Friend in low places

I agree with this statement:

"Although this seems far-fetched perhaps the world should start to take him a little more seriously"

Vdebate reporter

Friends in low places

Sep 15th 2009 CARACAS
From Economist.com

Hugo Chávez dreams of forging a new world order
Shutterstock/AFP


THE mountains and jungles of South America are not ideal terrain for tank warfare. So it is hard to envisage what role Venezuela’s president, Hugo Chávez, has in mind for the dozens of Russian tanks on his latest military shopping list. The strategic purpose of a recent tour that took him to some of the world’s least salubrious regimes is, however, easier to discern. And it led America’s State Department to give warning on Monday September 14th of a “serious challenge to stability” in the region.

Venezuela’s increasingly autocratic leader returned on Friday from a trip that took him to Libya, Iran, Algeria, Syria, Turkmenistan, Belarus and Russia, though he also found time for a visit Spain and the Venice film festival. On his jaunt he was decorated by Libya’s leader, Muammar Qaddafi, and embraced by Aleksandr Lukashenko, president of Belarus.

Apart from discussing weapons and oil with the Russians, he also courted condemnation by inviting Sudan’s pariah president, Omar al-Bashir, to Caracas, and breezily announced a nuclear co-operation deal with Mahmoud Ahmadinejad, Iran's president. Since the latter revelation was made to Le Figaro, a French newspaper, it fell to the French foreign ministry to issue a curt reminder of UN Security Council resolution 1737. This explicitly forbids the export by Iran of material from its controversial nuclear programme, which Mr Chávez supports.

The trip did much to bolster Mr Chávez’s well-earned reputation for outrageous statements. But there is method to his madness. The foreign-policy section of Venezuela’s “First Socialist Plan—2007-2013” (dubbed the “Simón Bolívar National Project”) assigns an “integral political alliance” with Iran, Syria, Belarus and Russia the highest priority outside the Latin American and Caribbean region. The rationale for this curious hotchpotch of alliances is the “common anti-imperialist interests” of those five countries—the imperialist in question being America.

Among the scheme’s aims is the strengthening of national defence and sovereignty. Not only the tanks but sophisticated anti-aircraft systems make up the order to Russia. Mr Chávez, a former lieutenant-colonel in Venezuela’s army, says these weapons will make it “very difficult for foreign aircraft to come and bomb us”. Having already spent at least $4.4 billion on Russian weapons, he has now secured an additional $2.2 billion credit-line from that country to lavish on more military hardware. Three submarines are among other possible purchases, press reports say.

In pursuit of his goal to “break North American imperialist hegemony”, the Venezuelan president has deployed to the full his prime asset—the country’s oil reserves. Thus Iran was promised 20,000 barrels of petrol a day, in potential defiance of sanctions advocated by America and despite Venezuela’s current problems supplying its own markets with fuel. Russia’s national oil consortium was also assigned a patch of the Orinoco heavy oil belt.

Closer to home, Mr Chávez’s strategic plans have come a little unstuck. He has so far failed in his quest for admittance to the Mercosur trade block. ALBA, his alliance of like-minded governments, lost a member after a coup in Honduras just over six weeks ago. And he has failed to secure regional condemnation of Colombia’s decision to allow American troops to deploy in seven military bases in the country.

Undaunted, he continues to pursue “greater world leadership”. If attention is what he is seeking, he finally seems to have got it. Last week Robert Morgenthau, a veteran New York district attorney, gave warning that Venezuela’s alliance with Iran was a threat to American interests. Bank accounts in Andorra supposedly belonging to individuals close to Mr Chávez have been frozen, reportedly because of the American Treasury Department’s suspicions of links to terrorism.

Mr Chávez is determined to play in the big leagues. His avowed calculation is that by helping to stir up trouble for America in many places simultaneously, he can bring about the collapse of “the empire”. The regimes he is so assiduously cultivating are, by this account, the nucleus of a new world order. Although this seems far-fetched perhaps the world should start to take him a little more seriously.

An axis in need of oiling

Plunging oil price is not helping Chavez, we are so happy!!!

