What Is Hugo Chavez Up to? Venezuelan President Hugo Chavez Has Set Alarms Ringing with His Efforts to Create a Global Anti-American Coalition. but in Caracas, Critics Say Their Bombastic President Is Giving Away the Country's Wealth and Getting Snookered by His Newfound Friends

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WHEN MUAMMAR AL-QADDAFI FACED WORLDWIDE condemnation this past winter as he brutally struck back against a popular uprising, the Libyan dictator may have taken comfort from knowing he had at least one friend left: Venezuelan president Hugo Chavez. The two have forged close political and economic ties during Chavez's dozen years in office, and the Libyan leader had already bestowed the Qaddafi International Human Rights Prize on his Latin American ally and named a soecer stadium in Benghazi in his honor. In February, Chavez repaid the favors by offering to mediate a peaceful solution to the fighting--at a time when the rebels seemed likely to triumph--and defending his old friend on Twitter: "Teach another lesson to the extreme right-wing little Yanquis! Long live Libya and its independence!"

Chavez's quixotic intervention was only the latest of his efforts to play a role in world affairs larger than most leaders of a midsize Latin American country might hope for. But Chavez has emerged at a fertile moment in world history. The apparent waning of U.S. power has opened up the possibility of a new geopolitical order, and the worldwide financial crisis and the rise of China have shaken the conventional wisdom that capitalism and democracy are superior to the alternatives.

Chavez has seized the moment by forcefully declaring his intention to change the world. "What we now have to do is define the future of the world. Dawn is breaking out all over. You can see it in Africa and Europe and Latin America and Oceania," he told the United Nations General Assembly in 2006. "I want to emphasize that optimistic vision. We have to strengthen ourselves, our will to do battle, our awareness. We have to build a new and better world."

Of course, that speech is better remembered for Chavez's characterization of President George W. Bush as the "devil," and his claim that the General Assembly chamber, where Bush had spoken the day before, still smelled of sulphur--only the most legendary example of Chavez's frequent and colorful denunciations of the United States.

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Chavez's torrid rhetoric has earned him both admiration--in a 2009 opinion poll of several Arab countries, Chavez was the most popular leader, by a large margin-and fear. And he has backed up his anti-American rhetoric by courting nearly any country that challenges the United States, including Iran, Russia, China, Belarus, Libya, and Syria.

Under Chavez, Venezuela has spent billions on Russian rifles, fighter jets, and other weapons, and it recently won Moscow's help in developing civilian nuclear power. Chavez has threatened to stop selling oil to the United States--the customer for more than hall of Venezuela's output--and ship it to China instead.

It is the relationship with Iran and its president, Mahmoud Ahmadinejad, that makes Chavez most effusive and worries Washington most. Chavez has hailed the Iranian leader as a "brother" and as a "gladiator in the anti-imperialist struggle." Publicly, their two countries have collaborated to build joint banks, as well as car, tractor, and bicycle factories, in Venezuela. But much of the relationship is not transparent, and there has been a great deal of heated speculation (though little hard evidence) that Venezuela has offered to host Iranian missiles on its territory and is cooperating with Russia and Iran on nuclear weapons development. Some say that the banks are being used to evade international sanctions imposed on Iran.

Chavez has also been accused of supporting FARC guerrillas in neighboring Colombia and Hezbollah terrorists in the Middle East. In 2008. the U.S. Treasury Department formally accused a Venezuelan diplomat who had served in Lebanon and Syria of acting as a fundraiser for Hezbollah, and froze his U.S.-based assets. Last year, a Spanish judge charged a Venezuelan official with terrorism and conspiracy to commit murder based on evidence that he had helped coordinate training sessions involving operatives from FARC and ETA, the Basque separatist organization known for its bombings and assassinations. …