Sep
20
2011
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Chávez, Circling the Wagons?

DSC 0754 150x150 Chávez, Circling the Wagons?José R. Cárdenas served in several foreign policy positions during the George W. Bush administration (2004-2009), including on the National Security Council staff. He is a consultant with Vision Americas in Washington, DC.

Hugo Chávez appears to be a man in a hurry these days.  Although we continue to have no independent confirmation on the extent of his illness, the recent, rapid succession of announcements from Caracas certainly makes it appear as if he’s someone who believes his days are numbered.

First, there was last month’s announcement that he was transferring $6 billion in cash reserves held in U.S. and European financial institutions to Russian and Chinese banks. In addition, Caracas announced that it was repatriating some 200 tons of gold – valued at $11 billion – held abroad to Venezuela’s Central Bank. Most analysts said there was no economic reason for such a risky move, meaning that its only justification was political, that Chávez likely intends to shield Venezuelan assets from future international sanctions or claims by jilted foreign creditors.

Then, The Wall Street Journal reported that Chávez was planning to make good on his promise to withdraw Venezuela from the World Bank’s International Centre for the Settlement of Investment Disputes (ICSID). The Center is the preeminent global forum where investors can hold governments accountable for breaches of contracts and other malfeasances. There, Chávez is facing more than $40 billion in claims by 20 foreign companies whose assets he has expropriated. Under ICSID regulations, Venezuela is still liable for those claims, although Chávez has never played by anyone’s rules but his own.

Finally, Chávez announced that he is moving up the 2012 presidential elections two months from December to October 7th, 2012, shortening the campaign season and placing less physical demands on his uncertain health.

Again, these decisions by Chávez hardly suggest someone who is steadily convalescing from a bout with cancer, but someone who is trying to get something done in a hurry. In this case, it could arguably be walling off Venezuela from retribution by the “imperial” powers as he rushes to put the final touches on his Bolivarian utopia.

Disengaging Venezuela from the U.S. and European-dominated international financial system — the “tyranny” of the U.S. dollar — has been Chávez’s dream since he first rose to power 12 years ago.  He has railed about the inherent “unfairness” of it all in countless speeches and has busied himself creating alternatives to “imperialist”-dominated international institutions. The effort appears to be entering hyper-drive.

Moving the election up, even by two months, increases the odds he will be healthy enough to keep to an arduous cross-country campaign schedule. If he falters physically, or is unexpectedly defeated at the polls, there is every chance he or his movement will upend the table and continue in power. The democratic world be damned. There will always be buyers of Venezuelan oil, and their cash reserves will likely be beyond the reach of international sanction. Make no mistake about it: over the next 12 months, every effort on Chávez and his acolytes’ part will be dedicated to the continuation of Chavismo, with or without Hugo, and with or without international approbation.

 
Oct
22
2010
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US to keep close eye on Venezuela-Iran energy deals

This article was originally posted by the AFP

The United States will be vigilant of the energy cooperation deals made between Iran and Venezuela to make sure they do not violate sanctions against Tehran, the US State Department said Thursday.

“Venezuela like all countries has clear responsibilities,” State Department spokesman Philip Crowley told reporters.

“We will watch to see if any of these deals amount to anything and if they do, whether they constitute a violation of the (UN) Security Council resolutions and sanctions against Iran.”

Venezuelan President Hugo Chavez on Wednesday signed 11 deals with Tehran focused on energy cooperation between the two major oil producers and US foes. Chavez and Iranian President Mahmoud Ahmadinejad both denounced American “imperialism” and called for a “new world order” during the visit, part of the South American leader’s international tour aimed at strengthening Venezuela’s economic ties with eastern Europe and the Middle East.

“It is hard for me to see how President Chavez’s current travel can be seen as constructive,” Crowley said.

“Venezuela has a right to pursue civilian nuclear energy,” Crowley added, though “it also has a responsibility to make sure that any nuclear program does not represent a proliferation risk.”

Earlier this week US President Barack Obama backed Venezuela’s efforts to develop nuclear power for civilian energy purposes after Caracas and Moscow signed a landmark deal.

Chavez clinched a deal in Moscow on Friday that will see Russia build and operate the first nuclear power plant in his country.

 
Oct
19
2010
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VenEconomy: Expensive Massage for One Man’s Ego

This article was originally posted by The Latin American Herald

The humiliating truth that Hugo Chávez was forced to face on September 26 pushed him into going out to look for a nice international massage for his ego. So, on October 13, he set off on a tour of Europe and Asia, while his fellow countrymen were left wondering which countries he would actually be visiting.

The need for a boost to the president’s ego is easily understandable given that the loss of the plebiscite must have been hard to take for someone who dreams of hegemonic power. What is so frightening about the whole situation, however, is how much this massage is going to end up costing, plus the total lack of transparency, and absence of any specific goals to be achieved by the tour and the agreements Chávez is signing.

It is extremely difficult to figure out the cost, the significance and the consequences when the government doesn’t report on the deals made, not even those that, pursuant to the Constitution, must be submitted to the approval of the National Assembly and the country.

Through the media the Venezuelan people found out that Chávez is selling Venezuela’s 50% interest in the Ruhr Oil refinery to Russia for $1.6 billion. The deal was made behind the country’s back and nothing at all has been said about how this price was arrived at. According to Humberto Calderón Berti, former Minister of Energy and Petroleum and former president of PDVSA, Ruhr Oil is worth two or three times that amount. Nor, much less, has the country been told what the money will be used for.

The press also reported that Chávez has bought 35 Russian tanks that, according to experts in the field, are obsolete and of no strategic use to the country.

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