Cuba’s Cienfuegos refinery, revived thanks to support from Venezuela. Credit: Jorge Luis Baños /IPS

By Marianela Jarroud
SANTIAGO, Mar 14 2013 (IPS)

Venezuela will keep in place the regional energy integration policies promoted by the late president Hugo Chávez if he is succeeded by acting president Nicolás Maduro, experts on regional relations told IPS.

It will do this in spite of the growing internal economic difficulties that could complicate the country’s ability to maintain external cooperation commitments.

“It’s possible that Venezuela might reduce aid to other countries in order to deal with internal problems, but not if it risks losing its regional and international influence and leadership role,” Sébastien Dubé, an expert in political science at Chile’s Diego Portales University, told IPS.

Dubé said he had no doubt that if Maduro wins the presidential elections on Apr. 14, as expected, there will be continuity in Venezuela’s foreign policy and especially its external energy cooperation.

Maduro’s rival will be Henrique Capriles, the governor of the central state of Miranda, who was defeated by Chávez in the Oct. 7, 2012 elections. Analysts predict that the wave of grief over the 58-year-old Chávez’s death from cancer on Mar. 5, and the strong majority support that he enjoyed, will carry his chosen successor, vice-president Maduro, into office – bar surprises.

“Maduro will want to maintain the geopolitical influence that Chávez’s leadership brought to Venezuela,” Dubé said, pointing out that Maduro was foreign minister from 2006 until January this year.

In his view, “the strong ideological focus of the Venezuelan government indicates that if implementing its political strategy means continuing to run a fiscal deficit, so be it.”

Regional energy integration was one of the key focuses of Chávez, who governed the South American oil-producing country since 1999.

By means of the policy of energy integration and cooperation promoted by the state oil company Petróleos de Venezuela S.A. (PDVSA), Chávez distributed energy in the region in order to boost the development of the countries that had the most difficulty paying their energy bills.

The foremost example is the Petrocaribe energy alliance, created in 2005 and involving 18 countries to which Venezuela supplies up to 185,000 barrels per day (bpd) of crude.

Petrocaribe offers financing for up to 50 percent of the value of the oil, payable over 25 years at an interest rate of two percent.

The Petrocaribe programme extended new benefits to more countries than came under the San José agreement, signed in 1980, under which Mexico and Venezuela jointly supplied oil on preferential terms to 11 Central American and Caribbean countries.

In the view of economist Manuel Riesco, of the National Centre for Alternative Development Studies (CENDA), Chávez, “as a good soldier and exceptional disciple of (independence hero Simón) Bolívar, gave due importance to a key element of state developmentalist strategy in Latin America: regional integration.

“Integration is inevitable in Latin America, partly to compensate for the enormous gravitational attraction exerted by our giant neighbour to the North (the United States), which constantly draws our countries individually into its orbit,” he said.

It is also essential “in order to create the conditions to be able to compete in the global market of the 21st century, made up of huge market-states with hundreds of millions of people,” he added.

Over the last decade, Venezuela has also signed special energy cooperation agreements with Argentina, Brazil, Colombia, Ecuador, Peru and Uruguay. In addition, a partnership was formed between PDVSA and Petrobras, the Brazilian state oil company, to build the Abreu e Lima Refinery in Brazil.

Thanks to high oil prices, Venezuela “may have provided relief for the countries of Latin America that had preferential access to its crude, but it remains to be seen whether this policy is sustainable over time,” according to economist Alfonso Dingemans, who has a doctorate in Americas studies from the Institute of Advanced Studies of the University of Santiago.

Only time will tell whether Venezuela’s political and economic circumstances will allow “what has been maintained only by the charisma and leadership of Hugo Chávez to be institutionalised,” he told IPS.

“I doubt Maduro has the same political capability to continue developing the Bolivarian programme (of energy cooperation), or that the Venezuelan people would accept all the costs implied,” he commented.

“At some point the costs will become unsustainable,” he said.

In Dubé’s view, in contrast, for a future Maduro administration “to break its commitments would be a sign of failure, which the government will try to avoid at any cost.

“The calculation is that oil prices may rise again,” above 100 dollars a barrel because of growth in world demand, and that would enable Venezuela to keep its agreements intact, “an important factor in maintaining its ties and the influence it has over the countries that benefit from its assistance,” he said.

Dubé said that Chávez’s successor will also face greater difficulties on the domestic front, because of the demands of the Venezuelan public, in an economic environment in which several problems have accumulated, such as a high rate of inflation, the impact of the currency devaluation in February and the loss of purchasing power.

