BY MICHAEL SHIFTER
For the United States, the fact that Venezuela supplies a significant share of all U.S. oil imports is a fundamental reason why the increasingly deteriorating bilateral relationship poses a problem that should be addressed rather than ignored. Energy issues are and should be a central concern for Washington in dealing with Venezuela given the continuing, mutual dependence between the two countries. But in light of Chávez’s explicitly anti-U.S. rhetoric and actions, it would be surprising if he did not eventually seek to supplant the U.S. market, in an effort to protect Venezuela from any harsh, punitive action by Washington. Indeed, Chávez has already substantially increased oil exports to China while PDVSA has set up a Beijing office. Venezuela’s oil exports to China grew tenfold from 2004 to 2006—from 12,300 barrels to 150,000—and they are expected to triple again in the next five years to 500,000 barrels—a quarter of the country’s total oil exports. Chávez is moving aggressively to open up and expand other markets in an effort to shift away from the United States, end dependence on his main adversary, and extend his influence in Latin America and throughout the world.
Chávez’s heretofore ample supply of petrodollars has enabled him to vigorously pursue his political project, not only in Venezuela, but across Latin America and globally as well. Of course, the increasingly autocratic tendencies of Chávez’s rule should be cause for concern in Washington and throughout a region that has repeatedly committed itself to democratic norms and progress. The erosion of the rule of law and woefully deficient democratic and institutional safeguards in Venezuela could lead to greater restrictions of fundamental civil and political rights.
The difficulties the United States faces in dealing with the Chávez administration are not limited to Venezuela. They directly influence Washington’s agenda in Latin America as well as sensitive U.S. national interests across the world. On regional and global levels, Chávez’s rhetoric and actions counter the priorities Washington is pursuing and, as a result, pose a serious challenge to the United States.
LATIN AMERICAN AGENDA
Chávez has consistently sought to block progress or cooperation on several U.S. projects in Latin America. To illustrate, from the outset of his rule, Chávez has fiercely opposed U.S. plans to extend free trade throughout the Americas, particularly via the region-wide Free Trade Area of the Americas (FTAA). In July 2005, Chávez said such efforts “should be buried.” He has called the FTAA a vehicle of U.S. “imperialism.” He has depicted Washington’s position on free trade as an attempt to impose U.S. economic and political control over more vulnerable Latin American economies. In his effort to construct and fortify a counterweight to U.S. influence in the region, Chávez proposed his own regional integration mechanism called the Bolivarian Alternative for the Americas (ALBA), which he claims is based on complementary trade and cooperation rather than free-market competition. So far, the only other ALBA members are Cuba, Bolivia and, most recently, Nicaragua.
In April 2006, Chávez said that he would leave the Andean Community of Nations (CAN) because two of its members — Colombia and Peru — had negotiated free trade agreements with Washington. For Chávez, this was an unacceptable deviation from his own vision for the region. Venezuela’s membership in the Mercosur trade group of South America reflects an effort to advance his political agenda and extend his influence throughout the region. Chávez is seeking to transform the arrangement into a political organization, moving it substantially away from its original purpose. So far, Argentina, Paraguay, and Uruguay have been reluctant to admit Bolivia, a strong Venezuelan ally, into Mercosur, partly because it would give Chávez greater say over the bloc’s future. These countries do not share Chávez’s socialist vision — Uruguay reached a trade and investment agreement with the United States in early 2007. Such differences set up a stalemate that threatens to further unravel and undermine one of the most important regional organizations in Latin America.
To pursue his Latin American strategy, Chávez is relying on close allies such as Bolivia, led by Evo Morales, to go along with him. In 2006, despite setbacks in Peru and Mexico, Chávez supporters won the presidencies of Nicaragua, where Sandinista Daniel Ortega returned to power, and Ecuador, where voters elected Rafael Correa, a political novice who has professed friendship with Chávez and echoed his anti-U.S., anti-globalization rhetoric. It is unclear to what extent both of these leaders will follow Chávez’s lead, particularly in view of their own agendas and their stated desire to cooperate with the United States as well.
In the case of Bolivia, however, despite some differences with Venezuela and cooperation with the United States, the alliance with Chávez seems to have solidified over the first year of the Morales administration. In late 2006, Venezuela pledged to send troops and spend millions to help Bolivia build military bases on its borders, which raised particular concern in neighboring Chile and Peru. The Bolivian Congress has stalled the pact so far, but civil unrest, Venezuelan pledges to fight for the Morales regime in a crisis, and the arrival of several dozen uniformed Venezuelan soldiers have done nothing to lessen the apprehension of the Bolivian opposition or its neighbors.
To carry out his grandiose schemes, Chávez is also counting on the indulgence and acquiescence of other Latin American leaders such as Luis Inacio Lula da Silva in Brazil and Néstor Kirchner in Argentina. Most of his proposed projects for regional integration—including Petrosur, Petrocaribe, and the Pipeline of the South—essentially revolve around oil, but have explicitly political aims. Estimated costs and technical feasibility are serious concerns and raise doubts that they will eventually come to fruition. Still, Chávez is pledging to proceed with a variety of regional integration initiatives, and pragmatic Latin American governments are open to an infusion of resources and prepared to wait and see what actually results. Though it is still expanding, the Petrocaribe initiative, through which Venezuela distributes nearly 200,000 barrels of oil daily to various Caribbean nations, has helped Chávez consolidate alliances in the region.
