Venezuela: A Flashing Red Light

The Washington Times (Washington, DC), August 18, 2004 | Go to article overview
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Venezuela: A Flashing Red Light


Byline: Ariel Cohen and Stephen Johnson, SPECIAL TO THE WASHINGTON TIMES

After open-collar, red-shirt-clad Hugo Chavez claimed a victory in a referendum, the global oil outlook is gloomier than before. Geopolitically, Venezuela has become a flashing red light.

During his six years in power, Mr. Chavez has increasingly politicized oil, nationalized and mismanaged the national oil company PDVSA, and used its finances as a political kitty (up to $3.7 billion this year alone) to buy off the poor. Beyond Venezuela, he sees himself replacing Fidel Castro as the leader of Latin America's radical left, opposing democracy, free markets, and American influence.

Mr. Chavez uses oil as a political tool to advance his hemispheric and global ambitions. He played a key role in the 1999 and 2003 decisions of the Organization of Petroleum Exporting Countries to cut production and coordinate policy aimed at driving oil prices higher. In 2000, Mr. Chavez visited Iran, Iraq, Libya and Saudi Arabia, further agitating for production cuts and quota enforcement. The year, he promised Fidel Castro 53,000 barrels of subsidized oil a day in exchange for the services of Cuban teachers - and intelligence experts.

Until the Chavez presidency, oil-rich Venezuela had been at peace with its neighbors and a firm American ally.

The situation changed in 1998. As a presidential candidate, Mr. Chavez campaigned against the "savage capitalism" of the United States. He allegedly aided Afghanistan's Taliban government following the September 11, 2001, attack on the United States. Mr. Chavez also proclaimed Cuba and Venezuela were "called upon to be a spearhead and summon other nations and governments" to fight free market capitalism.

After a June 24, 2004, U.S. Senate hearing on the Venezuela situation, Mr. Chavez called U.S. congressmen "dogs of war, those that intend to dominate the world, those imperialists."

In Venezuela's immediate area, Mr. Chavez has aided the narco-terrorist Revolutionary Armed Forces of Colombia (FARC). In Bolivia, Mr. Chavez supported indigenous activists who led an uprising that forced elected President Gonzalo Sanchez de Lozada from office in October 2003. And in El Salvador, Venezuelan troops on a post-earthquake mission urged villagers to support the leftist Farabundo Marti National Liberation Front.

Mr. Chavez's Fifth Republic Movement (MVR) party is allied with the Brazil-based Foro de Sao Paulo - an organization of some 39 rabidly leftist parties and guerrilla organizations from 16 countries in the hemisphere. It opposes U.S. counternarcotics collaboration with Latin America and the Free Trade Area of the Americas, which it characterizes as a U.S. "annexation."

In November 2003, Mr. Chavez inaugurated the first Peoples Bolivarian Congress, whose cells now spy on neighbors in Venezuela. It brought together 400 representatives from 20 Latin American countries expressly to condemn the policies of the United States, the U.S. Southern Command, the International Monetary Fund and the World Bank.

But it is his handling of oil, which reveals an agenda of destructive populism. During its 20-year history PDVSA built a reputation for smooth operation and competence. Even though it nationalized its oil industry in 1975, exploration and production were reopened to foreign participation in 1996.

The 2002-2003 national strike devastated the oil giant. Some 35,000-40,000 skilled workers, including fire fighters, walked out while spillage and fires ensued. Daily production dropped from 3 million barrels (mbd) to 600,000 barrels. Mr. Chavez fired 18,000 skilled managers and workers, further undermining PDVSA's precarious situation.

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