[Marxism] Chavez offers billions in Latin America
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Mon Aug 27 09:23:19 MDT 2007
Chavez offers billions in Latin America
By NATALIE OBIKO PEARSON and IAN JAMES, Associated Press Writers Aug 26,
CARACAS, Venezuela - Laid-off Brazilian factory workers have their jobs
back, Nicaraguan farmers are getting low-interest loans and Bolivian
mayors can afford new health clinics, all thanks to Venezuelan President
Bolstered by windfall oil profits, Chavez's government is now offering
more direct state funding to Latin America and the Caribbean than the
United States. A tally by The Associated Press shows Venezuela has pledged
more than $8.8 billion in aid, financing and energy funding so far this
While the most recent figures available from Washington show $3 billion in
U.S. grants and loans reached the region in 2005, it isn't known how much
of the Venezuelan money has actually been delivered. And Chavez's spending
abroad doesn't come close to the overall volume of U.S. private investment
and trade in Latin America.
But in terms of direct government funding, the scale of Venezuela's
commitments is unprecedented for a Latin American country.
Chavez's largesse tends to benefit left-leaning nations that support his
vision of a Latin America with greater independence from the United
States. But he denies the two countries are in a competition.
"We don't want to compete with anyone. I wish the United States were 100
times above us," Chavez told the AP in a recent interview. "But no, the
U.S. government views the region in a marginal way. What they offer is a
pittance sometimes, and with unacceptable pressures that at times
countries can't accept."
U.S. aid tends to be low-profile, constrained by strict guidelines and
often distributed through other institutions so that recipients may not
know it's from the U.S. government. Venezuela offers money with few
strings attached and a personal Chavez touch that aid experts say
generates more good will dollar for dollar.
Clay Lowery, the U.S. Treasury Department's acting undersecretary for
international affairs, argues that the U.S. plays a larger role than
reflected in its aid figures. The United States, for instance, drove
Inter-American Development Bank and World Bank debt relief deals totaling
$7.5 billion over the past three years in Latin America, he said.
"Who is the biggest financier of the IDB? The United States. Who is the
biggest financier of the World Bank? The United States is. We don't count
those," Lowery said. "We're basically engaged on a multilevel, multi-prong
Still, as the Chavez effect gains ground, there are signs the U.S. is
responding to the challenge.
The U.S. Navy medical ship Comfort is on a four-month, 12-country voyage
to Latin American ports, and has already treated more than 80,000 patients
with free vaccinations, eye care, dental checkups and surgeries aboard the
converted oil tanker.
U.S. officials are taking their cue from the free eye surgeries and
medical training that Chavez offers, says Adam Isacson of the
Washington-based Center for International Policy, which tracks American
aid and advocates international cooperation.
"They're trying to do things that are aimed in a small way at countering
what Chavez is doing — Chavez's much larger aid programs," he said.
His group calculates that nearly half of U.S. aid to the region goes to
military and police programs. However, U.S. Treasury Secretary Henry
Paulson also has pointed to the U.S. government's work with the IDB to
mobilize up to $200 million through private lenders to support small
Chavez's aid isn't limited to his region. Low-income Americans get cheap
heating oil, while the former Soviet republic of Belarus is counting on
Chavez to help pay off a $460 million gas bill to Russia. But most of the
funding goes to Latin America.
When a Brazilian plastics factory was shuttered in 2003 by its indebted
owners, hundreds of workers formed a cooperative. They appealed for help
in a private meeting with Chavez, who offered subsidized raw materials in
exchange for the technology to produce plastic homes in Venezuela. The
factory soon hummed back to life.
"I know there are people out there criticizing Chavez for helping us. They
say he is interfering with the internal affairs of Brazil," said Salviano
Jose da Silva, a security guard at the Flasko factory near Sao Paulo. "But
all he's doing is helping to guarantee our livelihood — something the
government should be doing but isn't."
When floods hit Bolivia this year, the U.S. provided $1.5 million in a
planeload of supplies and cash. Chavez promised 10 times more and sent in
teams that helped victims for weeks. In all, Chavez's pledges to Bolivia
total over $800 million, more than six times the U.S. commitment this
He also offered money for new garbage trucks in Haiti and an Argentine
Opponents say Chavez is spending haphazardly on "giveaways" abroad at a
time when more than a quarter of Venezuelans still live on less than $3 a
day. They question how long he can sustain it since government revenues
are highly dependent on fluctuating oil prices.
While Venezuelan asphalt paves streets in Bolivia's capital, a sign
recently protruded from one of Caracas' potholes reading: "Why for Bolivia
yes and for me no?"
Chavez argues much of the funding brings benefits back to Venezuela,
including oil-related investments and other cooperative exchanges. He says
billions more are being spent within Venezuela, and cites social programs
credited with helping to reduce poverty.
His recent commitments in the region exceed those of the World Bank and
the Inter-American Development Bank. Each lent nearly $6 billion in 2006,
but their influence has declined as nations repay their outstanding loans.
Regional International Monetary Fund debts dropped from $49 billion in
2003 to just $694 million this year, largely due to early repayments, some
of them financed by Chavez.
Chavez offers funds in unconventional, sometimes spontaneous ways. Summing
it up is difficult due to a lack of transparent accounting, so the AP
tally is based on public pledges rather than what has actually been spent.
Some of the money is expected to be paid over multiple years. The tally
also cannot cover undisclosed spending, such as aid to Cuba or Venezuela's
share in building a $5 billion oil refinery in Ecuador.
Venezuela's funding differs from U.S. aid because it includes investments
that in the U.S. would come from the private sector and purchases of bonds
that are later resold.
Most of the funding — $6.3 billion — involves energy projects, some of
which directly benefit Venezuela's oil industry, such as a $3.5 billion
refinery to be built in Nicaragua. That also includes funding for
electricity plants in Haiti and Bolivia, and an estimated $1.6 billion in
fuel financing to at least 17 nations.
Venezuela has pledged $772 million in development aid, including AIDS
treatment in Nicaragua, housing in Dominica and Cuban doctors in Haiti.
In Bolivia, $20 million went directly to mayors selected by leftist
President Evo Morales for projects including health clinics and schools.
Mayor Miguel Avila gratefully accepted a $427,000 check for his town of
San Lorenzo to build a new farmers' market.
Critics warn that scant oversight leads to waste and corruption.
"You don't do things well by just giving money away," said Liliana
Rojas-Suarez, a former IMF economist at the Washington-based Center for
Global Development. "If you give money without any conditions attached,
without any expectations, without anything, what are the incentives?"
But Mark Weisbrot of the Center for Economic Policy Research says Chavez
has succeeded in providing more financing options and breaking up a
"creditors' cartel" of Washington-based lenders whose economic
prescriptions failed to improve the lives of the poor.
Chavez helped Argentina pay off its IMF debt by buying some $5.1 billion
in Argentine bonds in recent years, and now proposes a "Bank of the South"
that would use billions from Venezuela's international reserves as seed
Meanwhile, Venezuela's state development bank, Bandes, is expanding into
Bolivia, Uruguay, Honduras, Guatemala and Haiti. In Nicaragua, it is
offering loans at just 5 percent interest, compared to 35 percent by some
Nicaraguan farmer Juan Vicente Castillo, whose cooperative plans to grow
black beans to pay off part of a $750,000 Bandes loan, says: "We are very
grateful to President Chavez's government for this loan that the
commercial banks wouldn't give."
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