“The scenario in Venezuela is complex,” and that could cause problems for the countries that benefit from its cooperation, he said. “No other country in ALBA (the Bolivarian Alliance for the Peoples of Our America) has the energy or financial capacity to provide the support that Venezuela is giving them now,” he said.

ALBA, which currently has eight full member countries, was formed in 2004 on Chávez’s initiative, and focuses on the struggle for social inclusion and “21st century socialism”.

One of the members, Cuba, could find itself particularly affected by a change of strategy in Venezuela’s integration policy. At present it receives at least 53,000 bpd of oil on preferential terms, as part of a series of bilateral cooperation agreements.

“Aid from the Chávez administration was quite important for the Cuban economy, and the danger is that if that support disappears or diminishes, the island’s economy will take a nosedive again,” Dingemans said.

Riesco stressed that the energy agreements established by the Chávez government were not unilateral subsidies granted by Venezuela to other countries.

For instance, he said, “the favourable but reasonable long-term prices for oil supplied to Cuba are partly compensated by the significant and valuable contribution of Cuban doctors working in Venezuela.”

Dubé said as well that cooperation between Caracas and Havana is mutual, and that both countries will continue to need each other. “In political terms, Maduro needs the strategic, political and ideological support of the Castro brothers (Fidel and Raúl) to maintain his regional influence,” he said.

However, in his view, a victory for opposition candidate Capriles could bring about “a radical change in Venezuela’s foreign policy, realignment with the United States and countries with liberal (free market) economies, and an end to subsidies for Cuba and the ALBA countries.”

Riesco predicted that the policies of integration promoted by Chávez will continue in one form or another, because “they reflect the deepest strategic interests of the region and of Venezuela.”

Chávez created ALBA, described by analysts as "an alternative project to capitalist globalisation." Credit: Jorge Luis Baños/IPS

By Fabiana Frayssinet
RIO DE JANEIRO, Jan 12 2013 (IPS)

A lot of water has passed under the bridge in Latin America since Hugo Chávez first took office as president of Venezuela in 1999, with left-wing and centre-left governments coming to power and the emergence of paths toward integration that exclude the United States.

The regional identity that Chávez has been instrumental in building is now suffering the vicissitudes of uncertainty arising from the Venezuelan leader’s serious illness. Chávez, re-elected Oct. 7 for the period 2013-2019, is in Cuba convalescing from his fourth surgery for a cancer diagnosed in June 2011.

The folkloric spectrum of the left in all its ideological shades is reflected in the region, from the Cuban model that adapted and survived, and has the support of Chávez, to newer manifestations like “Kirchnerism” in Argentina, “Lulaism” in Brazil, and the movements led by presidents Evo Morales of Bolivia, Rafael Correa of Ecuador, and former guerrillas Daniel Ortega in Nicaragua and José Mujica in Uruguay.

Brazilian peasant leader Joao Pedro Stédile, of the Landless Workers’ Movement (MST) which is allied to Chávez for land reform projects, said that when the Venezuelan president came to power it was “the beginning of the defeat of neoliberalism (free market dogma) in Latin America”.

“After he took office, a wave surged all over the continent. And the people, aware of the evils of neoliberal policies, elected anti-neoliberal candidates in the majority of the countries,” he told IPS.

Chávez laid the first foundations for an alternative for the region, quoting emblematic figures like Simón Bolívar, Ernesto “Che” Guevara and Juan Velasco Alvarado, who inspired his obsession with creating a common front in Latin America outside the U.S.-proposed Free Trade Area of the Americas (FTAA).

The Venezuelan president founded the Bolivarian Alliance for the Peoples of Our America (ALBA), described by Stédile as “an alternative project to capitalist globalisation”, and he worked tirelessly to strengthen other integration instruments like the Union of South American Nations (UNASUR) and the Community of Latin American and Caribbean States (CELAC).

International analyst Sébastien Dube, of Diego Portales University in Chile, said Chávez had played a “determining” role.

“His leadership role was at a level no Venezuelan and very few Latin American leaders had ever reached before on the regional and international stage. He played a key role in the failure of the FTAA; he questioned the weak institutions of the inter-American system; and he proposed an alternative project to the neoliberal model, taking advantage of the limits of the latter,” he said.

