortega’s government; • $20 billion promised to build a gas line from Venezuela to Argentina, across the Amazon Basin;• About $1.2 billion earmarked for different social, petroleum and military programs in Uruguay, Paraguay and Bolivia; • Close to $8 billion already spent in the acquisition of weapons, including rifles, fighter jets and tanks from Russia as well as an order for some $8 billion for submarines;• About $1.5 billion spent in armed frigates, missiles and satellites from Spain, China and Belarus;• A loan of some $400 million promised to Belarus to pay its debts to Russia; and, • About one billion dollars trying, unsuccessfully, to gain a seat on the UN Security Council.
Although Hugo Chavez refers to many of these expenditures as “foreign aid”, they are nothing of the sort. They lack coherent foreign policy objectives, other than his personal ambition, and the creation of anti-U.S. alliances. In a 2006 televised meeting with Bolivian President elect Evo Morales, Chavez told him “Evo, I have decided to give you $30 million.” And Morales, smiling, replied: “Will this be a monthly allowance, my president?”


Calculated on a yearly basis the sum total of Chavez’s expenditures or commitments abroad represent more than 6 percent of Venezuela’s GDP, an amount close to national expenditures in both education and health care.
What have been the results of this prodigality? Chavez has become notorious occupying the political center stage in the Western Hemisphere and becoming Fidel Castro's heir apparent. He holds considerable political influence in Cuba, Bolivia and Nicaragua, less so in Argentina and Ecuador (although the leaders of the latter two appear favorably disposed towards him). However, he has not been able to persuade the countries of the region to align against the United States in international organizations such as the UN and the OAS. ALBA, Chavez's economic alternative to Washington's Free Trade Area of the Americas (FTAA), remains stagnant. He has abandoned the Andean Common Market, the Group of Three with Mexico and Colombia and his entry into Mercosur, the trading bloc of Argentina, Brazil, Chile, Paraguay and Uruguay, appears doomed.
Chavez is progressively isolated on the global political scene, reduced to fragile alliances with Iran, Zimbabwe, Belarus and Syria. Recent Chavez visits to Russia, where he buys billions of dollars in weapons, and to Argentina, the recipient of much of Chavez’s largess, have become very embarrassing for both guest and hosts. In Russia he was denied an opportunity to address the Russian parliament and in Argentina his visit collided with a visit of potential U.S. investors and became entangled with a scandal concerning an attempt by a Venezuelan government contractor to smuggle some $800,000 into the country. (This is a scandal of major proportions, currently threatening the relationship between Chavez and Argentina’s President Nestor Kirchner.)
The domestic impact of Chavez’s generosity abroad is only negative. Poverty in Venezuela has not decreased under his tenure while inflation and unemployment are the highest in Latin America. There are persistent food shortages and infrastructure throughout the country has deteriorated. Chavez is currently trying to change the constitution to make himself president for life but this pretension is encountering massive rejection from Venezuelans, both among the opposition and among his followers. Because of Chavez’s chaotic management of national resources and undemocratic attitudes , observers feel a major Venezuelan political crisis might be just around the corner.
Gustavo Coronel is a petroleum geologist, author and public policy expert, who was elected to the Venezuelan Congress in 1998 before it was dissolved in 1999 following the election of Hugo Chavez as president. Coronel is currently designated as an "enemy" of the Chavez regime.


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