[Marxism] Venezuela funding to Latin America challenges U.S. spending

["Walter Lippmann" <walterlx@xxxxxxxxxxxxx>]

THE NEW YORK TIME
August 26, 2007
Reform in Venezuela (1 Letter) 

To the Editor:

"Mr. ChÃvez's Power Grab" (editorial, Aug. 22), about constitutional
reforms in Venezuela, underplays two key points: the process and the
purpose.

The reforms, which would affect only 33 of the Constitution's 350
articles, were submitted to the National Assembly last week. Debate
in the legislative body began this week and will proceed through
three phases and require a two-thirds majority for every proposed
reform.

Moreover, a special forum has been established to enable regular
Venezuelan citizens to voice their opinions. After that round of
debates, the reforms that make it through will be submitted to
popular vote through a national referendum. Nothing could be 
further from a "power grab."

The central purpose of the proposed reforms is to further
decentralize political power through innovative and independent
bodies, such as communal councils; grant the Venezuelan people 
more control over their natural resources; and further allow the
government to grow the economy, create jobs and continue addressing
social needs.

Since 1999, poverty has fallen over 12 percent, and the economy has
enjoyed three years of consecutive growth and diversification.

Ultimately, the reforms are meant as a path toward a new model for
development and democracy in Venezuela. And although you may not
think so, the 75 percent of the Venezuelan people who turned out to
vote in last December's presidential election prove that there is
something to Venezuela's participatory democracy.

Bernardo Ãlvarez Herrera 
Ambassador of Venezuela
Washington, Aug. 24, 2007

=====================================================================
(One of the advantages of not being an imperialist power is that you
aren't spending money trying to conquer and occupy foreign countries,
and to fund these operations and keep your soldiers tied down in
occupation activities. We don't know if Hugo Chavez has read Dale
Carnegie, but he's obviously an expert at winning friends and
influencing people.)
=====================================================================

Venezuela funding to Latin America challenges U.S. spending
The Associated Press
Saturday, August 25, 2007

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 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 US$8.8 billion (â6.5 billion) in aid,
financing and energy funding so far this year.

While the most recent figures available from Washington show US$3
billion (â2.2 billion) in U.S. grants and loans reached the region in
2005, it is not known how much of the Venezuelan money has actually
been delivered. And Chavez's spending abroad does not 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 US$7.5 billion (â5.51 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 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 US$200 million (â147 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 US$460 million (â338 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 US$1.5 million
(â1.1 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 US$800 million (â587
million), more than six times the U.S. commitment this year.

He also offered money for new garbage trucks in Haiti and an
Argentine dairy cooperative.

Opponents say Chavez is spending haphazardly on "giveaways" abroad at
a time when more than a quarter of Venezuelans still live on less
than US$3 (â2) 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 US$6
billion (â4.4 billion) in 2006, but their influence has declined as
nations repay their outstanding loans. Regional International
Monetary Fund debts dropped from US$49 billion (â36 billion) in 2003
to just US$694 million (â510 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 US$5 billion
(â3.7 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 - US$6.3 billion (â4.6 billion) - involves energy
projects, some of which directly benefit Venezuela's oil industry,
such as a US$3.5 billion (â2.6 billion) refinery to be built in
Nicaragua. That also includes funding for electricity plants in Haiti
and Bolivia, and an estimated US$1.6 billion (â1.2 billion) in fuel
financing to at least 17 nations.

Venezuela has pledged US$772 million (â567 million) in development
aid, including AIDS treatment in Nicaragua, housing in Dominica and
Cuban doctors in Haiti.

In Bolivia, US$20 million (â14.7 million) went directly to mayors
selected by leftist President Evo Morales for projects including
health clinics and schools. Mayor Miguel Avila gratefully accepted a
US$427,000 (â314,000) 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 US$5.1
billion (â3.75 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 5 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 US$750,000 (â551,000) Bandes
loan, says: "We are very grateful to President Chavez's government
for this loan that the commercial banks wouldn't give."

___

Contributing to this report were AP correspondents Stan Lehman and
Alan Clendenning in Sao Paulo, Brazil; Dan Keane in San Lorenzo,
Bolivia; Filadelfo Aleman in Managua, Nicaragua; Nestor Ikeda in
Washington, D.C.; and Diego Mendez and Luis Romero on board the USNS
Comfort


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