Although “his own project, ALBA, shows more signs of failure than of success, Chávez’s radical criticisms have had the effect of legitimising and opening up spaces for moderate leftwing leaders (like former Brazilian president Luiz Inácio Lula da Silva, 2003-2011) to criticise the neoliberal model and for their voices to be heard,” he said.

Venezuela has also joined the Southern Common Market (Mercosur), originally made up of Argentina, Brazil, Paraguay and Uruguay, seeing it as having potential for the economic integration of all of South America.

“Venezuela was already committed to integration before Chávez came to power, but he was decisive in turning the country’s gaze toward the Southern Cone of South America, instead of only looking toward the Andean countries,” Gabriel Puricelli, head of the Laboratorio de Políticas Públicas (LPP), a progressive think tank in Argentina, said in an interview with IPS.

This commitment was also essential in Venezuela’s help to regional neighbours during economic crises, such as Argentina’s debt bond placements and fuel oil imports.

Chávez’s Venezuela also supplied oil to other friendly countries like Cuba, Uruguay and Nicaragua, a clear demonstration of the traditional concept of “revolutionary solidarity between peoples,” or economic “complementarity” in less politically loaded terms.

Social researcher Roberto Laserna, who studies democracy and development in Bolivia, told IPS that Chávez’s financial support contributed “decisively to shape Morales’ presidential ‘caudillismo’ (charismatic populism and personalist style of government).”

Laserna reasoned that this support allowed Morales enough available funds, free from budget restrictions, tendering and project approval proceedings, for a government programme called “Bolivia Cambia, Evo Cumple” (Bolivia Changes, Evo Delivers).

“Those funds and projects have been used to maintain a sort of permanent electoral campaign with personal canvassing in different parts of the country,” he said.

The “Bolivarian” model was politically driven, as is reflected in Chávez’s support for peace talks in Colombia, but oil was also an essential factor.

International Chilean analyst Guillermo Holzmann said the model “has a characteristic that is by no means unimportant: it is one of only a few that have the resources to finance a revolution like the one Chávez is building.

“He has been able to forge alliances by virtue of the resources he can offer, in order to maintain a sort of integration based on cooperation, which often favours the poorest countries, but in practice does not lead to a productive integration,” he told IPS.

With stronger economies, like Brazil’s, Venezuela has applied the principle of “you scratch my back, I’ll scratch yours.” Big Brazilian infrastructure companies operate in Venezuela, and energy projects with the Venezuelan state oil company have been announced in Brazil.

Brazil, regarded by the United States as the barometer of the Latin American left, showed its gratitude through foreign policy actions. Not only did it chaperone Venezuela’s entry to Mercosur, but it was also the first country publicly to support the extension of Chávez’s mandate when it became apparent he would not be able to take the oath of office for his new term on the appointed date, Jan 10.

Integration under its own steam

With the prospect of Chávez’s possible absence from the front line, as well as Lula taking a back seat, and the death of former Argentine president Néstor Kirchner (2003-2007), a highly influential trio at the 2005 summit that said “No to FTAA” appear to have left the scene. The big question now is whether integration can make it under its own steam.

In Holzmann’s view, the case of Argentina has shown that “‘Kirchnerism’ can survive without him,” as a force to structure political and economic proposals.

“Lula’s model has also managed to survive and undergo significant development. So much so that when we add in Chavism, we see them together in UNASUR and Mercosur,” he said.

“In spite of the fact that neither Brazil nor Argentina belongs to ALBA, they do have a pragmatic relationship with Caracas on trade matters, and they deal with ideological issues case by case. Clearly, the existence of Venezuela, with Chávez or even without him, is advantageous to Argentina and Brazil according to their own lights,” he said.

Dube concurred, but from a different point of view. “The problems of Latin American integration go further than the roles or the obstacles put in place by each of the political leaders,” he said.

According to Puricelli, the future of regional integration as well as other integration processes depends more on “the devil in the details of regional trade” than on “visible political leadership.”

However, Stédile maintains that Chávez’s leadership has played a vital role. “His personality and determination have set a fast pace without hesitation for necessary changes,” he said.

The peasant leader said he is confident that there will be continuity in Venezuela.

“As we all know, popular leaders have a fundamental role to play in history, but they cannot effect changes on their own. Chávez knows this, which is why throughout his political career he has always promoted and stimulated popular organisations and mass movements as the necessary political forces to build an alternative social project,” he said.

*With additional reporting from Marianela Jarroud in Santiago, Franz Chávez in La Paz and Sebastián Lacunza in Buenos Aires.