"As Mr Chávez scales back spending he will have to choose between losing influence abroad or losing popularity at home. Already he has quietly cancelled a promise to build an oil refinery in Nicaragua"

vdebate reporter.

The anti-West
An axis in need of oiling
Oct 23rd 2008

From The Economist print edition
Russia, Iran and Venezuela have been making common cause. A plunging oil price may stay their hand, but the West should still watch out

Illustration by Claudio Munoz
IT WAS one of George Bush’s catchier turns of phrase—the “axis of evil” consisting of North Korea, Iran and Iraq. How evil, or even menacing, they really were is debatable. And it was not much of an axis: Iran and Iraq hated each other. North Korea exported nuclear know-how, but probably no more than other countries such as Pakistan, a supposed American ally.
Of late another trio, bound together by dislike for America, and confidence based on surging energy revenues, has appeared: an “axis of diesel”, as some have named it, comprising Russia, Iran and Venezuela. At least before the present financial crisis, the trio had been hobnobbing happily. Russia has sold billions of dollars’ worth of arms to Venezuela and blocked Western attempts to slap tougher sanctions on Iran. The Kremlin is also selling air-defence systems to the Iranians.
Yet in this case, too, the idea of an “axis” is exaggerated. Each of the trio has different aims. Venezuela wants to create an anti-American block in Latin America. Russia likes the idea of challenging the United States in its backyard: a suitable response to what it sees as American meddling in Russia’s own neighbourhood, where its president, Dmitry Medvedev, claims “privileged interests”. But Russia’s backing for Venezuela is constrained by its ties to other countries in the region, such as Brazil.
Similarly, Russia likes to play the “Iran card”, signalling to Mr Bush that he may have to give ground in, say, Georgia if he wants help in the Middle East. But as far as any outsider can say, the Kremlin does not want Iran to have a bomb.
So the common interests of the three countries are mostly tactical, not strategic. The same applies to China, which is a co-founder, along with Russia, of the Shanghai Co-operation Organisation, a loose security club. Having snubbed Russia over Georgia, China’s top priority is not gloating or spoiling, but salvaging the world economy, including that of America, which is a crucial outlet for its goods.
The “diesel” trio did gloat at first over the West’s meltdown. But they overlooked one of its effects: a plunge in oil prices, and hence their own revenues. This unwelcome news is likely to sharpen distinctions between them. Fyodor Lukyanov, a Russian foreign-policy pundit, says his country will have to prioritise. “Trying to achieve everything won’t fly any more.” The focus, he thinks, will be more on nearby countries and less on Latin America, not least because Venezuela will have less cash to buy Russian weaponry.
Indeed, the end of the oil boom may spell doom for that country’s populist leader, Hugo Chávez. Oil has been his political oxygen. When he took office in 1998 the price was $11 a barrel. It peaked in July at $147. Since then it has halved. Oil accounts for 90% of exports and more than half of government revenues. At home it has paid for what he calls “21st century socialism”: chiefly a torrent of central government spending, up from 22% of GDP in 2001 to 32% now. Mr Chávez also spends freely from the off-budget National Development Fund (Fonden), while Petróleos de Venezuela (PDVSA), the state oil company, has been required to divert part of its investment budget to social spending.
Oil has also financed an anti-American alliance. More than a dozen countries in Central America and the Caribbean receive a total of some 300,000 barrels per day (b/d) of Venezuelan oil on easy terms (of which 93,000 b/d go to Cuba). Venezuela has spent heavily to support Bolivia’s Evo Morales, Nicaragua’s Daniel Ortega and the opposition FMLN in El Salvador.
The price of cold turkey
For each $10 drop in the oil price, the government gets $5 billion (1.4% of GDP) less in revenue, according to LatinSource, a consultancy. Mr Chávez said this month that an oil price no lower than $80 was “sufficient”. But the economy is already deteriorating. Oil-dependency has risen; nationalisation, bullying and meddling have deterred private investment; a fixed and overvalued exchange rate has stoked imports. In 2006 growth was 10.3% and inflation 17%; the latest growth figure is a 7.1%; inflation is 36%. Foreign debt is up from $30 billion to $44 billion. The cost of credit has risen. Opaque statistics make it hard to gauge Mr Chávez’s room for manoeuvre. Fonden may contain some $15 billion; central bank reserves are about $27 billion. But the underlying trend is clear.
