Chavez
offers billions in Latin America
Petroleumworld
CARACAS
Petroleumworldtt.com
09 04 07
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
Hugo Chavez.
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 year.
While
the most recent figures available from Washington
show $3 billion in US 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 US 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 US 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.”
US
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 US 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 US Treasury Department’s
acting undersecretary for international affairs,
argues that the US 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
approach.”
Still, as the Chavez effect gains ground, there
are signs the US is responding to the challenge.
The US 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.
US 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 co-operation.
“They’re trying to do things that
are aimed in a small way at countering what Chavez
is doing ò Chavez’s much larger aid
programmes,” he said.
His
group calculates that nearly half of US aid to
the region goes to military and police programmes.
However, US Treasury Secretary Henry Paulson also
has pointed to the US government’s work with
the IDB to mobilise up to $200 million through
private lenders to support small business loans.
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 co-operative. They appealed for help in
a private meeting with Chavez, who offered subsidised
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 criticising
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 US provided
$1.5 million in a planeload of supplies and cash.
Chavez promised ten 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 US commitment this year.
He also offered money for new garbage trucks in
Haiti and an Argentine dairy co-operative.
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 co-operative exchanges. He says billions
more are being spent within Venezuela, and cites
social programmes 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 US aid because it includes
investments that in the US
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 money.
Meanwhile,
Venezuela’s state development
bank, Bandes, is expanding into Bolivia, Uruguay,
Honduras, Guatemala and Haiti. In Nicaragua, it
is offering loans at just five percent interest,
compared to 35 percent by some private banks.
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.”
Funding
Venezuelan
President Hugo Chavez’s government
has pledged more than $8.8 billion in aid, financing
and energy funding in Latin America and the Caribbean
so far in 2007. Bandes is a Venezuelan state development
bank. Below is a list of pledges sorted by type.
ENERGY:
n $3.55 billion. Nicaragua: to build 150,000 barrel-a-day
oil refinery. (Source: Venezuelan Foreign Ministry,
April 30)
n $1.6 billion. Estimated financing per year under
preferential oil deals to at least 17 countries.
(Source: Chavez, March 15)
n $340 million. Nicaragua: grants and loans to
supply oil, nine electricity generators. (Source:
Venezuela government statement, March 7)
n $240 million. Bolivia: exploration of gas and
oil fields. (Source: Bolivian Hydrocarbons Ministry,
Aug 8)
n $170 million. Bolivia: to build two liquid natural
gas extraction plants. (Source: Venezuelan Foreign
Ministry, April 30)
n $100 million. Nicaragua: to supply 32 electricity
generators. (Source: Chavez, Jan 10)
n $89 million. Nicaragua: to build 120 megawatt
electricity plant. (Source: Venezuelan Foreign
Ministry, April 30)
n $80 million. Haiti: to build 10,000 barrel-a-day
oil refinery. (Source: Venezuelan Foreign Ministry,
April 30)
n $63.7 million. Jamaica: for state oil company
to buy 49-percent stake in Jamaican refinery. (Source:
Jamaican Energy Ministry, May 18)
n $56 million. Haiti: to build 60-megawatt electricity
plant. (Source: Venezuelan Foreign Ministry, April
30)
n $30 million. Bolivia: to build diesel electricity
generation plant. (Source: Venezuelan Foreign Ministry,
April 30)
n $28 million. Bolivia: to build thermoelectric
plant. (Source: Bolivian Hydrocarbons Ministry,
Aug. 8)
n $8 million. Cuba: to build liquefied natural
gas re-gasification plant. (Source: Venezuelan
Foreign Ministry, April 30)
n $5 million. Bolivia: electricity-saving project.
(Source: Venezuelan Foreign Ministry, April 30)
n $4.7 million. Bolivia: to set up 15 service
stations to distribute fuel. (Source: Venezuelan
Foreign Ministry, April 30)
n $4 million. Haiti: to build LNG re-gasification
plant. (Source: Venezuelan Foreign Ministry, April
30)
n $200,000. Ecuador: donation of two drills for
oil exploration. (Source: Chavez, Aug 9)
Energy funding total:
$6.369 billion
Funding to Latin America
n From Page 14
FINANCING:
n $1 billion. Argentina: planned bond purchases,
including $500 million in bonds purchased in August.
