[Marxism] Chávez and Argentina

Louis Proyect lnp3 at panix.com
Thu Aug 9 06:53:47 MDT 2007

Guardian, Thursday August 9, 2007
Chávez opens his wallet wider to boost Latin American influence

· £1.4bn for Buenos Aires as regional tour starts
· Socialist leader strives to break IMF's grip on area

Rory Carroll in Caracas and Uki Goni in Buenos Aires

President Hugo Chávez has launched an intensive tour of South America to 
shore up Venezuela's influence over the region and to loosen the grip of 
western creditors. The socialist leader promised to buy up to $1bn 
(£500m) of Argentinian bonds and to help fund a $400m gas plant, 
bolstering his reputation as a benefactor of Buenos Aires's economic 

Mr Chávez was expected to announce other economic and energy deals 
during visits to Uruguay, Ecuador and Bolivia, underlining his ambition 
to forge a common Latin American front under his leadership.

"We need to unite and the north American empire doesn't want us to 
unite," the president told reporters in Buenos Aires. "It is a battle of 
interests, but we will win this battle."

The four-nation tour, which started on Tuesday, is an attempt to flex 
Venezuela's muscle after a series of setbacks in South America, 
including stalled or diluted initiatives by Caracas for a pan-regional 
bank and a gas pipeline.

Flush with oil revenues, Mr Chávez said his government had bought $500m 
of Argentinian bonds and would buy $500m more in coming months, bringing 
to more than $5bn the amount of Argentinian bonds bought by Venezuela in 
two years.

It confirms Venezuela's position as one of Argentina's prime lenders and 
will permit Buenos Aires to meet its foreign commitments this month, 
which total $2.5bn, just when it was having difficulty attracting 
foreign investment and credit.

The deal will also help Mr Chávez to soak up some of the liquidity in 
Venezuela, which has pushed the country's inflation rate close to 20%, 
the region's highest.

It has also cast Mr Chávez as the man who helped a proud ally recover 
from a 2002 economic crash which had threatened to make Argentina a 
basket case at the mercy of organisations such as the World Bank and 
International Monetary Fund, both widely loathed in Latin America as 
instruments of western domination.

"This is a big effort for Venezuela, but we are doing it because we know 
what is at stake. Argentina is freeing itself from Dracula, it is 
cutting ties with the IMF," said Mr Chávez.

In January 2006, Argentina repaid its entire remaining $9.6bn debt to 
the IMF, giving President Néstor Kirchner kudos at home for restoring 
national pride and sovereignty.

Mr Chávez's latest cash injection was a reminder to Mr Kirchner's 
politician wife, Cristina, that she too will owe Caracas if she wins the 
presidency in October's election after her husband steps down.

Some critics say the first couple have merely swapped one master, the 
IMF, for a more radical and controversial one. Argentina was now 
"Chávez-dependent", said Joaquín Morales Solá, a columnist with the 
daily La Nación.

Critics in Bolivia, Ecuador and Nicaragua have made similar accusations 
against their own governments.

Mr Chávez's oil diplomacy has also earned him influence in Cuba.

However, Michael Shifter, of the Inter-American Dialogue thinktank, said 
the Venezuelan leader might be disappointed if he expected unquestioning 
loyalty from Argentina and other beneficiaries.

"It is doubtful if he will be able to solidify his anti-US coalition in 
South America through his largesse," Mr Shifter said. "There are 
questions about how much he can actually deliver on so many promises to 
his allies. And there are signs that countries like Argentina, driven by 
pragmatism, are looking increasingly to expand and diversify their 
economic and political relationships."

In setbacks for Mr Chávez, his dreams of building a gas pipeline from 
the Caribbean to the South Atlantic have stalled, Brazil is dragging its 
feet over his plan for a Bank of the South, to rival the World Bank, and 
Venezuela's bid to join Mercosur, a regional trade bloc, has run into 
the sand.

President Luiz Inacio Lula da Silva of Brazil, a friend but also rival 
of Mr Chávez, is touring the region this week to promote his country's 
leadership in biofuels.

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