A devaluation risks setting off a downward spiral of inflation and rising poverty. As Mr Chávez scales back spending he will have to choose between losing influence abroad or losing popularity at home. Already he has quietly cancelled a promise to build an oil refinery in Nicaragua.
On the face of things, Russia looks better placed than its two friends to resist shocks; before the turmoil, it had built up the world’s third-biggest stash of currency, at more than $500 billion. However, the Kremlin has been spending heavily to prop up the rouble, bail out banks and plug holes in its budget. Apart from falling oil prices, a big cloud on the Russian horizon is falling oil output, a trend that looks hard to reverse without massive investment—and there are many other things Russia has pledged to invest in, from an expanding military to its own creaky infrastructure.
Compared with Mr Putin, Mr Chávez is less involved in the global financial markets and even more prone to blame everything on an American-driven fiasco. “There’s a spectre going round the developed world that was of its own making,” he said this month. “Like Frankenstein [sic]…it went around the world and then went back to his maker.” The first test of whom Venezuelans blame will come in local and state elections on November 23rd.
Thanks to sanctions, Iran is the axis member least exposed to the world economy. But the oil price fall will hit it hard. Some 80% of Iran’s government revenues come from energy. A drop in income is unlikely to make Iran slow down its nuclear programme, or end support for Israel’s armed foes. The nuclear efforts date back 20 years, predating the oil-price rise. But a sagging oil price will hurt the domestic economy and compound the woes of President Mahmoud Ahmadinejad.
Unlike Russia, which had prepared for a rainy day, Mr Ahmadinejad has been investing Iran’s oil money in a different future: his own. Energy subsidies alone are about 12% of Iran’s GDP; and energy revenues prop up the government budget. Inflation is at least 30%, up from an official 20% in February. The former central bank chief, sacked for resisting populist spending policies, has accused Mr Ahmadinejad of “looting” the bank’s assets. Merchants recently went on strike in several cities, including Tehran, over higher sales taxes.
Even before the oil price fell, some senior Iranians had criticised Mr Ahmadinejad for stoking confrontation with the West and making it easier for the United Nations to impose sanctions. Yet a falling oil price puts more pressure on Iran’s economy at a stroke than have several years of international sanctions.
The main aim of the “diesel” countries will now be to try to prop up falling prices. Iran and Venezuela, both members of the Organisation of the Petroleum Exporting Countries (OPEC), have called for it to cut output. Iran’s energy minister insisted defiantly this week that “the era of cheap oil is finished.” The cartel’s members are sufficiently worried about the falling price to have brought forward their next meeting by three weeks, to October 24th.
But Saudi Arabia, OPEC’s biggest producer, which would be responsible for the biggest share of any reduction in output, has not yet endorsed the idea of a cut and will not want to do all the cutting itself. It can withstand lower prices better than most, since it can balance its budget at an oil price of just $49 a barrel, according to the IMF. Iran and Venezuela, by contrast, need about $95 to make ends meet, according to Deutsche Bank.
Those fiscal straits will make Iran and Venezuela reluctant to forgo revenue by making cuts of their own, setting the stage for a row over quotas with Saudi Arabia. Yet the Saudis will not be unhappy to see Iran, a regional rival, squirm. What is more, says Leo Drollas of the Centre for Global Energy Studies, a consultancy, they are unlikely to agree to big cuts for fear of further blighting the world economy. There is also the question of whether the cartel will stick to whatever agreement it reaches. In the past, cash-strapped members have frequently cheated.
In sum, Iran, Russia and Venezuela are all likely to be left short of cash—and facing a diminution in their international clout. “Never confuse brilliance with a bull market,” goes a Wall Street saying. The leaders of the oily trio may have thought high oil prices were an adequate substitute for good governance. In many quarters, the difference is now painfully clear.

The FARC's foreign friends - Mary O'grady

FARC & Chavez did everything possible to make look bad president Uribe, as the computer is showing now......
vdebate reporter

In other words, there is no peace agenda. Only plans for a circus designed to undermine Colombia's democracy. The rest of the region's governments ought to worry about who is next.