The most symbolically powerful defiance of Washington by Chávez in the Western Hemisphere has to do with his warm friendship with Fidel Castro and economic support for his regime. Chávez’s supply of some 100,000 barrels of oil every day has been a significant subsidy propping up the Cuban economy. In turn, Castro has provided Chávez with thousands of teachers, doctors, and, it has been widely reported, a variety of military intelligence and security advisors, who perform a range of political functions to bolster Chávez’s rule.
The nature of the Venezuela-Cuba relationship in the post-Fidel era is uncertain and subject to a great deal of speculation, but it is reasonable to assume that economic assistance and mutual support will continue on the current course, though the level of aid may change. While Raúl Castro apparently does not have the same close relationship with Chávez that his brother does, he cannot afford to forgo the substantial aid Chávez provides. The United States should seek to help make whatever transition takes place in Cuba as peaceful and democratic as possible. The Venezuela relationship is now a central economic and geopolitical factor in the Cuba challenge that cannot be ignored.
By attempting to lead a realignment in the Americas, Chávez is disrupting a regional agenda based on democratic politics, market economics, and better relations with the United States. The good news is that most Latin American governments, though disappointed with the results of that agenda in their own experience and increasingly distrustful of the United States, reject such a radical and divisive approach to regional politics. This offers an opportunity for the United States to reengage constructively with the region on a variety of fronts—the social and governance agendas in particular—and compete with Chávez’s fundamentally unworkable and unappealing recipes for social betterment. Though there is frustration and dissatisfaction throughout Latin America, the prospect that Chávez will take the region back to the failed formulas of the past is remote. What is more worrisome for Latin America and the United States is the possibility that Chávez will pit countries against each other, hindering cooperation and progress in an already troubled region.
From the outset of his rule, it has been clear that Venezuela is too small a stage for Chávez’s ambitions and appetites. Increasingly, there is little question that even Latin America is too small a region for his huge, anti-U.S. agenda. For Washington, Chávez’s combination of unmistakable global intentions and the resources to realize at least some of his aims is problematic and should be taken seriously.
To be sure, as a member of the Organization of Petroleum Exporting Countries (OPEC) Venezuela has long had a relationship with Middle East oil producers like Iran and Iraq. Under Chávez, those relationships have continued and intensified. In August 2000, in defiance of UN sanctions, Chávez visited Saddam Hussein in Iraq, along with Libya’s Muammar el-Qadaffi. Today, however, Washington is more concerned with Chávez’s deepening alliance with Iran’s president Mahmoud Ahmadenijad. In February 2006, Venezuela, Syria, and Cuba were the only three countries on the 35-member board of the UN’s International Atomic Energy Agency (IAEA) to vote against reporting Iran’s nuclear activity to the Security Council. In January 2007, Ahmadenijad made his second visit to the region in five months to meet with Chávez in Venezuela, visit Ortega in Nicaragua, and attend Rafael Correa’s inauguration in Ecuador.
The Chávez-Ahmadenijad relationship is what drives Iran’s role in Latin America, which is fundamentally geopolitical rather than economic. Both countries are major oil exporters with little commercial exchange. Chávez has likened his Bolivarian Revolution to the Iranian Revolution. Of course, there have been a variety of technical cooperation agreements signed, but these are eclipsed by the political signals. They tell the world that Iran, an international pariah, is welcome in Latin America, which is traditionally regarded as the strategic preserve or “backyard” of the United States. For Washington, which sees Iran as an adversary and worries about its role in Iraq and its nuclear program, the relationship with Venezuela and, by extension, other Latin American governments, should be of particular concern.
Beyond Iran, Chávez is also actively seeking to consolidate ties to other major powers and use his oil wealth to establish his credentials as a serious global player. Chávez is putting particular emphasis on his relationship with China in an attempt to divert the principal market for Venezuelan oil from the United States. President Hu Jintao has met with Chávez several times and is clearly interested in deepening the economic relationship. In addition, Chávez has sought to strengthen his relationship with Russia. Arms purchases of Kalashnikov rifles, Sukhoi fighter jets, and Russian military helicopters have been an important piece of Chávez’s global strategy. He also has been pursuing closer ties with countries around the world that share his social agenda and anti-U.S. stance, including Belarus, Vietnam, Syria, Qatar, Benin, and Angola.
To date, Chávez’s aggressive global diplomacy has yielded mixed results at best. Though he has spent over a year away from Venezuela on foreign trips since taking power and was able to line up support from Russia and China, Venezuela failed to secure a non-permanent seat on the UN Security Council in 2006. Just as in Latin America, most governments throughout the world welcome Chávez’s oil and economic deals but remain uncomfortable with his confrontational and adversarial politics. Widespread opposition and criticism of U.S. global policies—in Iraq especially—do not necessarily translate into support for Chávez.
Still, it would be a mistake to underestimate Chávez’s tenacity on the world stage or his impassioned determination to forge an anti-U.S. coalition, which is the coherent thread running through many of his frenetic foreign policy initiatives. He is a notably astute tactician, sophisticated in his understanding of global politics. He is plainly trying to take advantage of U.S. weakness and defensiveness, and ride what he sees as heartening political waves in Latin America and throughout the world. The risk that Chávez can continue to disrupt and complicate U.S. policies in a variety of sensitive areas of the world should not be dismissed.
Michael Shifter is vice president for policy at the Inter-American Dialogue. This column is an excerpt of his new report, Hugo Chavez: A Test for U.S. Policy. Republished with permission from the author.