(Source: Chavez, Aug 7)
n $100 million. Bolivia: planned purchase of Bolivian
government bonds. (Source: Cabezas, Aug 2)
n $30 million. Nicaragua: debt forgiveness. (Source:
Chavez, Jan 10)
n
$8 million. Guyana: debt forgiveness. (Source:
Rodolfo Sanz, Venezuela’s deputy foreign
minister for Latin America and the Caribbean, Aug
9)
Financing total: $1.138 billion
DEVELOPMENT AID:
n
$250 million. Fund to finance joint economic
projects in region’s socialist-oriented
countries. (Source: Venezuelan Foreign Ministry,
April 30)
n $150 million. Dominica: funding for housing,
airport upgrade, scholarships. (Source: Chavez,
Feb 15)
n $135 million. Argentina: Bandes loan for Sancor
dairy cooperative. (Source: Venezuelan Finance
Minister Rodrigo Cabezas, Feb. 22)
n $88 million. Nicaragua: grants and loans for
tractors, Aids treatment, sending 86 Nicaraguan
athletes to sports tournament, 100,000 Hepatitis
B vaccines, etc. An additional $2 million listed
below under humanitarian aid. (Source: Venezuelan
government statement, March 7)
n $30 million. Bolivia: Bandes capital for low-interest
loans. (Source: Bandes president, May 7)
n $25 million. Ecuador: Bandes capital for new
branch to offer low-interest loans. (Source: Bandes
President Rafael Isea Romero, May 24)
n $21 million. Haiti: fund to build homes, acquire
unspecified equipment and provide medical aid by
supporting the work of Cuban specialists offering
health care to Haitians. (Source: Venezuelan government
statement, March 3)
n $20 million. Bolivia: grants for local infrastructure
projects in health, schools, sports and other areas.
(Source: Bolivian Public Finance Minister Luis
Arce, April 12).
n $20 million. Nicaragua: loans for rural poor,
health care and education. (Source: Chavez, Jan
10)
n $20 million. Nicaragua: capital for Bandes branch
for low-interest agricultural loans. (Source: Bandes
president, May 24)
n $10 million. Nicaragua: funding for social projects.
(Source: Chavez, Jan 10)
n $2 million. Guyana: donation to build a homeless
shelter. (Source: Guyanese Foreign Minister Rudy
Insanally, Aug 2)
n
$875,000. Bolivia: computers to digitalise Bolivia’s
national identification card system. (Source: Bolivian
government announcement, April 13.)
Development aid total:
$772 million
INFRASTRUCTURE:
n $350 million. Nicaragua: donation to build Pacific-Atlantic
highway. (Source: Nicaragua Infrastructure Minister
Pablo Fernando Martinez, Jan. 22)
n $150 million. Bolivia: asphalt plant. (Source:
Venezuelan Foreign Ministry, April 30)
n $57 million. Haiti: funding to expand Port-au-Prince
and Cap-Haitien airports. (Source: Venezuelan government
statement, March 3)
n $5.5 million. Bolivia: funding for paving streets
and other improvements to poor neighbourhoods in
La Paz. (Source: Bolivian government statement,
July 14)
n $3 million. Haiti: donation for garbage trucks.
(Source: Chavez, March 13)
Infrastructure aid total: $565.5 million
HUMANITARIAN AID:
n $15 million. Bolivia: donation for flood victims.
(Source: Chavez, Feb 26 and March 2)
n $2 million. Nicaragua: free medicine. Announced
as part of larger $90 million in grants and loans.
(Source: Venezuelan government statement, March
7)
n $1.5 million. Peru: two planeloads of earthquake
relief supplies, with more planned. (Armando Laguna,
Venezuelan ambassador to Peru, Aug. 22)
Humanitarian aid total: $18.5 million
MILITARY AID:
n $10 million. Bolivia: funding to fix military
barracks. (Source: Bolivian Defense Minister Walker
San Miguel, May 21 and 22).
Military total: $10 million
Total of public pledges: $8.87 billion
Source: AP
Petroleumworld 09
04 07
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