Mary O'grady

The FARC's Foreign Friends
by Mary O'grady

Some 11,000 text documents have been retrieved from the computers seized by the Colombian government after a bombing raid on a guerrilla camp in March. That raid killed rebel leader Raúl Reyes.Yet combing through only a portion of the material, which I did recently, is enough to see that the Revolutionary Armed Forces of Colombia – the FARC – is held together by two common threads.

First is the globalization of the armed struggle.

The FARC's allies and suppliers come from places as far flung as Australia, China, Russia, the Middle East and all parts of Latin America. Some are ideological comrades – both inside governments and operating as illegal cells; others are members of organized crime networks. All are crucial actors in the FARC's bloodthirsty search for power.

The second common thread is the propaganda war.

FARC rebels not only assume that they can manipulate international opinion by claiming a "humanitarian" agenda. They count on it. All this is facilitated by Venezuelan President Hugo Chávez. The Colombian military has been running up the score against the FARC of late and rebel operations are close to falling apart, as Journal reporter José de Cordoba wrote last week. But the documents show that aid from Mr. Chávez is prolonging the war by keeping FARC hopes alive.

The Venezuelan president has been creative in thinking about how he can help the rebels. The documents show that he has offered $250 million to $300 million but that's not all. In a February memo to the FARC high command, two rebel leaders who had recently met with Mr. Chávez describe proposed money-making schemes. "He offered us the possibility of a business in which we would receive a quota of oil to sell outside the country, which would leave us with a juicy profit."

There was also an offer of Venezuelan state contracts. In January 2007, the rebels penned a memo explaining that a Venezuelan general told them that arms shipments from abroad could be brought in through the Venezuelan port of Maracaibo.

By September, the shipments were being lined up. "Yesterday I received two Australian arms suppliers," one rebel wrote to the high command, "thanks to a contact made through Ramiro [a Salvadoran.]" The Aussies "offer very good prices on all we need."

The list includes 50-caliber machine guns, sniper rifles, rocket-propelled grenades and missiles. "All of these materials are made in Russia and China," he wrote, and the shipment would take a month or so "to arrive in Venezuela."

Just in case all this military hardware doesn't maim and murder enough civilians to produce a surrender by the Colombian government, Mr. Chávez and the FARC also have been collaborating on Plan B: an effort to acquire legitimacy in the eyes of the international community by branding Colombian President Álvaro Uribe as heartless and unreasonable.

That was supposed to be a slam dunk after Mr. Chávez last year won the role of "mediator" in the effort to free some FARC hostages, including the French-Colombian Ingrid Betancourt. But a series of PR faux-pas, culminating in a fruitless trip to see French President Nicolas Sarkozy, destroyed any credibility he may briefly have enjoyed as a peacemaker.

Shortly thereafter, rebel leaders wrote a memo outlining how they planned to position themselves as humanitarians ready to swap hostages for rebel prisoners "in contrast to the stubborn intransigence of Mr. Uribe."

Among their demands would be exclusion from the international terrorist list and access to diplomatic missions. "If [Mr. Uribe] rejects it, as he surely will," they wrote, "we lose nothing and instead he will remain isolated and under international pressure." That plan, too, went nowhere.

On Feb. 8 of this year, the rebels wrote that Mr. Chávez had a new idea: to create an international group – consisting of Cuba, Argentina, Ecuador, Brazil, Mexico and Nicaragua – similar to the Contadora Group. Contadora, which was formed in the 1980s allegedly to find a peaceful solution to the Central American wars, in fact provided political cover to the region's Marxists.

According to the rebels, Mr. Chávez said that if Mr. Uribe wants to improve bilateral relations, he would have to accept it and "asks that we bring Ingrid to the inaugural." In preparation for the swap, the group would set up a "humanitarian camp" with "the presence of the press, international delegates and the FARC." In other words, there is no peace agenda.

Only plans for a circus designed to undermine Colombia's democracy. The rest of the region's governments ought to worry about who is next.
http://www.hacer.org/report/2008/06/farcs-foreign-friends-by-mary-ogrady.html
Source/Fuente: http://www.wsj.com/